Supreme Court Affirms State ACB's Authority to Investigate Corruption by Central Government Employees

In a significant ruling that clarifies jurisdictional boundaries in anti-corruption enforcement, the Supreme Court of India has dismissed special leave petitions challenging the Rajasthan High Court's decision. The apex court upheld that the state's Anti-Corruption Bureau (ACB) possesses the authority to register cases, investigate, and file charge-sheets under the Prevention of Corruption Act, 1988 (PC Act), against central government employees for offences committed within state territory. This decision, delivered by Justices J.B. Pardiwala and Satish Chandra Sharma on January 19, 2026 , reinforces the role of state agencies in combating corruption without necessitating prior consent from the Central Bureau of Investigation (CBI). The case, arising from allegations of illegal gratification against petitioners Anil Daima and others, underscores the applicability of state police powers in such matters, particularly distinguishing cases of direct bribery demands from those involving official decisions.

Case Background

The petitions stem from criminal proceedings initiated against Anil Daima and another petitioner, who are employed by the central government. The allegations involve offences under Sections 7 and 7A of the PC Act, which pertain to public servants demanding or accepting undue advantage as a reward for performing or abstaining from official duties. Specifically, this is a case of demand for illegal gratification, where the petitioners are accused of soliciting bribes in their official capacities.

The sequence of events began with the registration of a First Information Report (FIR) by the Rajasthan ACB against the petitioners for these corruption charges. The petitioners challenged the ACB's jurisdiction before the Rajasthan High Court, Jaipur Bench, through two Criminal Miscellaneous Writ Petitions (Nos. 450 and 451 of 2025). They argued that as central government employees, any investigation under the PC Act required the exclusive involvement of the CBI, and that proceedings without CBI's prior approval were invalid.

On October 3, 2025 , the High Court disposed of these petitions, addressing two key legal questions: (1) Whether the state ACB has the authority to register, investigate, and prosecute PC Act offences against central government personnel within Rajasthan's territory, or if this jurisdiction lies exclusively with the CBI; and (2) Whether a charge-sheet filed by the ACB without CBI consent is legally valid for initiating and concluding a trial. The High Court ruled in favor of the ACB's jurisdiction, prompting the petitioners to approach the Supreme Court via Special Leave Petitions (Criminal) Nos. 1010-1011 of 2026.

This case highlights a growing tension in India's federal structure regarding anti-corruption enforcement. Central government employees, often posted across states, frequently face corruption allegations in diverse jurisdictions. Prior to this, jurisdictional overlaps between state ACBs and the CBI have led to delays and legal challenges, particularly in interpreting the Delhi Special Police Establishment Act, 1946 (DSPE Act), which governs CBI operations.

Arguments Presented

The petitioners, represented by their counsel, mounted a robust challenge centered on the exclusivity of CBI's role in prosecuting central government personnel. They contended that under the DSPE Act and the PC Act, offences involving central employees fall under the CBI's purview, especially when committed within state boundaries. The core argument was that the state ACB lacked territorial and statutory jurisdiction without obtaining prior consent or approval from the CBI or the central government. This, they argued, ensured uniformity in investigations and prevented potential misuse by state agencies.

Furthermore, the petitioners invoked Section 17A of the PC Act, which mandates prior approval for inquiries or investigations into offences "relatable to any recommendation made or decision taken by such public servant in discharge of his official functions or duties." They asserted that the allegations against them were intertwined with their official duties, thereby requiring such approval from the central government, as they were employed in connection with Union affairs. Without this, they claimed, the entire proceedings—including the FIR, investigation, and prospective charge-sheet—were void ab initio, rendering any trial unconstitutional.

On the other side, the respondents, including the State of Rajasthan and its ACB, defended the state agency's authority. They emphasized that the PC Act is a central legislation applicable nationwide, but its enforcement is not monopolized by the CBI unless specified. Drawing on the CrPC's provisions for police jurisdiction (Sections 154-176), they argued that state police, including specialized units like the ACB, have the primary responsibility to investigate cognizable offences within their territory. The state highlighted that the DSPE Act extends CBI jurisdiction only with state consent in certain cases, but does not oust state agencies from acting independently under the PC Act.

The respondents also contested the applicability of Section 17A, pointing out that the instant case involved a straightforward demand for illegal gratification under Sections 7 and 7A, which does not relate to "recommendations or decisions" in official functions. This distinction, they argued, exempted the matter from the prior approval requirement. The state's position was bolstered by the High Court's prior analysis, which reviewed constitutional provisions under Articles 141 and 142, as well as federal principles under Article 256, to affirm cooperative federalism in law enforcement.

Both sides referenced factual elements: the offence occurred in Rajasthan, involving local transactions, and no prior CBI involvement was sought or denied. The petitioners stressed potential prejudice to central employees, while the state underscored the need for prompt action against corruption to uphold public trust.

