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PETITIONER: UNION OF INDIA & ORS.

       Vs.

RESPONDENT: SUSHIL KUMAR MODI & ORS.

DATE OF JUDGMENT:       05/11/1996

BENCH: J.S VERMA, K. RAMASWAMY, S.P. BHARUCHA

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      Leave granted.      These appeals  by special  leave are  against the order dated 7.10.1996   passed by the Patna High Court in CWJC No. 1617 of  1996 and  CWJC Now 602 of 1996. The material  facts leading to these appeals, in briefs are stated here after.      Writ Petitions  numbered as  CWJC Nos. 1617 of 1996 and 602 of  1996 were  filed in  the Patna  High Court  alleging large-scale misappropriation  of public  funds to the extent of several  hundred  crores  of  rupees  by  indulging  into fraudulent transactions and falsification of accounts in the Animal Husbandry  Department in  the State  of Bihar  over a long period  between the  years 1977-78 to 1995-96 which has come to be known as ’Fodder Scam’. An in-depth investigation into the  Fodder Scam  was called for . The High Court by an order dated  1l.3.1996  directed  the  investigation  to  be entrusted to  the Central  Bureau of Investigation (CBI) and further directed as under:      "..I would  accordingly direct  the      Central  Bureau   of  Investigation      (CBI)  through   its  Director   to      enquire and scrutinise all cases of      excess drawals  and expenditure  in      the Deptt.  of Animal  Husbandry in      the State  of Bihar  during 1977-78      to 1995-96  and lodge  cases  where      the  drawals   are  found   to   be      fraudulent in  character  and  take      the investigation in those cases to      its  logical   end  as   early   as      possible, preferably,  within  four      months."      Aggrieved by this order of the High Court, Civil Appeal Nos. 5177  of 1996 and 5178-83 of 1996 were filed by special leave in this Court. This Court disposed of these appeals by order dated March 19, 1996. directing as under:      "We. are. also of the opinion that,      to alleviate  the apprehensions  of      the state  about the control of the      investigation by the CBI, it should

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    be under  the overall  control  and      supervision  of   the  Patna   High      Court. The  CBI officers  entrusted      with the investigation shall, apart      from the chief Justice of the Patna      High Court from time to time of the      progress made  in the investigation      and   may,   if   they   need   any      directions   in   the   matter   of      conducting    the    investigation,      obtain them  from him.  The learned      Chief Justice  may either  post the      matter  for   directions  before  a      Bench  presided   over  by  him  or      constitute  any  other  appropriate      Bench. After  the investigation  is      over and  reports are finalised, as      indicated by the. Division Bench of      the  High  Court  in  the  impugned      judgment,   expeditious   follow-up      action shall  be  taken.  The  High      Court  and   the  State  Government      shall   co-operate   in   assigning      adequate number  of special  judges      to    deal     with    the    cases      expeditiously so  that no  evidence      may be lost.      The order  of the Division Bench of      the High  Court in paragraph 54, to      the effect  that. investigation  by      the State  police in  cases already      instituted shall  remain suspended,      is     modified.     The     entire      investigation now  stands entrusted      to the CBI as aforesaid. The CBI is      directed   to    take   over    the      investigation already  made by  the      State  police,   inclusive  of  the      FIRs,   arrests   and   attachments      aforementioned       and       deal      appropriately therewith.           (Emphasis supplied)      { State of Bihar & Anr. Vs. }      { Ranchi Zila Samta Party & Anr. }      { 1996 (3) SCC 682 at 684-685 }      Pursuant to  the above  order of this Court the CBI has been reporting  the progress  of the  investigation  to  the Chief Justice of the Patna High Court. The Joint Director of the  CBI,  Dr.  U.N.  Biswas,  submitted  a  report  of  the investigation carried out by him to the Chief Justice of the High Court  on 3.10.1996  and also  made an  application for extension  of   time  since  the  High  Court  had  directed completion of  the investigation preferably within period of four months  in its  order dated 11.3.1996. This application for extension  of time  was  listed  for  hearing  before  a Division Bench  of the High Court (Coram: S.N. Jha, and S.J. Mukhopadhayaa, JJ.)  on 4.10.1996  according to the order of the Chief  Justice of  the High Court. The Division Bench of the  High  Court  in  the  impugned  order  dated  7.10.1996 observed that the Director of the CBI is trying to interfere with the  investigation and  if this  is allowed to go on, a fair, honest  and complete  investigation is  not  possible. Accordingly, it has directed as under:      "We would accordingly, direct. that      all  reports   by   the   concerned

