State Of Orissa & Ors vs Ujjal Kumar Burdhan

STATE OF ORISSA & ORS. -- APPELLANTS

VERSUS

UJJAL KUMAR BURDHAN -- RESPONDENT

J U D G M E N T

D.K. JAIN, J.:

1. Leave granted.

2. This appeal by special leave, assails the judgment dated 12th

February, 2008, rendered by a learned Single Judge of the

High Court of Orissa at Cuttack. By the impugned order, on a

petition under Section 482 of the Code of Criminal

Procedure, 1973 (for short "the Code"), the investigation

initiated by the Vigilance Department of the State

Government into the allegations of irregularities in the

receipt of excess quota, recycling of rice and distress sale of

paddy by one M/s Haldipada Rice Mill, a proprietary concern

of the respondent, has been quashed.

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

State Government initiated an inquiry against the said

concern, relating to the processing of paddy for and on

behalf of the Food Corporation of India. Preliminary inquiry

conducted by the Food and Supply department revealed

certain irregularities in the procurement and milling of paddy

by the respondent. A subsequent departmental inquiry

recommended initiation of a proper administrative action

against the respondent. Consequently, the State Government

directed the Vigilance Cell of the Police department to

conduct a preliminary inquiry regarding the alleged criminal

acts.

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

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

High Court while ordering the issue of the enforcement

certificate to the respondent pending the ongoing inquiry,

directed the completion of the said inquiry within twelve

weeks of the receipt of that order. In compliance with that

order, the Civil Supply Department of the State Government

issued enforcement certificate to the respondent. However,

the respondent filed yet another Writ Petition, being W.P.

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

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proceedings initiated by the State vigilance department on

the ground that an inquiry had already been conducted on

the same complaint by the department concerned. By way of

an interim order, the High Court directed the State

Government not to take any coercive action against the

respondent till further orders. As a result thereof, the

preliminary inquiry came to a standstill. For a similar relief,

respondent filed another petition, being Crl.M.C.No.2808 of

2006 under Section 482 of the Code in which the impugned

order has been passed. Aggrieved by the said order, the

State Government as also its two functionaries, viz. Director-

cum-Addl. D.G.P., Vigilance and Dy. Superintendent of

Police, Vigilance Cell have preferred this appeal.

5. Mr. Suresh Chandra Tripathy, learned counsel appearing for

the appellants submitted that it is settled law that a

preliminary inquiry ought not to be quashed by the High

Court in exercise of its jurisdiction under Section 482 of the

Code. He argued that the High Court was not at all justified in

interfering with the investigation at the threshold even before

the registration of an FIR, particularly when in his report

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

fabrication and forgery of accounts maintained by the

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respondent as also violation of the guidelines laid down in

the Food and Procurement Policy for the marketing season

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

passed by a Division Bench of the High Court in W.P.(C)

No.8315 of 2005, whereby, as aforesaid, a direction was

issued for expediting the inquiry, learned counsel stressed

that having observed that if in the inquiry any irregularity is

established, the respondent could be proceeded under the

relevant provisions of law, the High Court committed a

serious illegality in law in quashing the same

inquiry/investigation.

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

the respondent supported the impugned judgment and

submitted that the respondent was being harassed by

repeated investigations on the same set of facts. It was

alleged that the inquiry was ordered at the behest of an Ex-

M.L.A. who belonged to the ruling party and with whom the

respondent shared a long history of animosity and

antagonism. He thus, contended that the appeal deserved to

be dismissed.

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

under Section 482 of the Code are very wide. Nevertheless,

inherent powers do not confer arbitrary jurisdiction on the

High Court to act according to whims or caprice. This extra-

ordinary power has to be exercised sparingly with

circumspection and as far as possible, for extra-ordinary

cases, where allegations in the complaint or the first

information report, taken on its face value and accepted in

their entirety do not constitute the offence alleged. It needs

little emphasis that unless a case of gross abuse of power is

made out against those incharge of investigation, the High

Court should be loath to interfere at the early/premature

stage of investigation.

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

and Ors.1, emphasising that the Court will not normally

interfere with an investigation and will permit the inquiry into

the alleged offence, to be completed, this Court highlighted

the necessity of a proper investigation observing thus:

"An investigation is carried on for the purpose of

gathering necessary materials for establishing

and proving an offence which is disclosed. When

an offence is disclosed, a proper investigation in

the interests of justice becomes necessary to

1 (1982) 1 SCC 561: 1982 SCC (Cri) 283: (1982) 3 SCR 121

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collect materials for establishing the offence, and

for bringing the offender to book. In the absence

of a proper investigation in a case where an

offence is disclosed, the offender may succeed in

escaping from the consequences and the offender

may go unpunished to the detriment of the cause

of justice and the society at large. Justice requires

that a person who commits an offence has to be

brought to book and must be punished for the

same. If the court interferes with the proper

investigation in a case where an offence has been

disclosed, the offence will go unpunished to the

serious detriment of the welfare of the society and

the cause of the justice suffers. It is on the basis of

this principle that the court normally does not

interfere with the investigation of a case where an

offence has been disclosed....Whether an offence

has been disclosed or not must necessarily

depend on the facts and circumstances of each

particular case....If on a consideration of the

relevant materials, the court is satisfied that an

offence is disclosed, the court will normally not

interfere with the investigation into the offence

and will generally allow the investigation into the

offence to be completed for collecting materials

for proving the offence."

