After the audit reports are received in the
Parliament/State Legislature, they are scrutinized by the PAC.
In the State of Karnataka, having regard to the rules of
procedure and conduct of business in Karnataka Legislative
Assembly (Article 208(1) of the Constitution), the Committee is
formed consisting of not more than 20 members, who are
elected from the members of the Assembly and the Council
according to the principle of proportionate representation by
means of single transferable voting system. The Committee
scrutinizes the appropriation of the accounts of the State
Government vis-a-vis the report of the CAG. The duration of
the Committee being limited to one year, a system is evolved
by selecting the paragraphs from the audit report for detailed
examination. During the course, the Ministers and the
Executives of the Departments will be called upon to take
corrective action and to furnish a proposed action to be taken
in respect of the audit report. Thereafter the report of the
Committee will be placed before the House. In the matter of
Arun Kumar Agrawal (supra), it was observed that the CAG
report is always subject to scrutiny by the Parliament and the
Government can always offer its view point on the report of
the CAG. In Paras-67 and 68 it was held thus:
“67. The question that is germane for consideration
in this case is whether this Court can grant reliefs
by merely placing reliance on the CAG’s Report.
The CAG’s Report is always subject to
parliamentary debates and it is possible that PAC
can accept the ministry’s objection to the CAG
Report or reject the report of the CAG. The CAG,
indisputably is an independent constitutional
functionary, however, it is for Parliament to decide
whether after receiving the report i.e. PAC to make
its comments on the CAG’s Report.
We may, however, point out that since the
report is from a constitutional functionary, it
commands respect and cannot be brushed aside
as such, but it is equally important to examine the
comments what respective Ministries have to offer
on the CAG’s Report. The Ministry can always
point out, if there is any mistake in the CAG’s
report or the CAG has inappropriately appreciated
the various issues. For instance, we cannot as
such accept the CAG report in the instance case”.
The Division Bench of the High Court of Sikkim in
Subba Associates –vs- Union of India (MANU/SI/0002/2005)
was dealing with a situation wherein the search and seizure
operation under Section 132 of the Income Tax Act were
carried out on the basis of the preliminary draft and unsigned
report of CAG with regard to the business of lottery of the
State of Nagaland - The final CAG report was subsequently
laid before the Legislative Assembly and was referred to PAC
- The Legislative Assembly found the CAG report to the
unsustainable - The contention was the CAG report did not
acquire legal authenticity and could not be construed as
information within the meaning of Section 132(1) of the
Income Tax Act. The High Court observed that, CAG report is
a legislative paper and is a property of the House and its
members. . . . . . It is the exclusive prerogative of the House
and its members to deliberate on the same as the report falls
within the special jurisdiction of the House or its Committee. .
. . The executive or the judiciary cannot be in legal and/or
constitutional possession of the said report. The Division
Bench of the Gauhati High Court in M.S.Associates –vs-
Union of India (Manu/GH/0322/2005) addressing similar
issue regarding ‘information’ within the meaning of Section
132 of the Income Tax Act, though was of the opinion that the
CAG report is initially meant for the Parliament/Legislature,
and undoubtedly a property of the House, further held that
for the purpose of starting an investigation into evasion of tax,
the source of information is not material; when the legislature
itself has not restricted the authorities concerned under
Section 132 supra from acting upon the information which
may be derived from the report of the CAG which has not
been laid/discussed by the State legislature, it would be
realistic to hold that the legislative intendment is that even if
the authority concerned received the information about
evasion of tax from the report of the CAG, there is no legal
impediment on the part of the authorities concerned to act
upon such information.
In my considered opinion the view taken by the
Gauhathi High Court is more realistic. In this era of
advanced Information Technology with the enablement
conferred on the citizen of the country to have easy access to
information by way of Right to Information Act, 2005, it is
unrealistic to presume CAG report as a confidential
document, till it meets finality in the Parliament or the
Legislature. The Code no where contemplates a Police Officer
acting under Section 157 of the Code to publish the source of
information which drives him to register a suo moto complaint
in respect of a cognizable offence. Likewise it is always open to
a concerned/aggrieved informant to approach the
jurisdictional Police even on suspicion about commission of a
cognizable offence, to be dealt in accordance with Section
154(1) of the Code. But the concern is, availing the CAG
report as the basis for registration of the criminal case
subjecting the same to the test of trial in a criminal court
which has no jurisdiction to adjudicate the question raised in
the CAG report. The CAG report wherefore since not available
for judicial scrutiny, in my considered opinion, cannot be
used as a foundation to build up a criminal case and cannot
be made a part of investigation. As such, if an informant
has a reasonable suspicion about the commission of
cognizable offence he has every right to move the criminal law
into motion by way of a formal information oral/writing to the
concerned Court and the concerned Police if warranted can
ascertain truthfulness or otherwise of the information so
received by holding preliminary enquiry within the period
stipulated by the Apex Court as at Lalitha Kumari’s case
(supra) and then register the criminal case if the enquiry
probabalises commission of a cognizable offence.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF JANUARY 2016
BEFORE
THE HON’BLE MRS.JUSTICE RATHNAKALA
WRIT PETITION NO.41228 OF 2015 (GM-RES)
SHRI B.S.YEDDYURAPPA
Vs
THE STATE OF KARNATAKA
Read full judgment here;click here
The petitioner of the above cases is the former Chief
Minister of Karnataka and all these petitions originate from a
complaint lodged by one Jayakumar Hiremath before the
Lokayuktha seeking action on the basis of the Comptroller
and Auditor General of India’s report (‘C.A.G. report’ for short)
in finding irregularities in the action taken by the petitioner
4
and the co-accused in denotifying the various lands from
acquisition.
2. The story commences from, Sri.Jayakumar Hiremath
claiming to be a social worker, RTI activist and crusader
against the corruption in the country filing a petition in
W.P.No.15502/2013 (GM-RES-PIL) for a direction to the C.B.I.
to conduct thorough investigation into various issues
highlighted in the C.A.G. report No.6 of 2010-11 relating to
Government of Karnataka on acquisition, denotification and
allotment of land by the K.I.A.D.B. The Division Bench of this
Court headed by the then Hon’ble Chief Justice opined that
“. . . . . . the petitioner or any such public spirited person has an
alternative and more appropriate remedy available to him in
the form of provisions of Section 7 of the Karnataka
Lokayuktha Act, 1984 and the Lokayuktha having also the
power to investigate any action, the alternative remedy appears
to be more appropriate for investigation of the grievances and
allegations contained in the petition” and the petition came to
be disposed of leaving liberty to the petitioner to approach the
Lokayuktha for appropriate remedy. Another petition filed by
5
the very same petitioner viz., Jayakumar Hiremath seeking
action in respect of the C.A.G. report No.3/2012 in
W.P.No.8347/2013 (GM-RES-PIL) was dismissed as not
pressed.
3. In continuation of the above, the petitioner thereafter
filed a complaint before the Lokayuktha to investigate the
various issues highlighted in the C.A.G. report No.6/2010-11
and also C.A.G. report No.3/2012 relating to misuse of
authority with corrupt motive and thereby causing heavy loss
to the State Exchequer and to take further suitable action
under law. In the said complaint, he referred to the orders
passed by the Division Bench of this Court in
W.P.No.15502/2013 D.D. 10.4.2013 and W.P.No.8347/2013
D.D. 28.6.2013. As could be seen from the undisputed
documents placed on record, the Registry of the Lokayuktha
on receiving his complaint in the prescribed form, registered
the complaint. The names of the Officers involved were called
for from the Chief Secretary, Government of Karnataka to take
action against them. Since there was no response from the
Government side, by invoking the provisions of Section 15(3)
6
of the Karnataka Lokayuktha Act (‘the Act’ for short), the
matter was referred to the Director General of Police, Criminal
Investigation Department, Economic Offences and Special
Units, for investigation and to report. It took almost one year
for the DGP, CID to submit his report in the matter. The
report also appears to have mentioned that, in respect of 35
cases pertaining to de-notification of the land pointed out by
the CAG in his report, the prosecution is already launched in
some cases and some cases are pending in Lokayuktha
Special Court. On the note put by the Registry, the
Lokayuktha ordered on 11.6.2015 thus:
“Approved and officer in charge of investigation
shall submit progress report through proper
channel to ADGP every fortnight. ADGP shall
ensure expeditious investigation.”
4. The Registrar of Lokayuktha handed over the reports
to Superintendent of Police Wing, Lokayuktha, pursuant to
which the Lokayuktha Police registered the above cases in
respect of the offences under the Prevention of Corruption Act,
1988 the Karnataka Land (Registration on Transfer) Act, 1991
and Indian Penal Code (for brevity ‘the P.C. Act, K.L.R.T. Act
7
and IPC respectively). Jayakumar Hiremath’S signature is
found on the FIR also as the complainant. Annexed to the
FIR are found, the complaint of Jayakumar Hiremath, the CIG
report and case summary prepared by the Police Inspector.
At this stage itself, it needs to be appreciated that in his Writ
Petition No.15502/2013, the petitioner did not make specific
allegation as to under which provision of law the alleged
offences fall, either under the I.P.C. or under the provisions of
P.C.Act. As per para-5 of the order in the above W.P.
No.15502/2013 to the query of the Court in this regard,
learned Counsel practically threw up his hands with the
submission that ‘it is for the investigating agency to identify
the persons who could be arraigned for specific offences under
the relevant provisions of law’.
5. However, as per the summary of the prosecution
case, in the FIR, the allegation against the petitioner is:
In W.P.No.41228/2015 (Crime No.38/2015) pertaining
to 6 acres 10 guntas of land in Sy.Nos.171/3, 172/5 and
172/6 of Kothanur village, the petitioner colluded with the
8
landlords, BDA and other Department Officers indulged in
their illegal transaction and gave up the land from acquisition.
In W.P.No.26395/2015 (Crime No.42/2015) pertaining
to land in Sy.No.251 measuring 6 acres 18 guntas of
Halagevaderahalli Village, Bangalore South Taluk, gave up
from acquisition of land by conniving with the landlords and
officials of other Department.
In W.P.No.26396/2015 (Crime No.39/2015) pertaining
to land in Sy.Nos.5/1 and 6/3 measuring 1 acre 17 guntas of
Bilekahalli village, Bangalore South Taluk. The petitioner
herein with a malafide intention to help the landlords even
before any decision could be taken in the de-notification
Committee, took over the file from the Member Secretary and
ordered de-notification.
In W.P.No.26397/2015 (Crime No.44/2015) pertaining
to 270.01 acres of land in Sy.No.1 of G.B.Kaval Village, gave
up acquisition of the land by conniving with BDA and other
officials by involving himself in their illegal transaction against
the recommendation of the de-notification committee.
9
In W.P.No.41229/2015 (Crime No.40/2015) pertaining
to 6 acres 31 guntas of land in Sy.No.24 of Kothanur village,
gave up acquisition of the land by colluding with the
landlords, BDA and officials of other Departments, by placing
reliance on false information that the land is still in the
physical possession of the landlord.
In W.P.No.41230/2015 (Crime No.43/2015) pertaining
to Sy.No.1/1 measuring 3 acres 33 guntas of Lottegollahalli
village, denotified the land in respect of a person as against
the original Khatedar and said other persons subsequently
purchased the land after final notification against the K.L.R.T.
Act though 5 acres of said land was already denotified and the
case was closed as early as on 23.4.2010.
In W.P.No.41232/2015 (Crime No.52/2015) pertaining
to land in Sy.No.46 measuring 16 acres 9 guntas of
Nagarabavi Village, Bangalore North Taluk, gave up from
acquisition 25 guntas of land against the report of the Under
Secretary of BDA and gave up from acquisition 25 guntas of
land though the possession of the land was already taken.
10
In W.P.No.41234/2015 (Crime No.53/2015) pertaining
to 3 acres 18 guntas of land in Sy.No.78/1 of Kothanur
village, gave up acquisition of the land on a false information
that already buildings are existing on the land and BDA
cannot form the layout, by ignoring the public interest to help
the GPA Holder of the land owner; he misused his official
position and treated the case as a special case, though there
was no notification under Section 16(2) of the Land
Acquisition Act and without compensation to the landlords.
In W.P.No.41235/2015 (Crime No.45/2015) pertaining
to land in Sy.Nos.100/1 and 100/2 of Challakere village, by
involving with the co-accused against the report that there are
legal hurdles to de-notify, gave up from acquisition.
In W.P.No.41237/2015 (Crime No.46/2015) pertaining
to land measuring 2 acres 36 guntas in Sy.Nos.104/2, 104/3
nd 104/4 of Uttarahalli village, Bangalore South Taluk, by
conniving with the landlords and others against the
recommendation of the Urban Development Department
ordered to give up from acquisition.
11
In W.P.No.41238/2015 (Crime No.48/2015) pertaining
to land in Sy.Nos.39/2B, 50/2, 51/1, 55/1, 57/1, 61, 64/1
and 66/1 of Rachenalli Village, Bangalore East Taluk, ordered
to give up from acquisition without mentioning the survey
number and the extent of the land against the report of the
Urban Development Department, that except 1 acre 30 gutnas
out of 3 survey numbers, remaining land is not taken into
possession and can be given up from acquisition.
In W.P.No.41239/2015 (Crime No.49/2015) pertaining
to 2 acres 21 guntas of land in Sy.No.86/2 of Thanisandra
village, Bangalore East Taluk, against the notice put up by the
Under Secretary, Deputy Secretary of Urban Development
Department by conniving with the landlords involved in the
illegal transaction and gave up the land from acquisition.
