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TMI Blog2021 (10) TMI 1376X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. X X X X Extracts X X X X X X X X Extracts X X X X ..... s of income' Under Section 13(1)(e) of the PC Act, such as their Income Tax Returns, information submitted to their department under the Central Civil Services (Conduct) Rules 1964 "CCS Rules" and affidavit filed under the Representation of the People Act 1951 "RP Act" and the Rules under it; (ii) to counter the veracity of the information from these sources, the Appellant, Central Bureau of Investigation "CBI", should have conducted a Preliminary Enquiry under the Central Bureau of Investigation (Crime) Manual 2005 "CBI Manual" before registration of the FIR; and (iii) on the basis of the information ascertained from these 'known sources of income', the allegations against the Respondents in the FIR prima facie seem unsustainable. This view of the High Court has been called into question in these proceedings. B. Factual and procedural history 4. Since 1992, the first Respondent is a Civil Servant of the Indian Revenue Services "IRS", and was working as Commissioner of Income Tax (Audit-II), Tamil Nadu & Pondicherry when the FIR was registered against her. She is presently working as Commissioner of Income Tax (Audit) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod 4,033,322 F. Assets + Expenditure - Income (DA) 11,081,692 DA percentage 22.86% On the basis of the FIR dated 20 September 2017, the CBI ACB Chennai registered a Case RC 21(A)12017 against the Respondents for offences punishable Under Sections 13(2) read with 13(1)(e) of the PC Act and Section 109 of the Indian Penal Code. 6. On 5 March 2018, the Respondents filed a writ petition before the Telangana High Court Under Article 226 of the Constitution seeking quashing of the FIR. In their writ petition, the Respondents averred that: (i) the FIR is politically motivated since the second Respondent belongs to a rival political party; (ii) the Appellant did not conduct a Preliminary Enquiry before registering the FIR; and (iii) the particulars in the FIR did not constitute an offence and would not, as they stand, result in the Respondents' conviction. Further, the petition pointed out inconsistencies in the FIR where certain assets had been allegedly over-valued while income had been undervalued, without any explanation. Hence, the petition before the High Court urged that the FIR was liable to be quashed. To support their contentions, the Respondents annexed their Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onduct a Preliminary Enquiry before the registration of the FIR and its provisions are directory; (iii) A Preliminary Enquiry is only conducted when the information received is not sufficient to register a Regular Case. However, when the information available is adequate to register a Regular Case since it discloses the commission of a cognizable offence, no Preliminary Enquiry is necessary. This will depend on the facts and circumstances of each case. case, and the Preliminary Enquiry cannot be made mandatory for all cases of alleged corruption. This proposition finds support in the judgments of this Court in Lalita Kumari v. Govt. of UP and Ors. (2014) 2 SCC 1, paras 31-35, 37-39, 83-86, 89-92, 93-96, 101-105, 106-107, 111-112, 114-119 and 120 ("Lalita Kumari") and The State of Telangana v. Managipet (2019) 19 SCC 87, paras 33-34 ("Managipet"); (iv) The FIR was registered on the basis of reliable source information collected during the investigation of another case RC MA1 2016A 0019-CBl/ACB/Chennai in which the first Respondent was one of the Accused. During the investigation of that case, CBI conducted searches at four places belonging to the first Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra and Ors., ("Neeharika Infrastructure"). In the present case, the High Court has gone beyond the scope of its powers and conducted a mini-trial while considering the evidence put forward by the Respondents, in order to quash the FIR; (ix) The High Court has erred in relying upon the Income Tax Returns and other documents filed by the Respondents while quashing the FIR, since their veracity as "lawful sources of income" will have to be determined during the investigation, which has been ongoing for more than two years. The decision of this Court in State of Karnataka v. J. Jayalalitha (2017) 6 SCC 263 ("J. Jayalalitha") reiterates this principle; (x) The High Court has solely relied on the documents filed by the Respondents while calculating their income, expenditure and value of assets to hold that they did not possess any Disproportionate Assets. However, no explanation has been provided about why the calculations done by the CBI resulting in the filing of the FIR and during its subsequent investigation should be overlooked in favor of the Respondents' documents; and (xi) Pursuant t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of an FIR is a necessary requirement in cases of alleged corruption involving public servants, including those of Disproportionate Assets, since undue haste would lead to registration of frivolous and untenable complaints