2016 (10) TMI 10 - SC - Money Laundering

Competent Authority to act upon the recommendations made by the Lokayukta - Held that - As submitted by the counsel appearing for the concerned State agencies that having regarding to the voluminous documents and more particularly the need to verify the correctness of the information made available during the investigation/enquiry, it would take some more time to complete the investigation/enquiry in the respective cases. The counsel appearing for the appellant, however, submits that the law enforcement agencies have not done enough and are responsible for delaying the investigation/enquiry for reasons best known to them, which inevitably would benefit respondent nos. 5 and 6. The counsel for the respondent nos.5 and 6 has refuted this veiled attack on respondent nos.5 and 6 of being responsible for delay in the enquiry. He submits that these respondents have extended full cooperation to the concerned agencies thus far and would continue to do so even in future. It is unnecessary for us to dilate on this aspect. As aforesaid, the relief in the writ petition was limited to directing the Competent Authority to act upon the recommendations made by the Lokayukta. That relief has worked out in view of the direction issued by the Competent Authority to investigate/enquire into the factual matrix noticed in Lokayukta s report. Further, the law enforcement agencies have moved into action and have collected information and material including with reference to the representations and affidavits received in the course of the said investigation/enquiry. We may, therefore, accede to the request of the law enforcement agencies to give them some more time to complete the investigation/enquiries in relation to the acts of commission and omission of respondent nos.5 and 6 or any other person(s) privy thereto. Considering the fact that the law enforcement agencies are on their job for quite sometime, we express a sanguine hope that they would complete the investigation/enquiry at the earliest and not later than six months from today and take the same to its logical end in accordance with law. We make it clear that we are not expressing any opinion on the merits of the matters under investigation/enquiry or the defence that may be available to respondent nos. 5 and 6 in any proceedings to be instituted against them in relation to the said matters.

Summary

Issues Involved:
1. Implementation of Lokayukta's recommendations.
2. Jurisdiction and authority of the Lokayukta's report.
3. Role and actions of the Competent Authority and law enforcement agencies.
4. Progress of investigations by the State Vigilance Establishment and other agencies.
5. Public Interest Litigation (PIL) and its relevance.

Issue-wise Detailed Analysis:

1. Implementation of Lokayukta's Recommendations:
The appellant filed a writ petition under Article 226 of the Constitution of India as Public Interest Litigation, seeking the implementation of the Lokayukta Uttar Pradesh's recommendations dated 22nd February 2012. The Lokayukta's report concluded that certain public servants had acquired assets disproportionate to their known sources of income and recommended a thorough investigation by a Central Investigating Agency like the CBI or the Enforcement Directorate. The appellant believed that the Competent Authority was not taking steps to comply with these recommendations, prompting the filing of the writ petition.

2. Jurisdiction and Authority of the Lokayukta's Report:
The Division Bench of the High Court held that the Lokayukta's report was a fact-finding enquiry and not final or conclusive. It emphasized that a detailed enquiry was necessary after providing an opportunity for the accused to be heard. The High Court also opined that the petition for implementing the Lokayukta's recommendations should not be entertained as the Act itself provided sufficient provisions for implementation.

3. Role and Actions of the Competent Authority and Law Enforcement Agencies:
The Competent Authority decided to conduct an open vigilance enquiry through the State Vigilance Establishment, as per the Government Order dated 10th July 2013. The Enforcement Directorate, in its affidavit, clarified its mandate to investigate contraventions under the Foreign Exchange Management Act, 1999, and money laundering under the Prevention of Money Laundering Act, 2002, but not under the Prevention of Corruption Act, 1988. The CBI also stated that the case did not involve complexities or interstate ramifications requiring its specialized investigation.

4. Progress of Investigations by the State Vigilance Establishment and Other Agencies:
The State Vigilance Establishment completed its open enquiry and submitted a report to the State Government on 29th July 2015. However, several representations and affidavits were submitted by the accused, necessitating further verification and supplementary enquiry. The investigation into the FIR No.385/2013, registered under the Prevention of Corruption Act, 1988, was also ongoing, with supplementary investigations in progress. Additionally, another FIR related to corruption and irregularities in the construction of monuments and gardens was registered, involving the accused as co-accused.

5. Public Interest Litigation (PIL) and Its Relevance:
The High Court dismissed the writ petition, stating that there was no element of public interest in the grievances made by the appellant. The Supreme Court, however, issued notices to the respondents and reviewed the progress of investigations. The Court acknowledged the efforts of law enforcement agencies and granted them additional time to complete the investigations, expressing hope for their completion within six months.

Conclusion:
The Supreme Court disposed of the appeal, noting that the relief sought in the writ petition had been worked out with the Competent Authority's direction to investigate the Lokayukta's report. The Court emphasized the need for law enforcement agencies to complete their investigations promptly and clarified that it was not expressing any opinion on the merits of the matters under investigation.