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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

IA     NO.                      OF     2012   

IN

WRIT     PETITION     (CIVIL)     NO.     562     OF     2009   

Samaj Parivartan Samudaya & Ors.    … Petitioners

Versus

State of Karnataka & Ors. … Respondents  

O     R     D     E     R      

Swatanter     Kumar,     J  .

1. By this order we will deal with and dispose of, the  

recommendations made by the Central Empowered Committee  

(for short, ‘CEC’) in its report dated 20th April, 2012.  Since we  

have heard the affected parties, the petitioners and the learned  

Amicus Curiae, we shall summarize the contentions of the  

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learned counsel for the respective parties.  The learned counsel  

appearing for the affected parties contended:

a. CEC has submitted its report without providing them an  

opportunity of being heard.

b. CEC has exceeded its jurisdiction and enlarged the scope of  

the enquiry beyond the reference made by the Court.  Thus,  

the Court should not accept any of the recommendations made  

by the CEC.

c. In relation to the alleged irregularities and illegalities pointed  

out in the report of the CEC, even where criminality is involved  

or criminal offences are suspected, the matters are sub judice  

before the Court of competent jurisdiction.  Thus, this Court  

should not pass any orders for transferring the investigation of  

such offences to the Central Bureau of Investigation (for short  

‘CBI’) as it would seriously prejudice their interests.

2. In order to deal with these contentions, it is necessary for  

this Court to briefly refer to the background of these cases, which  

has resulted in the filing of the unnumbered IA in Writ Petition  

No. 562/2009 and the peculiar facts and circumstances in which  

the CEC has made its recommendations.

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3. Concerned with the rampant pilferage and illegal extraction  

of natural wealth and resources, particularly iron ore, and the  

environmental degradation and disaster that may result from  

unchecked intrusion into the forest areas, this Court felt  

compelled to intervene. Vide its order dated 9th September, 2002  

in T.N. Godavarman Thirumalpad v. Union of India & Ors. [W.P.(C)  

No. 202 of 1995], this Court constituted the CEC to examine and  

monitor the various activities infringing the laws protecting the  

environment and also the preventive or punitive steps that may  

be required to be taken to protect the environment.  In addition  

to this general concern for the environment, the order of this  

Court dated 9th September, 2002, this Court noted violations of  

its Orders and directed that the CEC shall monitor  

implementation of all orders of the Court and shall place before it  

any unresolved cases of non-compliance, including in respect of  

the encroachments, removals, implementations of working plans,  

compensatory afforestation, plantations and other conservation  

issues.   In furtherance to the said order, the Government framed  

a notification in terms of Section 33 of the Environment  

Protection Act, 1996.  The CEC constituted by this Court was  

proposed to be converted into a Statutory Committee.  The draft  

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notification for the same was also placed before this Court on 9th  

September, 2002.  After approval, the Court directed that a  

formal notification will be issued within a week and the functions  

and responsibilities given to the CEC were to be exercised by the  

said Statutory Committee.   In fact, this Notification was issued  

on 17th September, 2002.      

4. It may be noticed here that, it was in furtherance to the  

order of the Government of Andhra Pradesh vide G.O.M No. 467,  

Home (SCA) Dept. dated 17th November, 2009, supplemented by  

Notification No. 228/61/2009-AVD-11 dated 1st December, 2009  

issued by the Central Government, that the CBI was directed to  

register a case against the Obulapuram Mining Company (OMC).  

Earlier the CBI had registered a case against the OMC on 7th  

December, 2009 and started the probe.  This probably came to be  

stayed by the High Court vide its order dated 12th December,  

2009 which stay was vacated by another order of that Court on  

16th December, 2010 paving the way for a full-fledged probe.  As  

a result of vacation of the stay, the CBI continued its  

investigation.   

5. The CBI also filed a charge-sheet in a special court against  

the OMC, in an illegal mining case falling within the State of  

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Karnataka,  charging the accused under Sections 120B, 409,  

420, 468 and Section 471 of the Indian Penal Code, 1860 (for  

short ‘IPC’) read with the provisions of the Prevention of  

Corruption Act, 1988.  The case against the OMC for illegal  

mining was under investigation in respect of the areas of  

Obulapuram and Malangapudi villages of Anantpur district in the  

State of Andhra Pradesh and in the rest of the State of Andhra  

Pradesh.

6. Further, the State of Andhra Pradesh vide its G.O. Rt. No.  

723 dated 25th November, 2009, issued by the Industrial and  

Commercial Department, suspended the mining operations and  

also the transportation of mineral material by OMC and even  

other implicated companies, on the basis of the findings of a High  

Level Committee, headed by the Principal Chief Conservator of  

Forests, Hyderabad and the Report of the CEC submitted to this  

Court in I.A. No. 2/2009 in Writ Petition (Civil) No. 201 of 2009, a  

copy of which was forwarded to the State Government.  This was  

challenged before the High Court of Andhra Pradesh which, vide  

judgment dated 26th February, 2010, set aside the notification  

and allowed the writ petitions, while holding that the G.O. issued  

by the Government suffered from a jurisdictional error and was  

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in violation of the principles of natural justice.   Against the said  

judgment of the High Court, the Government of Andhra Pradesh  

filed a Special Leave Petition, SLP(C) No. 7366-7367 of 2010 on  

different grounds.  

7. Samaj Parivartan Samuday, a registered society, filed  

petition under Article 32 of the Constitution of India stating that  

the illegal mining in the States of Andhra Pradesh and Karnataka  

was still going on in full swing.  Such illegal mining and  

transportation of illegally mined minerals were being done in  

connivance with the officials, politicians and even Ministers of  

State.  There was a complete lack of action on the part of the  

Ministry of Environment and Forests on the one hand and the  

States of Andhra Pradesh and Karnataka, on the other.   It was  

averred that there was complete breakdown of the official  

machinery, thereby allowing such blatant illegalities to take  

place.  This inaction and callousness on the part of the Central  

and the State Governments and failure on their part to control  

the illegal mining has allowed large-scale destruction, both of  

forest and non-forest lands and has adversely affected the  

livelihood of the people.   It thus, has filed WP (C) 562 of 2009  

and has prayed for issuance of a writ of mandamus or any other  

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appropriate writ, order or direction to the respective State  

Governments and to the Union of India, to stop all mining and  

related activities in the forest areas of these two States.  It further  

sought that the orders passed by this Court in the W.P.(C) No.  