In W.P.No.41240/2015 (Crime No.50/2015) pertaining
to Sy.Nos.7, 6/2A, 6/2B totally 1 acre 20 guntas of land in
Guddadahalli village, Hennur-Bellary Road, Bangalore North
Taluk, against the report of the Chief Secretary of Urban
Development ordered to give up the land from acquisition.
12
Thereafter the land was purchased by land developer from the
original landlord.
In W.P.No.41241/2015 (Crime No.54/2015) against the
public interest, he misused his official position by treating it
as a special case and ordered to give up acquisition of land in
Sy.No.23 measuirng 2 acres 10 gutnas of Hulimavu village,
Begur Hobli, Bangalore South Taluk.
In W.P.No.41231/2015 (Crime No.47/2015) pertaining
to 3 acres 10 guntas of land in Sy.No.77/1 and 2 acres in
Sy.No.77/2 of Valagerehalli village, Kengeri Hobli, Bangalore
South Taluk, illegally ordered to give up the land from
acquisition against the report of the Urban Development
Department.
6. The common question of law raised for the petitioner
in these petitions is that, the C.A.G. report based on which
the complaint has originated being the exclusive property of
the House, same cannot be made use by the complainant as
against the petitioner. The FIR could not have been registered
though no information regarding commission of any
13
cognizable offence is informed by the complainant. There
being no specific allegation of demand or request by the
petitioner to obtain any valuable thing for his pecuniary
advantage, the case could not have been registered in respect
of the offence under Section 13(1)(d) of the P.C.Act. In the
absence of any property being entrusted to him, case could
not have been registered in respect of the offence under
Section 13(1)(c) of the P.C.Act and 409 of IPC. In the absence
of any allegation of deception to induce delivery of the
property, case under Section 420 of IPC could not have been
registered against him. When there is no allegation that the
transfer of land has occurred during the pendency of the
acquisition proceedings, case could not have been registered
for the offence under Sections 3, 4, 8 read with Section 9 of
the K.L.R.T. Act, 1991. The registration of the case is in
violation of Sections 9, 10, 11 and 12 of the Karnataka
Lokayuktha Act. On the very same allegation, a complaint
registered having been dismissed by the competent court, the
respondent could not have registered the FIR on the same
allegation.
14
7. Each of the petition is filed for a writ in the nature of
Certiorari to quash the FIRs and to declare that the report of
the C.A.G. of India cannot be the basis for registration of the
criminal case. It is a mater of record that originally the
petition was filed by arraying the Karnataka Lokayuktha
Police as sole respondent. However, the C.A.G. of India was
later impleaded as respondent No.2 and the State as
respondent No.3.
8. In W.P.No.41228/2015, the learned Special Public
Prosecutor for the Lokayuktha by placing reliance on a
Circular of this Court in No.HCE:94/2001 dated 13.8.2002
submitted that the matter shall be posted before Division
Bench when the Writ Petitioner is questioning under Articles
226 and 227 of the Constitution of India, the order of the
Lokayuktha, who was the Chief Justice of this Court.
Sri.C.V.Nagesh, learned Senior Counsel appearing for the
petitioner responded that “the petitioner is not challenging any
order passed by Lokayuktha, who was the Chief Justice of this
Court and he is challenging the very registration of the FIR on
the grounds urged in the petitions”. In that view of the matter,
15
the petitions are to be considered from the premise of the
registration of the FIR by Lokayuktha Police without challenge
to the order of the Lokayuktha in forwarding the complaint to
the Lokayuktha Police for investigation.
9. Sri.C.V.Nagesh, learned Senior Counsel appearing for
the petitioner submits that, the power of the Comptroller and
Auditor General of India emanates from Articles 148 to 151 of
the Constitution of India and further regulated by the
Comptroller and Auditor General’s (Duties, Powers and
Conditions of Service) Act, 1971, the report of the CAG would
be forwarded to the President or the Governor, as the case
may be and will be deliberated by the Public Accounts
Committee (‘PAC’ for short). The PAC after obtaining the
information from the concerned Ministers and Departments,
would prepare a separate report and both the reports would
be placed before the Parliament or the State Legislative
Assembly. The report of the CAG is for the exclusive
deliberation of the House and is considered to be the property
of the House. No other authority has any right to pick up
extracts from the CAG report and initiate proceedings either
16
civil or criminal. As observed by the Apex Court, the CAG
report cannot be considered as a ‘gospel truth’ and it is a
document, which has to be deliberated upon by the House
which has the discretion to either accept the
recommendations or to reject them. That being the position,
the respondent/Police could not have registered the FIR on
the basis of certain remarks in CAG report (reliance is placed
on the judgment of the Apex Court in (2013) 7 SCC 1 in the
matter of Arun Kumar Agrawal –vs- Union of India and
Others).
10. Learned Senior Counsel further submits, from the
acts alleged, the State Exchequer has not suffered any
financial loss. The land is restored back to the original
landlords. Those of the lands which were not utilized by the
beneficiary of the acquisition for a considerable time and in
respect of which the Government was satisfied that the land
may not be required for public purpose as they were either
denotified or given up from acquisition proceedings. In some
of the cases, the scheme itself had lapsed for not completion
of the acquisition process; in some cases, by operation of law,
17
the development scheme of the acquiring body or the
beneficiary itself stood lapsed. The denotification orders
passed by the petitioner are not so far set aside or held illegal
by any Court of law. In its administrative jurisdiction, the
Government can drop the land from acquisition if the actual
possession of the land is not taken over by the Government;
the error of judgment of the authority can be subjected for
judicial scrutiny but criminality cannot be attributed. In the
light of the judgments of the Apex Court, in (1) (2012) 9 SCC
257 (Subramanian Swamy –vs- A.Raja) and (2) (1976) 1 SCC
700 (B.N.Bhagdey –vs- M.D.Bhagwat), the orders passed
without routing the same through the Denotification
Committee, no criminal proceeding can be initiated since the
Denotification Committee has no statutory footing.
11. Learned Senior Counsel proceeds with his
submission that none of the Denotification Orders is sent for
the opinion of the Law Department as contemplated under
Rule 30 of Karnataka Government (Transaction of Business)
Rules, 1977. It is to be inferred that the denotification orders
are legal and no wrong can be alleged against him. As per the
18
opinion given by the then Advocate General, the notification
under Section 16(2) of the Land Acquisition Act is not
sufficient to hold that the land stood vested with the
Government in the absence of taking over actual possession of
the land. In such cases, it would be lawful for the
Government to drop the acquisition proceedings even in such
case where Section 16(2) notification has been published. In
the absence of proof of demand or request from the public
servant for a valuable thing or primary advantage, the offence
under Section 13(1)(d) of the P.C.Act cannot be held to be
made out.
12. In support of the above submission, learned Senior
Counsel placed his reliance on (1) (2009) 6 SCC 587
(A.Subair –vs- State of Kerala) regarding the submission
that ‘when there is no voluntary acceptance of money, no
need to be a bribe, no offence was held to be made out under
Section 5(1)(d) of the old P.C.Act’. (2) (2010) 4 SCC 450
(Banarsi Dass –vs- State of Haryana); (3) 1999(6) SCC 667
(Common Cause, a Registered Society –vs- Union of India
and Others) in respect of the issuance of summons against
19
the Minister, whereby it was held that there shall be an
element of deception or fraudulently or dishonestly inducing
another person to deliver any property.
13. Learned Senior Counsel hastens to add to his
submission that the FIR since does not disclose any offence of
deception of any person or about any property having been
delivered by any person pursuant to such deception and there
being no allegation of intentionally inducing any person to do
or omit to do anything which he would not do or omit, no
material to register the FIR in respect of the offence under
Section 415 or 420 of IPC, is made out, in the light of the
judgments in (1) (2009) 14 SCC 696 – Dalip Kaur –vs-
Jagnar Singh (2) (2009) 7 SCC 712 – Harmanpreet Singh
Ahluwalia –vs- State of Punjab. There is no allegation
much less proof to indicate that the lands in question were
transferred by anybody during the pendency of the acquisition
proceedings. It is only the seller of the land who is liable for
punishment none else. Hence, no offence under Sections 3
and 4 read with Section 9 of the K.L.R.T. Act, 1991 can be
found. The FIR since does not disclose commission of the
20
cognizable offence, it deserves to be quashed in accordance
with the ruling of the Apex Court in Patai Alias Krishna
Kumar –vs- State of Uttar Pradesh reported in (2010) 4
SCC 429. The FIR registered is neither on the information
given by the complainant nor on the suo moto report of the
Police Officer. The very registration of the FIR beyond the
procedure contemplated under the Code of Criminal
Procedure (‘the Code’ for brevity) is liable to be set aside.
Reliance is placed on (2014) 2 SCC 1 in the matter of Lalita
Kumari –vs- Government of Uttar Pradesh. One Hunsur
Chandrashekar had filed a similar complaint in
P.C.R.No.15/2013 against the petitioner and others. Said
complaint came to be rejected by the Lokayuktha Court
holding that no case is made out. The order of de-notification
dated 12.1.2010 came to be withdrawn by the Government on
4.11.2011. Aggrieved by the order of withdrawal, the land
owners approached this Court in W.P.Nos.42792-99/2011,
42800/2011 and 42831-34/2011. This Court set aside the
Government Order withdrawing the earlier de-notifications
and upheld the order passed by the petitioner dropping the
21
acquisition proceedings. When the de-notification order is
endorsed by this Court, it is illegal and improper to register
the FIR and investigate into the very same action.
14. In the Submission of Sri.Krishna Dixit, learned ASG
for respondent No.2 (both written and oral), the Comptroller
and Auditor General of India (for brevity ‘C.A.G.’), an
independent constitutional authority created by Article 148 of
the Constitution of India is neither the part of legislature nor
the Executive or the Judiciary. Under the Government of
India Act 1935, his office nomenclature was Auditor General
of India and the same was subservient to the Executive
Government. It was renamed by the Constituent Assembly on
the suggestion of Sri.T.T.Krishnamachari. On the suggestion
of Sri.B.Das, the Constituent Assembly redrafted the provision
to the effect that the CAG shall be “appointed by the President
by a warrant under his hand and seal”. In the opinion of
Dr.B.R.Ambedkar in his speech in the constituent assembly
on 30.5.1949, “the CAG is probably the most important officer
in the Constitution of India; if this functionary is to carry out
the duties and his duties are far more important than the
22
duties even of the judiciary; he should have been certainly as
independent as the judiciary; he ought to have far greater
independence than the judiciary itself”.
15. The C.A.G. deriving his powers and duties from
Article 149 to 151 of the Constitution of India is a premier
institution for carrying out audit of accounts in respect of
Government Departments, Government Companies,
Government Corporations and bodies/authorities funded by
the Government. The audit conducted by the C.A.G. is a
unitary audit in a federal set up and his reports pertaining to
Union sector are laid before the Parliament and those relating
to the State sector are laid before the respective Legislature,
as required under Article 151 of the Constitution of India. His
services are regulated by the Comptroller and Auditor General
of India (Duties, Powers and Conditions of Service) Act, 1971
(for brevity ‘CAG (DPC) Act). In pursuance of Article 149 and
148(3) of the Constitution of India, the Parliament has
enacted “Regulations on Audit and Accounts 2007” under the
CAG (DPC) Act. The final Audit Report of CAG under Article
151 of the Constitution is submitted to the President or the
23
Governor for laying before the Parliament/State Legislature.
The Audit Report will be referred to P.A.C. and the said
Committee has to examine the report with the assistance of
CAG and the Government Department concerned. A system
of selection of paragraphs for detailed examination has been
developed for convenience. After examination, the Committee
prepares its own report and presents it to the Speaker of the
House. The Ministries/Departments concerned are required
to intimate the Committee the collective action taken and the
proposed action on all the paragraphs contained in the
reports of the CAG. Once the report is placed before the
President/Governor of the State, it is their constitutional
obligation to place the same before the Parliament/State
legislature. Once the report enters the House, it becomes the
exclusive property of the House for discussion and debate
which again would be regulated by the Rules of Procedure and
Conduct of Business, in this case in Karnataka Legislative
Assembly by virtue of Article 208(1) of the Constitution of
India. The CAG report was placed before the Governor on
21.11.2012 and before the Assembly on 12.12.2012. As on
24
the relevant date, 5 Chapters of the Report are discussed by
the P.A.C., still 16 Chapters are yet to be taken for discussion.
Since the report is in the process of consideration, no other
authority can act upon said report, should any other
authority adversely comment upon its veracity/correctness in
as much as the House will be prejudiced by such a comment.