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    officers   entrusted    with    the      investigation/supervi- sion  of the      AHD cases  be submitted directly to      this Court  without being  sent  to      the  Director,  CBI  or  any  other      authority. We  would also  restrain      the Director, CBI, from meddling in      any manner  in investigation of the      AHD  case.      The   investigation      appears to  have reached  a crucial      stage,   we   would,   accordingly,      further direct the Director, CBI or      any other  competent authority  not      to  shift  the  officers  entrusted      with the  investigation/supervision      of the  cases except with the prior      permission of the Chief Justice."      These appeals  are preferred  against this order of the High Court.      The submission  of  the  learned  Attorney  General  on behalf of  the appellants is that the impugned order made by the High  Court was  on an application for extension of time and, therefore,  there was  no occasion  to make  the  above observation about  the  Director,  CBI  or  to  exclude  the Director, CBI  from involvement  in the  investigation or to produce the  report of  every officer  of the  CBI.  It  was contended that the agency of the CBI functions as a body and the report  required to be submitted to the Court is only of the agency  and not  of any  individual officer  because the report of the CBI is in fact the final opinion of the agency and not  the report of any individual officer of the CBI. It was also  contended that  in the  formation of  its  opinion about the  role of  the Director,  CBI, the  High Court  had overlooked  another  material  FAX  message  sent  later  on 2.10.1996 which  could not be produced before the High Court due to  paucity of time at the hearing. In all fairness, the learned Attorney  General added  that it is open to the High Court to  call for  any report  or document.  and the CBI is bound to  obey any  such direction to enable the High Court. to discharge its duty according to the order dated March 19, 1996 made  by this  Court, The main grievance of the learned Attorney General  is that the exclusion of the Director, CBI from investigation of the case would disturb the functioning of the  CBI and  its hierarchy which is not justified on the existing facts. Shri Ram Jethmalani, learned counsel for the respondents/writ petitioners  submitted that  the directions of the  High Court  are fully  justified and  its conclusion that the  Director, CBI  is trying  to  interfere  with  the course of  the investigation  in  attempt.  to  shield  some powerful persons  is fully  justified. He  submitted that no interference with the High Court’s order is called for.      At the hearing of the matter we had expressed our plain view that  the CBI with its Director at. the helm of affairs is  duty   bound  to   make  a  fair,  honest  and  complete investigation into  the accusations  and to identify all the culprits involved  in the  scam and  to take  the  necessary steps in  accordance with  law for the trial of all accused. The ultimate  responsibility to  ensure a  fair, honest  and complete investigation  into the  accusations is that of the Director, CBI  and he  is expected to discharge his duty and functions faithfully  towards this end. It is also necessary that Director  is not merely to perform his own duty in this manner but  he is  also to  ensure that every officer of the CBI works  honestly to  achieve this end. This is imperative under the  ’rule  of  law’.  The  Learned  Attorney  General

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unhesitatingly accepted  this and assured us of the same. It is not  necessary for us to elaborate this obvious point any further.      We also  made it  clear at the hearing that the special leave petition  is  not  happily  worded  and  some  of  its contents appear to be unwarranted and unfair to the Division Bench of  the High Court. The jurisdiction of the High Court in the  matter is  to be  determined with  reference to  the direction of  this Court  contained in the order dated March 19, 1996  which requires  the High  Court to  ensure that  a fair, honest  and complete  investigation is  made into  the accusation and  all persons  against whom a prima facie case for trial is made out are identified and put up for trial in accordance with  law.  It  is,  therefore,  not  correct  to suggest that  the  jurisdiction  of  the  High  Court  while hearing the  matter on the application for extension of time to  complete  the  investigation  is  limited  only  to  the question of  time to  be granted and does not extend also to examine the  manner in  which  the  investigation  is  being conducted. Similarly,  there is  no merit  in the contention advanced feebly  by the  learned Attorney General that it is only the  Chief Justice  of the  High Court and not also the Bench constituted  by the  Chief Justice  to hear the matter which has  the authority  to go  into these  questions.  The order dated  March 19,  1996 made by this Court clearly says that if  any directions  in the  matter  of  conducting  the investigation are  required by  the CBI,  the same  would be solicited from the learned Chief Justice who may either post the matter  for directions  before a  Bench presided over by him or  constitute any  other appropriate  Benchs. Once  the Chief Justice  decided to  constitute a  Bench to  hear  the application for  directions, it was competent for that Bench to go  into the  entire matter  for deciding the question of extension of  time to  complete the  investigation including all ancillary  matters. We  have therefore, no doubt, as was made plain  at the  hearing of this matter that the Division Bench of  the High  Court which  made the impugned order was fully competent  to examine  all  matters  relating  to  the investigation by  the CBI.  The question  now is  about  the merits of the order.      The first  question on  merits relates to the exclusion of the  Director CBI from participation in the investigation being conducted  by the  CBI. In our opinion, it is not only appropriate but  necessary that  the  Director,  CBI  should continue to  remain the  person ultimately  responsible  for proper  conduct   of  the   investigation  and   its   early completion. The  Director, being  the Head  of  the  agency, should be  the person accountable for the entire functioning of the  CBI and  in that capacity answerable and accountable to the  Court for  e proper  investigation into  the alleged crimes.      It  does  appear  that  the  directions  given  by  the Director, CBI  which led  to presentation  of an  incomplete picture of  the material  collected during the investigation upto that stage before the Division Bench hearing the matter gave rise  to the  impression in the Division Bench that the Director, CBI was withholding some material information from the High Court. The proper courser for the Director, CBI was to ensure  that the  High Court  was informed at the hearing that the CBI report presented to it was incomplete as it did not deal  with some  additional material which was till then under scrutiny by the agency. If this care had been taken by the Director while issuing instructions regarding production of the  CBI report  to the  High Court  at the  hearing, the impression created  in the High Court that the Director, CBI

