1998(1) Crimes 12 (SC)
Supreme Court of India
J.S. Verma, CJI, S.P. Bharucha and S.C. Sen, JJ.
Vineet Narain & Ors. - Appellants
versus
Union of India & Anr. - Respondents
Writ Petition (Crl.) Nos. 340-343 of 1993
Decided on 18-12-1997
Counsel for the Parties :
For the Petitioners : Anil B. Divan, Sr. Advocate, (A.C.), Abani Kumar Sahu, A.K. Panda, Mukul Mudgal and Anil Nauriya, Advocates.
For the Respondents : Ashok H. Desai, ­Attorney, K.N. Bhat, Additional Solicitor General, Pallav Shishodia, Ms. Anuradha Bindra and P. Par­meswaran, Advocates.

Important Points
1. The Single Directive 4.7(3) of 1969 issued by the Government, containing consolidated set of instructions issued to CBI, cannot be upheld as valid on the ground of it being permissible in exercise of the power of superintendence of the Central Government u/s 4(1) of the Delhi Special Police Establishment Act, 1946.
2. Where there is inaction even by the executive, for whether reason, the judiciary must step in, in exercise of its constitutional obligations to provide a solution till such time as the legislature acts to perform its role by enacting proper legislation to cover the field.
3. Statutory jurisdiction conferred on the CBI to investigate an offence by virtue of notification u/s 3 of the Police Act, cannot be estopped or curtailed by any executive instruction issued u/s 4(1) of the Delhi Special Police Establishment Act.

Headnote:(i) Jain Hawala Case - Constitution of India - Arts. 32, 141, 142 - Writ Petitions - Complaint of inertia by Central Bureau of Investigation in matters where accusation made was against high dignitaries - Whether any judicial remedy is available in such a situation? - (Yes) - Whether it is within domain of judicial review? - Whether it could be an effec­tive instrument for activating investigative process which is under the control of executive? - (Yes) - Case required innovation of a proce­dure within constitutional scheme of judicial review to permit inter­vention by court - Adoption of basic postulate of concept of equality: ‘Be you ever so high, the law is above you’ - Need for insulation of investigating agencies from any extraneous influence - For having a fair and impartial agency.

       Held: There are ample powers conferred by Article 32 read with Article 142 to make orders which have the effect of law by virtue of Article 141 and there is mandate to all authorities to act in aid of the orders of this Court as provided in Article 144 of the Constitution. In a catena of decisions of this Court, this power has been recognised and exercised, if need be, by issuing necessary directions to fill the vacuum till such time the legislature steps in to cover the gap or the executive discharge its role. This is the exercise we propose to perform in the present case since this exercise can no longer be delayed. It is essential and indeed the constitutional obli­gation of this Court under the aforesaid provisions to issue the necessary directions in this behalf. We now consider formulation of the needed directions in the performance of this obligation. The directions issued herein for strict compliance are to operate till such time as they are replaced by suitable legislation in this behalf. (Para 51)

       It is the duty of the execu­tive to fill the vacuum by executive orders because its field is coterminous with that of the legislature, and where there is inaction even by the executive, for whatever reason, the judiciary must step in, in exercise of its constitutional obligations under the aforesaid provisions to provide a solution till such time as the legislature acts to perform its role by enacting proper legislation to cover the field. (Para 54)

       Further held: It is trite that the holders of public offices are entrusted with certain powers to be exercised in public interest alone and, therefore, the office is held by them in trust for the people. Any deviation from the path of rectitude by any of them amounts to a breach of trust and must be severely dealt with instead of being pushed under the carpet. If the conduct amounts to an offence, it must be promptly investigated and the offender against whom a prima facie case is made out should be prosecuted expeditiously so that the majesty of law is upheld and the rule of law vindicated. It is the duty of the judiciary to enforce the rule of law and, therefore, to guard against erosion of the rule of law. (Para 57)