202 of 1995 be carried out and the provisions of the Forest  

Conservation Act, 1980 be implemented.  It also prayed for  

cancelling of the ‘raising contracts’  or sub-lease executed by the  

Government of Karnataka in favour of the various private  

individuals and allowing back-door entry into the mining activity  

in those areas.  The most significant prayer in this petition was  

that after stopping of the mining activity, a systematic survey of  

both the inter-state border between the States of Andhra Pradesh  

and Karnataka and mine lease areas along the border be  

conducted and proper Relief and Rehabilitation Programmes (for  

short ‘RR Programmes’) be implemented.

8. All the above cases, i.e., W.P.(C) No. 202/1995, 562/2009  

and SLP(C) No. 7366-7367/2010, relate to protection of  

environment, forest areas, stoppage of illegal mining and  

cancellation of illegal sub-leasing and contracts executed by any  

State Government in favour of the third parties, to the extent  

such contracts are invalid and improper.  The latter cases, Writ  

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Petition (Civil) No. 562 of 2009 and SLP(C) Nos. 7366-7367 of  

2010 concern the Bellary Forest Reserve.   Further, there were  

serious allegations raised in these petitions as to how and the  

manner in which the leases were executed and mining permits  

were granted or renewed for carrying out the mining activities  

stated in the petition.   

9. The CEC was required to submit quarterly reports, which it  

has been submitting and with the passage of time, large  

irregularities and illegalities coupled with criminality were  

brought to the notice of this Court.  The CEC, in discharge of its  

functions and responsibilities, was examining the matters, in  

both the States of Andhra Pradesh and Karnataka.  These  

violations have come to the surface as a result of enquiries  

conducted by the CEC, regarding illegal mining and mining  

beyond their leased areas by these companies.  It was pointed by  

the CEC with specific reference to these companies that there  

was not only illegal extraction of iron ore but the minerals was  

being also extracted  beyond the leased area specified in the lease  

deeds.  Further, there was unchecked export of iron ore from the  

border areas of the two States, Andhra Pradesh and Karnataka.  

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This related to the quantum, quality and transportation of ore as  

well.

10. While passing an order of complete ban on mining activity  

in these areas vide order dated 29th July, 2011 this Court sought  

submissions on the market requirement for mined ore and vide  

order dated 5th August, 2011 permitted only M/s. National  

Minerals Development Corporation Ltd. (for short “NMDC”) to  

carry out very limited mining activity, so that the economic  

interest of the country and of the states does not suffer  

irretrievably.     This Court has also directed the CEC to examine  

all aspects of the mining activity and report on various measures  

that are required to be taken for RR Programmes.   Limited  

mining activity, thus, was permitted to be carried on in the area  

with the clear direction that the RR Programmes shall be  

simultaneously commenced and it is only after such RR  

Programmes are satisfactorily put into motion and the CEC  

makes a suggestion in this regard, that the mining activity would  

be permitted.   Vide order dated 23rd September, 2011, this Court  

accepted various recommendations of the CEC and noticed that  

prima facie it appears that at the relevant time, there existed  

linkage between the alleged illegal mining in the Bellary Reserve  

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Forest, falling in the District Anantpur in Andhra Pradesh and  

the illegalities in respect of grant/renewal of mining leases and  

deviations from sanctioned mine sketch in the Bellary District in  

Karnataka.    The Court also noted that illegally extracted iron  

ore belonging to one M/s. Associated Mining Company (for short  

“AMC”) was apparently routed through the nearest Port in  

Vishakhapatnam, through district Anantpur in Andhra Pradesh.  

Thus, the Court felt that the CBI should examine the alleged  

illegalities.   Vide the same order, this Court required the CBI to  

additionally present a status report of investigations which the  

CBI had undertaken in respect of OMC in Andhra Pradesh under  

FIR No. 17A/2009-CBI(Hyderabad).   It was also reported that  

there was massive illegal mining by third parties in the mining  

lease No. 1111 of one M/s. National Minerals Development  

Corporation (NMDC).   It was suspected that one M/s. Deccan  

Mining Syndicate (for short “DMS”) was involved in such  

activities and no action had been taken on the complaints of  

NMDC.   Some other directions were also issued including  

directions for further inquiry by the CEC and the CEC was  

required to put up a comprehensive report before this Court.

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11. In the meanwhile, an application was filed by the petitioners  

of writ petition No.562 of 2009 which remained un-numbered.  

The prayer in this application was to extend the scope of  

investigation by the CBI relating to illegal mining and other allied  

activities which the politicians and major corporate groups  

including M/s. Jindal Group and M/s. Adanis were indulging in,  

within the State of Karnataka.  They also prayed that both the  

States should also be directed demarcate the inter-state  

boundaries, particularly, in the mining area.   

12. After examining the issues raised in the IA, the earlier  

orders of this Court and based on the meetings held by the CEC  

on 20th March, 2012 and 11th April, 2012, respectively, the CEC  

identified the issues as follows:-

i) The alleged serious illegalities/  irregularities and undue favour in  respect of (a) the land purchased by  the close relatives of the then Chief  Minister, Karnataka for 0.40 crore in  the year 2006 and subsequently sold to  M/s South West Mining Limited in the  year 2010 for Rs.20.00 crores and (b)  donation of Rs.20.00 crore received by  Prerna Education Society from M/s  South West Mining Limited.

ii) the alleged illegal export of iron ore  from Belekeri Port and associated  issues;

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iii) alleged export from Krishapatnam and  Chennai Port after exports were  banned by the State of Karnataka; and

iv) transfer of senior police officers on  deputation to Lokayukta, Karnataka.”

13. The CEC filed two comprehensive reports before this Court,  

one dated 20th April, 2012 and other dated 27th April, 2012, both  

in Writ Petition (Civil) No. 562 of 2009.

