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1996 Supreme(Pat) 147
PATNA HIGH COURT
Sachchidanand Jha and S.J.Mukhopadhaya JJ.
Sushil Kumar Modi
Versus
State Of Bihar
Civil Writ Jurisdiction Case No. 1617 of 1996 ;
Decided On : MARCH 11, 1996
The High Court has the jurisdiction to issue a direction for entrustment of the investigation to the C.B.I. under Article 226 of the Constitution, even without the consent of the State Government, in appropriate cases where the investigation by the State Police is inadequate or there are reasons to believe that the investigation may not be fair and impartial.
Headnote:
ANIMAL HUSBANDRY SCAM - EXCESS EXPENDITURE - FRAUDULENT DRAWALS - INVESTIGATION BY C.B.I. - JURISDICTION OF HIGH COURT - CONSENT OF STATE GOVERNMENT - SCOPE OF ARTICLE 226 OF THE CONSTITUTION - PUBLIC INTEREST LITIGATION.
Fact of the Case:
Excess expenditure and fraudulent drawals in the Animal Husbandry Department of the Government of Bihar were brought to the notice of the Court through Public Interest Litigations. The State admitted to the excess drawals but denied knowledge of their fraudulent nature until January 1996. The petitioners sought a direction to the Central Bureau of Investigation (C.B.I.) to investigate the cases.
Finding of the Court:
1. The Constitution contemplates and permits excess expenditure but only if the amount authorized by the Appropriation Bills is found to be insufficient for the purpose or when a need arises during the current financial year for supplementary or additional expenditure upon some new service not contemplated in the annual financial statement for that year or if the money already spent on any service during the financial year exceeds the amount granted for that service. 2. The excess expenditures/drawals may be a usual phenomenon in the State Financing but it is difficult to envisage that the amount of excess would be more than the amount of the grant, as in the years 1991-92, 1992-93, 1993-94 and also 1995-96 the figures of which are available on the records. 3. The plea of the State that the excess drawals are usual phenomenon, in the circumstances, is difficult to swallow. 4. If money is misappropriated on the basis of fake bills and vouchers, it would constitute criminal offence. 5. The State police is competent to make investigation in respect of cognizable offence under the Code of Criminal Procedure but it cannot be said that the Central Bureau of Investigation has got no statutory authority to make investigation. 6. The High Court is competent to issue mandamus of that nature. It is this aspect of the matter that I now propose to discuss. 7. The factual position of the case may be summed up as follows: (i) Huge sums of money, far in excess of the legislative sanction for the services, have been spent in the Animal Husbandry Department over the last so many years. These expenditures, systematically effected by making drawals from the concerned Treasuries, were fraudulent in nature. (ii) No legislative sanction in the shape of additional or supplementary grants/appropriations has been accorded to these excess drawals till date. (iii) The State Government was admittedly in know of the excess drawals. Yet, no remedial action whatsoever, was taken. The Government has failed to show its bona fide in not stopping the on-going drawals and expenditures. (iv) The stand of the State Government that excess drawals are usual phenomena, in the circumstances of these cases, cannot be accepted. Its plea that it was not aware of the fraudulent nature of the drawals/expenditure until January, 1996 is also not belief-worthy. (v) Excess drawals and expenditures could not have been made year after year without the tacit support and blessings of the high-ups at the Secretariat/Government level. (vi) The State Government gave patronage to the officers of the Animal Husbandry Department who were already under cloud and are now made accused. The; possibility of the Government influencing the course of investigation by State Police cannot be ruled out. (vii) Administrative actions taken against the officers are eye-wash. (viii) Investigation done so far appears to be slip-shod and perfunctory. (ix) The State police is not well-equipped to make full and proper investigation of the case of the present nature. (x) The State Governments recalcitrance in agreeing to probe by any outside agency, prima facie, shows that it wants to hide facts and shield guilty persons. Earlier in 1980 also, despite the Minister-in-charge suggestion C.B.I. enquiry, the proposal was scuttled on mis-representation of facts that C.B.I. had declined to take up investigation. (xi) The notification dated 19.2.96 (supra) and the appointment of Judicial Commission are attempts, prima facie, to pre-empt the CBI from taking up investigations and the Court from making positive orders in that regard.
Issues: 1. Whether the High Court has the jurisdiction to issue a direction for entrustment of the investigation to the Central Bureau of Investigation (C.B.I.)? 2. Whether the consent of the State Government is required under the Delhi Special Police Establishment Act, 1946, for the High Court to issue such a direction? 3. Whether the investigation by the State Police is adequate in the present case? 4. Whether the excess expenditure and fraudulent drawals in the Animal Husbandry Department warrant an investigation by the C.B.I.?
