Disproportionate Assets: Supreme Court Revives FIR Against Income Tax Commissioner & Her Husband Now A Minister Of AP Govt

The Supreme Court has allowed allowed the appeal filed by Central Bureau of Investigation against a High Court judgment that quashed FIR registered by it in a disproportionate assets case against e Thommandru Hannah Vijayalakshmi, a Commissioner of Income Tax and her husband Adimulapu Suresh, who is presently a Minister in the Andhra Pradesh Government.

"The Single Judge has donned the role of a Chartered Accountant and completely ignored that the Court was not at the stage of trial or considering an appeal against a verdict in a trial", the bench of Justices DY Chandrachud, Vikram Nath and BV Nagarathna observed.

The allegation against the duo is of possession of Disproportionate Assets to the tune of Rs 1,10,81,692. The FIR has thus been registered for offences punishable under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act 19885 and Section 109 of the Indian Penal Code 1860.

The High Court had allowed their petition seeking quashing of FIR on the following grounds (i) the information about the respondents' income can be ascertained from their 'known sources of income' under Section 13(1)(e) of the PC Act, such as their Income Tax Returns, information submitted to their department under the Central Civil Services (Conduct) Rules 1964 and affidavit filed under the Representation of the People Act 19518 and the Rules under it; (ii) to counter the veracity of the information from these sources, the appellant, Central Bureau of Investigation , should have conducted a Preliminary Enquiry under the Central Bureau of Investigation (Crime) Manual 2005 before registration of the FIR; and (iii) on the basis of the information ascertained from these 'known sources of income', the allegations against the respondents in the FIR prima facie seem unsustainable.

In appeal, on the issue of Preliminary enquiry,  the Court held that preliminary enquiry by CBI in cases of corruption is not mandatory. Perusing the High Court judgment, the court noted that, in a judgment spanning a hundred and seven pages the Single Judge has conducted a mini-trial, overlooking binding principles which govern a plea for quashing an FIR.

The Court said that a court cannot conduct a mini-trial at the stage of framing of charges and this bar is also applicable to the High Court at thee stage of considering a petition for quashing an FIR under Section 482 of the CrPC or Article 226 of the Constitution.

"The Single Judge has enquired into the material adduced by the respondents, compared it with the information provided by the CBI in the FIR and their counter-affidavit, and then pronounced a verdict on the merits of each individual allegation raised by the respondents largely relying upon the documents filed by them (by considering them to be 'known sources of income' within the meaning of Section 13(1)(e) of the PC Act). This exercised has been justified on account of the appellant not having conducted a Preliminary Enquiry and hence, not having addressed the respondents' PART E 52 objections relying upon the documents adduced by them. The reasons provided by the Single Judge for entering into the merits of the dispute while quashing the FIR are specious, especially so considering our finding that the CBI need not hold a Preliminary Enquiry mandatorily. While exercising its jurisdiction under Article 226 of the Constitution to adjudicate on a petition seeking the quashing of an FIR, the High Court should have only considered whether the contents of the FIR – as they stand and on their face – prima facie make out a cognizable offence. However, it is evident that in a judgment spanning a hundred and seven pages (of the paper-book in this appeal) the Single Judge has conducted a mini-trial, overlooking binding principles which govern a plea for quashing an FIR", the court observed in the judgment.

The court finally held that the CBI can continue with its investigation based upon the FIR.