A preliminary inquiry is conducted before registering a crime under the Prevention of Corruption Act. Information shared under Section 66(2) of the Prevention of Money Laundering Act can be a valid basis for registration of a crime.

ORDER :

The petitioner is before this Court calling in question registration of a crime in Crime No.39 of 2022 by the then Anti Corruption Bureau (‘ACB’ for short) for offences punishable under Section 13(1)(b) r/w Section 13(2) of the Prevention of Corruption Act, 1988 (‘the Act’ for short).

2. Heard Sri V.Lakshminarayana, learned senior counsel appearing for the petitioner and Sri B.B. Patil, learned counsel appearing for the respondents.

3. Facts, in brief, adumbrated are as follows:-

The petitioner is said to be the Member of Legislative Assembly from Chamarajpet Constituency. A complaint comes to be registered on 09-06-2019 which becomes a crime in Crime No.73 of 2019 for offences punishable under Sections 420 and 120B of the IPC against the promoter of I-Monetary Advisory Private Limited (‘IMA’ for short) – Sri Mohammed Mansoor Khan. Immediately thereafter, the Enforcement Directorate also registers an Enforcement Case Information Report (‘ECIR’ for short) against the said promoter. During the investigation by the Enforcement Directorate, the Investigating Officer found the role of the petitioner and then searched the office and residence of the petitioner. Certain information was gathered on the conduct of such search by the Enforcement Directorate with regard to certain transactions between the petitioner and the promoter of IMA which was to the tune of Rs.9.38 crores by way of cheque. Further the statement tendered by the promoter was that he had given cash up to Rs.29.38 crores and further Rs.25/-crores to the petitioner as loan and the same was not returned. Based upon this information, a report is submitted to the then ACB, who based upon the said report registers the impugned crime in Crime No.39 of 2022 for offences punishable under Section 13(1)(b) r/w 13(2) of the Act. It is the registration of crime that led the petitioner to this Court in the subject petition.

4. This Court in terms of its order dated 06-04-2023 rejected I.A.No.1 of 2022 by which further investigation by the ACB was permitted to continue on rejecting the application filed by the petitioner for stay. The petitioner challenges the said order of rejection on I.A.No.1 of 2022 before the Apex Court in Special Leave to Appeal (Criminal) No.5437 of 2023. The Apex Court in terms of its order dated 28-04-2023 while issuing notice grants an interim stay of the order dated 06-04-2023 which had dismissed I.A.No.I of 2022 filed by the petitioner for stay.

5. The matter was heard and reserved on 11-08-2023. since the matter was pending before the Apex Court in the SLP on the order passed by this Court on I.A.No.1 of 2022, only on consent of both the learned counsel appearing for the parties, the subject petition was taken up for consideration, on its merit. The matter was posted for further hearing later with regard to pendency of the SLP before the Apex Court. The learned senior counsel for the petitioner submitted that what is challenged before the Apex Court is only an order on I.A.No.I of 2022 which had rejected stay of further investigation and this Court has no impediment to consider the main matter, as there is no stay of further proceedings before this Court. It is, therefore, the matter was reheard and re-reserved.

6. The learned senior counsel Sri V.Lakshminarayana, representing the petitioner would vehemently contend that the crime so registered for offences punishable under Section 13(1(b) r/w 13(2) of the Act is loosely registered. No preliminary inquiry which is necessary to be conducted is not even conducted, no source report is drawn and there is no permission from the Competent Authority to register the crime. He would contend that the report of the Enforcement Directorate cannot become the basis of registration of crime, under the Act, while the converse can be legally valid. He would seek to place reliance upon the judgments of the Apex Court in the cases of MUKESH SINGH v. STATE, (2020) 10 SCC 120; CHARANSINGH v. STATE OF MAHARASHTRA, (2021) 5