16. The Apex Court in Arun Kumar Agrawal (supra)
and in Arvind Gupta –vs- Union ofIndia reported in (2013)1
SCC 393, considering the role of CAG and the audit reports of
CAG, declined to make the CAG report the basis for its
directions. In its judgment popularity known as 2G Spectrum
case, ((2012)3 SCC 1), the Apex Court considered it as not
proper to refer the findings and conclusion contained in CAG
report since it was being examined by the PAC and Joint
Parliamentary Committee of the Parliament. The view of the
Apex Court in Arun Kumar Agrawal (supra) being the latest is
binding dehors any previous judgment to the contrary, as per
the principles laid down by the Full bench of this Court
reported in AIR 1980 KAR 92 (FB) in the matter of
Govindanaik G.Kalaghatigi –vs- West Patent Press
25
Co.Ltd. and Another wherein it was held that where there is
a conflict of two decisions of equal strength, the later
judgment should be followed. The High Court of Sikkim, in
the matter of Subba Associates –vs- Union of India has held
the CAG Report as legislature paper and the property of the
House and its members. Same view is taken by the High
Court of Gauhati in M.S.Associates –vs- Union of India
(2005). As per the judgment of the High Court of Delhi in
W.P.No.8502/2014 Sarvesh Bisaria –vs- Union of India
and Others, the role of the CAG reports is to enable the
legislature to oversee the functioning of the Government and
it is for the legislature to take action on the basis of CAG
reports or to direct the Government to take action on the
basis thereof and till the legislature has not so directed, the
High Court cannot direct any action to be taken on the basis
of CAG report.
17. Sri.Dixit concludes his submission that his stand is
neutral so far the controversy in the present petitions is
concerned and he has highlighted only the legal position of
the CAG Report which is debated upon by the petitioner on
26
one side and the Lokayuktha Police and the State on the other
side.
18. The submission of Sri.Venaktesh P.Dalwai, learned
Special Public Prosecutor for the Lokayuktha Police in
W.P.Nos.41228/2015, 26395/2015, 26396/2015,
26397/2015, 41229/2015, 41230/2015, 41232/2015,
41234/2015, 41235/2015, 41237/2015 and 41239/2015 is,
in pursuance of one Jayakumar Hiremath filing a petition
under Section 7 of the Act 1984 seeking action based on the
CAG report for the years 2010-11 and 2012, in exercise of his
power under Section 15(3) of the Act 1984, the Hon’ble
Lokayuktha ordered for a report from Director General of
Police, CID, Economic Offences and Special Status Units,
Bangalore-1. On receipt of the report from the CID, the file
was forwarded to the Superintendent of Police attached to
Karnataka Lokayuktha. The CID report disclosed commission
of cognizable offences by petitioner and others. The
Lokayuktha or Upalokayuktha have no power to investigate
the offences disclosed in CID report under the Karnataka
Lokayuktha Act 1984. Hence, the Police attached to
27
Lokayuktha Institution being empowered to investigate the
offences under the P.C.Act, 1988 and IPC, took up the matter
and registered the cases. No particular source is required to
register the FIR if such source discloses commission of
cognizable offence. The source of information received from
CID disclosing the name of the petitioner along with other
accused, who have participated in commission of offence, is
the basis of registration of FIRs, the details found in Column
9 of the FIR are found in CID report. Hence, Lokayuktha
Police are justified in registration of the cases.
19. The petitioner has given up the ground against
Lokayuktha in respect of entertaining the complaint based on
CAG report. Same is recorded in the order sheet of
23.11.2015 in W.P.No.41228/2015. That being so, they
cannot question the action taken by Lokayuktha based on
CAG report. The petitioner having failed to challenge the
proceedings of the Lokayuktha, it is not required to consider
whether or not CAG report can be looked into. The FIR
indicates commission of cognizable office by the petitioner
which requires investigation. It is the settled law that the FIR
28
and the details are not the Encyclopedia of the crime alleged.
A full fledged investigation only would reveal whether the
offences are committed or not and appropriate report will
thereafter be filed. It is too premature to claim either way.
The investigation will be the domain of Police.
20. As regards the CAG report forming a basis for
taking action, reliance is placed on a judgment of the Apex
Court reported in (1) (2011)1 SCC 560 in the matter of
Centre for Public Interest Litigation and Others –vs-
Union of India and Others whereby the judgment of the
Delhi High Court was reversed by the Apex Court,
investigation on CAG and CVC report was ordered;
(2) 1996(2) BLJR 869 in the matter of Sushil Kumar Modi
and Others –vs- State of Bihar and Others and connected
cases, whereby the Division Bench of the High Court of Patna
directed CBI investigation in the Public Interest Litigation
which was filed based on a letter of the CAG regarding
misappropriation by the accused. Said judgment was upheld
by Apex Court vide Judgment reported in (1996) 3 SCC 682
(State of Bihar and Another –vs- Ranchi Zila Samta Party
29
and Another) and connected cases. In those cases, the
grievance of the writ petitioners was fraudulent expenditures
and drawls in Animal-Husbandry Department of the State
Government. While ordering time scheduled investigation, the
cases which were in the process of investigation by State
Police were ordered to be suspended in the meantime by the
High Court. In appeal said order was maintained with a
modification. Entire investigation by the State Police, which
was in progress, was brought to the fold of C.B.I. with further
modification for Court monitored investigation. In respect of
the allegation in each of the FIR, written objection statement
is filed by the respondent/Lokayuktha Police. Factual matrix
or sufficiency of evidence for the prosecution cannot be looked
into to nullify the prosecution. The Apex Court in its
judgment reported in 2013 AIR SCW 6660 in the matter of
Vinod Raghuvanshi –vs- Ajay Arora and Others has
cautioned “don’t kill the still born child”. The petitions are to
be dismissed and the investigation shall not be curtailed at
this stage.
30
21. Sri.A.G.Shivanna for respondent No.3/State
substantiates the action taken by Lokayuktha Police in
registering the FIR and initiating investigation.
22. With the parties taking respective firm positions and
on perusal of the 15 FIRs, which are sought to be quashed,
following factors gain my attention:
1. Sustainability of a FIR, which is not in consonance
with the procedure mandated in Section 154 Cr.P.C.
2. Constraint on use of the CAG report as a document in
a criminal proceeding.
23. Re. Point No.1:
The FIRs, fifteen in number reveal that they are
registered in respect of the offences under the P.C.Act allied
offences under IPC and the Karnataka Land (Restriction on
Transfer) Act 1991. The complainant’s name is mentioned as
Jayakumar Hiremath. Column 8 (b) wherein the details of the
personal knowledge of the offence by the complainant is
required to be recorded, is left blank. Column No.9 under the
head ‘Annexures to FIR’, following documents are mentioned:
31
1) Copy of the complaint
2) CAG report
Summary of the case, is annexed to each FIR.
When it is said ‘copy of the complaint’, what is furnished to the
petitioner on his request for the copy is, not a written
complaint by the complainant or his oral statement recorded
by the SHO/IO, but copy of a complaint dated 7.8.2013
submitted by Jayakumar Hiremath to the then Lokayuktha
whereby he had sought action in respect of ‘various issues
highlighted in CAG Report No.6 of the year 2010-11 as well as
CAG report No.3 of the year 2012 relating to misuse of
authority with corrupt motive and thereby causing heavy loss
to the State exchequer’. None was arrayed as accused in the
said complaint. In the body of the said complaint, the
circumstances that led him to approach the Lokayuktha
under Section 7 of the Lokayuktha Act (the Writ Petitions filed
by him in W.P.No.15502/2013 and W.P.No.8437/2013, the
disposal of the Writ Petitions with liberty to avail alternative
and efficacious remedy in the form of Section 7 of Karnataka
Lokayuktha Act 1996 is narrated.
32
24. As it emanates from the certified copies of the order
sheet maintained by the Registry of Lokayuktha, considering
the gravity of allegation in the complaint and also the CAG
report, by the order of the Lokayuktha the matter was referred
to DGP, CID under Section 15(3) of the Act for investigation
and report. After the report of the DGP, CID was submitted,
Lokayuktha granted permission to file a case under the P.C.
Act. The ADGP of the Police Wing attached to Lokayuktha
was ordered to ensure expeditious investigation through
Officer in charge of investigation. That is how the present
FIRs are registered by the respondent/Lokayuktha Police.
25. Whatever transpired in the office of the Lokayuktha
is not within the purview of the present proceeding. But
things stand clear that “complaint annexed to the FIRs in
question are not the oral or written information given by
Jayakumar Hiremath to the SHO of the Police Station but a
complaint given in Form No.1 under Section 7 of the Act to
the Lokayuktha”. Now coming to Section 154(1) of the Code
on the basis of which the Police system has evolved the format
of the FIR reads thus:
33
“154. Information in cognizable cases. – (1)
Every information relating to the commission of a
cognizable offence, if given orally to an officer in
charge of a police station, shall be reduced to
writing by him or under his direction, and be read
over to the informant; and every such information,
whether given in writing or reduced to writing as
aforesaid, shall be signed by the person giving it,
and the substance thereof shall be entered in a
book to be kept by such officer in such form as the
State Government may prescribe in this behalf.
(2)…………………………………………………..”.
26. If Jayakumar Hiremath had given any oral
information regarding his allegation about commission of a
cognizable offence, necessarily SHO would have reduced the
same into writing. As such, it is the fundamentals of Criminal
Justice that anybody can move the criminal law in motion. It
does not call upon the defacto informant to be a victim or a
witness to the alleged offence. The FIR not reflecting any such
oral or written statement given by the defacto complainant
that would have been translated into writing is definitely not
in consonance with sub-section (1) of Section 154 of the Code.
The so-called complaint annexed to the FIR being the
complaint in Form No.1 under Section 7 of the Lokayuktha
Act cannot be conceived as substantive information in the eye
34
of law to register a criminal case. To assume that the SHO on
his own satisfaction about commission of a cognizable offence
registered the case and took up the matter for investigation,
the FIR prepared by him will not substantiate such
assumption. It is not a FIR registered by the Police suo moto
on receipt of credible information. The Apex Court in the
matter of Lalita Kumari’s (supra) clinched the issue thus:
“97. The Code contemplates two kinds of FIRs: the
duly signed FIR under Section 154(1) is by the
informant to the officer concerned at the police
station. The second kind of FIR could be which is
registered by the police itself on any information
received or other than by way of an informant
[Section 157(1)] and even this information has to be
duly recorded and the copy should be sent to the
Magistrate forthwith. The registration of FIR either
on the basis of the information furnished by the
informant under Section 154(1) of the Code or
otherwise under Section 157(1) of the Code is
obligatory. The obligation to register FIR has
inherent advantages:
97.1. (a) It is the first step to “access to justice” for
a victim.
97.2. (b) It upholds the “rule of law” inasmuch as
the ordinary person brings forth the commission of
a cognizable crime in the knowledge of the State.
97.3. (c) It also facilitates swift investigation and
sometimes even prevention of the crime. In both
cases, it only effectuates the regime of law.
35
97.4. (d) It leads to less manipulation in criminal
cases and lessens incidents of “antedated” FIR or
deliberately delayed FIR”.
That is why a duly registered FIR is the sacrosanct at the
entry point to initiate a criminal case, which is missing here.
27. Sri.B.S.Prasad, Special Public Prosecutor for the
Lokayuktha in W.P.Nos. 41238/2015, 41240/2015,
41241/2015 and 41231/2015 while adding to the submission
of Sri.Venkatesh Dalwai, made effort to reason out the
registration of the FIRs that it was inevitable for the
Lokayuktha Police attached to the Lokayuktha wing to abide
by the order of the Lokayuktha thereby to register the cases.
The petitioner having consciously given up the challenge to
the order of the Lokayuktha, now he cannot challenge the
consequential registration of the FIRs. Learned Spl.P.P. refers
to the judgment of the Apex Court in the matter of Yunus Zia
–vs- State of Karnataka (2015 AIR SCW2478) in which
case the Lokayuktha Police had registered a complaint suo
moto on the basis of a newspaper publication and the said
registration was endorsed by the Apex Court.
36
28. But the situation herein is entirely different. ‘…..for
a message or communication to be qualified to be a first
information report there must be something in the nature of a
complaint or accusation or at least some information of the
crime given with the object of setting the police or criminal law
in motion (as per Patai Alias Krishna Kumar (supra). As
such, the Lokayuktha is not invested with jurisdiction to
probe into the offences under the Penal laws and a complaint
lodged before the Lokayuktha cannot take over the colour of
information of offence under Section 154(1) of the Code. It is
a mistaken notion to say that Lokayuktha Police is obliged to
abide by the order of the Lokayuktha to register and
investigate the offences under the various laws quoted in the
FIR.
29. The Police Officers in the State of Karnataka are on
deputation in the Police Station attached to Lokayuktha.
Even after such deputation, the relationship of the master
and servant between the Police personnel working in the
Police Station of Lokayuktha and the State Government would
not cease, but would continue as noticed by the Apex Court in
37
Yunus Zia’s case (supra), while referring to the judgment in
the matter of State of Punjab –vs- Inder Singh (AIR 1978
SC 7)]. The independent nature of investigation conducted by
the Police Wing of Lokayuktha fell for consideration of the
Division Bench of this Court in State of Karnataka, by
Chief Secretary and Others –vs- Basavaraj Guddapa
Maliger reported in 2003 Crl.LJ 4252. Referring to the
judgments of C.Rangaswamaiah and others –vs-
Karnataka Lokayuktha and others ((1998)6 SCC 66) and
State of Karnataka –vs- Kempaiah ((1998)6 SCC 103), the
Division Bench held that the ‘the pronouncement of Supreme
Court in Rangaswamaiah’s case (supra) would lead to the
inevitable conclusion that the Lokayuktha or Upalokayuktha
may request the Police Wing of a Police Officer of the competent
jurisdiction to consider registering the case under the provisions
of the P.C.Act, then the Police Wing of the Lokayuktha if notified
as a Police Station under Section 2 of the Code of Criminal
Procedure may make a preliminary investigation and the prima
facie case if made out may register the FIR and conduct
investigation in accordance with the provisions of the P.C.Act
38
and in accordance with the Code.’ That explains the space
between Lokayuktha and Lokayuktha Police attached to
Lokayuktha Wing. As noticed above, Police Officers in our
State working on deputation in Lokayuktha Police Station,
their identity is with the State Police not with the Lokayuktha.