14. Out of the above issues indicated, the CEC dealt with issue  

No. 1 in the Report dated 20th April, 2012, while issue Nos. 2 to 4  

were dealt with in the Report dated 27th April, 2012.   On issue  

No. 1, after summarizing the facts and its observations during its  

enquiry, the CEC pointed out illegalities, irregularities and  

instances of misuse of public office committed for the benefit of  

the close relatives of the then Chief Minister, State of Karnataka.  

It made the following recommendations :-

“15. Keeping in view the above facts and  circumstances the CEC is of the considered  view that the purchase of the above said  land notified for acquisition for public  purpose, its de-notification from acquisition,  permission granted for conversion from  agriculture to non-agricultural (residential)  purpose and subsequent sale to M/s South  West Mining Limited prima facie involves  serious violations of the relevant Acts and  

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procedural lapses and prima facie misuse of  office by the then Chief Minister, Karnataka  thereby enabling his close relatives to make  windfall profits and raises grave issues  relating to undue favour, ethics and  morality.  Considering the above and taking  into consideration the massive illegalities  and illegal mining which have been found to  have taken place in Karnataka and the  allegations made against the Jindal Group  as being receipient of large quantities of  illegally mined material and undue favour  being shown to them in respect of the  mining lease of M/s MML it is  RECOMMENDED that a detailed  investigation may be directed to be carried  out in the matter by an independent  investigating agency such as the Central  Bureau of Investigation (CBI) and to take  follow up action.  This agency may be asked  to delve into the matter in depth and in a  time bound manner.  This agency may also  be directed to investigate into other similar  cases, if any, of lands de-notified from  acquisition by the Bangalore Development  Authority and the illegalities / irregularities  / procedural lapses, if any, and to take  follow up action.

16. The Prerna Education Society set up by  the close relatives of the then Chief Minister,  Karnataka has during March, 2010 vide two  cheques of Rs.5.0 crores each received a  donation of Rs.10 crores from M/s South  West Mining Limited, a Jindal Group  Company.  In this context, it is of interest to  note that during the year 2009-2010 the net  

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profit (after tax) of the said Company was  only Rs.5,73 crores.  Looking into the details  of the other donations made by the said  Company or by the other Jindal Group  Companies to any other Trust / Society not  owned, managed or controlled by the Jindal  Group.  After considering that a number of  allegations, with supporting documents,  have been made in the Report dated 27th  

July, 2011 of Karnataka Lokayukta  regarding the M/s. JSW Steel Limited  having received large quantities of illegal  mineral and alleged undue favour shown to  it in respect of the extraction / supply of  iron ore by / to it from the mining lease of  M/s MML, it is RECOMMENDED that this  Hon’ble Court may consider directing the  investigating agency such as CBI to also  look into the linkages, if any, between the  above said donation of Rs.10 crores made by  M/s South West Mining Limited and the  alleged receipt of illegal mineral by M/s JSW  Steel Limited and the alleged undue favour  shown to it in respect of the mining lease of  M/s MML.

17. The CEC has filed its Report dated 28th  

March, 2012 wherein the representation  filed by the petitioner against Mr. R. Parveen  Chandra (ML 2661) has been dealt with  (refer para 6(ii), page 11-13 of the CEC  Report dated 28th March, 2012).  In the said  representation it has been alleged that Mr.  Parveen Chandra the lessee of ML No.2661  has made two payments, one of Rs.2.50  crores to M/s Bhagat Homes Private Limited  and the other of Rs.3.5 crores to M/s  

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Dhavalagir Property Developers Private  Limited as a quid pro quo for allotment of  the said mining lease.  It is  RECOMMENDED that this Hon’ble Court  may consider directing the investigating  agency such as CBI to investigate the  payments made by the above said lessee to  these two companies whose Directions /  shareholders are the close relatives of the  then Chief Minister, Karnataka and whether  there was any link between such payments  and grant of mining lease to Mr. Parveen  Chandra.”

15. When we heard the parties to the lis and even permitted the  

affected parties as interveners, the hearing had been restricted to  

the Report of the CEC dated 20th April, 2012.  Therefore,  

presently, we are passing directions only in relation to that  

Report, while postponing the hearing of the second Report which  

is dated 27th April, 2012.

16. In the backdrop of the above events of the case, reference to  

certain relevant provisions of the Criminal Procedure Code, 1973  

(Cr.P.C.) can now be appropriately made, before we proceed to  

deal with the above noticed contentions.

17. The machinery of criminal investigation is set into motion  

by the registration of a First Information Report (FIR), by the  

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specified police officer of a jurisdictional police station or  

otherwise.    The CBI, in terms of its manual has adopted a  

procedure of conducting limited pre-investigation inquiry as well.  

In both the cases, the registration of the FIR is essential.   A  

police investigation may start with the registration of the FIR  

while in other cases (CBI, etc.), an inquiry may lead to the  

registration of an FIR and thereafter regular investigation may  

begin in accordance with the provisions of the CrPC.    Section  

154 of the CrPC places an obligation upon the authorities to  

register the FIR of the information received, relating to  

commission of a cognizable offence, whether such information is  

received orally or in writing by the officer in-charge of a police  

station.    A police officer is authorised to investigate such cases  

without order of a Magistrate, though, in terms of Section 156(3)  

Cr.P.C. the Magistrate empowered under Section 190 may direct  

the registration of a case and order the police authorities to  

conduct investigation, in accordance with the provisions of the  

CrPC.     Such an order of the Magistrate under Section 156(3)  

CrPC is in the nature of a pre-emptory reminder or intimation to  

police, to exercise their plenary power of investigation under that  

Section.   This would result in a police report under Section 173,  

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whereafter the Magistrate may or may not take cognizance of the  

offence and proceed under Chapter XVI CrPC.   The Magistrate  

has judicial discretion, upon receipt of a complaint to take  

cognizance directly under Section 200 CrPC, or to adopt the  

above procedure. [Ref. Gopal Das Sindhi & Ors. v. State of Assam  

& Anr. [AIR 1961 SC 986]; Mohd. Yusuf v. Smt. Afaq Jahan &  

Anr. [AIR 2006 SC 705]; and Mona Panwar v. High Court of  

Judicature of Allahabad Through its Registrar & Ors. [(2011) 3  

SCC 496].

