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2021 (10) TMI 1376 - SC - Indian LawsPossession (allegedly) of assets disproportionate to known sources of income - offences punishable Under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act 1988 (PC Act) and Section 109 of the Indian Penal Code 1860 (IPC) - HELD THAT - In the present case, the Appellant is challenging the very source of the Respondents' income and the questioning the assets acquired by them based on such income. Hence, at the stage of quashing of an FIR where the Court only has to ascertain whether the FIR prima facie makes out the commission of a cognizable offence, reliance on the documents produced by the Respondents to quash the FIR would be contrary to fundamental principles of law. The High Court has gone far beyond the ambit of its jurisdiction by virtually conducting a trial in an effort to absolve the Respondents - The investigation is stated to be at an advanced stage and is likely to conclude within a period of two to three months. At the same time, the Court has been assured by the ASG on the instructions of the Investigating Officer that before concluding the investigation, the first and second Respondents will be called in order to enable them to tender their explanation in respect of the heads of Disproportionate Assets referred to in the FIR. The only infirmity pointed out by the Respondents which has been acceded to by the Appellant is in relation to the addition of the value of the elevator separately when the whole house had already been valued. However, by itself, it only being a value of Rs. 10 lakhs, this will not be enough to take away the whole basis of the Disproportionate Assets case against the Respondents. Hence, at this stage, the FIR against the Respondents cannot be quashed and it is held that the Appellant's investigation pursuant to it shall continue. The impugned judgment dated 11 February 2020 of the Single Judge of the Telangana High Court quashing the FIR and any proceedings pursuant to it, are set aside - appeal allowed.
Issues Involved:
1. Whether a Preliminary Inquiry is mandatory before registering an FIR. 2. Whether the FIR should be quashed. Detailed Analysis: A. The Appeal: The appeal arises from a judgment dated 11 February 2020 of the High Court of Telangana, which allowed a writ petition filed by the Respondents under Article 226 of the Constitution of India and quashed the FIR dated 20 September 2017 against the Respondents. B. Factual and Procedural History: The first Respondent is a Commissioner of Income Tax, and the second Respondent is her spouse, an MLA and Minister in the Andhra Pradesh government. The FIR was registered against them for possession of assets disproportionate to their known sources of income, punishable under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act 1988 and Section 109 of the IPC. The High Court quashed the FIR, holding that the CBI should have conducted a Preliminary Enquiry before registering the FIR and that the allegations in the FIR were prima facie unsustainable. C. Counsel's Submissions: The Appellant argued that: - The Telangana High Court lacked jurisdiction. - The CBI Manual does not mandate a Preliminary Enquiry before registering an FIR. - The FIR was based on reliable source information, and a Preliminary Enquiry was unnecessary. - The High Court conducted a mini-trial, which was beyond its scope while quashing an FIR. The Respondents argued that: - The Telangana High Court had jurisdiction. - A Preliminary Enquiry is necessary in corruption cases. - The FIR was politically motivated and based on unverified source information. - The allegations in the FIR were unsustainable based on their Income Tax Returns and other documents. D. Whether a Preliminary Inquiry is Mandatory Before Registering an FIR: D.1 Precedents of this Court: The Court reviewed several precedents, including P. Sirajuddin, Nirmal Singh Kahlon, and Lalita Kumari, which clarified that a Preliminary Enquiry is not mandatory if the information received discloses the commission of a cognizable offence. The need for a Preliminary Enquiry depends on the facts and circumstances of each case. D.2 CBI Manual: The CBI Manual provides guidelines for conducting a Preliminary Enquiry but does not make it mandatory. A Preliminary Enquiry is required only if the information does not disclose a cognizable offence. If the information reveals the commission of a cognizable offence, a Regular Case must be registered. D.3 Analysis: The Court held that a Preliminary Enquiry is not mandatory in all corruption cases. The decision in Lalita Kumari and the provisions of the CBI Manual make it clear that if the information discloses the commission of a cognizable offence, a Regular Case can be registered without a Preliminary Enquiry. The purpose of a Preliminary Enquiry is to ensure that the criminal investigation process is not initiated on a frivolous complaint. E. Whether the FIR Should be Quashed: E.1 Scope of Review Before the High Court: The High Court's power to quash an FIR is limited to determining whether the allegations in the FIR make out a cognizable offence. The High Court should not conduct a mini-trial or delve into the merits of the allegations at this stage. E.2 Whether the FIR is Liable to be Quashed in the Present Case: The High Court erred in quashing the FIR by conducting a detailed examination of the evidence and documents produced by the Respondents. The Court held that the documents relied upon by the Respondents, such as Income Tax Returns, cannot be the basis for quashing the FIR at this stage. The veracity and weight of these documents are matters of trial. The Appellant's investigation should continue, and the Respondents will have an opportunity to present their defense during the trial. F. Conclusion: The Court set aside the impugned judgment of the Telangana High Court quashing the FIR and allowed the Appellant to continue its investigation. The appeal was allowed, and the FIR was reinstated.
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