There is no statutory provision in any of the Penal laws in
respect of which the FIRs are registered, reconciling the
procedure contemplated in Section 154(1) of the Code. That
being so, the Lokayuktha Police ought not to have yielded to
register the FIRs by blowing away the mandatory procedure.
The irregularity/illegality committed in registration of the
FIRs, without there being any material in the nature of
information goes to the very root of the matter which cannot
be cured by whatever means.
Reg.Point No.2:
30. Each of the FIR apart from the copy of the
complaint (submitted to the Lokayuktha) is appended with the
copy of the CAG report. The summary of the prosecution case
annexed to the FIR refers to irregularity committed by the
petitioner and co-accused in reference to the particular case.
39
Of course, the Apex court had directed investigation on the
basis of the CAG report (in the matter of CPIL (supra)
popularly identified as 2G Spectrum case) and endorsed
investigation ordered by the High Court based on a letter of
the CAG in Sushil Kumar Modi’s case (supra). But now it is
to be recalled that Jayakumar Hiremath filed
W.P.No.15502/2013 seeking investigation into various issues
highlighted in the CAG report No.6/2010-11 without naming
anybody as accused and without making specific allegation
under any statutory provision and the said writ petition was
dismissed on the ground of availability of alternative remedy.
His writ petition in W.P.No.8347/2013 arraying the present
petitioner and another former Chief Minister of Karnataka
Sri.H.D.Kumarawamy on the allegation of illegal land denotification
was disposed as not pressed. The High Court in
its writ jurisdiction ordering probe in respect of an allegation
on the basis of CAG report is one thing and the Lokayuktha
Police taking CAG report on his file as a document to launch a
criminal case is another thing. There is no semblance
between two circumstances.
40
31. The author of the CAG report is the Comptroller and
Auditor General of India appointed under Article 148 in
Chapter V of the Constitution of India, which reads thus:
“148. Comptroller and Auditor-General of
India – (1) There shall be a Comptroller and
Auditor-General of India who shall be appointed by
the President by warrant under his hand and seal
and shall only be removed from office in like
manner and on the like grounds as a Judge of the
Supreme Court.
(2) Every person appointed to be the Comptroller
and Auditor-General of India shall, before he
enters upon his office, make and subscribe before
the President, or some person appointed in that
behalf by him, an oath or affirmation according to
the form set out for the purpose in the Third
Schedule.
(3) The salary and other conditions of service of the
Comptroller and Auditor-General shall be such as
may be determined by Parliament by law and,
until they are so determined, shall be as specified
in the Second Schedule;
Provided that neither the salary of a
Comptroller and Auditor-General nor his rights in
respect of leave of absence, pension or age of
retirement shall be varied to his disadvantage after
his appointment.
(4) The Comptroller and Auditor-General shall not
be eligible for further office either under the
Government of India or under the Government of
any State after he has ceased to hold his office
41
(5) Subject to the provisions of this Constitution
and of any law made by Parliament, the conditions
of service of persons serving in the Indian Audit
and Accounts Department and the administrative
powers of the Comptroller and Auditor-General
shall be such as may be prescribed by rules made
by the President after consultation with the
Comptroller and Auditor-General.
(6) The administrative expenses of the office of the
comptroller and Auditor-General, including all
salaries, allowances and pensions payable to or in
respect of persons serving in that office, shall be
charged upon the Consolidated Fund of India”.
32. He is a distinct and independent authority and
derives his power and duties from Article 149 to 151 of the
Constitution and his duties, powers and conditions of service
are envisaged by the Comptroller and Auditor General (Duties,
Powers and Conditions of Service) Act 1971. He is the
premier institution for carrying out audit and account in
respect of government department and government
instrumentalities. Under Section 10 of the Act of 1971 (supra)
he compiles the accounts of the Union and States, prepares
the annual account and submits to the President of India or
Governor of the State or Administrator of the Union Territory.
The report thereafter will be placed before the Parliament or
42
the Legislature of the State. He discharges his function
through Accountant General of the respective State. The
audit extends to all the expenditures to ascertain whether the
monies shown in the accounts as having been disbursed were
legally available for such disbursement and whether the
expenditure confirms to the authority which governs it. He
also examines the decisions, which have financial implications
including the propriety of the decision making.
33. After the audit reports are received in the
Parliament/State Legislature, they are scrutinized by the PAC.
In the State of Karnataka, having regard to the rules of
procedure and conduct of business in Karnataka Legislative
Assembly (Article 208(1) of the Constitution), the Committee is
formed consisting of not more than 20 members, who are
elected from the members of the Assembly and the Council
according to the principle of proportionate representation by
means of single transferable voting system. The Committee
scrutinizes the appropriation of the accounts of the State
Government vis-a-vis the report of the CAG. The duration of
the Committee being limited to one year, a system is evolved
43
by selecting the paragraphs from the audit report for detailed
examination. During the course, the Ministers and the
Executives of the Departments will be called upon to take
corrective action and to furnish a proposed action to be taken
in respect of the audit report. Thereafter the report of the
Committee will be placed before the House. In the matter of
Arun Kumar Agrawal (supra), it was observed that the CAG
report is always subject to scrutiny by the Parliament and the
Government can always offer its view point on the report of
the CAG. In Paras-67 and 68 it was held thus:
“67. The question that is germane for consideration
in this case is whether this Court can grant reliefs
by merely placing reliance on the CAG’s Report.
The CAG’s Report is always subject to
parliamentary debates and it is possible that PAC
can accept the ministry’s objection to the CAG
Report or reject the report of the CAG. The CAG,
indisputably is an independent constitutional
functionary, however, it is for Parliament to decide
whether after receiving the report i.e. PAC to make
its comments on the CAG’s Report.
68. We may, however, point out that since the
report is from a constitutional functionary, it
commands respect and cannot be brushed aside
as such, but it is equally important to examine the
comments what respective Ministries have to offer
on the CAG’s Report. The Ministry can always
point out, if there is any mistake in the CAG’s
report or the CAG has inappropriately appreciated
the various issues. For instance, we cannot as
such accept the CAG report in the instance case”.
34. The Division Bench of the High Court of Sikkim in
Subba Associates –vs- Union of India (MANU/SI/0002/2005)
was dealing with a situation wherein the search and seizure
operation under Section 132 of the Income Tax Act were
carried out on the basis of the preliminary draft and unsigned
report of CAG with regard to the business of lottery of the
State of Nagaland - The final CAG report was subsequently
laid before the Legislative Assembly and was referred to PAC
- The Legislative Assembly found the CAG report to the
unsustainable - The contention was the CAG report did not
acquire legal authenticity and could not be construed as
information within the meaning of Section 132(1) of the
Income Tax Act. The High Court observed that, CAG report is
a legislative paper and is a property of the House and its
members. . . . . . It is the exclusive prerogative of the House
and its members to deliberate on the same as the report falls
within the special jurisdiction of the House or its Committee. .
. . The executive or the judiciary cannot be in legal and/or
constitutional possession of the said report. The Division
Bench of the Gauhati High Court in M.S.Associates –vs-
Union of India (Manu/GH/0322/2005) addressing similar
issue regarding ‘information’ within the meaning of Section
132 of the Income Tax Act, though was of the opinion that the
CAG report is initially meant for the Parliament/Legislature,
and undoubtedly a property of the House, further held that
for the purpose of starting an investigation into evasion of tax,
the source of information is not material; when the legislature
itself has not restricted the authorities concerned under
Section 132 supra from acting upon the information which
may be derived from the report of the CAG which has not
been laid/discussed by the State legislature, it would be
realistic to hold that the legislative intendment is that even if
the authority concerned received the information about
evasion of tax from the report of the CAG, there is no legal
impediment on the part of the authorities concerned to act
upon such information.
35. In my considered opinion the view taken by the
Gauhathi High Court is more realistic. In this era of
advanced Information Technology with the enablement
conferred on the citizen of the country to have easy access to
information by way of Right to Information Act, 2005, it is
unrealistic to presume CAG report as a confidential
document, till it meets finality in the Parliament or the
Legislature. The Code no where contemplates a Police Officer
acting under Section 157 of the Code to publish the source of
information which drives him to register a suo moto complaint
in respect of a cognizable offence. Likewise it is always open to
a concerned/aggrieved informant to approach the
jurisdictional Police even on suspicion about commission of a
cognizable offence, to be dealt in accordance with Section
154(1) of the Code. But the concern is, availing the CAG
report as the basis for registration of the criminal case
subjecting the same to the test of trial in a criminal court
which has no jurisdiction to adjudicate the question raised in
the CAG report. The CAG report wherefore since not available
for judicial scrutiny, in my considered opinion, cannot be
used as a foundation to build up a criminal case and cannot
be made a part of investigation. As such, if an informant
has a reasonable suspicion about the commission of
cognizable offence he has every right to move the criminal law
into motion by way of a formal information oral/writing to the
concerned Court and the concerned Police if warranted can
ascertain truthfulness or otherwise of the information so
received by holding preliminary enquiry within the period
stipulated by the Apex Court as at Lalitha Kumari’s case
(supra) and then register the criminal case if the enquiry
probabalises commission of a cognizable offence.
36. The Apex Court in Vineet Narain –vs- Union of
India (Verma C.J.) reported in (1998) 1 SCC held thus:
“55……………… It is trite that the holders
of public offices are entrusted with certain powers
to be exercised in public interest alone and,
therefore, the office is held by them in trust for the
people. Any deviation from the path of rectitude
by any of them amounts to a breach of trust and
must be severely dealt with instead of being
pushed under the carpet. If the conduct amounts
to an offence, it must be promptly investigated
and the offender against whom a prima facie
case is made out should be prosecuted
expeditiously so that the majesty of law is upheld
and the rule of law vindicated. It is the duty of
the judiciary to enforce the rule of law and,
therefore, to guard against erosion of the rule of
law”.
Further, in Subramanian Swamy –vs- Manmohan Singh
(Ganguly J.) reported in (2012) 3 SCC it is observed thus:
“68. Today, corruption in our country not
only poses a grave danger to the concept
of constitutional governance, it also
threatens the very foundation of the
Indian democracy and the Rule of Law.
The magnitude of corruption in our public
life is incompatible with the concept of a
socialist secular democratic republic. It
cannot be disputed that where corruption
begins all rights end. Corruption
devalues human rights, chokes
development and undermines justice,
liberty, equality, fraternity which are the
core values in our Preambular vision.
Therefore, the duty of the court is that
any anti-corruption law has to be
interpreted and worked out in such a
fashion as to strengthen the fight against
corruption. That is to say in a situation
where two constructions are eminently
reasonable, the court has to accept the
one that seeks to eradicate corruption to
the one which seeks to perpetuate it”.
37. An alert citizen upholding the mission of ‘combat
against corruption’ is certainly laudable. But it shall not be a
free style battle. The penal laws under which the alleged
offence fall will take over, if offence is proved in a court of law.
The procedure contemplated by the Code to invoke criminal
49
law into motion being the first step for registration of a
criminal case, inroading of the procedure laid down by rule of
law is not at all permissible. An attempt is made to justify the
action of Lokayuktha Police that the case is not registered
solely on the report of C.A.G. but also on the independent
enquiry conducted by the C.I.D. Police on the direction of the
Lokayuktha. But this justification does not stand to reason,
neither the Lokayuktha nor the C.I.D. Police are the de facto
complainants here. The matter having gone out of the
premises of Lokayuktha Act, the Lokayuktha Police Station
being the Police Station as defined under Section 2(s) of the
Code, registration of the case shall be either under Section
154(1) of the Code, if it is on an information by an informant
or under Section 157(1) of the Code, if it is the instance of
Police Officer registering the case on his suo moto report. The
F.I.Rs. in question neither in consonance with Section 154(1)
nor 157(1) of Cr.P.C. cannot be sustained even after noticing
the fundamental defects in their formulation. Allowing the
investigation to continue on these defective F.I.Rs. is by itself
abuse of process of law. These F.I.Rs. since not registered on
50
information about a cognizable offence, in my considered
opinion, it is not required to go further to the merit of the
allegations made against the petitioner or the defence offered
by him to the said allegation. It is also not required to call
upon the petitioner to array Jayakumar Hiremath or the coaccused
as respondents in these petitions. Law on the
question of ultimate jurisdiction of this Court in exercise of
power vested under Article 226 of the Constitution of India
and Section 482 of the Code is well settled from long lineage
of judicial pronouncements commencing from State of
Haryana and others –vs- Ch.Bhajan Lal and others
reported in AIR 1992 SC 604. The F.I.Rs. not disclosing
commission of cognizable offence in the form of first
information are liable to be quashed keeping open the larger
questions raised in these criminal petitions.
All these Petitions are allowed. The F.I.Rs. in Crime
Nos.38/2015, 42/2015, 39/2015, 44/2015, 40/2015,
43/2015, 52/2015, 53/2015, 45/2015, 46/2015, 48/2015,
49/2015, 50/2015, 54/2015 and 47/2015 respectively, are
quashed. However, it is made clear that C.A.G. Report shall
51
not be used against the petitioner if any action is
contemplated against him in future.
All the contentions are kept open.