18. Once the investigation is conducted in accordance with the  

provisions of the CrPC, a police officer is bound to file a report  

before the Court of competent jurisdiction, as contemplated  

under Section 173 CrPC, upon which the Magistrate can proceed  

to try the offence, if the same were triable by such Court or  

commit the case to the Court of Sessions.   It is significant to  

note that the provisions of Section 173(8) CrPC open with non-

obstante language that nothing in the provisions of Section  

173(1) to 173(7) shall be deemed to preclude further investigation  

in respect of an offence after a report under sub-Section (2) has  

been forwarded to the Magistrate. Thus, under Section 173(8),  

where charge-sheet has been filed, that Court also enjoys the  

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jurisdiction to direct further investigation into the offence. {Ref.,  

Hemant Dhasmana v. Central Bureau of Investigation & Anr.  

[(2001) 7 SCC 536]}. This power cannot have any inhibition  

including such requirement as being obliged to hear the accused  

before any such direction is made.   It has been held in Shri  

Bhagwan Samardha Sreepada Vallabha Venkata Vishwandha  

Maharaj v. State of Andhra Pradesh and Ors.  [JT 1999 (4) SC  

537] that the casting of any such obligation on the Court would  

only result in encumbering the Court with the burden of  

searching for all potential accused to be afforded with the  

opportunity of being heard.     

19. While the trial Court does not have inherent powers like  

those of the High Court under Section 482 of the CrPC or the  

Supreme Court under Article 136 of the Constitution of India,  

such that it may order for complete reinvestigation or fresh  

investigation of a case before it, however, it has substantial  

powers in exercise of discretionary jurisdiction under Sections  

311 and 391 of CrPC.   In cases where cognizance has been  

taken and where a substantial portion of investigation/trial have  

already been completed and where a direction for further  

examination would have the effect of delaying the trial, if the trial  

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court is of the opinion that the case has been made out for  

alteration of charge etc., it may exercise such powers without  

directing further investigation.  {Ref.   Sasi Thomas v. State &  

Ors. [(2006) 12 SCC 421]}.   Still in another case, taking the aid of  

the doctrine of implied power, this Court has also stated that an  

express grant of statutory power carries with it, by necessary  

implication, the authority to use all reasonable means to make  

such statutory power effective.    Therefore, absence of statutory  

provision empowering Magistrate to direct registration of an FIR  

would not be of any consequence and the Magistrate would  

nevertheless be competent to direct registration of an FIR. {Ref.  

Sakiri Vasu v. State of Uttar Pradesh & Ors. [(2008) 2 SCC 409]}.

20. Thus, the CrPC leaves clear scope for conducting of further  

inquiry and filing of a supplementary charge sheet, if necessary,  

with such additional facts and evidence as may be collected by  

the investigating officer in terms of sub-Sections (2) to (6) of  

Section 173 CrPC to the Court.

21. To put it aptly, further investigation by the investigating  

agency, after presentation of a challan (charge sheet in terms of  

Section 173 CrPC) is permissible in any case impliedly but in no  

event is impermissible.

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22. A person who complains of commission of a cognizable  

offence has been provided with two options under Indian  

Criminal jurisprudence.   Firstly, he can lodge the police report  

which would be proceeded upon as afore-noticed and secondly,  

he could file a complaint under Section 200 CrPC, whereupon the  

Magistrate shall follow the procedure provided under Sections  

200 to 203 or 204 to 210 under Chapter XV and XVI of the  

CrPC.

23. In the former case, it is upon the police report that the  

entire investigation is conducted by the investigating agency and  

the onus to establish commission of the alleged offence beyond  

reasonable doubt is entirely on the prosecution.   In a complaint  

case, the complainant is burdened with the onus of establishing  

the offence and he has to lead evidence before the Court to  

establish the guilt of the accused.  The rule of establishing the  

charges beyond reasonable doubt is applicable to a complaint  

case as well.

24. The important feature that we must notice for the purpose  

of the present case is that even on a complaint case, in terms of  

Section 202, the Magistrate can refer the complaint to  

investigation by the police and call for the report first, deferring  

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the hearing of the complaint till then.    Section 210 CrPC is  

another significant provision with regard to the powers of the  

Court where investigation on the same subject matter is pending.  

It provides that in a complaint case where any enquiry or trial is  

pending before the Court and in relation to same offence and  

investigation by the Police is in progress which is the subject  

matter of the enquiry or trial before the Court, the Magistrate  

shall stay the proceedings and await the report of the  

investigating agency.  Upon presentation of the report, both the  

cases on a Police report and case instituted on a complaint shall  

be tried as if both were instituted on a Police report and if the  

report relates to none of the accused in the complaint it shall  

proceed with the enquiry/trial which had been stayed by it.  The  

section proceeds on the basis that a complaint case and case  

instituted on a police report for the commission of the same  

offence can proceed simultaneously and the Court would await  

the Police report before it proceeds with the complaint in such  

cases.  The purpose again is to try these cases together, if they  

are in relation to the same offence with the intent to provide a fair  

and effective trial.  The powers of the trial court are very wide and  

the legislative intent of providing a fair trial and presumption of  

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innocence in favour of the accused is the essence of the criminal  

justice system.

25. The Court is vested with very wide powers in order to equip  

it adequately to be able to do complete justice.    Where the  

investigating agency has submitted the charge sheet before the  

court of competent jurisdiction, but it has failed to bring all the  

culprits to book, the Court is empowered under Section 319  

Cr.P.C. to proceed against other persons who are not arrayed as  

accused in the chargesheet itself.  The Court can summon such  

suspected persons and try them as accused in the case, provided  

the Court is satisfied of involvement of such persons in  

commission of the crime from the record and evidence before it.