Legal Analysis

The Supreme Court's order meticulously dissects the jurisdictional framework, affirming the High Court's reasoning while rejecting the petitioners' novel interpretation of Section 17A. At the outset, the bench noted that the High Court correctly addressed the two questions by examining the interplay between the PC Act, the DSPE Act, and the Code of Criminal Procedure, 1973 (CrPC). The court observed that the PC Act does not confer exclusive investigative powers on the CBI; instead, it allows any police officer to investigate cognizable offences under Section 17, subject to safeguards like Section 17A.

A pivotal aspect of the analysis is the scope of the DSPE Act. The CBI, established under this Act, has jurisdiction over offences notified by the central government, including those under the PC Act. However, Section 6 of the DSPE Act requires state government consent for CBI investigations within state territories. The Supreme Court implied that in the absence of such exclusive consent or a specific notification barring state agencies, the ACB retains concurrent jurisdiction. This aligns with precedents like State of West Bengal v. Jugal Kishore More (1969), where the apex court held that state police jurisdiction is not supplanted by central agencies without explicit statutory ouster.

The bench also delved into Section 17A, introduced via the 2018 amendment to the PC Act to prevent frivolous probes against public servants. It mandates prior approval for investigations into offences linked to official recommendations or decisions. However, the court drew a clear distinction: "Section 17-A talks about enquiry or inquiry or investigation of offences relatable to recommendations made or decision taken by public servant in discharge of official functions or duties. Section 17-A by any stretch of imagination cannot be applied to cases of demand of illegal gratification." This interpretation prevents the provision from being misused to shield outright bribery, which Sections 7 and 7A target directly as undue advantage demands, irrespective of official duties.

The ruling references the High Court's review of decisions like State of Bihar v. J.A.C. Saldanha (1980), which emphasized that central laws do not automatically divest states of police powers, and CBI v. State of Maharashtra (2010), reinforcing cooperative investigation models. By upholding the ACB's role, the court promotes efficiency in anti-corruption drives, avoiding delays from jurisdictional ping-pong. It distinguishes this from cases requiring CBI involvement, such as those under the economic offences notification, but clarifies that PC Act bribery by central employees in state areas falls under state purview unless otherwise directed.

This analysis has broader implications for federalism in criminal justice. It mitigates concerns of "jurisdictional federalism" where central employees might exploit overlaps to evade probes, while safeguarding against overreach by ensuring Section 17A's protections apply only to nuanced official acts, not blatant corruption.

Key Observations

The Supreme Court's order contains several incisive observations that illuminate its reasoning:

• On ACB's jurisdiction: "The High Court after due consideration of the position of law and a review of various decisions of this Court and the provisions of law, has recorded a categorical finding that the ACB of the State of Rajasthan has jurisdiction to register the criminal case under the provisions of the Prevention of Corruption Act despite the fact that the accused is an employee of the Central Government. The High Court has taken the correct view while saying that it is incorrect to say that it is only the CBI who could have instituted the prosecution."

• Clarifying Section 17A's scope: "Section 17-A came to be enacted with a particular object. Section 17-A talks about enquiry or inquiry or investigation of offences relatable to recommendations made or decision taken by public servant in discharge of official functions or duties."

• Rejecting misapplication: "The entire submission of the learned counsel is thoroughly misconceived... We have no hesitation in rejecting such submission at the threshold."

These excerpts emphasize the court's commitment to a purposive interpretation of the PC Act, prioritizing anti-corruption efficacy over procedural hurdles.

Court's Decision

The Supreme Court unequivocally dismissed the Special Leave Petitions on January 19, 2026 , with the observation: "With the aforesaid, the Special Leave Petitions stand dismissed." Pending applications were also disposed of, effectively endorsing the Rajasthan High Court's orders and allowing the ACB's proceedings to continue unabated.

The practical effects are manifold. Charge-sheets filed by state ACBs against central employees under Sections 7 and 7A will now be presumptively valid, streamlining trials and reducing appeals on jurisdictional grounds. This empowers states to act decisively against corruption within their borders, potentially accelerating convictions in bribery cases.

For future cases, the ruling sets a precedent that Section 17A does not blanket central employees in demand-for-gratification scenarios, narrowing its application to discretionary official acts. It may influence similar challenges in other states, fostering uniformity while respecting federal dynamics. However, it leaves room for CBI primacy in complex, inter-state, or high-profile cases via notifications under the DSPE Act.

Overall, this decision bolsters India's anti-corruption architecture, signaling that no public servant—central or state—is above swift scrutiny. Legal practitioners handling PC Act matters must now advise clients on these clarified boundaries, while policymakers may revisit amendments to address any residual overlaps. As corruption erodes governance, such judicial affirmations are crucial for upholding the rule of law.