Sd/-
JUDGE
KNM/-
Print Page
Parliament/State Legislature, they are scrutinized by the PAC.
In the State of Karnataka, having regard to the rules of
procedure and conduct of business in Karnataka Legislative
Assembly (Article 208(1) of the Constitution), the Committee is
formed consisting of not more than 20 members, who are
elected from the members of the Assembly and the Council
according to the principle of proportionate representation by
means of single transferable voting system. The Committee
scrutinizes the appropriation of the accounts of the State
Government vis-a-vis the report of the CAG. The duration of
the Committee being limited to one year, a system is evolved
by selecting the paragraphs from the audit report for detailed
examination. During the course, the Ministers and the
Executives of the Departments will be called upon to take
corrective action and to furnish a proposed action to be taken
in respect of the audit report. Thereafter the report of the
Committee will be placed before the House. In the matter of
Arun Kumar Agrawal (supra), it was observed that the CAG
report is always subject to scrutiny by the Parliament and the
Government can always offer its view point on the report of
the CAG. In Paras-67 and 68 it was held thus:
“67. The question that is germane for consideration
in this case is whether this Court can grant reliefs
by merely placing reliance on the CAG’s Report.
The CAG’s Report is always subject to
parliamentary debates and it is possible that PAC
can accept the ministry’s objection to the CAG
Report or reject the report of the CAG. The CAG,
indisputably is an independent constitutional
functionary, however, it is for Parliament to decide
whether after receiving the report i.e. PAC to make
its comments on the CAG’s Report.
We may, however, point out that since the
report is from a constitutional functionary, it
commands respect and cannot be brushed aside
as such, but it is equally important to examine the
comments what respective Ministries have to offer
on the CAG’s Report. The Ministry can always
point out, if there is any mistake in the CAG’s
report or the CAG has inappropriately appreciated
the various issues. For instance, we cannot as
such accept the CAG report in the instance case”.
The Division Bench of the High Court of Sikkim in
Subba Associates –vs- Union of India (MANU/SI/0002/2005)
was dealing with a situation wherein the search and seizure
operation under Section 132 of the Income Tax Act were
carried out on the basis of the preliminary draft and unsigned
report of CAG with regard to the business of lottery of the
State of Nagaland - The final CAG report was subsequently
laid before the Legislative Assembly and was referred to PAC
- The Legislative Assembly found the CAG report to the
unsustainable - The contention was the CAG report did not
acquire legal authenticity and could not be construed as
information within the meaning of Section 132(1) of the
Income Tax Act. The High Court observed that, CAG report is
a legislative paper and is a property of the House and its
members. . . . . . It is the exclusive prerogative of the House
and its members to deliberate on the same as the report falls
within the special jurisdiction of the House or its Committee. .
. . The executive or the judiciary cannot be in legal and/or
constitutional possession of the said report. The Division
Bench of the Gauhati High Court in M.S.Associates –vs-
Union of India (Manu/GH/0322/2005) addressing similar
issue regarding ‘information’ within the meaning of Section
132 of the Income Tax Act, though was of the opinion that the
CAG report is initially meant for the Parliament/Legislature,
and undoubtedly a property of the House, further held that
for the purpose of starting an investigation into evasion of tax,
the source of information is not material; when the legislature
itself has not restricted the authorities concerned under
Section 132 supra from acting upon the information which
may be derived from the report of the CAG which has not
been laid/discussed by the State legislature, it would be
realistic to hold that the legislative intendment is that even if
the authority concerned received the information about
evasion of tax from the report of the CAG, there is no legal
impediment on the part of the authorities concerned to act
upon such information.
In my considered opinion the view taken by the
Gauhathi High Court is more realistic. In this era of
advanced Information Technology with the enablement
conferred on the citizen of the country to have easy access to
information by way of Right to Information Act, 2005, it is
unrealistic to presume CAG report as a confidential
document, till it meets finality in the Parliament or the
Legislature. The Code no where contemplates a Police Officer
acting under Section 157 of the Code to publish the source of
information which drives him to register a suo moto complaint
in respect of a cognizable offence. Likewise it is always open to
a concerned/aggrieved informant to approach the
jurisdictional Police even on suspicion about commission of a
cognizable offence, to be dealt in accordance with Section
154(1) of the Code. But the concern is, availing the CAG
report as the basis for registration of the criminal case
subjecting the same to the test of trial in a criminal court
which has no jurisdiction to adjudicate the question raised in
the CAG report. The CAG report wherefore since not available
for judicial scrutiny, in my considered opinion, cannot be
used as a foundation to build up a criminal case and cannot
be made a part of investigation. As such, if an informant
has a reasonable suspicion about the commission of
cognizable offence he has every right to move the criminal law
into motion by way of a formal information oral/writing to the
concerned Court and the concerned Police if warranted can
ascertain truthfulness or otherwise of the information so
received by holding preliminary enquiry within the period
stipulated by the Apex Court as at Lalitha Kumari’s case
(supra) and then register the criminal case if the enquiry
probabalises commission of a cognizable offence.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF JANUARY 2016
BEFORE
THE HON’BLE MRS.JUSTICE RATHNAKALA
WRIT PETITION NO.41228 OF 2015 (GM-RES)
SHRI B.S.YEDDYURAPPA
Vs
THE STATE OF KARNATAKA
Read full judgment here;click here
The petitioner of the above cases is the former Chief
Minister of Karnataka and all these petitions originate from a
complaint lodged by one Jayakumar Hiremath before the
Lokayuktha seeking action on the basis of the Comptroller
and Auditor General of India’s report (‘C.A.G. report’ for short)
in finding irregularities in the action taken by the petitioner
4
and the co-accused in denotifying the various lands from
acquisition.
2. The story commences from, Sri.Jayakumar Hiremath
claiming to be a social worker, RTI activist and crusader
against the corruption in the country filing a petition in
W.P.No.15502/2013 (GM-RES-PIL) for a direction to the C.B.I.
to conduct thorough investigation into various issues
highlighted in the C.A.G. report No.6 of 2010-11 relating to
Government of Karnataka on acquisition, denotification and
allotment of land by the K.I.A.D.B. The Division Bench of this
Court headed by the then Hon’ble Chief Justice opined that
“. . . . . . the petitioner or any such public spirited person has an
alternative and more appropriate remedy available to him in
the form of provisions of Section 7 of the Karnataka
Lokayuktha Act, 1984 and the Lokayuktha having also the
power to investigate any action, the alternative remedy appears
to be more appropriate for investigation of the grievances and
allegations contained in the petition” and the petition came to
be disposed of leaving liberty to the petitioner to approach the
Lokayuktha for appropriate remedy. Another petition filed by
5
the very same petitioner viz., Jayakumar Hiremath seeking
action in respect of the C.A.G. report No.3/2012 in
W.P.No.8347/2013 (GM-RES-PIL) was dismissed as not
pressed.
3. In continuation of the above, the petitioner thereafter
filed a complaint before the Lokayuktha to investigate the
various issues highlighted in the C.A.G. report No.6/2010-11
and also C.A.G. report No.3/2012 relating to misuse of
authority with corrupt motive and thereby causing heavy loss
to the State Exchequer and to take further suitable action
under law. In the said complaint, he referred to the orders
passed by the Division Bench of this Court in
W.P.No.15502/2013 D.D. 10.4.2013 and W.P.No.8347/2013
D.D. 28.6.2013. As could be seen from the undisputed
documents placed on record, the Registry of the Lokayuktha
on receiving his complaint in the prescribed form, registered
the complaint. The names of the Officers involved were called
for from the Chief Secretary, Government of Karnataka to take
action against them. Since there was no response from the
Government side, by invoking the provisions of Section 15(3)
6
of the Karnataka Lokayuktha Act (‘the Act’ for short), the
matter was referred to the Director General of Police, Criminal
Investigation Department, Economic Offences and Special
Units, for investigation and to report. It took almost one year
for the DGP, CID to submit his report in the matter. The
report also appears to have mentioned that, in respect of 35
cases pertaining to de-notification of the land pointed out by
the CAG in his report, the prosecution is already launched in
some cases and some cases are pending in Lokayuktha
Special Court. On the note put by the Registry, the
Lokayuktha ordered on 11.6.2015 thus:
“Approved and officer in charge of investigation
shall submit progress report through proper
channel to ADGP every fortnight. ADGP shall
ensure expeditious investigation.”
4. The Registrar of Lokayuktha handed over the reports
to Superintendent of Police Wing, Lokayuktha, pursuant to
which the Lokayuktha Police registered the above cases in
respect of the offences under the Prevention of Corruption Act,
1988 the Karnataka Land (Registration on Transfer) Act, 1991
and Indian Penal Code (for brevity ‘the P.C. Act, K.L.R.T. Act
7
and IPC respectively). Jayakumar Hiremath’S signature is
found on the FIR also as the complainant. Annexed to the
FIR are found, the complaint of Jayakumar Hiremath, the CIG
report and case summary prepared by the Police Inspector.
At this stage itself, it needs to be appreciated that in his Writ
Petition No.15502/2013, the petitioner did not make specific
allegation as to under which provision of law the alleged
offences fall, either under the I.P.C. or under the provisions of
P.C.Act. As per para-5 of the order in the above W.P.
No.15502/2013 to the query of the Court in this regard,
learned Counsel practically threw up his hands with the
submission that ‘it is for the investigating agency to identify
the persons who could be arraigned for specific offences under
the relevant provisions of law’.
5. However, as per the summary of the prosecution
case, in the FIR, the allegation against the petitioner is:
In W.P.No.41228/2015 (Crime No.38/2015) pertaining
to 6 acres 10 guntas of land in Sy.Nos.171/3, 172/5 and
172/6 of Kothanur village, the petitioner colluded with the
8
landlords, BDA and other Department Officers indulged in
their illegal transaction and gave up the land from acquisition.
In W.P.No.26395/2015 (Crime No.42/2015) pertaining
to land in Sy.No.251 measuring 6 acres 18 guntas of
Halagevaderahalli Village, Bangalore South Taluk, gave up
from acquisition of land by conniving with the landlords and
officials of other Department.
In W.P.No.26396/2015 (Crime No.39/2015) pertaining
to land in Sy.Nos.5/1 and 6/3 measuring 1 acre 17 guntas of
Bilekahalli village, Bangalore South Taluk. The petitioner
herein with a malafide intention to help the landlords even
before any decision could be taken in the de-notification
Committee, took over the file from the Member Secretary and
ordered de-notification.
In W.P.No.26397/2015 (Crime No.44/2015) pertaining
to 270.01 acres of land in Sy.No.1 of G.B.Kaval Village, gave
up acquisition of the land by conniving with BDA and other
officials by involving himself in their illegal transaction against
the recommendation of the de-notification committee.
9
In W.P.No.41229/2015 (Crime No.40/2015) pertaining
to 6 acres 31 guntas of land in Sy.No.24 of Kothanur village,
gave up acquisition of the land by colluding with the
landlords, BDA and officials of other Departments, by placing
reliance on false information that the land is still in the
physical possession of the landlord.
In W.P.No.41230/2015 (Crime No.43/2015) pertaining
to Sy.No.1/1 measuring 3 acres 33 guntas of Lottegollahalli
village, denotified the land in respect of a person as against
the original Khatedar and said other persons subsequently
purchased the land after final notification against the K.L.R.T.
Act though 5 acres of said land was already denotified and the
case was closed as early as on 23.4.2010.
In W.P.No.41232/2015 (Crime No.52/2015) pertaining
to land in Sy.No.46 measuring 16 acres 9 guntas of
Nagarabavi Village, Bangalore North Taluk, gave up from
acquisition 25 guntas of land against the report of the Under
Secretary of BDA and gave up from acquisition 25 guntas of
land though the possession of the land was already taken.
10
In W.P.No.41234/2015 (Crime No.53/2015) pertaining
to 3 acres 18 guntas of land in Sy.No.78/1 of Kothanur
village, gave up acquisition of the land on a false information
that already buildings are existing on the land and BDA
cannot form the layout, by ignoring the public interest to help
the GPA Holder of the land owner; he misused his official
position and treated the case as a special case, though there
was no notification under Section 16(2) of the Land
Acquisition Act and without compensation to the landlords.
In W.P.No.41235/2015 (Crime No.45/2015) pertaining
to land in Sy.Nos.100/1 and 100/2 of Challakere village, by
involving with the co-accused against the report that there are
legal hurdles to de-notify, gave up from acquisition.
In W.P.No.41237/2015 (Crime No.46/2015) pertaining
to land measuring 2 acres 36 guntas in Sy.Nos.104/2, 104/3
nd 104/4 of Uttarahalli village, Bangalore South Taluk, by
conniving with the landlords and others against the
recommendation of the Urban Development Department
ordered to give up from acquisition.
11
In W.P.No.41238/2015 (Crime No.48/2015) pertaining
to land in Sy.Nos.39/2B, 50/2, 51/1, 55/1, 57/1, 61, 64/1
and 66/1 of Rachenalli Village, Bangalore East Taluk, ordered
to give up from acquisition without mentioning the survey
number and the extent of the land against the report of the
Urban Development Department, that except 1 acre 30 gutnas
out of 3 survey numbers, remaining land is not taken into
possession and can be given up from acquisition.
In W.P.No.41239/2015 (Crime No.49/2015) pertaining
to 2 acres 21 guntas of land in Sy.No.86/2 of Thanisandra
village, Bangalore East Taluk, against the notice put up by the
Under Secretary, Deputy Secretary of Urban Development
Department by conniving with the landlords involved in the
illegal transaction and gave up the land from acquisition.