26. We have referred to these provisions and the scope of the  

power of the criminal court, in view of the argument extended  

that there are certain complaints filed by private persons or that  

the matters are pending before the court and resultantly this  

Court would be not competent in law to direct the CBI to conduct  

investigation of those aspects.  We may notice that the  

investigation of a case or filing chargesheet in a case does not by  

itself bring the absolute end to exercise of power by the  

investigating agency or by the Court.   Sometimes and  

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particularly in the matters of the present kind, the investigating  

agency has to keep its options open to continue with the  

investigation, as certain other relevant facts, incriminating  

materials and even persons, other than the persons stated in the  

FIR as accused, might be involved in the commission of the  

crime. The basic purpose of an investigation is to bring out the  

truth by conducting fair and proper investigation, in accordance  

with law and ensure that the guilty are punished.   At this stage,  

we may appropriately refer to the judgment of this Court in the  

case of Nirmal Singh Kahlon v. State of Punjab & Ors. [(2009) 1  

SCC 441] wherein an investigation was being conducted into  

wrongful appointments to Panchayat and other posts by the  

Police Department of the State.   However, later on, these were  

converted into a public interest litigation regarding larger  

corruption charges. The matter was sought to be referred for  

investigation to a specialised agency like CBI.  The plea taken  

was that the Special Judge was already seized of the case as  

charge sheet had been filed before that Court, and the question  

of referring the matter for investigation did not arise.   The High  

Court in directing investigation by the CBI had exceeded its  

jurisdiction and assumed the jurisdiction of the Special Judge.  

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The plea of prejudice was also raised.   While rejecting these  

arguments, the appeals were dismissed and this Court issued a  

direction to the CBI to investigate and file the charge sheet before  

the Court having appropriate jurisdiction over the investigation.  

The reasoning of the Court can be examined from paragraph 63  

to 65 of the said judgment, which reads as under:-

“63. The High Court in this case was not  monitoring any investigation. It only desired  that the investigation should be carried out by  an independent agency. Its anxiety, as is  evident from the order dated 3-4-2002, was to  see that the officers of the State do not get  away. If that be so, the submission of Mr Rao  that the monitoring of an investigation comes  to an end after the charge-sheet is filed, as has  been held by this Court in Vineet Narain and  M.C. Mehta (Taj Corridor Scam) v. Union of  India, loses all significance.

64. Moreover, it was not a case where the High  Court had assumed a jurisdiction in regard to  the same offence in respect whereof the Special  Judge had taken cognizance pursuant to the  charge-sheet filed. The charge-sheet was not  filed in the FIR which was lodged on the  intervention of the High Court.

65. As the offences were distinct and different,  the High Court never assumed the jurisdiction  of the Special Judge to direct reinvestigation as  was urged or otherwise.”

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27. Now, we shall proceed to examine the merit of the  

contentions raised before us.  We may deal with the submissions  

(a) and (b), together, as they are intrinsically inter-related.    

28. The CEC had submitted the Report dated 20th April, 2012  

and it has been stated in the Report that opportunity of being  

heard had been granted to the affected parties.   However, the  

contention before us is that while the CEC heard other parties, it  

had not heard various companies like M/s. South West Mining  

Ltd. and M/s. JSW Steel Ltd.   Firstly, the CEC is not vested with  

any investigative powers under the orders of this Court, or under  

the relevant notifications, in the manner as understood under the  

CrPC.   The CEC is not conducting a regular inquiry or  

investigation with the object of filing chargesheet as  

contemplated under Section 173 CrPC.   Their primary function  

and responsibility is to report to the Court on various matters  

relating to collusion in illegal and irregular activities that are  

being carried on by various persons affecting the ecology,  

environment and reserved forests of the relevant areas.   While  

submitting such reports in accordance with the directions of this  

Court, the CEC is required to collect such facts.   In other words,  

it has acted like a fact finding inquiry.   The CEC is not  

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discharging quasi-judicial or even administrative functions, with  

a view to determine any rights of the parties.   It was not  

expected of the CEC to give notice to the companies involved in  

such illegalities or irregularities, as it was not determining any of  

their rights.   It was simpliciter reporting matters to the Court as  

per the ground realities primarily with regard to environment and  

illegal mining for appropriate directions.  It had made different  

recommendations with regard to prevention and prosecution of  

environmentally harmful and illegal activities carried on in  

collusion with government officers or otherwise.   We are of the  

considered view that no prejudice has been caused to the  

intervenor/affected parties by non-grant of opportunity of hearing  

by the CEC.   In any case, this Court has heard them and is  

considering the issues independently.

29. As far as the challenge to the enlargement of jurisdiction by  

the CEC beyond the reference made by the Court, is concerned,  

the said contention is again without any substance.   We have  

referred to the various orders of this Court.   The ambit and  

scope of proceedings before this Court, pending in the above writ  

petition and civil appeal, clearly show that the Court is exercising  

a very wide jurisdiction in the national interest, to ensure that  

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there is no further degradation of the environment or damage to  

the forests and so that illegal mining and exports are stopped.  

The orders are comprehensive enough to not only give leverage to  

the CEC to examine any ancillary matters, but in fact, place an  

obligation on the CEC to report to this Court without exception  

and correctly, all matters that can have a bearing on the issues  

involved in all these petitions in both the States of Karnataka and  

Andhra Pradesh.   Thus, we reject this contention also.

30. Contention (c) is advanced on the premise that all matters  

stated by the CEC are sub-judice before one or the other  

competent Court or investigating agency and, thus, this Court  

has no jurisdiction to direct investigation by the CBI.  In any  

case, it is argued that such directions would cause them serious  

prejudice.   

31. This argument is misplaced in law and is misconceived on  

facts.  Firstly, all the facts that had been brought on record by  

the CEC are not directly sub-judice, in their entirety, before a  

competent forum or investigating agency.   

32. In relation to issue 1(a) raised by the CEC which also but  

partially is the subject matter of PCR No. 2 of 2011 pending  

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before the Additional City Civil and Sessions Judge, Bangalore  

under the Prevention of Corruption Act.  The Court took  

cognizance and summoned the accused to face the trial, writ  

against the same is pending in the High Court.  It primarily  

relates to the improper de-notification of the land, which had  

been under acquisition but possession whereof was not taken.  

