SUPREME COURT OF INDIA
S. Ratnavel Paandian and K. Jayachandra Reddy, JJ.
Union of India & another – Appellants
Versus
W.N. Chadha – Respondent
Cri. Appeal No. 567 of 1992
Decided on 17.12.1992

IMPORTANT POINT
1. In Bofors Gun Deal Case, issue of letters rogatory is not liable to be quashed on the ground of non-compliance of the rule of audi alteram partem as the facts and circumstances of the case do not require a prior notice and an opportunity of being heard to Mr. W.N. Chadha.
2. In Bofors Gun Deal Cases judgment of the High Court quashing the F.I.R. is liable to be set aside in view of the self contradictory findings of the High Court itself.

Headnote:(i) Bofors case – Criminal Procedure Code, 1973 – Section 166 – A as introduced by the Criminal Procedure Code (Amendment) Ordinance 1990 – Issue of letter rogatory by the Special Judge – Obligation to issue a prior notice and hear the accused – Facts and circumstances of the case do not attract the audi alteram partem rule – Merely because the Special Judge heard counsel for the C.B.I. before issuing letter rogatory the respondent cannot allege violation of the principle of audi alteram partem.

       Held: The rule of audi alteram partem is not attracted unless the impugned order is shown to have deprived a person of his liberty or his property. In the present case, on such consequences have arisen from the letter rogatory. If the letter rogatory is accepted by the foreign Court and facts about the identity of the account holders, quantum of the amounts standing in the names of the individual account holders representing the credit of Bofors money and the nature of such accounts. The follow up consequences would be that the corpus of the offence would be preserved intact from preventing the withdrawal of the money from those accounts or closure of the accounts by the account holders till the merit of the case is decided. (Para 48)

       Further held: There is exclusion of the application of audi alteram partem rule to cases where nothing unfair can be inferred by not affording an opportunity to present and meet a case. This rule cannot be applied to defeat the ends of justice or to make the law ‘lifeless, absurd, stultifying and self – defeating or plainly contrary to the common sense of the situation’ and this rule may be jettisoned in very exceptional circumstances where compulsive necessity so demands. (Para 50)

       Consequently held, that there is no question of attachment of money of the respondent or any of the accused named or unnamed, standing to the credit of the account holders in Swiss banks linked with Bofors mystery but it was only freezing of the accounts as per the request made by the Director C.B.I. by his letter dated 23rd January 1990 and followed by another letter dated 26th January 1990 and thereafter pursuant to the request through letters rogatory for judicial assistance in Switzerland. But for the request made by the letter rogatory, the Swiss law obliges withdrawal of all the instructions to block the account. Therefore we are of the view that the detailed discussion of the High Court with reference to the Criminal Law Amendment Ordinance of 1944 though is not warranted in this regard. (Para 56)

       It is not the case of the respondent that he is having any account in Swiss banks connected with Before mystery and that account is frozen to his prejudice. When the respondent himself has not come forward with any specific case stating as to what was the quantum of the amount standing to his credit in Swiss banks and in what manner he is now aggrieved by the letter rogatory and in what way he is deprived of his properties, it is incomprehensible as to how the High Court has come to the conclusion that the respondent is deprived of his property. Similarly, any of the other named or unnamed accused or any third part, not named in the F.I.R., has not come forward with a complaint of grievance on account of the freezing of the accounts. (Para 58)

       (ii) Bofors case – Issue of letter rogatory – Considering the evidence on record, the Special Judged cannot be found fault to have issued letter rogatory casually or mechanically but only after applying their mind – No reason to sustain the conclusion of the High Court that the issue of letter rogatory suffers form non- application of mind.

       Held: We unhesitatingly set aside the order of the High court quashing the letter rogatory dated 5/7th February 1990 and the rectified letter rogatory dated 21/22nd August 1990 issued in pursuance of the orders passed by the Special Judge. The respondent who is a named accused in the F.I.R. has no locus standi at this stage to question the manner in which the evidence is to be collected. However, it is open for the respondent to challenge the admissibility and reliability of the evidence only .at the stage of trial in care the investigation ends up in filing a final report under Section 173 of the Code indicating that an offence appears to have been committed. (Para 71)

       (iii) Bofors Gun Deal Case - Finding with regard to the nature of the contract and the procedure followed - High Court prejudged the issue and freely used documents which are stated to be secret and confidential - High Court not justified in affixing its seal of approval to the contract by holding it to be bona fide, on being executed following the paper procedure.

