ORDER

1. Leave granted.

2. Heard the learned counsel on both sides.

3. These appeals by special leave arise from the judgment dated 11-3-1996 of the Division Bench of the Patna High Court in CWJC No. 459 of 1996 and batch. It is not necessary to narrate all the facts stated in the impugned judgment of the High Court. Suffice it to state that a large-scale defalcation of public funds, fraudulent transactions and falsification of accounts, to the tune of around Rs. 500 crores, came to light in the Animal Husbandry Department of the State of Bihar. This had taken place during the years 1977-78 to 1995-96. A similar situation prevailed in the Education, Cooperation and Fisheries Departments. It is agreed by all the counsel that an in-depth investigation is required to be made. The only controversy between counsel on either side is whether the High Court, in exercise of its power under Article 226, could take the investigation away from the State police and entrust it to the Central Bureau of Investigation (CBI).

4. Shri F.S. Nariman, the learned Senior Counsel appearing for the State, contended that, by reason of Entry 80 of List I of the Seventh Schedule to the Constitution and Section 6 of the Delhi Special Police Establishment Act, 1946 (Act 25 of 1946), without the consent of the appropriate State Government no investigating agency other than the State police could investigate an offence committed in the State. The High Court, while exercising power under Article 226, should have kept in mind this limitation. The limitation did not apply to this Court exercising power under Article 142 of the Constitution to do complete justice. The High Court, therefore, was not correct in law in directing the CBI to investigate the allegations of defalcation of public funds, large-scale misappropriation, fabrication and destruction of the record etc. Shri P.P. Rao, learned Senior Counsel, contended that the State Government had not delayed in instituting the investigation. As soon as the matter was brought to the knowledge of the Chief Minister, he took prompt action, suspended the erring officers and constituted an enquiry to submit periodical reports. The State, Mr. Rao submitted, would not attempt to shield any corrupt officer from being prosecuted or proceeded with departmentally. The prompt action taken established the sincerity of the State Government to see that proper investigation was carried out. There was no allegation against the State police. The High Court could have preserved control and supervised the investigation by the State police. Instead, it divested the State police of its statutory power and entrusted the same to the CBI, which upset the distribution of powers under the Constitution. Shri Soli J. Sorabjee, learned Senior Counsel, supporting all the contentions, submitted that the power was traceable to Entry 39 of the Government of India Act, 1935. The State police could not be divested of the power. The investigation by the Central agency could not have been ordered by the High Court without the consent of the State Government.

5. On the other hand, Shri Shanti Bhushan, the learned Senior Counsel leading for the respondents, contended that the power of the High Court was unlimited. There were self-imposed limitations on the exercise of that power. In view of the enormity of the fraudulent transactions that had taken place within the administration of the State, they needed to be investigated and the erring officers brought to book by an independent agency. The peoples confidence would be best assured if the investigation was conducted by an independent agency. There was no reason for the CBI in either falsely implicate any innocent person or shield any real culprit. Therefore, in a democratic set-up, when a cloud was cast on the administration, it would be appropriate for an independent agency to conduct the investigation. The High Court, therefore, in exercise of its discretionary power under Article 226 had rightly