Introduction
In the case of T. N. Chikkarayappa v. State of Karnataka[i], the Karnataka High Court (‘Court’) quashed the first information report (‘FIR’) and charge sheet against the Petitioner, an executive engineer accused of possessing wealth disproportionate to his known income. The Court held that the anti-corruption bureau (‘ACB’) had failed to conduct a mandatory preliminary inquiry before registering the FIR, relying solely on a letter from the Income-tax department (‘ITD’) without independent verification. Furthermore, the source report prepared by the ACB lacked sufficient details regarding the Petitioner’s assets and income. Due to these procedural lapses and the deficient investigation process, the court deemed the actions of the ACB illegal and incurably defective, leading to the dismissal of all proceedings against the Petitioner.
Brief Facts
T. N. Chikkarayappa (‘Petitioner’), who started his service as an Assistant Engineer in 1987, was promoted to Assistant Executive Engineer and then to Executive Engineer. The ITD raided the Petitioner’s house, seizing cash, jewellery, and documents. The ITD sent a letter regarding the seizure to the Chief Secretary, Government of Karnataka.
Based on the ITD’s letter, the ACB prepared a source report wherein it was indicated that the Petitioner had earned a substantial sum through illegitimate means and possessed properties exceeding the known sources of income.
Based on the report, the Superintendent of Police, ACB, directed the registration of an FIR and investigation against the Petitioner and four others. Accordingly, the chargesheet was filed against the Petitioner, and the trial court took cognizance of offences punishable under ss. 13 (1) (d) and 13 (1) (e), read with s. 13(2) of the Prevention of Corruption Act, 1988 (‘PC Act’).
It was alleged that during his service, the Petitioner amassed wealth disproportionate to his known sources of income, including properties and expenditures far exceeding his declared income.
The Petitioner filed a writ petition under as. 226 and 227 of the Constitution of India, read with s. 482 of the Code of Criminal Procedure, 1973 (CrPC) before the court to quash the source report, the resultant FIR, and the charge sheet filed by the ACB.
Arguments by the Petitioner
The investigation by the ITD was a judicial proceeding, and it was still pending and inconclusive.
The ACB should not have registered the FIR without the ITD’s conclusive findings.
The ACB failed to conduct a preliminary inquiry before registering the FIR.
The source report lacked detailed evidence and was based solely on the ITD’s letter.
The Petitioner argued that the Hon'ble Supreme Court quashed the case against co-accused No.3, entitling him to similar relief.
Arguments by the Respondent
The proceedings by ITD and ACB were separate and parallel, permissible under the law. The ITD’s role was to verify taxable income, while the ACB could prosecute under the PC Act.
Preliminary inquiry and detailed source reports were not mandatory for ACB to register an FIR. The sanction for prosecution was obtained, and the validity of the sanction should be contested during the trial.
The Court’s Observation
After examining the facts, the Court found that ACB conducted no preliminary inquiry before registering the FIR, which was filed only on the basis of the letter by the ITD.
The Court also found that the source report did not provide sufficient details regarding the Petitioner’s assets while joining the service.
The FIR was registered based on the ITD’s letter without independent verification by ACB. The investigation and registration of the FIR by ACB were deemed illegal and incurably defective.
Consequently, the Court quashed the proceedings against the Petitioner due to procedural lapses and a lack of sufficient preliminary inquiry by the ACB.
Conclusion
The Court exercised its inherent powers to quash the proceedings in the interest of justice, identifying significant procedural lapses by the ACB. Specifically, the ACB’s failure to conduct a mandatory preliminary inquiry and its reliance solely on the ITD’s letter without independent verification rendered the investigation process illegal and incurably defective.
However, it is important to note that the Court’s decision focused primarily on the procedural deficiencies and did not delve into the substantive allegations outlined in the charge sheet. The Court’s ruling highlights that while procedural correctness is crucial in upholding the judicial process's integrity, the allegations' substantive merits remain unexamined in this instance.
End Note
[i] 2024 Taxscan (HC) 1330 dated 31.05.2024.
Authored by Nitish Solanki, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion.
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