which could affect the careers of these officials. The judgments of this Court in Yashwant Sinha v. CBI (2020) 2 SCC 338, paras 114-115 and 117 ("Yashwant Sinha"), Charansingh v. State of Maharashtra (2021) 5 SCC 469, paras 10-15 ("Charansingh"), P. Sirajuddin v. State of Madras (1970) 1 SCC 595, para 17 ("P. Sirajuddin"), Nirmal Singh Kahlon (supra) (2009) 1 SCC 441, para 30 and Lalita Kumari (supra) Paras 89, 92, 117, 120.5 and 120.6(d) support this formulation; (v) The FIR states that it was filed on the basis of source information received by the CBI ACB Chennai at 4 pm on 20 September 2017, following which the FIR was registered and sent to the Court of the Principal Special Judge for CBI Cases, (VIIIth Additional City Civil Court), Chennai at 5 pm and was received there by 6.25 pm. Hence, it is evident that no verification or Preliminary Enquiry was conducted before registering the FIR; (vi) The failure of CBI to condu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ix) The FIR also deserves to be quashed since: a. It does not differentiate in relation to the separate role of the two Respondents and clubs the charges against them, which vitiates their independent right of defense. Further, the FIR has been filed against the second Respondent in Chennai even though he has never held any public office there and no cause of action arises there; and b. The complaint is completely false since the Respondents do not have any Disproportionate Assets in the check period but rather have an excess of income. To support this, the following chart has been filed along with the counter-affidavit of the first Respondent: SL Description Amount as per FIR (in Rs.) Actual Amount (in Rs.) Revised DA (in Rs.) A1/A2 Disproportionate Assets Check Period 01.04.2010 - 29.02.2016 1,10,81,692 - - 1 STATEMENT B SL.NO. 6 & 7 CBI has valued the Construction cost of Sl.6-7 property of STMB as Rs.5,15,50,000/- [RS. 2,59,50,000 + RS. 2,56,00,000]. Even as per the STM B SL6-7, the value is taken from the report dated 11.03.2016 submitted by A1 to her department vide letter dated 14.03.2016. The total value of construction as per the said report is Rs.4,14,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions now fall for our consideration. Based on the submissions, this Court is called upon to decide two questions: (i) whether the CBI is mandatorily required to conduct a Preliminary Enquiry before the registration of an FIR in every case involving claims of alleged corruption against public servants; and (ii) independent of the first question, whether the judgment of the High Court to quash the FIR can be sustained in the present case. D. Whether a Preliminary Inquiry is mandatory before registering an FIR D.1 Precedents of this Court 12. Before proceeding with our analysis of the issue, it is important to understand what previous judgments of this Court have stated on the issue of whether CBI is required to conduct a Preliminary Enquiry before the registration of an FIR, especially in cases of alleged corruption against public servants. 13. The first of these is a judgment of a two Judge Bench in P. Sirajuddin (supra), in which it was observed that before a public servant is charged with acts of dishonesty amounting to serious misdemeanor, some suitable preliminary enquiry must be conducted in order to obviate incalculable harm to the reputation of that person. Justice G K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CBI. However, this Crime Manual is not a statute and has not been enacted by the legislature. It is a set of administrative orders issued for internal guidance of the CBI officers. It cannot supersede the Code. Moreover, in the absence of any indication to the contrary in the Code itself, the provisions of the CBI Crime Manual cannot be relied upon to import the concept of holding of preliminary inquiry in the scheme of the Code of Criminal Procedure. At this juncture, it is also pertinent to submit that CBI is constituted under a special Act namely, the Delhi Special Police Establishment Act, 1946 and it derives its power to investigate from this Act. (emphasis supplied) However, the Court was also cognizant of the possible misuse of the powers under criminal law resulting in the registration of frivolous FIRs. Hence, it formulated "exceptions" to the general Rule that an FIR must be registered immediately upon the receipt of information disclosing the commission of a cognizable offence. The Constitution Bench held: 115. Although, we, in unequivocal terms, hold that Section 154 of the Code postulates the mandatory registration of FIRs. on receipt of all cognizable of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved but only to ascertain whether the information reveals any cognizable offence. 