Holding

The Supreme Court held that the offence is complete on failure to account for excess assets, that a CBI Inspector may investigate under Section 17, that the Sessions Judge was empowered by a valid notification, and that the High Court erred in interfering with the trial at the charge‑framing stage.

Summary

The Central Bureau of Investigation filed a charge‑sheet against former Karnataka Chief Minister S. Bangarappa under the Prevention of Corruption Act, 1988, alleging that he had amassed assets disproportionate to his known sources of income. The trial court framed a charge under Section 13(2) read with Section 13(1)(e) and ordered the trial to proceed. The Karnataka High Court, however, quashed the proceedings on three grounds: the investigation was not conducted as required by Section 17, the Sessions Judge lacked jurisdiction because no notification under Section 4(1) existed, and the prosecution’s evidence was insufficient. On appeal, the Supreme Court held that the offence is complete when a public servant fails to account for excess assets, that a CBI inspector may investigate under Section 17, and that the Sessions Judge was duly empowered by a state notification. The Court also ruled that the High Court erred in evaluating the evidence at the charge‑framing stage and directed the trial to continue. The appeal was allowed, setting aside the High Court order.

Issues considered

Whether the offence under Section 13(1)(e) of the Prevention of Corruption Act is complete on the failure of a public servant to account for disproportionate assets, permitting charge‑framing.
Whether an investigation conducted by an Inspector of Police attached to the CBI complies with the requirements of Section 17 of the Act.
Whether the Sessions Judge had jurisdiction to try the case in the absence of a specific notification under Section 4(1) of the Act.
Whether the High Court could quash criminal proceedings at the charge‑framing stage by scrutinising the merits of the evidence.

Legislation cited

Code of Criminal Procedure, 1973s. 482
Prevention of Corruption Act, 1988s. 13(1)(e), s. 13(2), s. 17, s. 4(1)

Subjects

Prevention of Corruption ActDisproportionate assetsCharge framingJurisdiction of special judgeSection 13Section 17Section 4CBI investigationHigh Court interferenceCriminal procedure

Judgment

A STATE BY CENTRAL BUREAU OF INVESTIGATION
v.
SH. S. BANGARAPPA

NOVEMBER 20, 2000

B (K.T. THOMAS AND R.P. SETHI JJ.]

Prevention of Corruption Act, I988:

C
Section I 3 (2) read with I 3 (1) (e) Public servant acquiring assets
disproportionate to his know._n source of income-Held, on failure to account
.
for excess of income offence is complete under the Act-Further, charge can
be framed and trial can be commenced.

Section I 7-Persons authorised to investigate-If investigation io be
conducted by the Central Bureau of Investigation-On order, any inspector
D of police attached to CBI can conduct the investigation-Officer to be of the
rank of Deputy Superintendent of Police is an exception.

Section 4(1 )-Issuance of notification-Empowering the Court to frame
charge-High Court did not check about the notification empowering the
Sessions Judge to frame the charge under the Act-Further it quashed the
E criminal proceedings on the Act-Further it quashed the criminal proceedings
on the ground that the Sessions Judge is not empowered to try the case-
Held, not correct.

Criminal Trial :

F Material sufficient to frame charge-Held, Court should not evaluate
evidence by deciding its worth-Materials adduced as evidence should be
sufficient for the Court to proceed further.

Interference with the case at the stage of trial-High Court scuttled the
proceedings at the stage of trial holding investigations illegal-Held, High """'"
G Court could have directed the respondent to participate in the trial.
Respondent acquired assets disproportionate to his known source of
income and failed to account for the excess of income. Trial Court ordered
framing charge under Section 13 read with Section 13 (1) (e) of the
Prevention of Corruption Act, 1988 and to proceed with the trial against the
II 726
STATE BY CENTRAL BUREAU OF INVESTIGATION 1•. S. BANGARAPPA 727
respondent. High Court quashed the order. Hence this appeal. A
Allowing the appeal, the Court

HELD: 1.1. When the pecuniary assets acquired by the public ser1ant
are disproportionately larger than his known sources of income, then he has
to account for such excess. The offence under Section 13 (1) (e) of the B
Prevention of Corruption Act, 1988 becomes complete on the failure of the
public servant to account or explain such excess. The Court can frame charge
until the public servant fails to explain the excess or surplus pointed out to
be the wealth or assets of the public servant concerned. The exercise can be
complete only in the trial. [736-B-C)

M Krishna Ready v. State Dy. Superintendent of Police, (1992) 4 SCC
c
45; K. Veeraswami v. Union of India, [1991) 3 SCC 655 and State of
Maharashtra v. Ishwar Piraji Ka/patri, [1996) 1 SCC 542, relied on.