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was  attempting   to   withhold   some   material   material information from  the High  Court or  to interfere  with the investigation, could  have  been  avoided.  The  explanation given before  us at  the hearing  by  the  learned  Attorney General who  placed before  us both  the FAX  messages dated 2.10.96 sent  by the  CBI,  Headquarter  at  New  Delhi,  if available  to   the  High  Court,  could  have  avoided  the impression of  the High Court that the CBI Director had made an attempt to interfere with the investigation. We also find that the  first FAX  message of 2.10.1996 sent from the Head Quarter at  New Delhi  does appear  to be a complete message and a  part thereof  gives the  impression of a direction to withhold some  material from the Court. It is unnecessary to go into  the reasons  which led to this situation because of the lack of proper care of the agency in presenting the full upto date picture before the High Court. It is sufficient to observe that  care should be taken hereafter by the Director CBI to  ensure that  the officers  of the CBI work in unison and as  a cohesive  team and  the High  Court is  kept fully apprised of  all the  relevant facts to enable it to perform its task  in the manner required by this Court’s order dated March 19,  1996. It  is needless  to add that the High Court also would  take the  necessary precaution  of requiring the production of  all the  relevant material before setting out any concluded  opinion on  any aspect  of the investigation, including its fairness.      We deem  it proper  to emphasise  that every officer of the CBI associated with the investigation has to function as a member  of a  cohesive team which is engaged in the common pursuit of a fair honest and complete investigation into the crimes alleged. It is needless to further emphasise that the exercise has to be performed objectively and fairly, mindful of the fact that the majesty of law has to be upheld and the ’rule of law’ preserved, which does not discriminate between individuals on the basis of their status, position or power. The law  treats everyone  as equal before it and this has to be kept  in view  constantly in  every State action to avoid violation of  the ’right  to equality’ guaranteed in Article 14 of the Constitution.      We  have   been  assured   that  Dr.U.N.Biswas,  Joint. Director,  CBI   continues  to   be  associated   with   the investigation and  his participation  in  the  investigation team in  this capacity would continue till the completion of the investigation.  Subject to any direction given hereafter by the  High  Court  in  this  behalf,  Dr  U.N.Biswas  will continue to  participate in  the investigation, of which the overall responsibility is that of the Director, CBI who will ensure the  production of  all relevant  material before the High Court at every relevant stage. The investigation should be continued  in this  manner till  its completion  with the filing of  the charge-sheet in the competent court to enable the trial of the accused persons in accordance with law. The High Court  would continue  its task in the manner indicated by the  earlier order  dated March  19, 1996  passed by this Court till the completion of the task with the filing of the chargesheet in the competent court.      We make  it clear  that in  case cf  any difference  of opinion between  the officers  of the CBI in relation to the implication of  any individual  in the  crimes or  any other matter relating  to the investigation, the final decision in the matter  would not  be taken by the Director, CBI himself or by  him merely  on the opinion of the Legal Department of the CBI;  and in  such a  situation,  the  matter  would  be determined according  to the opinion of the Attorney General of India  for the purpose of the investigation and filing of

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the charge-sheet  against any such individal. In that event, the opinion  would be sought from the Attorney General after making available  to him  all the  opinions expressed on the subject by  the persons associated with the investigation as a part of the materials.      It appears  necessary to  add that  the Court,  in this proceeding, is  concerned with  ensuring proper  and  honest performance of  its duty  by the CBI. and not. the merits of the  accusations   being  investigated,   which  are  to  be determined at  the trial on the filing of the chargesheet in the competent  court, according  to the  ordinary  procedure prescribed by  law. Care  must, therefore,  be taken  by the High Court  to avoid  making any  observation which  may  be construed  as  the  expression  of  its  opinion  on  merits relating to  the accusation against any individual. Any such observation made  on the  merits of the accusation so far by the High  Court, including  those in  Para 8 of the impugned order are not to be treated as final, or having the approval of this  Court. Such  observations should not, in any manner influence the decision on merits at. the trial on the filing of the  chargesheet. The  directions given  by this Court in its  aforesaid  order  dated  March  19,  1996  have  to  be understood in  this manner  by all  concerned, including the High Court.      As a  result of  the aforesaid discussion, the impugned order dated  7.10.1996 passed  by the High Court is modified to the  above extent. The High Court would now determine the period of  extension considered  appropriate  and  give  the required  directions   for  completing   the   investigation expeditiously.      The appeals are disposed of accordingly. No costs.