       Held: In our view, the documents (the copies of which are produced before us claiming to be secret documents) from their very nature could have never been in possession of any third party much less with the respondent and in such a case, the High Court was not at all justified in making - use of those documents for its findings especially in a case of this nature where there are serious and outrageous allegations. In these circumstances, one would be constrained to observe that the High Court has prejudged the issue and thereby laid down the foundation for its subsequent findings for quashing the entire proceedings. No doubt every court has its plenary powers to deliberate open every issue agitated before it as well as any other issue arising on the materials placed before it in the manner known to law after giving a prior notice and affording an opportunity of being heard. This power of discharging the Salutary functions' whether discretionary or obligatory should be in the interest of justice anti confined within the legal permissibility. In doing so, the Judge should disengage himself of any irrelevant and extraneous materials which come to his knowledge from any source other than the one presented before him in accordance with law and which are likely to influence his mind one way or the other. (Para 77)

       (iv) Bofors Gun Deal Case - Criminal Procedure Code, 1973 - Section 154 – High Court holding that the F.I.R. on the face of it does not disclose any offence - Challenged - Investigation at a preliminary stage - The High Court having positively found that the F.I.R. discloses an offence/offences against named and unnamed accused - Supreme Court, in its earlier proceedings, has rejected the contention that the F.I.R. does not disclose any offence - This observation being on the High Court Self-contradictory findings of the High Court, not sustainable - Impugned judgment quashing the F.I.R. registered by the C.B.I. against the respondent set aside.

       Held: This paradoxical finding perhaps by the High Court is sought to be justified by feebly relying on the fact that the investigating agency has failed to name any public servant as an accused, on the conclusions at the J.P.C. and also on the circumstances of the impounding of the passport of the respondent. These aspects have been dealt by us and we have erotically held that these aspects do not in any by affect the contents of the validity of the F.I.R Placing reliance on these aspects which are irrelevant at this stage, the High Court ought riot to have taken the extreme step of quashing the very F.I.R.

       We, therefore, are of the firm view that the self contradictory findings of the High Court itself gives a frontal attack to the impugned judgment, rendering it unsustainable both in law and fact. To put it ironically, the impugned judgment profusely bleeds due to its self inflicted injury. (Paras 94 & 95)

       Further held: It cannot be said that the Report of the I.P.C. has acquitted the respondent and others of all the charges leveled against them on appraisal of the entire evidence. On the other hand, the Report spells cut that Bofors did not cooperate and the evidence relating to the recipients of the amount was not forthcoming. (para 97)

       Now it is shown that the Swiss authorities are coming forward to give full co-operation and assistance in the collection of evidence at their end. Therefore, when all those are extending their helping hands though so far yet so close, there is no reason to forestall the investigation. In fact, Shri Rajiv Gandhi, the then Prime Minister of India himself wanted a complete probe and made a statement in this behalf in the Lok Sabha on 20th April 1987 which we have already extracted in our earlier part of this judgment. However, it may be recalled, in this connection also, his statement reading "You show us evidence we do not want proof, we will bring the proof'. This assurance was affirmed and reaffirmed on more than one, 7 occasion by the Minister for Defence during the course of the discussion in the Parliament. The J.P.C. itself has felt some suspicion as regards the existence of middleman, but what the report says is that the mere suspicion does not constitute sufficient ground for initiating action. (Para 98),

       Therefore, the suspicion entertained by the J.P.C. gives room for a probe especially when there is scope of getting sufficient assistance to make the probe. The opinion of the then learned Attorney General in the J.P.C. report was based only on the materials available on that day and at that stage, but not on the materials which is still to be unearthed and brought over the surface. (Para 100)

       (v) Bofors case - High court taking a serious note of a piece officer pasted by the C.B.I. on the letter rogatory -Observation made stating. Whatever explanation for this may be, we disapprove the said action of the officer of C.B.I. who had done this as it may amount to tampering with the judicial records" - Challenged as disparaging – Evidence on record to reveal that there was no tempering of judicial letter rogatory - Only additional particulars were furnished with the knowledge of the court - The C.B.I. cannot be ostracised - Order to expunge the remark of the High Court. (Paras 86, 88)

       Result: Appeals allowed. Impugned judgment of the High Court quashed.