(emphasis supplied by us)

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

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

explaining the scope and ambit of the inherent powers of the

High Court under Section 482 of the Code, one of us (D.K.

Jain, J.) speaking for the Bench, has observed as follows:

"20......The section itself envisages three

circumstances under which the inherent

jurisdiction may be exercised, namely, (i) to give

2 (2010) 6 SCC 243

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effect to an order under the Code; (ii) to prevent

abuse of the process of Court; and (iii) to

otherwise secure the ends of justice.

Nevertheless, it is neither possible nor desirable

to lay down any inflexible rule which would

govern the exercise of inherent jurisdiction of the

Court. Undoubtedly, the power possessed by the

High Court under the said provision is very wide

but it is not unlimited. It has to be exercised

sparingly, carefully and cautiously, ex debito

justitiae to do real and substantial justice for which

alone the court exists. It needs little emphasis that

the inherent jurisdiction does not confer an

arbitrary power on the High Court to act

according to whim or caprice. The power exists to

prevent abuse of authority and not to produce

injustice."

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

to the scope and width of the power of the High Court under

Section 482 of the Code, we are constrained to hold that in

the fact-situation at hand, the impugned decision is clearly

indefensible. In the present case, the S.P., Vigilance Cell, had

merely approved the opening of an inquiry and converted it

into a Cell File. The preliminary inquiry was yet to

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

instance, the High Court stayed the preliminary inquiry by an

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

judgment quashed the same. It goes without saying that

commencement and completion of an investigation is

necessary to test the veracity of the alleged commission of an

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offence. Any kind of hindrance or obstruction of the process

of law from taking its normal course, without any supervening

circumstances, in a casual manner, merely on the whims and

fancy of the court tantamounts to miscarriage of justice, which

seems to be the case here.

11.We are convinced that the circumstances that have weighed

with the High Court, do not justify the conclusion it has

arrived at. The High Court has allowed the petition under

Section 482 of the Code, inter-alia, on the following grounds;

firstly, the enforcement certificate had been issued to the

respondent which evidences compliance with the Rice and

Paddy Procurement (Levy) and Restriction on sale and

Movement Order, 1982. The observation came to be made

by losing sight of the fact that the said enforcement certificate

had been issued pursuant to the order dated 18th July 2005,

passed by the High Court in W.P. (C) No.8315 of 2005.

Secondly, two inquires on the same facts had already been

conducted, wherein the respondent had been exonerated.

The High Court has committed a grave error of fact in

observing that the respondent had been exonerated in the

two inquiries held previously as both the inquiry reports had

in fact concluded that the respondent had committed serious

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irregularities and proper action needs to be initiated against

him. As far as the two previous inquiries are concerned, it

may also be noted that those inquiries were departmental

inquiries and what has been quashed by the impugned

judgment is the initiation of police investigation. Both the

inquiries are entirely different in nature; operate in different

fields and have different object and consequences.

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

arbitration agreement between the agent and the

Government, all the alleged violations fell within the purview

of Arbitration and Conciliation Act, 1996 and therefore, the

respondent could not be held liable for any criminal offence.

This observation is against the well settled principle of law

that the existence of an arbitration agreement cannot take the

criminal acts out of the jurisdiction of the courts of law. On

this aspect, in S.W. Palanitkar & Ors. Vs. State of Bihar &

Anr.3, this Court has echoed the following views:

"22. Looking to the complaint and the grievances

made by the complainant therein and having

regard to the agreement, it is clear that the

dispute and grievances arise out of the said

agreement. Clause 29 of the agreement provides

for reference to arbitration in case of disputes or

controversy between the parties and the said

3 (2002) 1 SCC 241

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clause is wide enough to cover almost all sorts of

disputes arising out of the agreement. As a matter

of fact, it is also brought to our notice that the

complainant issued a notice dated 3-10-1997 to

the appellants invoking this arbitration clause

claiming Rs.15 lakhs. It is thereafter the present

complaint was filed. For the alleged breach of the

agreement in relation to commercial transaction,

it is open to the Respondent 2 to proceed against

the appellants for his redressal for recovery of

money by way of damages for the loss caused, if

any. Merely because there is an arbitration clause

in the agreement, that cannot prevent criminal

prosecution against the accused if an act

constituting a criminal offence is made out even

prima facie."

(Emphasis supplied)

13.The High Court has also adversely commented upon the

progress of the preliminary inquiry and has recorded that no

new material has been placed on record by the Vigilance

Cell. This has been recorded without having regard to the

fact that the High Court by another order, dated 5th

September 2005, had, by way of an interim order, directed

the State Government not to take any coercive steps against

the respondent, with the result that there was no occasion for

the department concerned to bring to the fore any material to

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

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

completion of inquiry within a set time-frame of twelve

weeks, which was subsequently interjected by an interim

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order and finally the entire investigation/inquiry came to be

quashed by the impugned judgment. It seems incongruous

that in the first instance the court set into motion the process

of law only to ultimately quash it on the specious plea that it

would cause unnecessary embarrassment to the respondent.

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

interference with the investigation was totally unwarranted

and therefore, the impugned order cannot be sustained. We,

accordingly, allow the appeal, quash and set aside the

impugned judgment and restore the investigation initiated

against the respondent and direct the Vigilance Cell of the

State to proceed with and complete the investigation

expeditiously, in accordance with law.

..................................................

(D.K. JAIN, J.)

.................................................

(ANIL R. DAVE, J.)

NEW DELHI;

MARCH 19, 2012

ARS

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