120.6. As to what type and in which cases preliminary inquiry is to be conducted will depend on the facts and circumstances of each case. The category of cases in which preliminary inquiry may be made are as under: [...] (d) Corruption cases [...] The aforesaid are only illustrations and not exhaustive of all conditions which may warrant preliminary inquiry. (emphasis supplied) The Constitution Bench thus held that a Preliminary Enquiry is not mandatory when the information received discloses the commission of a cognizable offence. Even when it is conducted, the scope of a Preliminary Enquiry is not to ascertain the veracity of the information, but only whether it reveals the commission of a cognizable offence. The need for a Preliminary Enquiry will depend on the facts and circumstances of each case. As an illustration, "corruption cases" fall in that category of cases where a Preliminary Enquiry "may be made". The use of the expression "may be made" goes to emphasize that holding a preliminary enquiry is not mandatory. Dwelling on the CBI Manual, the Constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure and raising the allegation of corruption. This Court also has permitted preliminary inquiry when there is delay, laches in initiating criminal prosecution, for example, over three months. A preliminary inquiry, it is to be noticed in para 120.7, is to be completed within seven days. (emphasis supplied) 17. The decision of a two Judge Bench in Managipet (supra) thereafter has noted that while the decision in Lalita Kumari (supra) held that a Preliminary Enquiry was desirable in cases of alleged corruption, that does not vest a right in the Accused to demand a Preliminary Enquiry. Whether a Preliminary Enquiry is required or not will depends on the facts and circumstances of each case, and it cannot be said to be mandatory requirement without which a case cannot be registered against the Accused in corruption cases. Justice Hemant Gupta held thus: 28. In Lalita Kumari [Lalita Kumari v. State of U.P., (2014) 2 SCC 1 : (2014) 1 SCC (Cri.) 524], the Court has laid down the cases in which a preliminary inquiry is warranted, more so, to avoid an abuse of the process of law rather than vesting any right in favour of an Accused. Herein, the argument made was that if a police officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce is disclosed. Reference in this regard, is made to a judgment of this Court in State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri.) 426] wherein, this Court held inter alia that where the allegations made in the FIR or the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out a case against the Accused and also where a criminal proceeding is manifestly attended with mala fides and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the Accused and with a view to spite him due to private and personal grudge. 34. Therefore, we hold that the preliminary inquiry warranted in Lalita Kumari [Lalita Kumari v. State of U.P., (2014) 2 SCC 1 : (2014) 1 SCC (Cri.) 524] is not required to be mandatorily conducted in all corruption cases. It has been reiterated by this Court in multiple instances that the type of preliminary inquiry to be conducted will depend on the facts and circumstances of each case. There are no fixed parameters on which such inquiry can be said to be conducted. Therefore, any formal an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received does not disclose a cognizable offence but indicates the necessity for an inquiry, a preliminary enquiry may be conducted to ascertain whether cognizable offence is disclosed or not. It is observed that as to what type and in which cases the preliminary enquiry is to be conducted will depend upon the facts and circumstances of each [...] 14. In the context of offences relating to corruption, in para 117 in Lalita Kumari [Lalita Kumari v. State of U.P., (2014) 2 SCC 1 : (2014) 1 SCC (Cri.) 524], this Court also took note of the decision of this Court in P. Sirajuddin v. State of Madras [P. Sirajuddin v. State of Madras, (1970) 1 SCC 595 : 1970 SCC (Cri.) 240] in which case this Court expressed the need for a preliminary enquiry before proceeding against public servants. [...] 15.1. Thus, an enquiry at pre-FIR stage is held to be permissible and not only permissible but desirable, more particularly in cases where the allegations are of misconduct of corrupt practice acquiring the assets/properties disproportionate to his known sources of income. After the enquiry/enquiry at pre-registration of FIR stage/preliminary enquiry, if, on the basis of the material collected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odging the FIR, an enquiry is held and/or conducted after following the procedure as per Maharashtra State Anti-Corruption & Prohibition Intelligence Bureau Manual, it cannot be said that the same is illegal and/or the police officer, Anti-Corruption Bureau has no jurisdiction and/or authority and/or power at all to conduct such an enquiry at pre-registration of FIR stage. (emphasis supplied) 19. Hence, all these decisions do not mandate that a Preliminary Enquiry must be conducted before the registration of an FIR in corruption cases. An FIR will not stand vitiated because a Preliminary Enquiry has not been conducted. The decision in Managipet (supra) dealt specifically with a case of Disproportionate Assets. In that context, the judgment holds that where relevant information regarding prima facie allegations disclosing a cognizable offence is available, the officer recording the FIR can proceed against the Accused on the basis of the information without conducting a Preliminary Enquiry. 