1.2. At the stage of framing charge the Court should not enter upon a
process of evaluating the evidence by deciding its worth or credibility. The D
limited exercise during the stage is to find out whether the materials offered
by the prosecution to be adduced as evidence are sufficient for the Court to
proceed further. [735-G)

State of MP. v. Dr. Krishna Chandra Saksena, [1996) 11 SCC 439 and
Kanti Bhadra Shah & Anr. v. State of West Bengal, (2000) 1SCC722, relied on. E
1.3. There was no necessity for the High Court to have interfered with
the case at stage of the trial. When the trial court has chosen to decide that
the accused had to be tried for the offence, the High Court was not right in
making a meticulous scrutiny of the evidence proposed to be adduced by the
prosecution and scuttle proceedings of the trial without waiting for the trial F
to reach its normal culmination. (729-G I

1.4. When there is an order under the provision of Section 17 of

-- Prevention of Corruption Act authorising to investigate, any Inspector of
Police attached to the Central Bureau of Investigation can conduct the
investigation. The Word "elsewhere" in clause (c) of Section 17 of the Act is G
clear indication that the insistence for Deputy Superintendent of Police can
have application only if it does not fall under clauses (a) and (b) of the Act.
[732-E}

State of Haryana & Ors. v. Bhajan Lal & Ors., (1992] Supple. 1 SCC
335, referred to. H

..
728 SUPREME COURT REPORTS [2000) SUPP. 4 S.C.R.

A 1.5. High Court quashed the criminal proceedings initiated by the trial
Court under Section 13(2) read with section 13(l)(e) of the Act without
checking about the notification issued under Section 4(1) of the Act
empowering Sessions Judge to frame the charge against the respondent. If
the High Court found that the Sessions Judge is not empowered to try such
cases, it could transfer the case from that Court to the Court having
B jurisdiction to try the offence, and if no Court had been empowered till then,
the criminal proceedings couid be kept in abeyance till the Government issued
a notification conferring such power on any other Court. More so, since the
Court which ordered framing of charge against the respondent was legally
empowered to try the offence alleged against the respondent it is not necessary
C to keep the criminal proceedings in abeyance. (734-E-F] ·

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 997
of2000.

From the Judgment and Order dated 4.10.99 of the Karnataka High Court
D in Crl. A. No. 2229of1999.
Harish N. Salve, Solicitor General, A.D.N. Rao, A. Mariarputham and P.
Parmeswaran for the Appellant.

Kapil Sibal, V. Laxmi Narayanan and Dinesh Kumar Garg for the
E Respondents.
The Judgment of the Court was delivered by

THOMAS, J. Leave granted.

A case has been charge-sheeted by the Central Bureau of Investigation
F (CBI) against S. Bangarappa, one time Chief Minister of Kamataka State,
alleging that he had amassed wealth grossly disproportionate to his known
sources of income during a check period when he held public offices either
as Minister or Chief Minister. The offence under Section 13(2) of the Prevention
of Corruption Act, 1988, (for short 'the Act') was pitted against him, read with
G Section l 3(1 )(e) thereof on the ground that he was in possession of pecuniary
resources and assets so disproportionate that he could not satisfactorily
account for them. When respondent (S. Bangarappa) moved the High Court
of Kamataka for quashing the said criminal proceedings, a single judge of the
High Court, as per the order impugned in this cas~, quashed the same. This
appeal, by special leave, is at the instance of the CBI in challenge of the said
H order.
STATE BY CENTRAL BUREAU OF INVFSTIGATJON ''· S. BANGARAPPA [THOMAS, J.] 729

The check period is nearly a decade (between 9.8.1988 and 31.10.1997) A
during which the respondent held public offices either as MLA or as a
Minister in the State Cabinet or as Chief Minister of the State or as a Member
of Parliament. According to the CBI the total income which respondent had
from all his known sources of income, during the aforesaid period, was around
30 lakhs and after deducting his expenses (which were worked out approximately B
to be 22 lakhs) he could not have made a saving of more than 7 lakhs of
rupees. But the CBI found that during the said period the respondent had
acquired assets worth more than Rs. I, 16,00,000 (one crore sixteen lakhs) for
which he had no explanation whatsoever.

When respondent was brought before the trial court he pleaded for a C
discharge from the prosecution for which he raised various contentions. The
Special Judge heard arguments at that stage for a long time spreading over
to a number of days. He then passed a very detailed order (running into 57
closely typed pages) just for holding that "there is a primafacie case against
the accused person to frame charge under Section 13 read with Section
13( I)(e) of the Act and to proceed with the trial". D
Respondent then moved the High Court under Section 482 of the Code
of Criminal Procedure (for short the Code) challenging the aforesaid order.
Three contentions were mainly raised by him before the High Court. First was
that the investigation was not conducted in the manner specified under
Section 17 of the Act. Second was that the Court which ordered to frame the E
charge had no jurisdiction to try the case because no notification had been
issued under Section 4 of the Act. Third was that on the merits it is not safe
to rely on the statements alleged to have been made by some of the witnesses.