This land was purchased by the family members of the then  

Chief Minister for a consideration of Rs.40 lacs and was sold after  

de-notification for a sum of Rs.20 crores to South West Mining  

Ltd. after de-notification.  For this purpose, office of the Chief  

Minister and other higher Government Officials were used.  While  

the earlier part of above-noted violations is covered under PCR  

No. 2 of 2011, the transactions of purchase sale and other  

attendant circumstances are beyond the scope of the said  

pending case which refers only to the decision of de-notification.  

It appears that the entire gamut or the complete facts stated by  

the CEC and supported by documents are not the matter sub-

judice before the Trial Court.  Similarly, issue 1 (b) relates to the  

donation of Rs.20 crores received by Prerna Education Society  

from M/s. South West Mining Ltd.  The society is stated to be  

belonging to the members of the family of the Chief Minister Shri  

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Yeddyurappa.  The written submissions filed on behalf of M/s.  

South West Mining Ltd., do not reflect that issue 1(a) and (b) of  

the CEC report under consideration are directly and in their  

entirety are the subject matter of any investigations in progress  

and proceedings pending before any competent forum.  These are  

merely informatory facts, supported by relevant and authentic  

documents, highlighted by the CEC in its report for consideration  

of the Court.  A suspect has no indefeasible right of being heard  

prior to initiation of the investigation, particularly by the  

investigating agency.  Even, in fact, the scheme of the Code of  

Criminal Procedure does not admit of grant of any such  

opportunity.  There is no provision in the CrPC where an  

investigating agency must provide a hearing to the affected party  

before registering an FIR or even before carrying on investigation  

prior to registration of case against the suspect.  The CBI, as  

already noticed, may even conduct pre-registration inquiry for  

which notice is not contemplated under the provisions of the  

Code, the Police Manual or even as per the precedents laid down  

by this Court.  It is only in those cases where the Court directs  

initiation of investigation by a specialized agency or transfer  

investigation to such agency from another agency that the Court  

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may, in its discretion, grant hearing to the suspect or affected  

parties.  However, that also is not an absolute rule of law and is  

primarily a matter in the judicial discretion of the Court.  This  

question is of no relevance to the present case as we have already  

heard the interveners.   

33. In the case of Narmada Bai v. State of Gujarat & Ors. [(2011)  

5 SCC 79], this Court was concerned with a case where the State  

Government had objected to the transfer of investigation to CBI of  

the case of a murder of a witness to a fake encounter.  The CBI  

had already investigated the case of fake encounter and  

submitted a charge sheet against high police officials.  This Court  

analyzed the entire law on the subject and cited with approval  

the judgment of the Court in the case of Rubabbuddin Sheikh v.  

State of Gujarat [(2010) 2 SCC 200].  In that case, the Court had  

declared the law that in appropriate cases, the Court is  

empowered to hand over investigation to an independent agency  

like CBI even when the charge-sheet had been submitted.  In the  

case of Narmada Bai, the Court had observed that there was a  

situation which upon analysis of the allegations it appeared that  

abduction of Sohrabuddin and Kausarbi thei their subsequent  

murder as well as the murder of the witnesses are one series of  

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facts and was connected together as to form the same  

transaction under Section 220 of the Code of Criminal Procedure  

and it was considered appropriate to transfer the investigation of  

the subsequent case also to CBI.  

34. If we analyse the abovestated principles of law and apply the  

same to the facts of the present case, then the Court cannot rule  

out the possibility that all these acts and transactions may be so  

inter-connected that they would ultimately form one composite  

transaction making it imperative for the Court to direct complete  

and comprehensive investigation by a single investigating agency.  

The need to so direct is, inter alia, for the following  

considerations:

(a) The report of the CEC has brought new facts, subsequent  

events and unquestionable documents on record to  

substantiate its recommendations.

(b) The subsequent facts, inquiry and resultant suspicion,  

therefore, are the circumstances for directing further and  

specialized investigation.

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(c) The scope and ambit of present investigation is much wider  

than the investigations/proceedings pending before the  

Court/investigating agencies.   

(d) Various acts and transactions prima facie appear to be part  

of a same comprehensive transaction.

(e) The requirement of just, fair and proper investigation  

would demand investigation by a specialized agency  

keeping in view the dimensions of the transactions, the  

extent of money involved and manipulations alleged.

35. To give an example to emphasize that this is a case  

requiring further investigation and is fit to be transferred to the  

specialized investigating agency, we may mention that the South  

West Mining Ltd. was initially found to be a front company of  

JSW Steels Ltd.  Thereafter all transactions were examined and  

the improper purchase of land and donations made by them  

came to light.  These facts appear to be inherently interlinked.  

Despite that and intentionally, we are not dealing with the factual  

matrix of the case or the documents on record, in any detail or  

even discussing the merits of the case in relation to the  

controversies raised before us so as to avoid any prejudice to the  

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rights of the affected parties before the courts in various  

proceedings and investigation including the proposed  

investigation.

36. Now, we shall proceed on the assumption that the  

illegalities, irregularities and offences alleged to have been  

committed by the affected parties are the subject matter, even in  

their entirety, of previous investigation cases, sub-judice before  

various Courts including the writ jurisdiction of the High Court.  

It is a settled position of law that an investigating agency is  

empowered to conduct further investigation after institution of a  

charge-sheet before the Court of competent jurisdiction.  A  

magistrate is competent to direct further investigation in terms of  

Section 173(8) Cr.P.C. in the case instituted on a police report.  

Similarly, the Magistrate has powers under Section 202 Cr.P.C.  

to direct police investigation while keeping the trial pending  

before him instituted on the basis of a private complaint in terms  

of that Section.  The provisions of Section 210 Cr.P.C. use the  

expression ‘shall’ requiring the Magistrate to stay the proceedings  

of inquiry and trial before him in the event in a similar subject  

matter, an investigation is found to be in progress.  All these  

provisions clearly indicate the legislative scheme under the  

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Cr.P.C. that initiation of an investigation and filing of a  

chargesheet do not completely debar further or wider  

investigation by the investigating agency or police, or even by a  

specialized investigation agency.  Significantly, it requires to be  

noticed that when the court is to ensure fair and proper  

investigation in an adversarial system of criminal administration,  

the jurisdiction of the Court is of a much higher degree than it is  

in an inquisitorial system.  It is clearly contemplated under the  

Indian Criminal Jurisprudence that an investigation should be  

fair, in accordance with law and should not be tainted.  But, at  

the same time, the Court has to take precaution that interested  

or influential persons are not able to misdirect or hijack the  

investigation so as to throttle a fair investigation resulting in the  

offenders escaping the punitive course of law.  It is the inherent  

duty of the Court and any lapse in this regard would tantamount  

to error of jurisdiction.   