20. This conclusion is also supported by the judgment of another Constitution Bench in K. Veeraswami (supra). The judgment was in context of Section 5(1)(e) of the old Prevention of Corruption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e elevating the Investigating Officer to the position of an enquiry officer or a judge. The Investigating Officer is not holding an enquiry against the conduct of the public servant or determining the disputed issues regarding the disproportionality between the assets and the income of the Accused. He just collects material from all sides and prepares a report which he files in the court as charge-sheet. (emphasis supplied) Therefore, since an Accused public servant does not have a right to be afforded a chance to explain the alleged Disproportionate Assets to the Investigating Officer before the filing of a charge sheet, a similar right cannot be granted to the Accused before the filing of an FIR by making a Preliminary Enquiry mandatory. 21. Having revisited the precedents of this Court, it is now necessary to consider the provisions of the CBI Manual. D.2 CBI Manual 22. In the judgment in Vineet Narain (supra), a three Judge Bench of this Court noted that the provisions of the CBI Manual must be followed by the officers of the CBI strictly, and disciplinary action should be taken against those who deviate from them. Chief Justice J.S. Verma noted: 58. As a result of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.) 1000] has been incorporated in the CBI Manual, the CBI Manual itself is the best authority to determine the issue at hand. The court has to read the relevant provisions of the CBI Manual alone and no judgment of this Court can be a better guiding factor under such a scenario. 25. Hence, it is necessary to scrutinize the provisions of the CBI Manual. Chapter 8 of the CBI Manual is titled "Complaints and Source Information". Para 8.1 notes that the CBI must register every complaint it receives, whatever be its source, before it starts verifying it. Para 8.6(ii) provides that verification can be undertaken for "[c]omplaints containing specific and definite allegations involving corruption or serious misconduct against public servants etc., falling within the ambit of CBI, which can be verified". Paras 8.8-8.9 describe the process of verification where the officers are to examine records informally and discreetly without making written requisitions, and that this process ordinarily should not take more than three months but can take up to four months for complicated cases. Para 8.24 indicates that the officer entrusted with verification must submit a detailed r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... superior officer thus has to verify whether the developed "source information" prima facie would result in the registration of a case by the CBI; if yes, they then have to direct the verification of such information. Verification is governed by para 8.29, which speaks of a process similar to para 8.9. Para 8.32 provides that verification of "source information" shall be completed within three months and approval of the Competent Authority is required to carry out verification beyond that period. Similar to para 8.24, under para 8.33, the officer entrusted with verification has to submit a report with specific recommendations on whether a Preliminary Enquiry is required or if a Regular Case should be registered directly. 27. If a Preliminary Enquiry is necessary, it is covered by Chapter 9 of the CBI Manual. Para 9.1 notes: 9.1 When, a complaint is received or information is available which may, after verification as enjoined in this Manual, indicate serious misconduct on the part of a public servant but is not adequate to justify registration of a regular case under the provisions of Section 154 Code of Criminal Procedure, a Preliminary Enquiry may be registe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Preliminary Enquiry must be completed within three months. D.3 Analysis 29. The precedents of this Court and the provisions of the CBI Manual make it abundantly clear that a Preliminary Enquiry is not mandatory in all cases which involve allegations of corruption. The decision of the Constitution Bench in Lalita Kumari (supra) holds that if the information received discloses the commission of a cognizable offence at the outset, no Preliminary Enquiry would be required. It also clarified that the scope of a Preliminary Enquiry is not to check the veracity of the information received, but only to scrutinize whether it discloses the commission of a cognizable offence. Similarly, para 9.1 of the CBI Manual notes that a Preliminary Enquiry is required only if the information (whether verified or unverified) does not disclose the commission of a cognizable offence. Even when a Preliminary Enquiry is initiated, it has to stop as soon as the officer ascertains that enough material has been collected which discloses the commission of a cognizable offence. A similar conclusion has been reached by a two Judge Bench in Managipet (supra) as well. Hence, the proposition