       (ii) Investigations - Single ­Directives (1969) issued by Government - Direc­tive No. 4.7(3) - Consolidated set of instructions issued to CBI - It requires prior sanction of designated authority to initiate investiga­tion against officers of Government, Public Sector Undertakings, nationalised Banks above a certain level - Validity, legality and extent of coverage of Directive 4.7(3) - Held, Single Directive cannot include within its ambit cases of possession of disproportionate assets by the offender - Single Directive cannot be upheld as valid on ground of it being permissible in exercise of power of superintendence of Central Government u/s 4(1) of Delhi Special Police Act, 1946 - Effect of Single Directive might thwart investigation of a cognizable offence and not to promote cause of justice - Meaning of word ‘superinten­dence’ in Section 4(1) of Delhi Special Police Estab­lishment Act, 1946. (Police Act, 1861-Section 3).

       Held : Once the jurisdiction is conferred on the CBI to investigate an offence by virtue of notification under Section 3 of the Act, the powers of investigation are governed by the statutory provisions and they cannot be estopped or curtailed by any executive instruction issued under Section 4(1) thereof. This result follows from the fact that conferment of jurisdiction is under Section 3 of the Act and exercise of powers of investigation is by virtue of the statutory provisions governing investigation of offences. It is settled that statutory jurisdiction cannot be subject to executive control. (Para 44)

       There is no similarity between a mere executive order requiring prior permission or sanction for investigation of the offence and the sanction needed under the statute for prosecution. The requirement of sanction for prosecution being provided in the very statute which enacts the offence, the sanction for prosecution is a pre-requisite for the court to take cognisance of the offence. In the absence of any statutory requirement of prior permission or sanction for investiga­tion, it cannot be imposed as a condition precedent for initiation of the investigation once jurisdiction is conferred on the CBI to inves­tigate the offence by virtue of the notification under Section 3 of the Act. The word “superintendence” in Section 4(1) of the Act in the context must be construed in a manner consistent with the other provi­sions of the Act and the general statutory powers of investigation which govern investigation even by the CBI. The necessity of previous sanction for prosecution is provided in Section 6 of the Prevention of Corruption Act, 1947 (Section 19 of the 1988 Act) without which no court can take cognisance of an offence punishable under Section 5 of that Act. There is no such previous sanction for investigation provid­ed for either in the Prevention of Corruption Act or the Delhi Special Police Establishment Act or in any other statutory provision. The above is the only manner in which Section 4(1) of the Act can be harmonised with Section 3 and the other statutory provisions. (Para 45)

       The Single Directive has to be examined in this background. The law does not classify offenders differently for treatment thereunder, including investigation of offences and prosecution for offences, according to their status in life. Every person accused of committing the same offence is to be dealt with in the same manner in accordance with law, which is equal in its application to everyone. The Single Directive is applicable only to certain persons above the specified level who are described as “decision making officers”. The question is whether any distinction can be made for them for the purpose of inves­tigation of an offence of which they are accused. (Para 46)

       The Single Directive cannot, therefore, be upheld as valid on the ground of it, being permissible in exercise of the power of superin­tendence of the Central Government under Section 4(1) of the Act. (Para 49)

       (iii) Delhi Special Police Establishment Act, 1946 - Sections 3, 4(1) - Power of Superintendence of Central Government u/s 4(1) - Word ‘Superintend­ence’ - Meaning - Word must be construed in a manner consistent with other provisions of the Act and general statutory powers of investiga­tion which govern investigation even by CBI - (Police Act, 1861 - Section 3).

