REPORTABLE IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

C  RIMINAL     APPEAL     NO.546     OF     2012   (Arising out of S.L.P. (Criminal) No. 5667 of 2008)

STATE OF ORISSA & ORS. — APPELLANTS

VERSUS

UJJAL KUMAR BURDHAN — RESPONDENT

J     U     D     G     M     E     N     T   

D.K.     JAIN,     J.  :

1. Leave granted.

2. This appeal by special leave, assails the judgment  

dated 12th February, 2008, rendered by a learned Single  

Judge of the High Court of Orissa at Cuttack.  By the  

impugned order, on a petition under Section 482 of the  

Code of Criminal Procedure, 1973 (for short “the  

Code”), the investigation initiated by the Vigilance  

Department of the State Government into the  

allegations of irregularities in the receipt of excess  

quota, recycling of rice and distress sale of paddy by  

one M/s Haldipada Rice Mill, a proprietary concern of  

the respondent, has been quashed.  

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3.  On receipt of a complaint, the civil supply department  

of the State Government initiated an inquiry against the  

said concern, relating to the processing of paddy for  

and on behalf of the Food Corporation of India.  

Preliminary inquiry conducted by the Food and Supply  

department revealed certain irregularities in the  

procurement and milling of paddy by the respondent. A  

subsequent departmental inquiry recommended  

initiation of a proper administrative action against the  

respondent. Consequently, the State Government  

directed the Vigilance Cell of the Police department to  

conduct a preliminary inquiry regarding the alleged  

criminal acts.

4. In the meantime, on filing of a Writ Petition, being W.P.  

No.8315 of 2005, by the respondent, a Division Bench  

of the High Court while ordering the issue of the  

enforcement certificate to the respondent pending the  

ongoing inquiry, directed the completion of the said  

inquiry within twelve weeks of the receipt of that order.  

In compliance with that order, the Civil Supply  

Department of the State Government issued  

enforcement certificate to the respondent. However,  

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the respondent filed yet another Writ Petition, being  

W.P. No.10761 of 2005, inter-alia, praying for quashing  

of inquiry proceedings initiated by the State vigilance  

department on the ground that an inquiry had already  

been conducted on the same complaint by the  

department concerned.  By way of an interim order, the  

High Court directed the State Government not to take  

any coercive action against the respondent till further  

orders. As a result thereof, the preliminary inquiry came  

to a standstill. For a similar relief, respondent filed  

another petition, being Crl.M.C.No.2808 of 2006 under  

Section 482 of the Code in which the impugned order  

has been passed.  Aggrieved by the said order, the  

State Government as also its two functionaries, viz.  

Director-cum-Addl. D.G.P., Vigilance and Dy.  

Superintendent of Police, Vigilance Cell have preferred  

this appeal.

5. Mr. Suresh Chandra Tripathy, learned counsel  

appearing for the appellants submitted that it is settled  

law that a preliminary inquiry ought not to be quashed  

by the High Court in exercise of its jurisdiction under  

Section 482 of the Code. He argued that the High Court  

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was not at all justified in interfering with the  

investigation at the threshold even before the  

registration of an FIR, particularly when in his report  

dated 4th June 2005, the civil supply officer had reported  

fabrication and forgery of accounts maintained by the  

respondent as also violation of the guidelines laid down  

in the Food and Procurement Policy for the marketing  

season 2004-2005.  Referring us to the order dated 18th  

July 2005, passed by a Division Bench of the High Court  

in W.P.(C) No.8315 of 2005, whereby, as aforesaid, a  

direction was issued for expediting the inquiry, learned  

counsel stressed that having observed that if in the  

inquiry any irregularity is established, the respondent  

could be proceeded under the relevant provisions of  

law, the High Court committed a serious illegality in law  

in quashing the same inquiry/investigation.

6. Per contra, Mr. Randhir Jain, learned counsel appearing  

for the respondent supported the impugned judgment  

and submitted that the respondent was being harassed  

by repeated investigations on the same set of facts. It  

was alleged that the inquiry was ordered at the behest  

of an Ex-M.L.A. who belonged to the ruling party and  

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with whom the respondent shared a long history of  

animosity and antagonism. He thus, contended that the  

appeal deserved to be dismissed.

7. It is true that the inherent powers vested in the High  

Court under Section 482 of the Code are very wide.  