Learned Single Judge of the High Court upheld all the above three
contentions raised by the respondent and consequently the proceedings F
taken against him were quashed in full measure.

Shri Harish Salve, learned Solicitor General of India, contended that the
High Court has grossly erred on all the three points and there was absolutely
no necessity for the High Court to have interfered with the case at that G
preliminary stage. When the trial court has chosen to decide that the accused
had to be tried for the offence, he could not understand the wisdom of the
High Court in making a meticulous scrutiny of the evidence proposed to be
adduced by the prosecution .and to scuttle further proceedings of the trial
without waiting for the trial to reach its normal culmination. Shri Kapil Sibal,
learned senior counsel, who argued for the respondent, has fairly conceded H
730 SUPREME COURT REPORTS [2000) SUPP. 4 S.C.R.

A t.hat he could not validly countermand the contentions of the learned Solicitor
General of India in respect of the first and second points referred to above,
but he made a bid to sustain the order on the ground that there was no
sufficient materials to frame the charge.

Learned Single Judge reminded himself that public men should have .,-- .
B crystal clear and transparent personality and that "Caesar's wife must be
above suspicion". He made "a close scrutiny of the materials" and felt that
there is no option except to quash the proceedings against the respondent.
However, learned single judge made the following general observations:

"No doubt corruption affects the normal fabric of the society. The
c citizens loose their faith in the political leaders who shout that they
are for the people. No doubt many people go unpunished although
corruption causes considerable damage to the economy of the nation.
The roots of corruption are so deep that it is an uphill task to
eradicate them. It is only possible if and only if each citizen in our
D country follows the philosophy of contentment. To quench the thirst
of greed and lust one must be drenched in shower of honesty and the
fountain of sublime love should sprinkle the magical drops on the
eyes of everyone who has shut his eyes for the reality of the life.
Unless one tries to find a golden key to open the gates of wisdom,

E
the heavenly life remains as a myth and we are all making the futile
effort to attain divinity in our life. The public man should have crystal
clear and transparent personality. Caesar's wife must be above
--
suspicion."

Having been reminded himself of all such sublime thoughts on how to
eradicate the evil of corruption it would have been appropriate for the High
F Court to direct the respondent to participate in the trial to reach its logical
terminus by affording him the opportunity to explain or account for the excess
wealth projected by the investigating agency. But learned Single Judge,
instead of choosing that line, has chosen to scuttle the proceedings at the
beginning stage of the trial itself for which he had even upheld the contention
G that the investigation was illegally conducted.

For· arriving at such a finding learned Single Judge unfortunately
bypassed the factual position that the investigation was conducted by the
CBI and not the regular police of the State. It appears to us that learned single
judge assumed that investigation under Section 17 of the Act could be
H conducted only by an officer not below the rank of Deputy Superintendent
STATE BY CENTRAL BUREAU OF INVESTIGATION'" S. BANGARAPPA [THOMAS, J.] 73}

of Police whichever be the investigating agency. The reasoning of the learned A
single judge on that score is this:

"One can understand, if there is no mandatory provision, it is left to
the discretion of the Superintendent of Police to assign his work
provided the statute permits. But to investigate, Section 17 of the Act B
is mandatory in nature. No officer below the rank of Deputy
Superintendent of Police shall investigate the case. In case if he has
not carried on the investigation, there must be some order authorising
the other person to go on with the investigation in the case on hand.
This is the patent lacuna."
\ The above is the result of a wrong understanding of the scope of
c
Section 17 of the Act. If the investigation is to be conducted by the CBI the
legislative insistence for the rank of the officer to be not below that of Deputy
Superintendent of Police is given exception to. This can be discerned even
by a reading of the Section in its entfrety. We, therefore, extract Section 17
hereunder: D
"17. Persons authorised to investigate. Notwithstanding anything
contained in the Code of Criminal Procedure, 1973 (2 of 1974), no
police officer below the rank-
(a) in the case of the Delhi Special Police Establishment, of an E
Inspector of Police;
(b) in the metropolitan areas of Boinbay, Calcutta, Madras and
Ahmedabad and in any other metropolitan area notified as such
under sub-section ( 1) of se~tion 8 of the Code of Criminal
Procedure, 1973 (2 of 1974), of an Assistant Commissioner of F
Police;
(c) Elsewhere, of a Deputy Superintendent of Police or a police
officer of equivalent rank,
Shall investigate any offence punishable under this Act without
the order of a Metropolitan Magistrate or a Magistrate of the first G
class, as the case may 'be, or make any arrest therefore without
a warrant:
Provided that if a police officer not below the rank of an Inspector
of Police is authorised by the State Government in this behalf by
general or special order, he may also investigate any such offence H
732 SUPREME COURT REPORTS (2000] SUPP. 4 S.C.R.