       Held : It is, therefore, the notification made by the Central Government under Section 3 which confers and determines the jurisdiction of the CBI to investigate an offence; and once that jurisdiction is attracted by virtue of the notification under Section 3, the actual investiga­tion is to be governed by the statutory provisions under the general law applicable to such investigations. This appears to us the proper construction of Section 4(1) in the context, and it is in harmony with the scheme of the Act, and Section 3 in particular. The word “superin­tendence” in Section 4(1) cannot be construed in a wider sense to permit supervision of the actual investigation of an offence by the CBI contrary to the manner provided by the statutory provisions. The broad proposition urged on behalf of the Union of India that it can issue any directive to the CBI to curtail or inhibit its jurisdiction to investigate an offence specified in the notification issued under Section 3 by a directive under Section 4(1) of the Act cannot be accepted. The jurisdiction of the CBI to investigate an offence is to be determined with reference to the notification issued under Section 3 and not by any separate order not having that character. (Para 42)

       (iv) Constitution of India - Arts. 32, 141, 142 - Writ petitions - Common perception shared by everyone including Government of India and Inde­pendent Review Committee (IRC) of need for insulation of CBI from extraneous influence - Power of Supreme Court - Held, it is constitu­tional obligation of this Court to issue necessary directions - Guide­lines issued also considering that improvement of investigation with­out improving prosecution machinery is of no practical significance - Directions issued for rigid compliance till such time as legislature steps in.

       Held : There are ample powers conferred by Article 32 read with Article 142 to make orders which have the effect of law by virtue of Article 141 and there is mandate to all authorities to act in aid of the orders of this Court as provided in Article 144 of the Constitution. In a catena of decisions of this Court, this power has been recognised and exercised, if need be, by issuing necessary directions to fill the vacuum till such time the legislature steps in to cover the gap or the executive discharge its role. It is in the discharge of this duty that the IRC was constituted by the Government of India with a view to obtain its recommendations after an indepth study of the problem in order to implement them by suitable executive directions till proper legislation is enacted. The report of the IRC has been given to the Government of India but because of certain difficulties in the present context, no further action by the executive has been possible. The study having been made by a Committee considered by the Government of India itself as an expert body, it is safe to act on the recommenda­tions of the IRC to formulate the directions of this Court, to the extent they are of assistance. In the remaining area, on the basis of the study of the IRC and its recommendations, suitable directions can be formulated to fill the entire vacuum. This is the exercise we propose to perform in the present case since this exercise can no longer be delayed. It is essetial and indeed the constitutional obli­gation of this Court under the aforesaid provisions to issue the necessary directions in this behalf. We now consider formulation of the needed directions in the performance of this obligation. The directions issued herein for strict compliance are to operate till such time as they are replaced by suitable legislation in this behalf. (Para 51)

       The need for a strong and competent prosecution machinery and not merely a fair and competent investigation by the CBI can hardly be overemphasised. This is the occasion for us to take the view that a suitable machinery for prosecution of the cases filed in court by the CBI is also essential to ensure discharge of its full responsiblity by the CBI. Unless a competent prosecution follows a fair and competent investigation, the exercise in the ultimate analysis would be futile. Investigation and prosecution are inter-related and improvement of investigation without improving the prosecution machinery is of no practical significance. We would, therefore, consider the aspect of prosecution also in the formulation of the guidelines. (Para 52)

       (v) Central Bureau of Investigation (CBI) and Central Vigilance Commission (CVC) - Directions issued by Supreme Court - CVC to be give statutory status - Selection for post of Central Vigilance Commissioner - Proce­dure prescribed - CVC shall be responsible for efficient functioning of CBI - CBI shall report to CVC - Government shall remain answerable for CBI’s functioning - Appointment of the Director, CBI - Procedure de­vised - Director, CBI shall have a minimum tenure of two years, regard­less of date of his superannuation - Powers of - Tenure of CBI Director Shri R.C. Sharma is not to be continued beyond date of expiry of his term.

       Held: 1. The Central Vigilance Commission (CVC) shall be given statutory status.

       2. Selection for the post of Central Vigilance Commissioner shall be made by a Committee comprising the Prime Minister, Home Minister and the Leader of the Opposition from a panel of outstanding civil serv­ants and others with impeccable integrity, to be furnished by the Cabinet Secretary. The appointment shall be made by the President on the basis of the recommendations made by the Committee. This shall be done immediately.