Ratio Decidendi: 1. The High Court has the jurisdiction to issue a direction for entrustment of the investigation to the C.B.I. under Article 226 of the Constitution. 2. The consent of the State Government is not required under the Delhi Special Police Establishment Act, 1946, for the High Court to issue such a direction. 3. The investigation by the State Police is not adequate in the present case, considering the magnitude and nature of the excess expenditure and fraudulent drawals, the involvement of high-level officials, and the lack of credibility of the State Police. 4. The excess expenditure and fraudulent drawals in the Animal Husbandry Department warrant an investigation by the C.B.I. to ensure a full, fair, and impartial investigation.
Final Decision: The Court directed the Central Bureau of Investigation (C.B.I.) to enquire and scrutinize all cases of excess drawals and expenditure in the department of Animal Husbandry in the State of Bihar during the period 1977-78 to 1995-96 and lodge cases where the drawals are found to be fraudulent in character, and take the investigation in those cases to its logical end, as early as possible; preferably, within four months. The investigations by the State police in cases already instituted shall remain suspended in the meantime. The Court also directed the Income-tax Department to initiate such action as may be considered fit, necessary and expedient under the Income-tax Act, Wealth-tax Act etc. against persons whom he reasonably, thinks to be involved in the scam and possess unaccountable wealth and property, and taken the proceedings to their logical conclusions.
Sachchidanand Jha, J.
1. These writ petitions have been filed in public interest by individual citizens and organisations of different complexions, in substance seeking direction, to the Central Bureau of Investigation (CBI) to enquire and investigate the cases relating to fraudulent excess expenditures/drawals in the Animal-Husbandry Department of the Government.
2. The crux of the petitioners case is that the officers of the Animal Husbandry Department-Both at the district and the Secretariat levels-in collusion with the Treasury Officers Officers of the Finance Department at the Secretariat level with the blessings and support of the Government, systematically drew huge sums of money in excess of the grant, i.e. the financial sanction against fake allotment orders, vouchers, etc. According to the petitioners, because of the involvement and bias of the high-ups, fair investigation into-what has come to be known as Animal Husbandry Scam in the State, is not possible.
3. The State does not deny that there have been excess drawals of money beyond sanctioned grant. It also does not deny that the drawals were fraudulent in nature. In paragraph 43 of the counter-affidavit in C.W.J.C. No. 602 of 1996 (R) it has been stated, "As a matter of fact, it is a case of fraud and forgery and the money fraudulently drawn from the consolidated fund of the State". According to the State, while it was aware of the excess drawals, which is an usual phenomenon in the State Financing, it had no knowledge that the drawals were fraudulent in nature until January, 1996. And when the fraud came to light prompt action was taken by filing criminal cases, instituting administrative enquiry and so on.
4. It would be appropriate at this stage to notice the Constitutional provisions relating to State Financing applicable to the States. The provisions which require to be noticed for the purpose of, these cases are contained in Articles 202 to 206, 266 and 267. Article 202 provides for laying down of a statement of the estimated receipts and expenditure, called Annual Financial Statement, in common parlance known as the Budget, in respect of every financial year, before the Houses of the State Legislature. Article 203 provides that estimates in respect of non-charged expenditure, i.e. items other than those mentioned in Article 202(3), shall be submitted in the form of demands in the Legislative Assembly. After the Assembly gives its assent to the estimates, that is to say, the grants are made under Article 203. Appropriation Bill is introduced under Article 204 for the appropriation of money out of the consolidated fund of the State of meet the grants (with respect of non-charged expenditure) and the charged expenditure, i.e. Expenditure charged on the consolidated Fund of the State under Article 202(3). Article 205 lays down that if the amount authorised under the Appropriation Bill to be spent for a particular service for the current financial year is found to be insufficient for the purposes of that year or when a need arises during the current financial year for supplementary or additional expenditure upon some new service not contemplated in the Annual Financial Statement (Budget) for that year, or if the money spent on any service during a financial year exceeds the amount granted for that service, another statement showing the estimated amount of that expenditure is required to be presented to the Assembly, In that situation, the same procedure as contemplated by Articles 202 to 204 is required to be followed. Article 206 provides for vote of accounts and exceptional grants. Where a full-fledged annual statement cannot be presented, the Assembly is empowered to make a grant in advance in respect of estimated expenditure for a part of the financial year pending completion of the usual procedure for the voting of such grants and passing of appropriation bill in accordance with Articles 203 and 204. Similarly, the Assembly is empowered to make a
