(This is a guest post by Mr. Divyang Thakur. Views are personal)
Introduction
The Hon’ble Supreme Court of India (the Court) in the case titled Charansingh v. State of Maharashtra (AIR 2021 SC 1620) decided on 24.03.2021 came to some interesting conclusions regarding the scope of a Preliminary Enquiry (PE) in corruption cases which have potentially far-reaching implications.
A complaint was received by the Anti-Corruption Bureau, Nagpur regarding disproportionate assets owned by a public servant, the Appellant (hereinafter referred to as ‘C’). C received a notice issued by the Inspector (“IO”) of ACB, Nagpur in pursuance of an “Open Enquiry”. The notice required C to (i) give a statement regarding the properties owned by him; (ii) produce certain documents relating to the properties. The list of documents required to be furnished by C to the IO has been reproduced by the Court in the judgment and is repeated here for the sake of convenience: -
“1) Record in respect of ancestral and self-acquired property in your name, for example, Registered Deed, Construction Licence, Receipts relating to tax, Sale Deed of Agricultural Land, 7/12 Extract and Mutation Entries, etc. 2) Details of ancestral and self-acquired gold coins and jewellery, likewise sale and purchase of vehicle. 3) Passbooks, Certificates, L.I.C., Shares/Debentures Certificates, etc. in respect of investments at bank, insurance and others in your name and in the name of your family members. 4) Details of documentary evidence in respect of loan borrowed by you. 5) Proofs and income tax return in respect of your income other than your remuneration. 6) Details of expenditure incurred by you in respect of pilgrimages, functions, hospitals, foreign tours, etc. 7) Information regarding remuneration and allowances received by you.”
C challenged the notice issued by the IO, ACB through a writ petition alleging that the same infringed his constitutional right against self-incrimination before the Hon’ble High Court which dismissed the petition and thereafter C appealed to the Hon’ble Supreme Court.
The Findings
Two questions arose: - (a) whether a PE was legal, (b) what is the scope and extent of such PE.
Regarding (a), the Court relying upon Lalita Kumari v. Government of UP & Ors (AIR 2014 SC 187) found that such enquiry was permissible and in the words of the Court “…and not only permissible but desirable, more particularly in cases where the allegations are of misconduct of corrupt practice acquiring the assets/properties disproportionate to his known sources of income…” This is merely a reiteration of Lalita Kumari where the Court had identified corruption cases as one category in which PE would be permissible. (Whether the Court in Lalita Kumari having interpreted Section 154 CrPC in the manner in which they did, should have given judicial sanction to PEs is debatable and also not the subject of the present post.)
The more significant findings relate to (b) i.e., with respect to the manner and extent of the PE. The Court found that (i) a PE is only held to determine if a cognizable offence is made out; (ii) the IO need not be completely convinced or satisfied about the gravamen of allegations, it is sufficient if he suspects the commission of a cognizable offence, once the IO does so suspect he is duty-bound to put an end to the PE and register the FIR; (iii) a notice sent during the PE is only to allow the receiver of the notice to clarify regarding the assets and known source of income; (iv) the statement recorded during such PE does not fall within Section 160 CrPC; (v) the statement recorded during PE cannot be used against the accused during trial; (vi) the statement recorded during PE cannot be treated as a confessional statement.
The Court finally dismissed the appeal while adding a rider that the statement recorded during the PE could only be used by the IO to enable him to take a decision with respect to registration of the FIR.
Implications & Key Takeaways
The Conundrum of summoning of documents during A Preliminary Enquiry
From a reading of the notice as reproduced in the judgment that was issued by the IO, ACB, it appears that it was not merely a notice to give a statement but to produce documents as well. In fact, the Court notes that “By the impugned notice, impugned before the High Court, and during the course of the 'open enquiry', the Appellant has been called upon to give his statement and he has been called upon to carry along with the information on the points, which are referred to hereinabove for the purpose of recording his statement.” In fact, the Court also cited the rules under the Maharashtra State Anti-corruption & Prohibition Intelligence Bureau Manual of Instructions 1968 which explicitly allow the Enquiry Officer (EO) to collect “all available documentary evidence in support of the allegation”. The Manual of the Central Bureau of Investigation (CBI Manual) also allows for collection of documents during a PE (Point 7.14 of Chapter 7 dealing with PE states that required documents should be collected with a proper receipt. Interestingly, it is further stated that notices under 91 CrPC and 160 CrPC cannot be resorted to during a PE.)
In Shyamlal Mohanlal v. State of Gujarat (AIR 1965 SC 1251) the Hon’ble Supreme Court held that “any person” does not include the accused u/s 91 of the Code of Criminal Procedure (CrPC) and therefore notice cannot be issued to an accused to produce documents, by virtue of Article 20(3).
However, from a reading of this judgment, it appears that the IO could ask a person (as he would not be an accused before registration of FIR) to produce relevant documents during the PE stage. While the Court was at pains to point out that any statement recorded during the PE could not be used during trial, it did not hold so for documents.
In disproportionate assets cases, the prosecution case often rests on documentary evidence related to the proof of known sources of income and actual assets. It would be highly contradictory for the IO to come to a finding that a cognizable offence has been made out on the basis of documents furnished during the course of the PE and then be subsequently barred from using such document at trial.