37. In the case of Rama Chaudhary v. State of Bihar [(2009) 6  

SCC 346], this Court was considering the scope of Sections  

173(8), 173(2) and 319 of the CrPC in relation to directing further  

investigation.  The accused raised a contention that in that case,  

report had been filed, charges had been framed and nearly 21  

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witnesses had been examined and at that stage, in furtherance to  

investigation taken thereafter, if a supplementary charge-sheet is  

filed and witnesses are permitted to be summoned, it will cause  

serious prejudice to the rights of the accused.  It was contended  

that the Court has no jurisdiction to do so.  The Trial Court  

permitted summoning and examination of the summoned  

witnesses in furtherance to the supplementary report.  The order  

of the Trial Court was upheld by the High Court.  While  

dismissing the special leave petition, a Bench of this Court  

observed :

“14. Sub-section (1) of Section 173 CrPC  makes it clear that every investigation shall  be completed without unnecessary delay.  Sub-section (2) mandates that as soon as the  investigation is completed, the officer in  charge of the police station shall forward to a  Magistrate empowered to take cognizance of  the offence on a police report, a report in the  form prescribed by the State Government  mentioning the name of the parties, nature  of information, name of the persons who  appear to be acquainted with the  circumstances of the case and further  particulars such as the name of the offences  that have been committed, arrest of the  accused and details about his release with or  without sureties.

15. Among the other sub-sections, we are  very much concerned about sub-section (8)  of Section 173 which reads as under:

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“173. (8) Nothing in this section shall be  deemed to preclude further  investigation in respect of an offence  after a report under sub-section (2)  has been forwarded to the Magistrate  and, where upon such investigation,  the officer in charge of the police  station obtains further evidence, oral  or documentary, he shall forward to  the Magistrate a further report or  reports regarding such evidence in the  form prescribed; and the provisions of  sub-sections (2) to (6) shall, as far as  may be, apply in relation to such  report or reports as they apply in  relation to a report forwarded under  sub-section (2).”

A mere reading of the above provision makes  it clear that irrespective of the report under  sub-section (2) forwarded to the Magistrate,  if the officer in charge of the police station  obtains further evidence, it is incumbent on  his part to forward the same to the  Magistrate with a further report with regard  to such evidence in the form prescribed. The  abovesaid provision also makes it clear that  further investigation is permissible, however,  reinvestigation is prohibited.

16. The law does not mandate taking of prior  permission from the Magistrate for further  investigation. Carrying out a further  investigation even after filing of the charge- sheet is a statutory right of the police.  Reinvestigation without prior permission is  prohibited. On the other hand, further  investigation is permissible.

18. Sub-section (8) of Section 173 clearly  envisages that on completion of further  investigation, the investigating agency has to  

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forward to the Magistrate a “further”  report  and not a fresh report regarding the “further”  evidence obtained during such investigation.

19. As observed in Hasanbhai Valibhai  Qureshi v. State of Gujarat the prime  consideration for further investigation is to  arrive at the truth and do real and  substantial justice. The hands of the  investigating agency for further investigation  should not be tied down on the ground of  mere delay. In other words

“[t]he mere fact that there may be  further delay in concluding the trial  should not stand in the way of further  investigation if that would help the  court in arriving at the truth and do  real and substantial as well as effective  justice.”

38. Reference can also be made to the judgment of this Court in  

the case of National Human Rights Commission v. State of Gujarat  

& Ors. [(2009) 6 SCC 342], wherein the Court was dealing with  

different cases pending in relation to the communal riots in the  

State of Gujarat and the trial in one of the cases was at the  

concluding stage.  In the meanwhile, in another FIR filed in  

relation to a similar occurrence, further investigation was being  

conducted and was bound to have a bearing even on the pending  

cases.  The Court, while permitting inquiry/investigation,  

including further investigation, completed stayed the proceedings  

in the Trial Court as well and held as under :

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“10. We make it clear that SIT shall be free  to work out the modalities and the norms  required to be followed for the purpose of  inquiry/investigation including further  investigation. Needless to say the sole object  of the criminal justice system is to ensure  that a person who is guilty of an offence is  punished.

11. Mr K.T.S. Tulsi, learned Senior Counsel  had submitted that in some cases the alleged  victims themselves say that wrong persons  have been included by the police officials as  accused and the real culprits are sheltered.  He, therefore, suggested that trial should go  on, notwithstanding the inquiry/  investigation including further investigation  as directed by us. We find that the course  would not be appropriate because if the trial  continues and fresh evidence/materials  surface, it would require almost a de novo  trial which would be not desirable.”

39. We do not find any necessity to multiply the precedents on  

this issue.  It is a settled principle of law that the object of every  

investigation is to arrive at the truth by conducting a fair,  

unbiased and proper investigation.