In W.P.No.41240/2015 (Crime No.50/2015) pertaining
to Sy.Nos.7, 6/2A, 6/2B totally 1 acre 20 guntas of land in
Guddadahalli village, Hennur-Bellary Road, Bangalore North
Taluk, against the report of the Chief Secretary of Urban
Development ordered to give up the land from acquisition.
12
Thereafter the land was purchased by land developer from the
original landlord.
In W.P.No.41241/2015 (Crime No.54/2015) against the
public interest, he misused his official position by treating it
as a special case and ordered to give up acquisition of land in
Sy.No.23 measuirng 2 acres 10 gutnas of Hulimavu village,
Begur Hobli, Bangalore South Taluk.
In W.P.No.41231/2015 (Crime No.47/2015) pertaining
to 3 acres 10 guntas of land in Sy.No.77/1 and 2 acres in
Sy.No.77/2 of Valagerehalli village, Kengeri Hobli, Bangalore
South Taluk, illegally ordered to give up the land from
acquisition against the report of the Urban Development
Department.
6. The common question of law raised for the petitioner
in these petitions is that, the C.A.G. report based on which
the complaint has originated being the exclusive property of
the House, same cannot be made use by the complainant as
against the petitioner. The FIR could not have been registered
though no information regarding commission of any
13
cognizable offence is informed by the complainant. There
being no specific allegation of demand or request by the
petitioner to obtain any valuable thing for his pecuniary
advantage, the case could not have been registered in respect
of the offence under Section 13(1)(d) of the P.C.Act. In the
absence of any property being entrusted to him, case could
not have been registered in respect of the offence under
Section 13(1)(c) of the P.C.Act and 409 of IPC. In the absence
of any allegation of deception to induce delivery of the
property, case under Section 420 of IPC could not have been
registered against him. When there is no allegation that the
transfer of land has occurred during the pendency of the
acquisition proceedings, case could not have been registered
for the offence under Sections 3, 4, 8 read with Section 9 of
the K.L.R.T. Act, 1991. The registration of the case is in
violation of Sections 9, 10, 11 and 12 of the Karnataka
Lokayuktha Act. On the very same allegation, a complaint
registered having been dismissed by the competent court, the
respondent could not have registered the FIR on the same
allegation.
14
7. Each of the petition is filed for a writ in the nature of
Certiorari to quash the FIRs and to declare that the report of
the C.A.G. of India cannot be the basis for registration of the
criminal case. It is a mater of record that originally the
petition was filed by arraying the Karnataka Lokayuktha
Police as sole respondent. However, the C.A.G. of India was
later impleaded as respondent No.2 and the State as
respondent No.3.
8. In W.P.No.41228/2015, the learned Special Public
Prosecutor for the Lokayuktha by placing reliance on a
Circular of this Court in No.HCE:94/2001 dated 13.8.2002
submitted that the matter shall be posted before Division
Bench when the Writ Petitioner is questioning under Articles
226 and 227 of the Constitution of India, the order of the
Lokayuktha, who was the Chief Justice of this Court.
Sri.C.V.Nagesh, learned Senior Counsel appearing for the
petitioner responded that “the petitioner is not challenging any
order passed by Lokayuktha, who was the Chief Justice of this
Court and he is challenging the very registration of the FIR on
the grounds urged in the petitions”. In that view of the matter,
15
the petitions are to be considered from the premise of the
registration of the FIR by Lokayuktha Police without challenge
to the order of the Lokayuktha in forwarding the complaint to
the Lokayuktha Police for investigation.
9. Sri.C.V.Nagesh, learned Senior Counsel appearing for
the petitioner submits that, the power of the Comptroller and
Auditor General of India emanates from Articles 148 to 151 of
the Constitution of India and further regulated by the
Comptroller and Auditor General’s (Duties, Powers and
Conditions of Service) Act, 1971, the report of the CAG would
be forwarded to the President or the Governor, as the case
may be and will be deliberated by the Public Accounts
Committee (‘PAC’ for short). The PAC after obtaining the
information from the concerned Ministers and Departments,
would prepare a separate report and both the reports would
be placed before the Parliament or the State Legislative
Assembly. The report of the CAG is for the exclusive
deliberation of the House and is considered to be the property
of the House. No other authority has any right to pick up
extracts from the CAG report and initiate proceedings either
16
civil or criminal. As observed by the Apex Court, the CAG
report cannot be considered as a ‘gospel truth’ and it is a
document, which has to be deliberated upon by the House
which has the discretion to either accept the
recommendations or to reject them. That being the position,
the respondent/Police could not have registered the FIR on
the basis of certain remarks in CAG report (reliance is placed
on the judgment of the Apex Court in (2013) 7 SCC 1 in the
matter of Arun Kumar Agrawal –vs- Union of India and
Others).
10. Learned Senior Counsel further submits, from the
acts alleged, the State Exchequer has not suffered any
financial loss. The land is restored back to the original
landlords. Those of the lands which were not utilized by the
beneficiary of the acquisition for a considerable time and in
respect of which the Government was satisfied that the land
may not be required for public purpose as they were either
denotified or given up from acquisition proceedings. In some
of the cases, the scheme itself had lapsed for not completion
of the acquisition process; in some cases, by operation of law,
17
the development scheme of the acquiring body or the
beneficiary itself stood lapsed. The denotification orders
passed by the petitioner are not so far set aside or held illegal
by any Court of law. In its administrative jurisdiction, the
Government can drop the land from acquisition if the actual
possession of the land is not taken over by the Government;
the error of judgment of the authority can be subjected for
judicial scrutiny but criminality cannot be attributed. In the
light of the judgments of the Apex Court, in (1) (2012) 9 SCC
257 (Subramanian Swamy –vs- A.Raja) and (2) (1976) 1 SCC
700 (B.N.Bhagdey –vs- M.D.Bhagwat), the orders passed
without routing the same through the Denotification
Committee, no criminal proceeding can be initiated since the
Denotification Committee has no statutory footing.
11. Learned Senior Counsel proceeds with his
submission that none of the Denotification Orders is sent for
the opinion of the Law Department as contemplated under
Rule 30 of Karnataka Government (Transaction of Business)
Rules, 1977. It is to be inferred that the denotification orders
are legal and no wrong can be alleged against him. As per the
18
opinion given by the then Advocate General, the notification
under Section 16(2) of the Land Acquisition Act is not
sufficient to hold that the land stood vested with the
Government in the absence of taking over actual possession of
the land. In such cases, it would be lawful for the
Government to drop the acquisition proceedings even in such
case where Section 16(2) notification has been published. In
the absence of proof of demand or request from the public
servant for a valuable thing or primary advantage, the offence
under Section 13(1)(d) of the P.C.Act cannot be held to be
made out.
12. In support of the above submission, learned Senior
Counsel placed his reliance on (1) (2009) 6 SCC 587
(A.Subair –vs- State of Kerala) regarding the submission
that ‘when there is no voluntary acceptance of money, no
need to be a bribe, no offence was held to be made out under
Section 5(1)(d) of the old P.C.Act’. (2) (2010) 4 SCC 450
(Banarsi Dass –vs- State of Haryana); (3) 1999(6) SCC 667
(Common Cause, a Registered Society –vs- Union of India
and Others) in respect of the issuance of summons against
19
the Minister, whereby it was held that there shall be an
element of deception or fraudulently or dishonestly inducing
another person to deliver any property.
13. Learned Senior Counsel hastens to add to his
submission that the FIR since does not disclose any offence of
deception of any person or about any property having been
delivered by any person pursuant to such deception and there
being no allegation of intentionally inducing any person to do
or omit to do anything which he would not do or omit, no
material to register the FIR in respect of the offence under
Section 415 or 420 of IPC, is made out, in the light of the
judgments in (1) (2009) 14 SCC 696 – Dalip Kaur –vs-
Jagnar Singh (2) (2009) 7 SCC 712 – Harmanpreet Singh
Ahluwalia –vs- State of Punjab. There is no allegation
much less proof to indicate that the lands in question were
transferred by anybody during the pendency of the acquisition
proceedings. It is only the seller of the land who is liable for
punishment none else. Hence, no offence under Sections 3
and 4 read with Section 9 of the K.L.R.T. Act, 1991 can be
found. The FIR since does not disclose commission of the
20
cognizable offence, it deserves to be quashed in accordance
with the ruling of the Apex Court in Patai Alias Krishna
Kumar –vs- State of Uttar Pradesh reported in (2010) 4
SCC 429. The FIR registered is neither on the information
given by the complainant nor on the suo moto report of the
Police Officer. The very registration of the FIR beyond the
procedure contemplated under the Code of Criminal
Procedure (‘the Code’ for brevity) is liable to be set aside.
Reliance is placed on (2014) 2 SCC 1 in the matter of Lalita
Kumari –vs- Government of Uttar Pradesh. One Hunsur
Chandrashekar had filed a similar complaint in
P.C.R.No.15/2013 against the petitioner and others. Said
complaint came to be rejected by the Lokayuktha Court
holding that no case is made out. The order of de-notification
dated 12.1.2010 came to be withdrawn by the Government on
4.11.2011. Aggrieved by the order of withdrawal, the land
owners approached this Court in W.P.Nos.42792-99/2011,
42800/2011 and 42831-34/2011. This Court set aside the
Government Order withdrawing the earlier de-notifications
and upheld the order passed by the petitioner dropping the
21
acquisition proceedings. When the de-notification order is
endorsed by this Court, it is illegal and improper to register
the FIR and investigate into the very same action.
14. In the Submission of Sri.Krishna Dixit, learned ASG
for respondent No.2 (both written and oral), the Comptroller
and Auditor General of India (for brevity ‘C.A.G.’), an
independent constitutional authority created by Article 148 of
the Constitution of India is neither the part of legislature nor
the Executive or the Judiciary. Under the Government of
India Act 1935, his office nomenclature was Auditor General
of India and the same was subservient to the Executive
Government. It was renamed by the Constituent Assembly on
the suggestion of Sri.T.T.Krishnamachari. On the suggestion
of Sri.B.Das, the Constituent Assembly redrafted the provision
to the effect that the CAG shall be “appointed by the President
by a warrant under his hand and seal”. In the opinion of
Dr.B.R.Ambedkar in his speech in the constituent assembly
on 30.5.1949, “the CAG is probably the most important officer
in the Constitution of India; if this functionary is to carry out
the duties and his duties are far more important than the
22
duties even of the judiciary; he should have been certainly as
independent as the judiciary; he ought to have far greater
independence than the judiciary itself”.
15. The C.A.G. deriving his powers and duties from
Article 149 to 151 of the Constitution of India is a premier
institution for carrying out audit of accounts in respect of
Government Departments, Government Companies,
Government Corporations and bodies/authorities funded by
the Government. The audit conducted by the C.A.G. is a
unitary audit in a federal set up and his reports pertaining to
Union sector are laid before the Parliament and those relating
to the State sector are laid before the respective Legislature,
as required under Article 151 of the Constitution of India. His
services are regulated by the Comptroller and Auditor General
of India (Duties, Powers and Conditions of Service) Act, 1971
(for brevity ‘CAG (DPC) Act). In pursuance of Article 149 and
148(3) of the Constitution of India, the Parliament has
enacted “Regulations on Audit and Accounts 2007” under the
CAG (DPC) Act. The final Audit Report of CAG under Article
151 of the Constitution is submitted to the President or the
23
Governor for laying before the Parliament/State Legislature.
The Audit Report will be referred to P.A.C. and the said
Committee has to examine the report with the assistance of
CAG and the Government Department concerned. A system
of selection of paragraphs for detailed examination has been
developed for convenience. After examination, the Committee
prepares its own report and presents it to the Speaker of the
House. The Ministries/Departments concerned are required
to intimate the Committee the collective action taken and the
proposed action on all the paragraphs contained in the
reports of the CAG. Once the report is placed before the
President/Governor of the State, it is their constitutional
obligation to place the same before the Parliament/State
legislature. Once the report enters the House, it becomes the
exclusive property of the House for discussion and debate
which again would be regulated by the Rules of Procedure and
Conduct of Business, in this case in Karnataka Legislative
Assembly by virtue of Article 208(1) of the Constitution of
India. The CAG report was placed before the Governor on
21.11.2012 and before the Assembly on 12.12.2012. As on
24
the relevant date, 5 Chapters of the Report are discussed by
the P.A.C., still 16 Chapters are yet to be taken for discussion.
Since the report is in the process of consideration, no other
authority can act upon said report, should any other
authority adversely comment upon its veracity/correctness in
as much as the House will be prejudiced by such a comment.
