Preliminary inquiry not mandatory in corruption cases: Supreme Court relief for Karnataka Lokayukta

The court allowed a plea by the Karnataka government led by Additional Advocate General Nishanth Patil against the High Court's judgment of March 4, 2024.

New Delhi: In a significant judgment, the Supreme Court has held that preliminary inquiry is not mandatory in every case registered under the Prevention of Corruption Act.

"If a superior officer is in seisin of a source information report which is both detailed and well-reasoned and such that any reasonable person would be of the view that it prima facie discloses the commission of a cognizable offence, the preliminary inquiry may be avoided," a bench of Justices Dipankar Datta and Sandeep Mehta said.

The court allowed a plea by the Karnataka government led by Lokayukta counsel and Additional Advocate General Nishanth Patil against the High Court's judgment of March 4, 2024.

The bench said, "The High Court gravely erred while imposing unwarranted fetters on the investigation agency in corruption cases by carving out a framework of administrative hurdles which may have the potential of incapacitating law enforcement agencies."

By mandating elaborate pre-investigation procedures and creating unwarranted procedural check dams, the High Court’s approach has the potential to render the effectiveness of law enforcement nugatory, the bench added.

The High Court quashed the FIR registered by the Karnataka Lokayukta Police Station, Bengaluru against the respondent, T N Sudhakar Reddy, then Deputy General Manager (Vigilance)/Executive Engineer (Electrical) at BESCOM, Bengaluru, Vigilance Squad, Bangalore, for the offences punishable under Section 13(1)(b) and Section 12 read with Section 13(2) of the PC Act.

The top court said the High Court erred in coming to the conclusion that December 4, 2023 order by the Superintendent of Police, Lokayukta for lodging the FIR, was directly passed under Section 17 of the PC Act, thereby violated the mandatory provisions.

The bench, however, said, "Section 17 relates specifically to the investigation process, and not the initial act of registering the FIR, for which it relies on the provisions of the CrPC. Hence, it places limitations on only the investigation; it does not impede the fundamental duty of the law enforcement agency to record and register an FIR for cognisable offences."

The court said a fair investigation cannot be interpreted to cater to the accused only. It also opined on harmonious reading of the provisions of the PC Act and CrPC, the Superintendent of Police is competent to direct the investigation, if he has information about the commission of cognisable offence under the PC Act.

The February 17, 2025 judgment has huge ramifications on multiple cases pending before the Karnataka High Court and the Supreme Court where various FIRs have been quashed for non compliance of Section 17(2) of the PC Act.

The respondent was accused of possessing assets to the tune of over Rs 3.81 Cr, disproportionate to his known sources income. The FIR was lodged against him on December 4, 2023 on the basis of source information to the SP.

Senior advocates and S Nagamuthu and Anand Sanjay M Nuli, appearing for the respondent, submitted, before the lodging of an FIR against a public servant for the offences under the PC Act, a preliminary inquiry must be undertaken by the competent authority, considering the gravity of accusations.

The court, however, said conducting a preliminary inquiry is not sine qua non for registering a case against a public servant who is accused of corruption.

"While preliminary inquiry is desirable in certain categories of cases, it is neither a vested right of the accused, nor a mandatory pre-requisite for registration of a criminal case. Its purpose is not to verify the veracity, but merely to ascertain whether the said information reveals the commission of a cognisable offence," the bench said.

The scope of such inquiry is naturally narrow and limited to prevent unnecessary harassment while simultaneously ensuring that genuine allegations of a cognisable offence are not stifled arbitrarily, it said.

"The determination, whether a preliminary inquiry is necessary or not will vary according to the facts and circumstances of each case," the bench said, referring to the Constitution bench judgment in Lalita Kumari Vs State of UP (2014).

The court said in the case, the source information report of November 10, 2023, served as a critical piece of information which not only documented the financial discrepancies but also presented a clear, prima facie picture of disproportionate assets accumulated by the respondent.

"We are of the opinion that the High Court erred in concluding that the FIR was liable to be quashed on account of omission to conduct a preliminary inquiry," the bench said.

The bench also said if the officer in charge of a police station can direct the registration of an FIR, as a natural corollary, superior officers, are equally competent to issue such directions for registration of the FIR.

The police officials are duty-bound to register an FIR in case of cognisable offences, except in cases where individual reputation and relations are at stake, wherein it is advisable to conduct a preliminary inquiry, it said.