that a Preliminary Enq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r caste, for latter no such preliminary investigation is necessary. In that view of the matter it should not be necessary to hold preliminary inquiry for registering an offence under the Atrocities Act, 1989. (emphasis supplied) 31. In a recent decision of a two Judge Bench in Vinod Dua v. Union of India and Ors., a direction of the Court was sought for requiring "that henceforth FIRs. against persons belonging to the media with at least 10 years standing be not registered unless cleared by a committee...". In refusing such a prayer, the Court observed that doing so would be akin to instituting a preliminary inquiry which was not mandated by the statutory framework. Justice U.U. Lalit, speaking for the Bench held: 101...the directions issued in Dr. Subhash Kashinath Mahajan regarding holding of a preliminary inquiry were not found consistent with the statutory framework. The second prayer made in the Writ Petition is asking for the constitution of the Committee completely outside the scope of the statutory framework. Similar such exercise of directing constitution of a Committee was found inconsistent with the statutory framework in the decisions discussed above...Any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Scope of review before the High Court 34. Having answered the first question in the negative, that leaves the court with the second question of whether the FIR should be quashed in the present case. In order to answer this, we must first consider the scope of the review that a High Court exercises while entertaining a petition for quashing of an FIR Under Article 226 of the Constitution or Section 482 of the Code of Criminal Procedure. 35. The well settled test is whether, as they stand, the allegations contained in the FIR make out an offence. The locus classicus on this issue is the judgment of a two Judge Bench of this Court in Bhajan Lal (supra), where the Court provided an illustrative set of situations where the High Court may exercise its jurisdiction Under Article 226 of the Constitution or Section 482 of the Code of Criminal Procedure. Delivering the judgment, Justice S. Ratnavel Pandian held: 102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power Under Article 226 or the inherent powers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a more recent decision of a three Judge Bench of this Court in Neeharika Infrastructure (supra), Justice M.R. Shah, speaking for the Bench consisting also of one of us (Justice D.Y. Chandrachud), enunciated the following principles in relation to the Court exercising its jurisdiction Under Article 226 of the Constitution or Section 482 of the Code of Criminal Procedure: 80. In view of the above and for the reasons stated above, our final conclusions on the principal/core issue, whether the High Court would be justified in passing an interim order of stay of investigation and/or "no coercive steps to be adopted", during the pendency of the quashing petition Under Section 482 Code of Criminal Procedure and/or Under Article 226 of the Constitution of India and in what circumstances and whether the High Court would be justified in passing the order of not to arrest the Accused or "no coercive steps to be adopted" during the investigation or till the final report/chargesheet is filed Under Section 173 Code of Criminal Procedure, while dismissing/disposing of/not entertaining/not quashing the criminal proceedings/complaint/FIR in exercise of powers under Section 482 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the complainant, the investigating officer may file an appropriate report/summary before the learned Magistrate which may be considered by the learned Magistrate in accordance with the known procedure; xiii) The power Under Section 482 Code of Criminal Procedure is very wide, but conferment of wide power requires the court to be more cautious. It casts an onerous and more diligent duty on the court; xiv) However, at the same time, the court, if it thinks fit, regard being had to the parameters of quashing and the self-restraint imposed by law, more particularly the parameters laid down by this Court in the cases of R.P. Kapur (supra) and Bhajan Lal (supra), has the jurisdiction to quash the FIR/complaint; xv) When a prayer for quashing the FIR is made by the alleged Accused and the court when it exercises the power Under Section 482 Code of Criminal Procedure, only has to consider whether the allegations in the FIR disclose commission of a cognizable offence or not. The court is not required to consider on merits whether or not the merits of the allegations make out a cognizable offence and the court has to permit the investigating agency/police to investigate the allegation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d/or misapplied. (emphasis supplied) 37. We must now assess whether the Single Judge of the Telangana High Court has, while quashing the FIR, decided within the parameters of the law described above. The High Court has taken note of the following documents filed by the Respondents: (i) Income Tax Returns; (ii) disclosures by the first