       3. The CVC shall be responsible for the efficient functioning of the CBI. While Government shall remain answerable for the CBI’s function­ing, to introduce visible objectivity in the mechanism to be estab­lished for overviewing the CBI’s working, the CVC shall be entrusted with the responsibility of superintendence over the CBI’s functioning. The CBI shall report to the CVC about cases taken up by it for inves­tigation; progress of investigations; cases in which chargesheets are filed and their progress. The CVC shall review the progress of all cases moved by the CBI for sanction of prosecution of public servants which are pending with the competent authorities, specially those in which sanction has been delayed or refused.

       4. The Central Government shall take all measures necessary to ensure that the CBI functions effectively and efficiently and is viewed as a non-partisan agency.

       5. The CVC shall have a separate section in its Annual Report on the CBI’s functioning after the supervisory function is transferred to it.

       6. Recommendation for appointment of the Director, CBI shall be made by a Committee headed by the Central Vigilance Commissioner with the Home Secretary and Secretary (Personnel) as members. The views of the incumbent Director shall be considered by the Committee for making the best choice. The Committee shall draw up a panel of IPS officers on the basis of their seniority, integrity, experience in investigation and anti-corruption work. The final selection shall be made by the Appointments Committee of the Cabinet (ACC) from the panel recommended by the Selection Committee. If none among the panel is found suitable, the reasons thereof shall be recorded and the Committee asked to draw up a fresh panel.

       7. The Director, CBI shall have a minimum tenure of two years, regard­less of the date of his superannuation. This would ensure that an officer suitable in all respects is not ignored merely because he has less than two years to superannuate from the date of his appointment.

       8. The transfer of an incumbent Director, CBI in an extraordinary situation, including the need for him to take up a more important assignment, should have the approval of the Selection Committee.

       9. The Director, CBI shall have full freedom for allocation of work within the agency as also for constituting teams for investigations. Any change made by the Director, CBI in the Head of an investigative team should be for cogent reasons and for improvement in investiga­tion, the reasons being recorded.

       10. Selection/extension of tenure of officers upto the level of Joint Director (JD) shall be decided by a Board comprising the Central Vigilance Commissioner, Home Secretary and Secretary (Personnel) with the Director, CBI providing the necessary inputs. The extension of tenure or premature repatriation of officers upto the level of Joint Director shall be with final approval of this Board. Only cases per­taining to the appointment or extension of tenure of officers of the rank of Joint Director or above shall be referred to the Appointments Committee of the Cabinet (ACC) for decision.

       11. Proposals for improvement of infrastructure, method of investiga­tion, etc. should be decided urgently. In order to strengthen CBI’s in-house expertise, professionals from the revenue, banking and secu­rity sectors should be inducted into the CBI.

       12. The CBI Manual based on statutory provisions of the Cr.P.C. pro­vides essential guidelines for the CBI’s functioning. It is imperative that the CBI adheres scrupulously to the provisions in the Manual in relation to its investigation functions, like raids, seizure and arrests. Any deviation from the established procedure should be viewed seriously and severe discipline action taken against the concerned officials.

       13. The Director, CBI shall be responsible for ensuring the filing of chargesheets in courts within the stipulated time limits, and the matter should be kept under constant review by the Director, CBI.

       14. A document on CBI’s functioning should be published within three months to provide the general public with a feedback on investigations and information for redress of genuine grievances in a manner which does not compromise with the operational requirements of the CBI.

       15. Time limit of three months for grant of sanction for prosecution must be strictly adhered to. However, additional time of one month may be allowed where consultation is required with the Attorney General (AG) or any other law officer in the AG’s office.

       16. The Director, CBI should conduct regular appraisal of personnel to prevent corruption and/or inefficiency in the agency. [Para 60(I)]

       (vi) Invetigation - Enforcement Directorate - Structure, constitution of - Directions issued by Supreme Court - Appointment of Director, Enforcement Directorate - Tenure of - Appointment of competent legal advisers - Procedures/systems of functioning.