Nevertheless, inherent powers do not confer arbitrary  

jurisdiction on the High Court to act according to whims  

or caprice.  This extra-ordinary power has to be  

exercised sparingly with circumspection and as far as  

possible, for extra-ordinary cases, where allegations in  

the complaint or the first information report, taken on  

its face value and accepted in their entirety do not  

constitute the offence alleged.  It needs little emphasis  

that unless a case of gross abuse of power is made out  

against those incharge of investigation, the High Court  

should be loath to interfere at the  early/premature  

stage of investigation.  

8. In State of West Bengal and Ors. Vs. Swapan  

Kumar Guha and Ors.1, emphasising that the Court  

will not normally interfere with an investigation and will  

permit the inquiry into the alleged offence, to be  1 (1982) 1 SCC 561: 1982 SCC (Cri) 283: (1982) 3 SCR 121  

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completed, this Court highlighted the necessity of a  

proper investigation observing thus:

“An     investigation     is     carried     on     for     the    purpose     of     gathering     necessary     materials     for    establishing     and     proving     an     offence     which     is    disclosed.     When     an     offence     is     disclosed,     a    proper     investigation     in     the     interests     of     justice    becomes     necessary     to     collect     materials     for    establishing     the     offence,     and   for     bringing     the    offender     to     book.     In     the     absence     of     a     proper    investigation     in     a     case     where     an     offence     is    disclosed,     the     offender     may     succeed     in    escaping     from     the     consequences     and     the    offender     may     go     unpunished     to     the     detriment    of     the     cause     of     justice     and     the     society     at    large. Justice requires that a person who  commits an offence has to be brought to  book and must be punished for the same. If  the     court     interferes     with     the     proper    investigation     in     a     case     where     an     offence     has    been     disclosed,     the     offence     will     go    unpunished     to     the     serious     detriment     of     the    welfare     of     the     society     and     the     cause     of     the    justice     suffers.     It     is     on     the     basis     of     this    principle     that     the     court     normally     does     not    interfere     with     the     investigation     of     a     case    where     an     offence     has     been    disclosed....Whether an offence has been  disclosed or not must necessarily depend on  the facts and circumstances of each  particular case....If     on     a     consideration     of     the    relevant     materials,     the     court     is     satisfied     that    an     offence     is     disclosed,     the     court     will    normally     not     interfere     with     the     investigation    into     the     offence     and     will     generally     allow     the    investigation     into     the     offence     to     be    completed     for     collecting     materials     for     proving    the     offence.  ”

(emphasis supplied by  us)

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9. On a similar issue under consideration, in Jeffrey J.  

Diermeier & Anr. Vs. State of West Bengal & Anr.2,  

while explaining the scope and ambit of the inherent  

powers of the High Court under Section 482 of the  

Code, one of us (D.K. Jain, J.) speaking for the Bench,  

has observed as follows:  

“20……The section itself envisages three  circumstances under which the inherent  jurisdiction may be exercised, namely, (i) to  give effect to an order under the Code; (ii) to  prevent abuse of the process of Court; and  (iii) to otherwise secure the ends of justice.  Nevertheless, it is neither possible nor  desirable to lay down any inflexible rule  which would govern the exercise of inherent  jurisdiction of the Court. Undoubtedly, the  power possessed by the High Court under the  said provision is very wide but it is not  unlimited. It has to be exercised sparingly,  carefully and cautiously, ex debito justitiae to  do real and substantial justice for which alone  the court exists. It needs little emphasis that  the inherent jurisdiction does not confer an  arbitrary power on the High Court to act  according to whim or caprice. The power  exists to prevent abuse of authority and not  to produce injustice.”

10. Bearing in mind the afore-said legal position with  

regard to the scope and width of the power of the High  

Court under Section 482 of the Code, we are  

constrained to hold that in the fact-situation at hand,  2 (2010) 6 SCC 243

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the impugned decision is clearly indefensible. In the  

present case, the S.P., Vigilance Cell, had merely  

approved the opening of an inquiry and converted it  

into a Cell File.  The preliminary inquiry was yet to  

commence and an FIR was yet to be lodged.  In the first  

instance, the High Court stayed the preliminary inquiry  

by an interim order in the Writ Petition, and then by the  

impugned judgment quashed the same. It goes without  

saying that commencement and completion of an  

investigation is necessary to test the veracity of the  

alleged commission of an offence.  Any kind of  

hindrance or obstruction of the process of law from  

taking its normal course, without any supervening  

circumstances, in a casual manner, merely on the  

whims and fancy of the court tantamounts to  

miscarriage of justice, which seems to be the case here.  

