2009 (7) TMI 111 - HC - Central Excise

Investigation by CBI Fraud In Duty Fraud - criminal conspiracy - An offence came to be registered by the Central Bureau of Investigation, Gandhinagar as Case No. RC 36(A)/2000-GNR on 29th December, 2000 against one Shri M.K. Bhada, Commissioner of CE and C and seven others for the offences punishable under Section 12B read with Section 420 of the Indian Penal Code and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 held that - there is no bar against conducting further investigation under Section 173(8) Cr.P.C. after the final report submitted under Section 173(2) has been accepted - Prior to carrying out further investigation under Section 173(8) Cr.P.C. it is not necessary that the order accepting the final report should be reviewed, recalled or quashed - The decision of the Supreme Court setting aside the judgment of CEGAT which formed the basis of the final report as well as the basis of the order of the learned Special Judge while accepting the report, would form fresh material so as to call for further investigation in the case

Issues Involved:
1. Whether further investigation under Section 173(8) Cr.P.C. is permissible after a final report has been accepted by the Magistrate.
2. Whether the order accepting the final report under Section 190(1)(c) Cr.P.C. is a judicial order.
3. Whether further investigation requires the order accepting the final report to be reviewed, recalled, or quashed.
4. Whether the Supreme Court's decision setting aside the CEGAT judgment constitutes fresh material for further investigation.
5. Whether the principle of double jeopardy applies to further investigation.
6. Whether the accused must be given an opportunity of hearing before further investigation is ordered.

Detailed Analysis:

1. Permissibility of Further Investigation under Section 173(8) Cr.P.C.
The court held that there is no bar against conducting further investigation under Section 173(8) Cr.P.C. even after a final report submitted under Section 173(2) has been accepted by the Magistrate. The court emphasized that the statutory provision of Section 173(8) Cr.P.C. permits further investigation and that the legislature did not intend to preclude such investigation after the acceptance of the final report.

2. Judicial Nature of the Order Accepting the Final Report
The court acknowledged that an order accepting a final report under Section 190(1)(c) Cr.P.C. is a judicial order. This position is supported by the Full Bench decision of this Court in *State of Gujarat v. Shah Lakhamshi Umarshi* and the Supreme Court's decision in *Kamlapati Trivedi v. State of West Bengal*.

3. Requirement to Review, Recall, or Quash the Order Accepting the Final Report
The court clarified that prior to carrying out further investigation under Section 173(8) Cr.P.C., it is not necessary to review, recall, or quash the order accepting the final report. The court cited the Supreme Court's decision in *Union Public Service Commission v. S. Papaiah and others*, which held that the Magistrate could direct further investigation without the need to review or recall the previous order accepting the final report.

4. Supreme Court's Decision as Fresh Material
The court held that the Supreme Court's decision setting aside the CEGAT judgment constitutes fresh material for further investigation. The court noted that the final report and the order accepting it were based on the CEGAT decision, which was later set aside by the Supreme Court. This new development justified further investigation.

5. Principle of Double Jeopardy
The court held that the principle of double jeopardy does not apply to further investigation. It explained that further investigation is merely a continuation of the earlier investigation and does not equate to prosecution or punishment, which are necessary conditions for double jeopardy under Article 20(2) of the Constitution.

6. Opportunity of Hearing for the Accused
The court ruled that there is no obligation to hear the accused before ordering further investigation under Section 173(8) Cr.P.C. The court referred to the Supreme Court's decision in *Sri Bhagwan Samardha Sreepada Vallabha Venkata Vishwandadha Maharaj v. State of Andhra Pradesh and others*, which held that the accused do not have locus standi at the stage of investigation and further investigation.

Conclusion:
The court dismissed the petition, holding that further investigation under Section 173(8) Cr.P.C. is permissible even after a final report has been accepted by the Magistrate. The court found no infirmity in the observation made by the learned Special Judge that the dismissal of the application shall not preclude the CBI from carrying out further investigation and submitting a further report against the accused in accordance with the law. The court discharged the rule and dismissed the petition.

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