16. The Apex Court in Arun Kumar Agrawal (supra)
and in Arvind Gupta –vs- Union ofIndia reported in (2013)1
SCC 393, considering the role of CAG and the audit reports of
CAG, declined to make the CAG report the basis for its
directions. In its judgment popularity known as 2G Spectrum
case, ((2012)3 SCC 1), the Apex Court considered it as not
proper to refer the findings and conclusion contained in CAG
report since it was being examined by the PAC and Joint
Parliamentary Committee of the Parliament. The view of the
Apex Court in Arun Kumar Agrawal (supra) being the latest is
binding dehors any previous judgment to the contrary, as per
the principles laid down by the Full bench of this Court
reported in AIR 1980 KAR 92 (FB) in the matter of
Govindanaik G.Kalaghatigi –vs- West Patent Press
25
Co.Ltd. and Another wherein it was held that where there is
a conflict of two decisions of equal strength, the later
judgment should be followed. The High Court of Sikkim, in
the matter of Subba Associates –vs- Union of India has held
the CAG Report as legislature paper and the property of the
House and its members. Same view is taken by the High
Court of Gauhati in M.S.Associates –vs- Union of India
(2005). As per the judgment of the High Court of Delhi in
W.P.No.8502/2014 Sarvesh Bisaria –vs- Union of India
and Others, the role of the CAG reports is to enable the
legislature to oversee the functioning of the Government and
it is for the legislature to take action on the basis of CAG
reports or to direct the Government to take action on the
basis thereof and till the legislature has not so directed, the
High Court cannot direct any action to be taken on the basis
of CAG report.
17. Sri.Dixit concludes his submission that his stand is
neutral so far the controversy in the present petitions is
concerned and he has highlighted only the legal position of
the CAG Report which is debated upon by the petitioner on
26
one side and the Lokayuktha Police and the State on the other
side.
18. The submission of Sri.Venaktesh P.Dalwai, learned
Special Public Prosecutor for the Lokayuktha Police in
W.P.Nos.41228/2015, 26395/2015, 26396/2015,
26397/2015, 41229/2015, 41230/2015, 41232/2015,
41234/2015, 41235/2015, 41237/2015 and 41239/2015 is,
in pursuance of one Jayakumar Hiremath filing a petition
under Section 7 of the Act 1984 seeking action based on the
CAG report for the years 2010-11 and 2012, in exercise of his
power under Section 15(3) of the Act 1984, the Hon’ble
Lokayuktha ordered for a report from Director General of
Police, CID, Economic Offences and Special Status Units,
Bangalore-1. On receipt of the report from the CID, the file
was forwarded to the Superintendent of Police attached to
Karnataka Lokayuktha. The CID report disclosed commission
of cognizable offences by petitioner and others. The
Lokayuktha or Upalokayuktha have no power to investigate
the offences disclosed in CID report under the Karnataka
Lokayuktha Act 1984. Hence, the Police attached to
27
Lokayuktha Institution being empowered to investigate the
offences under the P.C.Act, 1988 and IPC, took up the matter
and registered the cases. No particular source is required to
register the FIR if such source discloses commission of
cognizable offence. The source of information received from
CID disclosing the name of the petitioner along with other
accused, who have participated in commission of offence, is
the basis of registration of FIRs, the details found in Column
9 of the FIR are found in CID report. Hence, Lokayuktha
Police are justified in registration of the cases.
19. The petitioner has given up the ground against
Lokayuktha in respect of entertaining the complaint based on
CAG report. Same is recorded in the order sheet of
23.11.2015 in W.P.No.41228/2015. That being so, they
cannot question the action taken by Lokayuktha based on
CAG report. The petitioner having failed to challenge the
proceedings of the Lokayuktha, it is not required to consider
whether or not CAG report can be looked into. The FIR
indicates commission of cognizable office by the petitioner
which requires investigation. It is the settled law that the FIR
28
and the details are not the Encyclopedia of the crime alleged.
A full fledged investigation only would reveal whether the
offences are committed or not and appropriate report will
thereafter be filed. It is too premature to claim either way.
The investigation will be the domain of Police.
20. As regards the CAG report forming a basis for
taking action, reliance is placed on a judgment of the Apex
Court reported in (1) (2011)1 SCC 560 in the matter of
Centre for Public Interest Litigation and Others –vs-
Union of India and Others whereby the judgment of the
Delhi High Court was reversed by the Apex Court,
investigation on CAG and CVC report was ordered;
(2) 1996(2) BLJR 869 in the matter of Sushil Kumar Modi
and Others –vs- State of Bihar and Others and connected
cases, whereby the Division Bench of the High Court of Patna
directed CBI investigation in the Public Interest Litigation
which was filed based on a letter of the CAG regarding
misappropriation by the accused. Said judgment was upheld
by Apex Court vide Judgment reported in (1996) 3 SCC 682
(State of Bihar and Another –vs- Ranchi Zila Samta Party
29
and Another) and connected cases. In those cases, the
grievance of the writ petitioners was fraudulent expenditures
and drawls in Animal-Husbandry Department of the State
Government. While ordering time scheduled investigation, the
cases which were in the process of investigation by State
Police were ordered to be suspended in the meantime by the
High Court. In appeal said order was maintained with a
modification. Entire investigation by the State Police, which
was in progress, was brought to the fold of C.B.I. with further
modification for Court monitored investigation. In respect of
the allegation in each of the FIR, written objection statement
is filed by the respondent/Lokayuktha Police. Factual matrix
or sufficiency of evidence for the prosecution cannot be looked
into to nullify the prosecution. The Apex Court in its
judgment reported in 2013 AIR SCW 6660 in the matter of
Vinod Raghuvanshi –vs- Ajay Arora and Others has
cautioned “don’t kill the still born child”. The petitions are to
be dismissed and the investigation shall not be curtailed at
this stage.
30
21. Sri.A.G.Shivanna for respondent No.3/State
substantiates the action taken by Lokayuktha Police in
registering the FIR and initiating investigation.
22. With the parties taking respective firm positions and
on perusal of the 15 FIRs, which are sought to be quashed,
following factors gain my attention:
1. Sustainability of a FIR, which is not in consonance
with the procedure mandated in Section 154 Cr.P.C.
2. Constraint on use of the CAG report as a document in
a criminal proceeding.
23. Re. Point No.1:
The FIRs, fifteen in number reveal that they are
registered in respect of the offences under the P.C.Act allied
offences under IPC and the Karnataka Land (Restriction on
Transfer) Act 1991. The complainant’s name is mentioned as
Jayakumar Hiremath. Column 8 (b) wherein the details of the
personal knowledge of the offence by the complainant is
required to be recorded, is left blank. Column No.9 under the
head ‘Annexures to FIR’, following documents are mentioned:
31
1) Copy of the complaint
2) CAG report
Summary of the case, is annexed to each FIR.
When it is said ‘copy of the complaint’, what is furnished to the
petitioner on his request for the copy is, not a written
complaint by the complainant or his oral statement recorded
by the SHO/IO, but copy of a complaint dated 7.8.2013
submitted by Jayakumar Hiremath to the then Lokayuktha
whereby he had sought action in respect of ‘various issues
highlighted in CAG Report No.6 of the year 2010-11 as well as
CAG report No.3 of the year 2012 relating to misuse of
authority with corrupt motive and thereby causing heavy loss
to the State exchequer’. None was arrayed as accused in the
said complaint. In the body of the said complaint, the
circumstances that led him to approach the Lokayuktha
under Section 7 of the Lokayuktha Act (the Writ Petitions filed
by him in W.P.No.15502/2013 and W.P.No.8437/2013, the
disposal of the Writ Petitions with liberty to avail alternative
and efficacious remedy in the form of Section 7 of Karnataka
Lokayuktha Act 1996 is narrated.
32
24. As it emanates from the certified copies of the order
sheet maintained by the Registry of Lokayuktha, considering
the gravity of allegation in the complaint and also the CAG
report, by the order of the Lokayuktha the matter was referred
to DGP, CID under Section 15(3) of the Act for investigation
and report. After the report of the DGP, CID was submitted,
Lokayuktha granted permission to file a case under the P.C.
Act. The ADGP of the Police Wing attached to Lokayuktha
was ordered to ensure expeditious investigation through
Officer in charge of investigation. That is how the present
FIRs are registered by the respondent/Lokayuktha Police.
25. Whatever transpired in the office of the Lokayuktha
is not within the purview of the present proceeding. But
things stand clear that “complaint annexed to the FIRs in
question are not the oral or written information given by
Jayakumar Hiremath to the SHO of the Police Station but a
complaint given in Form No.1 under Section 7 of the Act to
the Lokayuktha”. Now coming to Section 154(1) of the Code
on the basis of which the Police system has evolved the format
of the FIR reads thus:
33
“154. Information in cognizable cases. – (1)
Every information relating to the commission of a
cognizable offence, if given orally to an officer in
charge of a police station, shall be reduced to
writing by him or under his direction, and be read
over to the informant; and every such information,
whether given in writing or reduced to writing as
aforesaid, shall be signed by the person giving it,
and the substance thereof shall be entered in a
book to be kept by such officer in such form as the
State Government may prescribe in this behalf.
(2)…………………………………………………..”.
26. If Jayakumar Hiremath had given any oral
information regarding his allegation about commission of a
cognizable offence, necessarily SHO would have reduced the
same into writing. As such, it is the fundamentals of Criminal
Justice that anybody can move the criminal law in motion. It
does not call upon the defacto informant to be a victim or a
witness to the alleged offence. The FIR not reflecting any such
oral or written statement given by the defacto complainant
that would have been translated into writing is definitely not
in consonance with sub-section (1) of Section 154 of the Code.
The so-called complaint annexed to the FIR being the
complaint in Form No.1 under Section 7 of the Lokayuktha
Act cannot be conceived as substantive information in the eye
34
of law to register a criminal case. To assume that the SHO on
his own satisfaction about commission of a cognizable offence
registered the case and took up the matter for investigation,
the FIR prepared by him will not substantiate such
assumption. It is not a FIR registered by the Police suo moto
on receipt of credible information. The Apex Court in the
matter of Lalita Kumari’s (supra) clinched the issue thus:
“97. The Code contemplates two kinds of FIRs: the
duly signed FIR under Section 154(1) is by the
informant to the officer concerned at the police
station. The second kind of FIR could be which is
registered by the police itself on any information
received or other than by way of an informant
[Section 157(1)] and even this information has to be
duly recorded and the copy should be sent to the
Magistrate forthwith. The registration of FIR either
on the basis of the information furnished by the
informant under Section 154(1) of the Code or
otherwise under Section 157(1) of the Code is
obligatory. The obligation to register FIR has
inherent advantages:
97.1. (a) It is the first step to “access to justice” for
a victim.
97.2. (b) It upholds the “rule of law” inasmuch as
the ordinary person brings forth the commission of
a cognizable crime in the knowledge of the State.
97.3. (c) It also facilitates swift investigation and
sometimes even prevention of the crime. In both
cases, it only effectuates the regime of law.
35
97.4. (d) It leads to less manipulation in criminal
cases and lessens incidents of “antedated” FIR or
deliberately delayed FIR”.
That is why a duly registered FIR is the sacrosanct at the
entry point to initiate a criminal case, which is missing here.
27. Sri.B.S.Prasad, Special Public Prosecutor for the
Lokayuktha in W.P.Nos. 41238/2015, 41240/2015,
41241/2015 and 41231/2015 while adding to the submission
of Sri.Venkatesh Dalwai, made effort to reason out the
registration of the FIRs that it was inevitable for the
Lokayuktha Police attached to the Lokayuktha wing to abide
by the order of the Lokayuktha thereby to register the cases.
The petitioner having consciously given up the challenge to
the order of the Lokayuktha, now he cannot challenge the
consequential registration of the FIRs. Learned Spl.P.P. refers
to the judgment of the Apex Court in the matter of Yunus Zia
–vs- State of Karnataka (2015 AIR SCW2478) in which
case the Lokayuktha Police had registered a complaint suo
moto on the basis of a newspaper publication and the said
registration was endorsed by the Apex Court.
36
28. But the situation herein is entirely different. ‘…..for
a message or communication to be qualified to be a first
information report there must be something in the nature of a
complaint or accusation or at least some information of the
crime given with the object of setting the police or criminal law
in motion (as per Patai Alias Krishna Kumar (supra). As
such, the Lokayuktha is not invested with jurisdiction to
probe into the offences under the Penal laws and a complaint
lodged before the Lokayuktha cannot take over the colour of
information of offence under Section 154(1) of the Code. It is
a mistaken notion to say that Lokayuktha Police is obliged to
abide by the order of the Lokayuktha to register and
investigate the offences under the various laws quoted in the
FIR.
29. The Police Officers in the State of Karnataka are on
deputation in the Police Station attached to Lokayuktha.
Even after such deputation, the relationship of the master
and servant between the Police personnel working in the
Police Station of Lokayuktha and the State Government would
not cease, but would continue as noticed by the Apex Court in
37
Yunus Zia’s case (supra), while referring to the judgment in
the matter of State of Punjab –vs- Inder Singh (AIR 1978
SC 7)]. The independent nature of investigation conducted by
the Police Wing of Lokayuktha fell for consideration of the
Division Bench of this Court in State of Karnataka, by
Chief Secretary and Others –vs- Basavaraj Guddapa
Maliger reported in 2003 Crl.LJ 4252. Referring to the
judgments of C.Rangaswamaiah and others –vs-
Karnataka Lokayuktha and others ((1998)6 SCC 66) and
State of Karnataka –vs- Kempaiah ((1998)6 SCC 103), the
Division Bench held that the ‘the pronouncement of Supreme
Court in Rangaswamaiah’s case (supra) would lead to the
inevitable conclusion that the Lokayuktha or Upalokayuktha
may request the Police Wing of a Police Officer of the competent
jurisdiction to consider registering the case under the provisions
of the P.C.Act, then the Police Wing of the Lokayuktha if notified
as a Police Station under Section 2 of the Code of Criminal
Procedure may make a preliminary investigation and the prima
facie case if made out may register the FIR and conduct
investigation in accordance with the provisions of the P.C.Act
38
and in accordance with the Code.’ That explains the space
between Lokayuktha and Lokayuktha Police attached to
Lokayuktha Wing. As noticed above, Police Officers in our
State working on deputation in Lokayuktha Police Station,
their identity is with the State Police not with the Lokayuktha.