11.We are convinced that the circumstances that have  

weighed with the High Court, do not justify the  

conclusion it has arrived at.  The High Court has allowed  

the petition under Section 482 of the Code, inter-alia,  

on the following grounds; firstly, the enforcement  

certificate had been issued to the respondent which  

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evidences compliance with the Rice and Paddy  

Procurement (Levy) and Restriction on sale and  

Movement Order, 1982.  The observation came to be  

made by losing sight of the fact that the said  

enforcement certificate had been issued pursuant to  

the order dated 18th July 2005, passed by the High  

Court in W.P. (C) No.8315 of 2005. Secondly, two  

inquires on the same facts had already been conducted,  

wherein the respondent had been exonerated. The High  

Court has committed a grave error of fact in observing  

that the respondent had been exonerated in the two  

inquiries held previously as both the inquiry reports had  

in fact concluded that the respondent had committed  

serious irregularities and proper action needs to be  

initiated against him. As far as the two previous  

inquiries are concerned, it may also be noted that those  

inquiries were departmental inquiries and what has  

been quashed by the impugned judgment is the  

initiation of police investigation. Both the inquiries are  

entirely different in nature; operate in different fields  

and have different object and consequences.  

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12.Further, the impugned order also notes that in view of  

the arbitration agreement between the agent and the  

Government, all the alleged violations fell within the  

purview of Arbitration and Conciliation Act, 1996 and  

therefore, the respondent could not be held liable for  

any criminal offence. This observation is against the  

well settled principle of law that the existence of an  

arbitration agreement cannot take the criminal acts out  

of the jurisdiction of the courts of law. On this aspect, in  

S.W. Palanitkar & Ors. Vs. State of Bihar & Anr.3,  

this Court has echoed the following views:  

“22. Looking to the complaint and the  grievances made by the complainant therein  and having regard to the agreement, it is  clear that the dispute and grievances arise  out of the said agreement. Clause 29 of the  agreement provides for reference to  arbitration in case of disputes or controversy  between the parties and the said clause is  wide enough to cover almost all sorts of  disputes arising out of the agreement. As a  matter of fact, it is also brought to our notice  that the complainant issued a notice dated 3- 10-1997 to the appellants invoking this  arbitration clause claiming Rs.15 lakhs. It is  thereafter the present complaint was filed.  For the alleged breach of the agreement in  relation to commercial transaction, it is open  to the Respondent 2 to proceed against the  appellants for his redressal for recovery of  money by way of damages for the loss  

3 (2002) 1 SCC 241

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caused, if any. Merely     because     there     is     an    arbitration     clause     in     the     agreement,     that    cannot     prevent     criminal     prosecution     against    the     accused     if     an     act     constituting     a     criminal    offence     is     made     out     even     prima     facie  .”

(Emphasis supplied)

13.The High Court has also adversely commented upon the  

progress of the preliminary inquiry and has recorded  

that no new material has been placed on record by the  

Vigilance Cell. This has been recorded without having  

regard to the fact that the High Court by another order,  

dated 5th September 2005, had, by way of an interim  

order, directed the State Government not to take any  

coercive steps against the respondent, with the result  

that there was no occasion for the department  

concerned to bring to the fore any material to unravel  

the truth. It is also pertinent to note here that the High  

Court had itself, by order dated 18th July, 2005 directed  

the completion of inquiry within a set time-frame of  

twelve weeks, which was subsequently interjected by  

an interim order and finally the entire  

investigation/inquiry came to be quashed by the  

impugned judgment. It seems incongruous that in the  

first instance the court set into motion the process of  

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law only to ultimately quash it on the specious plea that  

it would cause unnecessary embarrassment to the  

respondent.

14. For all these reasons, in our opinion, High Court’s  

interference with the investigation was totally  

unwarranted and therefore, the impugned order cannot  

be sustained.  We, accordingly, allow the appeal, quash  

and set aside the impugned judgment and restore the  

investigation initiated against the respondent and direct  

the Vigilance Cell of the State to proceed with and  

complete the investigation expeditiously, in accordance  

with law.

.........…..………………………………   (D.K. JAIN, J.)  

..……………………………..………… (ANIL R. DAVE, J.)

NEW DELHI; MARCH 19, 2012

ARS

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