At the same time, to say that the IO could summon documents from a potential suspect during PE but not do so during investigation incentivizes the IO to conduct the investigation in the garb of a PE, register the FIR and then place those documents on the charge sheet which were summoned from the accused during the PE, thereby doing indirectly what he could not have done directly by virtue of the Shyamlal Mohanlal judgment, without resort to Section 91 CrPC. In Charansingh, C had raised the issue of a potential violation of the rights guaranteed under Article 20(3) of the Constitution i.e., the right against self-incrimination, however the Court did not directly deal with the same and resolved the tension by holding that such statements were not to be used during trial.
Charansingh, therefore, creates a grey area for criminal defence lawyers while advising clients at the stage of PE. Can a potential accused refuse to participate in an “open enquiry”? Could he refuse to produce documents which could potentially lead to a criminal charge, penalty or forfeiture? Would he be subject to prosecution under Section 175 of the Indian Penal Code (IPC) in event of such refusal? Unfortunately, there is no clarification in this regard in the present judgment and could possibly lead to future litigation.
Removal of the Protection of Section 160, 161 and 162 CrPC for Statements made during a Preliminary Enquiry
The CrPC lays down certain safeguards that protect witnesses and accused during the course of an investigation. Section 161(2) binds persons to answer truly except in cases where the answers might expose him to a criminal charge, penalty or forfeiture. Such refusal does not lead to a prosecution under Section 176 IPC. However, in the present case, the Court ruled that the statement made during PE does not fall under the ambit of Section 160 CrPC. Presumably this would be true for witnesses as well as the potential accused. Would this mean that Section 161(2) does not apply and therefore, there is no right to silence during the PE and a possibility of prosecution under Section 176 IPC? Even conceding the fact that the statement of the potential accused cannot be used against him during the trial, the judgment does not clarify the status of the statements made by other witnesses who might be arrayed as prosecution witnesses during trial. A liberal interpretation would be to presume that no statement made, whether by the potential accused or witnesses would be admissible during trial, however, as the present case only dealt with the use of the statement of the accused, there is a grey area with respect to the statements of witnesses.
Moreover, if such witness statements do not fall under Section 160 CrPC, in that case, the bar of Section 162 CrPC would not operate, and such statements could be used to not only contradict prosecution witnesses but to corroborate them and operate in a manner similar to an FIR or a statement under Section 164 CrPC. Moreover, the EO, in absence of the bar under Section 162(1) could also get such statements signed by the witnesses, which might prejudice the accused during trial.
The holding in the present judgment that statements made during a PE do not fall under Section 160 CrPC might have some unintentional consequences and create a grey area.
Section 27 of the IEA and Discovery during PE
Another problem that might arise is if a discovery takes place by virtue of a statement made during PE. Usually, such confessional statements are admissible by virtue of Section 27 of the Indian Evidence Act 1872, notwithstanding anything contained in Sections 25, 26 of the IEA. In this case it would be the prosecution that stands to lose, because the present judgment makes the statements completely inadmissible, without exceptions.
The other alternative with the IO would be to register such confessional statement as an FIR and thereafter conduct the subsequent recovery, but then that would subvert the rationale behind the present judgment where the Court tried to shield potential suspects from their statements made during PE being used against them subsequently.
Conclusions
As noted above, Charansingh could potentially lead to unintended consequences, especially in the three situations outlined above. It should also be kept in mind that the present judgment would also be applicable to a vast variety of white-collar crime, matrimonial, commercial cases investigated by the local police authorities, where a PE is usually conducted, and not only to corruption cases. It would have been better, therefore, if these issues were clarified, especially as this ruling could incentivize Investigative agencies to conduct investigations surreptitiously in the guise of a PE, with wider powers than they have under the CrPC. Moreover, while the Court held that the statement of the potential accused cannot be used against him during trial, it would have been better if the Court had identified the statutory principles behind this, as to my understanding, there is nothing in the Evidence Act that bars the use of such statements.
Of even more significance is the rationale used to justify the PE as being helpful to the potential accused as it enables him to give an account of his assets. This sounds very much like an obligation on the accused to disclose his defence at the pre-FIR stage itself. It also looks like a discovery procedure for the Prosecution against the defence at a much earlier stage. Certain jurisdictions like England under the Criminal Justice Act 1996 (amended in 2003) require a disclosure of defence in certain circumstances. We should be on guard against any such ad hoc disclosure and discovery procedures in the garb of a PE. IOs often place the entire record of the Enquiry on record before the Court and without being intended, such record could play a role in the final decision on charge and judgment.
In the larger perspective, while the Supreme Court was at pains to point out that the framework of the CrPC is inapplicable PE, it is unclear then as to what rules can be resorted to by the IOs of various agencies to conduct a PE. The CBI Manual recognizes that the CrPC is inapplicable to the collection of material including documents during a PE but then also requires the Enquiry Officer to collect “required documents”. While it has been the settled law that the CBI Manual and other manuals of similar nature are in the nature of executive instructions and cannot override the statutory law, the decision in Charansingh has, in my opinion, given the judicial go-ahead for Enquiry Officers to collect documents and statements while explicitly making the CrPC inapplicable. While the decision clearly states that this exercise is only for the purpose of deciding whether a cognizable offence is made out, it is not clear as to what remedy is available if an Enquiry Officer exceeds his mandate.
It is time that PEs, if seen as necessary, should have legislative backing, clearly delineating the safeguards, and resolving the conundrums highlighted in this post.
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