Respondent to her Department under the CCS Rules; (iii) an affidavit filed by the second Respondent under the RP Act and the Rules; (iv) a letter dated 14 March 2016 by the first Respondent to Principal Chief Commissioner of Income Tax (CCA), Chennai in relation to the details of the construction of her house, and proof of it having been taken on the record by an Office Memorandum dated 12 June 2017; and (v) a letter dated 15 June 2016 from the Deputy Commissioner of Income Tax, Hyderabad noting the intimation received from the first Respondent in relation to the sale of her property and value realized on 27 February 2016, and the intimation by the first Respondent in regard to the investment undertaken by her. After noting these documents, the High Court has held: There is absolutely no dispute that the above documents are true, in the sense they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate upon the core issue whether the Respondents have prima facie material to conclude that the Petitioners are in possession of disproportionate assets. 39. The High Court has then quashed the FIR by scrutinizing it in detail and pointing out five major grounds. First, it has dealt with the argument that there is a miscalculation of the Respondents' income in the FIR. It has held that while the FIR notes the income of the Respondents in the check period to be Rs. 1,39,61,014, their Income Tax Returns show it to be Rs. 2,47,63,542. Hence, based on the Respondents' Income Tax Returns alone, the High Court has directed that the difference in income of Rs. 1,08,02,528 be added to Statement-C in the FIR. Second, it deals with the Respondents' issue with Serial No. 9 of Statement-C of the FIR, that while they sold a property for a sum of Rs. 1 crore (in accordance with their Income Tax Returns for FY 2015-16), their income is only mentioned as Rs. 72,50,000. The High Court has accepted this submission and rejected the Appellant's position that the sum of Rs. 72,50,000 was recorded based on their "source information". As such, it directed that a sum of Rs. 25,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference of Salary and arrears received by the 1st petitioner 37,67,242 2. Difference of Income of 2nd petitioner 70,35,286 3. Difference of sale consideration received by Sale of immovable property in Bengaluru 27,50,000 Total amount of income to be added in Statement-C 1,35,52,528 II. The following amounts have to be deducted from Statement-B 1. Difference of value of the Building Constructed by the 1st petitioner 85,78,200 2. Cost of Bengaluru property which was already sold away by 2nd petitioner 8,00,000 3. Value of Oscan Elevator which is included in the value of the construction of building by the 1st petitioner 10,00,000 Total amount of income to be added in Statement-B 1,03.78,200 a) Total Income as modified (Statement-C) 6,20,29,158 b) Total value of assets possessed at the end of check period as modified (Statement-B) 5,86,72,866 It then provided 'revised' figures (as compared to the FIR) in another table: Sl.No. Particulars of Assets Amount A Assets at the beginning of the check period 1,35,26,066 B Assets at the end of the check period 5,86,72,866 C Assets during the check period (B-A) 4,51,46,800 D Income during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Justice Ranjana P. Desai held: 34.4. No restriction can be placed on the High Court's powers Under Section 482 of the Code. The High Court always uses and must use this power sparingly and with great circumspection to prevent inter alia the abuse of the process of the court. There are no fixed formulae to be followed by the High Court in this regard and the exercise of this power depends upon the facts and circumstances of each case. The High Court at that stage does not conduct a mini trial or roving inquiry, but nothing prevents it from taking unimpeachable evidence or totally acceptable circumstances into account which may lead it to conclude that no trial is necessary qua a particular Director. This principle also applies squarely to the exercise of powers by a High Court Under Article 226 of the Constitution while considering a writ petition for quashing an FIR. Further, in numerous judgments of this Court it has been held that a court cannot conduct a mini-trial at the stage of framing of charges State of Orissa v. Debendra Nath Padhi, (2005) 1 SCC 568, para 18; Bharat Parikh v. CBI, (2008) 10 SCC 109, para 19; Indu Jain v. State of M.P., (2008) 15 SCC 341, para 39; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; [Ed.: As observed in State of M.P. v. Awadh Kishore Gupta, (2004) 1 SCC 691 at p. 697: 2004 SCC (Cri.) 353, para 6.] The categories so enumerated are illustrative. Receipt by way of share in the partition of ancestral property or bequest under a will or advances from close relations would come within the expression "known sources of income" provided the second condition stands fulfilled that is to say, such receipts were duly intimated to the authorities as prescribed. (emphasis supplied) 44. In the present case, the Respondents have filed before us their Income Tax Returns, statements under the CCS Rules, affidavits under the