2020 (2) TMI 1502 - HC - Indian Laws

Misappropriation of funds at the State Disabled Resource Center - allegations were levelled that whopping amount towards payment of salary was withdrawn by showing them to be working at the Physical Referral Rehabilitation Centre - HELD THAT - The order under review on satisfaction that the matter needs to be investigated by an independent agency. In fact the matter was reffered to the CBI for the reason that the SRC was manned by officers at the level of the Chief Secretary and despite direction by the PIL Court the matter was not properly examined and effective action was not taken by the State authorities. There is no error apparent on the face of record warranting exercise of review jurisdiction to review recall the order - both the review petitions sans substratum are liable to be and are hereby dismissed.

Summary

Issues: Misappropriation of funds at the State Disabled Resource Center (SRC) and legality of directing CBI to register an FIR without hearing the prospective accused.

Misappropriation of Funds at SRC:
The case involved allegations of misappropriation of funds at the State Disabled Resource Center (SRC). The writ petition, later converted into a Public Interest Litigation (PIL), raised concerns about the withdrawal of a significant amount for salary payments by falsely claiming that employees were working at the Physical Referral Rehabilitation Centre (PRRC). It was alleged that the PRRC existed only on paper without any tangible activity, recruitment process, or establishment of a hospital for the disabled.

Legal Implications of Directing CBI to Register FIR:
The Court directed the Central Bureau of Investigation (CBI) to register an FIR within one week, seize relevant records within 15 days, and conduct an independent investigation. The applicants in the review petitions argued that they were not heard before the matter was handed over to the CBI, questioning the exaggeration of the defalcated amount to create a larger scandal. Reference was made to Section 17A of the Prevention of Corruption Act, 1988, to argue against investigation without government sanction. However, the Court emphasized that prospective accused have no right to be heard at the FIR registration stage.

Court's Analysis and Decision:
The Court found prima facie substance in the misappropriation allegations and transferred the case to the CBI due to the failure of state authorities to address the financial irregularities adequately. The Court dismissed the review petitions, stating that there was no error in directing the CBI investigation. It clarified that the rule of audi alteram partem does not apply at the FIR registration stage for prospective accused. The Court highlighted that Section 17A of the PC Act does not protect individuals involved in corrupt practices and upheld its jurisdiction to direct FIR registration in cases of suspected misuse of public funds.

Conclusion:
The Court's decision to involve the CBI in investigating the misappropriation of funds at the SRC was upheld, emphasizing the need for an independent agency due to the involvement of senior officers and the lack of effective action by state authorities. The review petitions were dismissed, affirming the legality of the Court's order to register an FIR without hearing the prospective accused and rejecting arguments based on Section 17A of the PC Act.