40. Referring to the plea of prejudice taken up by the affected  

parties before us, we are unable to see any element of prejudice  

being caused to the affected parties if the CBI is permitted to  

investigate the entire matter.  The plea taken by the interveners  

before us is that M/s. JSW Steels Ltd. is a bona fide purchaser of  

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iron ore from the open market and they have been affected by the  

unilateral actions of one M/s. Mysore Minerals Ltd.  They state  

that they have no statutory liability to check origin of iron ore or  

to maintain Form 27.  According to M/s. JSW Steels Ltd., they  

are already co-operating with the CBI in the investigation  

directed by the Supreme Court.  As far as M/s. South West  

Mining Ltd. is concerned, it has stated that it is the purchaser of  

the land for bona fide consideration and genuine purpose.  The  

land has been converted to commercial use and that is why  

Rs.20 crores were paid as consideration.  They further claimed  

that they had Rs.23.96 crores of pre-tax profit and, therefore,  

they were in a position to make the donation which they had  

made.  Not only they, but other companies affiliated to Jindal  

Group have also made similar contributions.  It is not for us to  

examine whether the stand taken by the intervener companies is  

correct or not.  It requires to be investigated and an investigation  

per se would help them to clear their position, rather than  

subjecting them to face multifarious litigations, investigations  

and economic burden.  Having heard them, we are unable to find  

any prejudice to parties if further or wider investigation is  

directed by this Court.  The direction of further investigation is  

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based upon documents and facts brought to light by the CEC as  

a result of examination conducted in the course of its primary  

function relating to inquiry into environmental violations and  

illegal mining activity.  If the proceedings are permitted to  

continue and finally investigations reveal that a case which  

requires to be tried in accordance with law exists, then the  

interveners would have to face proceedings all over again.  So, it  

is in their own interest that the specialized agency is permitted to  

investigate and bring out the true facts before the Court of  

competent jurisdiction.

41. We must notice that the criminal offences are primarily  

offences against the State and secondarily against the victim.  In  

this case, if the investigation by specialized agency finds that the  

suspect persons have committed offences with or without  

involvement of persons in power, still such violation undoubtedly  

would have been a great loss to the environmental and natural  

resources and would hurt both the State and national economy.  

We cannot expect an ordinary complainant to carry the burden of  

proving such complex offences before the Court of competent  

jurisdiction by himself and at his own cost.   Doing so would be a  

travesty of the criminal justice system.

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42. It was ever and shall always remain the statutory the  

obligation of the State to prove offences against the violators of  

law. If a private citizen has initiated the proceedings before the  

competent court, it will not absolve the State of discharging its  

obligation under the provisions of the CrPC and the obligations of  

Rule of Law. The Court cannot countenance an approach of this  

kind where the State can be permitted to escape its liability only  

on the ground that multifarious complaints or investigations  

have been initiated by private persons or bodies other than the  

State.  In our considered view, it enhances the primary and legal  

duty of the State to ensure proper, fair and unbiased  

investigation.

43. The facts of the present case reveal an unfortunate state of  

affairs which has prevailed for a considerable time in the  

mentioned districts of both the States of Andhra Pradesh and  

Karnataka.   The CEC has recommended, and the complainant  

and petitioners have also highlighted, a complete failure of the  

State machinery in relation to controlling and protecting the  

environment, forests and minerals from being illegally mined and  

exploited.

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44. Wherever and whenever the State fails to perform its duties,  

the Court shall step in to ensure that Rule of Law prevails over  

the abuse of process of law.  Such abuse may result from  

inaction or even arbitrary action of protecting the true offenders  

or failure by different authorities in discharging statutory or legal  

obligations in consonance with the procedural and penal  

statutes.    This Court expressed its concern about the rampant  

pilferage and illegal extraction of natural wealth and resources,  

particularly, iron ore, as also the environmental degradation and  

disaster that may result from unchecked intrusion into the forest  

areas.  This Court, vide its order dated 29th July, 2011 invoked  

the precautionary principle, which is the essence of Article 21 of  

the Constitution of India as per the dictum of this Court in the  

case of M.C. Mehta v. Union of India [(2009) 6 SCC 142], and had  

consequently issued a ban on illegal mining.  The Court also  

directed Relief and Rehabilitation Programmes to be carried out  

in contiguous stages to promote inter-generational equity and the  

regeneration of the forest reserves.  This is the ethos of the  

approach consistently taken by this Court, but this aspect  

primarily deals with the future concerns.  In respect of the past  

actions, the only option is to examine in depth the huge  

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monetary transactions which were effected at the cost of national  

wealth, natural resources, and to punish the offenders for their  

illegal, irregular activities. The protection of these resources was,  

and is the constitutional duty of the State and its  

instrumentalities and thus, the Court should adopt a holistic  

approach and direct comprehensive and specialized investigation  

into such events of the past.

45. Compelled by the above circumstances and keeping in mind  

the clear position of law supra, we thus direct;

a) The issues specified at point 1(a) and 1(b) of the CEC Report  

dated 20th April, 2012 are hereby referred for investigation by  

the Central Bureau of Investigation.

b) All the proceedings in relation to these items, if pending before  

any Court, shall remain stayed till further orders of this Court.  

The CBI shall complete its investigation and submit a Report  

to the Court of competent jurisdiction with a copy of the  

Report to be placed on the file of this Court within three  

months.

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c) The Report submitted by the CEC and the documents annexed  

thereto shall be treated as ‘informant’s information to the  

investigating agency’ by the CBI.    

d) The CBI shall undertake investigation in a most fair, proper  

and unbiased manner uninfluenced by the stature of the  

persons and the political or corporate clout, involved in the  

present case.  It will be open to the CBI to examine and inspect  

the records of any connected matter pending before any  

investigating agency or any court.

e) The competent authority shall constitute the special  

investigating team, headed by an officer not below the rank of  

Additional Director General of Police/Additional Commissioner  

forthwith.

f) Any investigation being conducted by any agency other than  

CBI shall also not progress any further, restricted to the items  

stated in clause (a) above, except with the leave of the Court.  

The CBI shall complete its investigation uninfluenced by any  

order, inquiry or investigation that is pending on the date of  

passing of this order.

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g) This order is being passed without prejudice to the rights and  

contentions of any of the parties to the lis, as well as in any  

other proceedings pending before courts of competent  

jurisdiction and the investigating agencies.     

h) All pleas raised on merits are kept open.

i) We direct all the parties, the Government of the States of  

Andhra Pradesh, Karnataka and all other government  

departments of that and/or any other State, to fully cooperate  

and provide required information to CBI.

46. With the above directions, we accept the recommendation of  

the CEC to the extent as afore-stated.  

47. Let the matter stand over to 3rd August, 2012 for  

consideration of the Report dated 27th April, 2012 filed by the  

CEC.

….…………......................CJI.                              (S.H. Kapadia)

…….…………......................J.                                                     (Aftab Alam)

...….…………......................J.

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                                                   (Swatanter Kumar) New Delhi May 11, 2012

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