There is no statutory provision in any of the Penal laws in
respect of which the FIRs are registered, reconciling the
procedure contemplated in Section 154(1) of the Code. That
being so, the Lokayuktha Police ought not to have yielded to
register the FIRs by blowing away the mandatory procedure.
The irregularity/illegality committed in registration of the
FIRs, without there being any material in the nature of
information goes to the very root of the matter which cannot
be cured by whatever means.
Reg.Point No.2:
30. Each of the FIR apart from the copy of the
complaint (submitted to the Lokayuktha) is appended with the
copy of the CAG report. The summary of the prosecution case
annexed to the FIR refers to irregularity committed by the
petitioner and co-accused in reference to the particular case.
39
Of course, the Apex court had directed investigation on the
basis of the CAG report (in the matter of CPIL (supra)
popularly identified as 2G Spectrum case) and endorsed
investigation ordered by the High Court based on a letter of
the CAG in Sushil Kumar Modi’s case (supra). But now it is
to be recalled that Jayakumar Hiremath filed
W.P.No.15502/2013 seeking investigation into various issues
highlighted in the CAG report No.6/2010-11 without naming
anybody as accused and without making specific allegation
under any statutory provision and the said writ petition was
dismissed on the ground of availability of alternative remedy.
His writ petition in W.P.No.8347/2013 arraying the present
petitioner and another former Chief Minister of Karnataka
Sri.H.D.Kumarawamy on the allegation of illegal land denotification
was disposed as not pressed. The High Court in
its writ jurisdiction ordering probe in respect of an allegation
on the basis of CAG report is one thing and the Lokayuktha
Police taking CAG report on his file as a document to launch a
criminal case is another thing. There is no semblance
between two circumstances.
40
31. The author of the CAG report is the Comptroller and
Auditor General of India appointed under Article 148 in
Chapter V of the Constitution of India, which reads thus:
“148. Comptroller and Auditor-General of
India – (1) There shall be a Comptroller and
Auditor-General of India who shall be appointed by
the President by warrant under his hand and seal
and shall only be removed from office in like
manner and on the like grounds as a Judge of the
Supreme Court.
(2) Every person appointed to be the Comptroller
and Auditor-General of India shall, before he
enters upon his office, make and subscribe before
the President, or some person appointed in that
behalf by him, an oath or affirmation according to
the form set out for the purpose in the Third
Schedule.
(3) The salary and other conditions of service of the
Comptroller and Auditor-General shall be such as
may be determined by Parliament by law and,
until they are so determined, shall be as specified
in the Second Schedule;
Provided that neither the salary of a
Comptroller and Auditor-General nor his rights in
respect of leave of absence, pension or age of
retirement shall be varied to his disadvantage after
his appointment.
(4) The Comptroller and Auditor-General shall not
be eligible for further office either under the
Government of India or under the Government of
any State after he has ceased to hold his office
41
(5) Subject to the provisions of this Constitution
and of any law made by Parliament, the conditions
of service of persons serving in the Indian Audit
and Accounts Department and the administrative
powers of the Comptroller and Auditor-General
shall be such as may be prescribed by rules made
by the President after consultation with the
Comptroller and Auditor-General.
(6) The administrative expenses of the office of the
comptroller and Auditor-General, including all
salaries, allowances and pensions payable to or in
respect of persons serving in that office, shall be
charged upon the Consolidated Fund of India”.
32. He is a distinct and independent authority and
derives his power and duties from Article 149 to 151 of the
Constitution and his duties, powers and conditions of service
are envisaged by the Comptroller and Auditor General (Duties,
Powers and Conditions of Service) Act 1971. He is the
premier institution for carrying out audit and account in
respect of government department and government
instrumentalities. Under Section 10 of the Act of 1971 (supra)
he compiles the accounts of the Union and States, prepares
the annual account and submits to the President of India or
Governor of the State or Administrator of the Union Territory.
The report thereafter will be placed before the Parliament or
42
the Legislature of the State. He discharges his function
through Accountant General of the respective State. The
audit extends to all the expenditures to ascertain whether the
monies shown in the accounts as having been disbursed were
legally available for such disbursement and whether the
expenditure confirms to the authority which governs it. He
also examines the decisions, which have financial implications
including the propriety of the decision making.
33. After the audit reports are received in the
Parliament/State Legislature, they are scrutinized by the PAC.
In the State of Karnataka, having regard to the rules of
procedure and conduct of business in Karnataka Legislative
Assembly (Article 208(1) of the Constitution), the Committee is
formed consisting of not more than 20 members, who are
elected from the members of the Assembly and the Council
according to the principle of proportionate representation by
means of single transferable voting system. The Committee
scrutinizes the appropriation of the accounts of the State
Government vis-a-vis the report of the CAG. The duration of
the Committee being limited to one year, a system is evolved
43
by selecting the paragraphs from the audit report for detailed
examination. During the course, the Ministers and the
Executives of the Departments will be called upon to take
corrective action and to furnish a proposed action to be taken
in respect of the audit report. Thereafter the report of the
Committee will be placed before the House. In the matter of
Arun Kumar Agrawal (supra), it was observed that the CAG
report is always subject to scrutiny by the Parliament and the
Government can always offer its view point on the report of
the CAG. In Paras-67 and 68 it was held thus:
“67. The question that is germane for consideration
in this case is whether this Court can grant reliefs
by merely placing reliance on the CAG’s Report.
The CAG’s Report is always subject to
parliamentary debates and it is possible that PAC
can accept the ministry’s objection to the CAG
Report or reject the report of the CAG. The CAG,
indisputably is an independent constitutional
functionary, however, it is for Parliament to decide
whether after receiving the report i.e. PAC to make
its comments on the CAG’s Report.
68. We may, however, point out that since the
report is from a constitutional functionary, it
commands respect and cannot be brushed aside
as such, but it is equally important to examine the
comments what respective Ministries have to offer
on the CAG’s Report. The Ministry can always
point out, if there is any mistake in the CAG’s
report or the CAG has inappropriately appreciated
the various issues. For instance, we cannot as
such accept the CAG report in the instance case”.
34. The Division Bench of the High Court of Sikkim in
Subba Associates –vs- Union of India (MANU/SI/0002/2005)
was dealing with a situation wherein the search and seizure
operation under Section 132 of the Income Tax Act were
carried out on the basis of the preliminary draft and unsigned
report of CAG with regard to the business of lottery of the
State of Nagaland - The final CAG report was subsequently
laid before the Legislative Assembly and was referred to PAC
- The Legislative Assembly found the CAG report to the
unsustainable - The contention was the CAG report did not
acquire legal authenticity and could not be construed as
information within the meaning of Section 132(1) of the
Income Tax Act. The High Court observed that, CAG report is
a legislative paper and is a property of the House and its
members. . . . . . It is the exclusive prerogative of the House
and its members to deliberate on the same as the report falls
within the special jurisdiction of the House or its Committee. .
. . The executive or the judiciary cannot be in legal and/or
constitutional possession of the said report. The Division
Bench of the Gauhati High Court in M.S.Associates –vs-
Union of India (Manu/GH/0322/2005) addressing similar
issue regarding ‘information’ within the meaning of Section
132 of the Income Tax Act, though was of the opinion that the
CAG report is initially meant for the Parliament/Legislature,
and undoubtedly a property of the House, further held that
for the purpose of starting an investigation into evasion of tax,
the source of information is not material; when the legislature
itself has not restricted the authorities concerned under
Section 132 supra from acting upon the information which
may be derived from the report of the CAG which has not
been laid/discussed by the State legislature, it would be
realistic to hold that the legislative intendment is that even if
the authority concerned received the information about
evasion of tax from the report of the CAG, there is no legal
impediment on the part of the authorities concerned to act
upon such information.
35. In my considered opinion the view taken by the
Gauhathi High Court is more realistic. In this era of
advanced Information Technology with the enablement
conferred on the citizen of the country to have easy access to
information by way of Right to Information Act, 2005, it is
unrealistic to presume CAG report as a confidential
document, till it meets finality in the Parliament or the
Legislature. The Code no where contemplates a Police Officer
acting under Section 157 of the Code to publish the source of
information which drives him to register a suo moto complaint
in respect of a cognizable offence. Likewise it is always open to
a concerned/aggrieved informant to approach the
jurisdictional Police even on suspicion about commission of a
cognizable offence, to be dealt in accordance with Section
154(1) of the Code. But the concern is, availing the CAG
report as the basis for registration of the criminal case
subjecting the same to the test of trial in a criminal court
which has no jurisdiction to adjudicate the question raised in
the CAG report. The CAG report wherefore since not available
for judicial scrutiny, in my considered opinion, cannot be
used as a foundation to build up a criminal case and cannot
be made a part of investigation. As such, if an informant
has a reasonable suspicion about the commission of
cognizable offence he has every right to move the criminal law
into motion by way of a formal information oral/writing to the
concerned Court and the concerned Police if warranted can
ascertain truthfulness or otherwise of the information so
received by holding preliminary enquiry within the period
stipulated by the Apex Court as at Lalitha Kumari’s case
(supra) and then register the criminal case if the enquiry
probabalises commission of a cognizable offence.
36. The Apex Court in Vineet Narain –vs- Union of
India (Verma C.J.) reported in (1998) 1 SCC held thus:
“55……………… It is trite that the holders
of public offices are entrusted with certain powers
to be exercised in public interest alone and,
therefore, the office is held by them in trust for the
people. Any deviation from the path of rectitude
by any of them amounts to a breach of trust and
must be severely dealt with instead of being
pushed under the carpet. If the conduct amounts
to an offence, it must be promptly investigated
and the offender against whom a prima facie
case is made out should be prosecuted
expeditiously so that the majesty of law is upheld
and the rule of law vindicated. It is the duty of
the judiciary to enforce the rule of law and,
therefore, to guard against erosion of the rule of
law”.
Further, in Subramanian Swamy –vs- Manmohan Singh
(Ganguly J.) reported in (2012) 3 SCC it is observed thus:
“68. Today, corruption in our country not
only poses a grave danger to the concept
of constitutional governance, it also
threatens the very foundation of the
Indian democracy and the Rule of Law.
The magnitude of corruption in our public
life is incompatible with the concept of a
socialist secular democratic republic. It
cannot be disputed that where corruption
begins all rights end. Corruption
devalues human rights, chokes
development and undermines justice,
liberty, equality, fraternity which are the
core values in our Preambular vision.
Therefore, the duty of the court is that
any anti-corruption law has to be
interpreted and worked out in such a
fashion as to strengthen the fight against
corruption. That is to say in a situation
where two constructions are eminently
reasonable, the court has to accept the
one that seeks to eradicate corruption to
the one which seeks to perpetuate it”.
37. An alert citizen upholding the mission of ‘combat
against corruption’ is certainly laudable. But it shall not be a
free style battle. The penal laws under which the alleged
offence fall will take over, if offence is proved in a court of law.
The procedure contemplated by the Code to invoke criminal
49
law into motion being the first step for registration of a
criminal case, inroading of the procedure laid down by rule of
law is not at all permissible. An attempt is made to justify the
action of Lokayuktha Police that the case is not registered
solely on the report of C.A.G. but also on the independent
enquiry conducted by the C.I.D. Police on the direction of the
Lokayuktha. But this justification does not stand to reason,
neither the Lokayuktha nor the C.I.D. Police are the de facto
complainants here. The matter having gone out of the
premises of Lokayuktha Act, the Lokayuktha Police Station
being the Police Station as defined under Section 2(s) of the
Code, registration of the case shall be either under Section
154(1) of the Code, if it is on an information by an informant
or under Section 157(1) of the Code, if it is the instance of
Police Officer registering the case on his suo moto report. The
F.I.Rs. in question neither in consonance with Section 154(1)
nor 157(1) of Cr.P.C. cannot be sustained even after noticing
the fundamental defects in their formulation. Allowing the
investigation to continue on these defective F.I.Rs. is by itself
abuse of process of law. These F.I.Rs. since not registered on
50
information about a cognizable offence, in my considered
opinion, it is not required to go further to the merit of the
allegations made against the petitioner or the defence offered
by him to the said allegation. It is also not required to call
upon the petitioner to array Jayakumar Hiremath or the coaccused
as respondents in these petitions. Law on the
question of ultimate jurisdiction of this Court in exercise of
power vested under Article 226 of the Constitution of India
and Section 482 of the Code is well settled from long lineage
of judicial pronouncements commencing from State of
Haryana and others –vs- Ch.Bhajan Lal and others
reported in AIR 1992 SC 604. The F.I.Rs. not disclosing
commission of cognizable offence in the form of first
information are liable to be quashed keeping open the larger
questions raised in these criminal petitions.
All these Petitions are allowed. The F.I.Rs. in Crime
Nos.38/2015, 42/2015, 39/2015, 44/2015, 40/2015,
43/2015, 52/2015, 53/2015, 45/2015, 46/2015, 48/2015,
49/2015, 50/2015, 54/2015 and 47/2015 respectively, are
quashed. However, it is made clear that C.A.G. Report shall
51
not be used against the petitioner if any action is
contemplated against him in future.
All the contentions are kept open.
Sd/-
JUDGE
KNM/-
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