MS Fertico Marketing and Investments Pvt. Ltd and Ors v. Central Bureau of Investigation and Anr.
Criminal Appeal Nos. 760- 764 OF 2020 [Arising out of SLP(Crl.) Nos. 8342-46 of 2019]
17 November, 2020
Counsel for the appellants: learned Senior Counsel Shri Mukul Rohatgi, learned Senior Counsel Mr. Ajit Kumar Sinha,
Counsel for the respondents: learned Additional Solicitor General S.V. Raju.
The Hon’ble Supreme Court comprising of Justice B.R. Gavai and Justice A.M. Khanwilkar held in a case that the CBI investigation would not be vitiated unless the illegality is prejudicial to the accused or results in miscarriage of justice.
On 25th March 2011, a joint surprise raid was conducted by the CBI in factory premises of Fertico Marketing and Investment Private Limited and it was found that the coal purchased under the FSA was sold in the black market. It was further found by CBI that this was done in connivance with the unknown government officials which led to loss of Rs.36.28 crore to the Central Government. Accordingly, on 13th April 2011, an FIR came to be registered by CBI for the offences punishable under Sections 120B and 420 of the IPC and Section 13 (2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 During the course of investigation, it was found that two officers namely Ram Ji Singh, the then General Manager, DIC, Chandauli and Yogendra Nath Pandey, Assistant Manager, DIC, Chandauli were also part of the conspiracy.
The competent authority granted sanction to prosecute the two public servants on 31st May 2012, under Section 19 of the PC Act. Charge-sheet was filed on 31st May 2012, against the appellants under Section 120B read with Section 420, Sections 467, 468 and 471 of the IPC. Post-Facto consent was given by the state government by notification dated 7th September 2018, Various petitioners approached the High Court by filing petitions under Section 482 Cr.P.C. praying for quashing the charge-sheet/summoning order and consequential proceedings pending before the Special Judge, Anti-Corruption, CBI. The learned Single Judge of the High Court dismissed all the petitions and held in favour of the CBI.
The question of law is as follows:
Whether the investigation conducted by the CBI in these bunch of cases are illegal and without jurisdiction for non-compliance of section 6 of DSPE Act? If so, what is its effect?
Learned counsel for the appellants submitted that (i) the consent of the State Government is mandatory as is seen from Section 6 of the DSPE Act. (ii) That failure in obtaining the consent prior to registration of the FIR would go to the root of the matter and vitiate the entire investigation. (iii) That an offence under Section 120B of the IPC read with Section 13(1) (d) of the Prevention of Corruption Act cannot stand unless there is a meeting of minds between public servant and the private individuals and as such, an FIR could not be registered.
Learned counsel for the public servants submitted that (i) insofar as the appellants-public servants are concerned, in the absence of a valid consent, the CBI could not have exercised powers and jurisdiction to investigate the matter. (ii) That the Post-Facto sanction granted on 7th September 2018, would not cure the defect of obtaining the prior consent.
Counsel for the respondents submitted that (i) the prior consent under Section 6 of the DSPE Act is not mandatory but directory. (ii) That in any case unless the appellants point out that on account of the procedural irregularity of not obtaining the prior consent, prejudice is caused to the appellants or it has resulted in miscarriage of justice, the investigation would not be vitiated. (iii) Insofar as the public servants are concerned, in any case, the consent has been granted after completion of the investigation on 7th September 2018 and as such the defect, if any, stands cured.
Placing emphasis on sections 5 and 6 of the DSPE Act, the Court observed the following:
It could thus be seen, that though Section 5 enables the Central Government to extend the powers and jurisdiction of Members of the DSPE beyond the Union Territories to a State, the same is not permissible unless, a State grants its consent for such an extension within the area of State concerned under Section 6 of the DSPE Act. Obviously, the provisions are in tune with the federal character of the Constitution, which has been held to be one of the basic structures of the Constitution. (Para 11)
The Court then referred to notification of the state government dated 15th June 1989. In that regard, the Court dismissed the contention of the private parties with relation to prior consent and observed the following:
As such, insofar as the private individuals are concerned, there is no embargo with regard to registration of FIR against them inasmuch as, no specific consent would be required under Section 6 of the DSPE Act. Vide notification dated 15th June 1989, the State of Uttar Pradesh has accorded a general consent thereby, enabling the Members of DSPE to exercise powers and jurisdiction in the entire State of Uttar Pradesh with regard to investigation of offences under the Prevention of Corruption Act, 1988 and also to all or any of the offence or offences committed in the course of the same transaction or arising out of the same facts. As such, for registration of FIR against the private individuals for the offences punishable under the Prevention of Corruption Act and other offences under the IPC, committed in the course of the same transaction or arising out of the same facts, the Members of DSPE have all the powers and jurisdiction. As such, we find absolutely no merits in the appeals filed by the private individuals. (Para 13)
As far as the prosecutions with regard to the two public servants are concerned, the Court referred to its judgment in H.N. Rishbud and Inder Singh v. The State of Delhi [1955] 1 SCR 1150, State of Karnataka v. Kuppuswamy Gownder and Others (1987) 2 SCC 74. The Court also placed emphasis on its judgment in Union of India v. Prakash P. Hinduja and Another (2003) 6 SCC 195, wherein it was observed as follows:
The Court, after referring to Prabhu v. Emperor AIR 1944 SC 73 and Lumbhardar Zutshi v. The King AIR 1950 PC 26 held that if cognizance is in fact taken on a police report initiated by the breach of a mandatory provision relating to investigation, there can be no doubt that the result of the trial, which follows it cannot be set aside unless the illegality in the investigation can be shown to have brought about a miscarriage of justice and that an illegality committed in the course of investigation does not affect the competence and the jurisdiction of the Court for trial. This being the legal position, even assuming for the sake of argument that the CBI committed an error or irregularity in submitting the charge sheet without the approval of CVC, the cognizance taken by the learned Special Judge on the basis of such a charge sheet could not be set aside nor could further proceedings in pursuance thereof be quashed. The High Court has clearly erred in setting aside the order of the learned Special Judge taking cognizance of the offence and in quashing further proceedings of the case.” (Para 21 in Union of India v. Prakash P. Hinduja and another (2003) 6 SCC 195)
In the above regard, the Court observed the following:
It could thus be seen, that this Court held that even for the sake of argument that CBI had committed an error or irregularity in submitting the charge-sheet without the approval of CVC, the cognizance taken by the learned Special Judge on the basis of such a charge-sheet, would not be set aside nor could further proceedings in pursuance thereof be quashed. (Para 17)
Concluding, the court held the following:
In the result, we find no reason to interfere with the finding of the High Court with regard to not obtaining prior consent of the State Government under Section 6 of the DSPE Act. (Para 21)
However, it could be noticed that the learned Single Judge while referring two questions to the Division Bench, had observed that the question Nos. 2, 3 and 4 can be decided only after the question No. 1 was answered. After the matter was returned to the learned Single Judge by the Division Bench, the learned Single Judge was bound to answer question Nos. 2, 3 and 4. The learned Single Judge, in the impugned order, has not at all dealt with question Nos. 2, 3 and 4. (Para 22)
We, therefore, remit the matter to the learned Single Judge for deciding the question Nos. 2, 3 and 4 on its own merits. We clarify, that we have not considered the merits of the matter and all questions available to both the parties are kept open. (Para 23)
Consequently, the appeals were disposed of in the aforementioned terms.
View/Download Judgment: MS Fertico Marketing and Investments Pvt. Ltd and Ors v. Central Bureau of Investigation and Anr.
Kalidharun K M
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