RP Act and all other document filed before the Telangana High Court as well. Based on these documents, the Respondents have urged that the calculation of their income, expenditure and value of assets during the check period in the FIR is incorrect. In support of the proposition that these documents can be relied upon, they have pointed out the following observations in the judgment in Kedari Lal (supra): 12. In the instant case, every single amount received by the Appellant has been proved on record through the testimony of the witnesses and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was Rs. 4,14,21,800. To this, an amount of Rs. 15,50,000 has been added to reach a final value of Rs. 4,29,71,800, which is Rs. 85,78,200 less than the value mentioned in the FIR. Further, while the Appellant has defended the valuation in the FIR, based on a valuation conducted by the CPWD in 2018 (which valued the house at Rs. 6,48,85,300), the Respondents have argued that the CPWD valuation has been done after the FIR had been filed and cannot be used to defend the figures therein. Second, it has been argued that Serial No. 31 of Statement-B of the FIR records that the Respondents have an asset worth Rs. 10 lakhs, which is an elevator inside the house mentioned in the assets. The argument against its inclusion is two-fold: (i) the value of the elevator would have already been included within the value of the house; and (ii) even the Appellant's rejoinder, at paragraph 16, admits this to be a mistake and notes that the elevator's value is "subsumed in the construction cost of the house property of the Respondent and hence this value will be reduced". Hence, on the basis of the first two submissions, the Respondents argue that the value of the Disproportionate As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has relied upon the judgment of a two Judge Bench of this Court in J. Jayalalitha (supra), where it has been held that documents such as Income Tax Returns cannot be relied upon as conclusive proof to show that the income is from a lawful source under the PC Act. Justice P.C. Ghose held thus: 191. Though considerable exchanges had been made in course of the arguments, centering around Section 43 of the Evidence Act, 1872, we are of the comprehension that those need not be expatiated in details. Suffice it to state that even assuming that the income tax returns, the proceedings in connection therewith and the decisions rendered therein are relevant and admissible in evidence as well, nothing as such, turns thereon definitively as those do not furnish any guarantee or authentication of the lawfulness of the source(s) of income, the pith of the charge levelled against the Respondents. It is the plea of the defence that the income tax returns and orders, while proved by the Accused persons had not been objected to by the prosecution and further it (prosecution) as well had called in evidence the income tax returns/orders and thus, it cannot object to the admissibility of the records ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned and all the payments were made by cheques, and thus the allegation levelled against them were baseless. It was observed that the minuteness of the details furnished by the parties and the income tax returns and assessment orders, sale deeds, etc. were necessary to be carefully looked into and analyzed only by an independent agency with the assistance of chartered accountants and other accredited engineers and valuers of the property. It was observed that the Income Tax Department was concerned only with the source of income and whether the tax was paid or not and, therefore, only an independent agency or CBI could, on court direction, determine the question of disproportionate assets. CBI was thus directed to conduct a preliminary enquiry into the assets of all the Respondents and to take further action in the matter after scrutinizing as to whether a case was made out or not. 201. This decision is to emphasize that submission of income tax returns and the assessments orders passed thereon, would not constitute a foolproof defence against a charge of acquisition of assets disproportionate to the known lawful sources of income as contemplated under the PC Act and that furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no clash between the decisions in Kedari Lal (supra) and J. Jayalalitha (supra) for two reasons: (i) the judgment in J. Jayalalitha (supra) notes that a document like the Income Tax Return, by itself, would not be definitive evidence in providing if the "source" of one's income was lawful since the Income Tax Department is not responsible for investigating that, while the facts in the judgment in Kedari Lal (supra) were such that the "source" of the income was not in question at all and hence, the Income Tax Returns were relied upon conclusively; and (ii) in any case, the decision in Kedari Lal (supra) was delivered while considering a criminal appeal challenging a conviction under the PC Act, while the present matter is at the stage of quashing of an FIR. 49. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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