       Held : 1. A Selection Committee headed by the Central Vigilance Commissioner and including the Home Secretary, Secretary (Personnel) and Revenue Secretary, shall prepare a panel for appointment of the Director, Enforcement Directorate. The appointment to the post of Director shall be made by the Appointments Committee of the Cabinet (ACC) from the panel recommended by the Selection Committee.

       2. The Director, Enforcement Directorate like the Director, CBI shall have a minimum tenure of two years. In his case also, premature trans­fer for any extraordinary reason should be approved by the aforesaid Selection Committee headed by the Central Vigilance Commissioner.

       3. In view of the importance of the post of Director, Enforcement Directorate, it shall be upgraded to that of an Additional Secretary/Special Secretary to the Government.

       4. Officers of the Enforcement Directorate handling sensitive assign­ments shall be provided adequate security to enable them to discharge their functions fearlessly.

       5. Extensions of tenure upto the level of Joint Director in the En­forcement Directorate should be decided by the said Committee headed by the Central Vigilance Commissioner.

       6. There shall be no premature media publicity by the CBI/Enforcement Directorate.

       7. Adjudication/commencement of prosecution shall be made by the Enforcement Directorate within a period of one year.

       8. The Director, Enforcement Directorate shall monitor and ensure speedy completion of investigations/adjudications and launching of prosecutions. Revenue Secretary must review their progress regularly.

       9. For speedy conduct of investigations abroad, the procedure to approve filing of applications for Letters Rogatory shall be stream­lined and, if necessary, Revenue Secretary authorised to grant the approval.

       10. A comprehensive circular shall be published by the Directorate to inform the public about the procedure/systems of its functioning for the sake of transparency.

       11. In-house legal advice mechanism shall be strengthened by appoint­ment of competent legal advisers in the CBI/Directorate of Enforce­ment.

       12. The Annual Report of the Department of Revenue shall contain a detailed account on the working of the Enforcement Directorate. [Para 60 (II)]

       (vii) Investigation - Nodal Agency - Politico bureaucrat criminal nexus - A Nodal Agency shall be constituted for coordinated action in cases having politico-bureaucrat criminal nexus - Agency shall meet at least once every month - Working and efficacy of Nodal Agency should be watched for about one year. [Para 60 (III)]

       (viii) Investigation And Prosecution - Prosecution Agency - A Panel of compe­tent lawyers of experience and impeccable reputation shall be prepared with advice of Attorney General - Their services to be utilised as Prosecuting Counsel in cases of significance - Their advice to be taken during course of investigation of an offence - Cases of discharge or acquittal of accused - Must be reviewed by a lawyer on the panel - Supervision of prosecutions launched by CBI/Enforcement Direc­torate - Direction for appointment of Special Counsel till constitution of this body.

       Held : 1. A panel of competent lawyers of experience and impeccable reputa­tion shall be prepared with the advice of the Attorney General. Their services shall be utilised as Prosecuting Counsel in cases of signifi­cance. Even during the course of investigation of an offence, the advice of a lawyer chosen from the panel should be taken by the CBI/Enforcement Directorate.

       2. Every prosecution which results in the discharge or acquittal of the accused must be reviewed by a lawyer on the panel and, on the basis of the opinion given, responsibility should be fixed for dere­liction of duty, if any, of the concerned officer. In such cases, strict action should be taken against the officer found guilty of dereliction of duty.

       3. The preparation of the panel of lawyers with the approval of the Attorney General shall be completed within three months.

       4. Steps shall be taken immediately for the constitution of an able and impartial agency comprising persons of unimpeachable integrity to perform functions akin to those of the Director of Prosecutions in U.K. On the constitution of such a body, the task of supervising prosecution launched by the CBI/Enforcement Directorate shall be entrusted to it.

       5. Till the constitution of the aforesaid body, Special Counsel shall be appointed for the conduct of important trials on the recommendation of the Attorney General or any other law officer designated by him. [Para 60 (IV)] )

       (ix) Investigation in States - Selection of Police Chief in States - Urgent need for State Government to set up credible mechanism.

       Held : In view of the problem in the States being even more acute, as elaborately discussed in the Report of the National Police Commission (1979), there is urgent need for the State Governments also to set up credible mechanism for selection of the Police Chief in the States. The Central Government must pursue the matter with the State Govern­ments and ensure that a similar mechanism, as indicated above, is set up in each State for the selection/appointment, tenure, transfer and posting of not merely the Chief of the State Police but also all police officers of the rank of Superintendent of Police and above. It is shocking to hear, a matter of common knowledge, that in some States the tenure of a Superintendent of Police is on an average only a few months and transfers are made for whimsical reasons. Apart from demo­ralising the police force, it has also the adverse effect of politi­cizing the personnel. It is, therefore, essential that prompt measures are taken by the Central Government within the ambit of their consti­tutional powers in the federation to impress upon the State Govern­ments that such a practice is alien to the envisaged constitutional machinery. The situation described in the National Police Commission’s Report (1979) was alarming and it has become much worse by now. The desperation of the Union Home Minister in his letters to the State Governments, placed before us at the hearing, reveal a distressing situation which must be cured, if the rule of law is to prevail. No action within the constitutional scheme found necessary to remedy the situation is too stringent in these circumstances. (Para 62)

       (x) Investigation and Pro­secution - Central investigating agencies - Powers of concerned Minister in Central Cabinet - Recommendations of Independ­ent Review Committee (IRC) - Limitations on Minister’s power.

       Held that the Minister’s general power to review the working of the agency and to give broad policy directions regarding the functioning of the agencies and to appraise the quality of the work of the Head of the agency and other officers as the execu­tive head is in no way to be diluted. Similarly, the Minister’s power to call for information generally regarding the cases being handled by the agencies is not to be taken away. However, all the powers of the Minister are subject to the condition that none of them would extend to permit the Minister to interfere with the course of investigation and prosecution in any individual case and in that respect the con­cerned officers are to be governed entirely by the mandate of law and the statutory duty cast upon them. (Para 28)

       (xi) Constitution of India - Article 32 - Writ Petitions - Jain Hawala case - Allegations that Government agencies like CBI and revenue au­thorities had failed to perform their duties - Complaints of inertia of CBI and other agencies to investigate into offences relating to sever­al persons holding high offices in the executive - Accusations it true revealed a nexus between high ranking politicians and bureaucrats - Merely issuance of mandamus directing agencies to perform their task would be futile - Various directions issued from time to time - Case of ‘continuing mandamus’.

       (xii) Court Practice And Procedure - Fair trial - Requirement of public hear­ing in a court - Subject to need of proceedings being held in camera to the extent necessary in public interest - Jain Hawala case - Accusation against persons holding high offices and weilding power - Inaction of investigating agencies to investigate into serious offences alleged - A part of proceedings held ‘in camera’ - Innovation in procedure made, on request, to reconcile interest of justice with that of the accused.

       Held : It is settled that the requirement of a public hearing in a court of law for a fair trial is subject to the need of proceedings being held in camera to the extent necessary in public interest and to avoid prejudice to the accused. We consider it appropriate to mention these facts in view of the nature of these proceedings wherein innovations in procedure were required to be made from time to time to sub-serve the public interest, avoid any prejudice to the accused and to advance the cause of justice. The medium of “continuing mandamus”, was a new tool forged because of the peculiar needs of this matter. (Para 14)

       At the very outset, the then Solicitor General Shri Dipankar P. Gupta requested that a part of the proceedings be held ‘in camera’ to enable him to state certain facts and, if necessary, place before us material, the secrecy of which was required to be maintained for integrity of the investigation and also to a void any prejudice to the concerned accused. In these circumstances, such a procedure was adopted only to the extent necessary for this purpose, in the interest of justice, and that is how a part of some hearings was held in camera. This innova­tion in the procedure was made, on request, to reconcile the interest of justice with that of the accused. (Para 13)

       Result : Petitions disposed of accordingly.