A without the order of a Metropolitan Magistrate or a Magistrate
of the first class, as the case may be, or make arrest therefore
without a warrant:
Provided further that an offence referred to in clause (e) of sub-
section ( l) of section 13 shall not be investigated without the
B order of a police officer not below the rank of a Superintendent
of Police."

There is no dispute that CBI is a Delhi Special Police Establishment.
The Superintendent of CBI, Bangalore has issued the following order on
21.10.1997:
c I
"Under the provision of Section 17 of P.C. Act, 1988, Sh. B. Pannir
Salvem, Inspector of Police Establishment Division, Bangalore is hereby
authorised to investigate the said case against Sh. S. Bangarappa,
Member of Parliament and Former Chief Minister ofKamataka for the
offences under Section 13(2) read with l 3(l)(e) of Prevention of
D Corruption Act, 1988."

When there is such an order, any inspector of police attached to the
CBI can conduct the investigation. Learned single judge unnecessarily quoted
extracts from the decision of this Court in State of Haryana & ors. v. Bhajan
E Lal & ors., (1992] Supple. 1 sec 335 perhaps being misled in believing that
even when the investigation was conducted by CBI the requirement contained
in clause (c) of Section 17 of the Act has to be followed. The word "elsewhere"
in that clause _is clear indication that the insistence for Deputy Superintendent
of Police can have application only if it does not fall under clauses (a) and
(b). We do not wish to delve more into this aspect as Shri Kapil Sibal, learned
F senior counsel for the respondent, has fairly conceded that the High Court
has gone wrong on that aspect.

Learned single judge thereafter proceeded to consider the contention
that the Court concerned had no jurisdiction to try the case. While upholding
the said contention he has stated thus:
G
"There is no notification in this case that the XXI City Civil and
Sessions Judge was empowered to try this case. Mr. Tharanath, learned
counsel for respondent relied upon the decision popularly known as
Jayalalitha's case reported in (1999) AIR SCW 1579. The points involved
in that case are entirely different from the facts of this case. The very
H question. of appointing the Special Judge was challenged to try all
STATE BY CENTRAL BUREAU OF INVESTIGATION''- S. BANGARAPPA [THOMAS, J.] 733

cases against her. The Hon'ble Supreme Court has held that there is A
nothing wrong for the appointment of Special Judge to try all the
cases as the speedy disposal is one of the criteria. Hence, in my
opinion, by close scrutiny of the judgment cited by the learned counsel
for CBI is not applicable unless there is notification if any, to try such
case. Otherwise, it will be a trial without jurisdiction. In view ofthese B
facts and circumstances, I feel that there is some force in the
submission of the learned counsel for the petitioner."

We strongly feel that learned single judge has chosen to uphold the
contention in a very casual manner without taking into account the fall-out
of such a finding on other cases pending in that Court. Section 4(1) of the C
Act says that "Notwithstanding anything contained in the Code of Criminal
Procedure, 1973, or in any other law for the time being in force, the offences
specified in sub-section(!) of Section 3 shall be tried by Special Judges only."
I
Sub-section (2) enjoins on the Special Judge concerned to try every offence
specified in Section 3(1) of the Act. Power is conferred on the Central
Government as well as the State Government to appoint Special Judges. Such D
conferment can be discerned from Section 3(1) of the Act which reads thus:

"The Central Government or the State Government may, by notification
in the Official Gazette, appoint as many special judges as may be
necessary for such area or areas or for such case or group of cases
as may be specified in the notification to try the following offences, E
namely:-

(a) ;iny offence punishable under this Act; and

(b) any conspiracy to commit or any attempt to commit or any
abetment of any of the offences specified in clause (a)." p
On 13 .6.1990, the State Government of Kamataka had issued a notification
which is extracted below:

"In exercise of the powers conferred by sub- section(!) of Section 3
of the Prevention of Corruption Act, 1988 (Central Act 49of1988) and G
in partial modification ofNotification No.HD 192 PCR 82 dated 15/16th
February, 1982, No.HD 110 PCR 82 dated l ltr May, 1982 and all other
Notifications issued on the subject, the Government of Karnataka
hereby appoints the Sessions Judge specified in col. (2) of the table
below as Special Judge for the areas specified in the corresponding
entries of Col. (3) thereof for the cases instituted by the Delhi Special H
734 SUPREME COURT REPORTS [2000] SUPP. 4 S.C.R.

A Police Establishment in respect of the offences specified in the said
sub-section.

SL Name of the Area
No. Judge and Designation

B I. XXI Addi. City Civil and Bangalore District (including the
Sessions area Judge. Comprising city of Bangalore
declared as Metropolitan area
under the Code of Criminal
Procedure, 1973) and the District
of Bangalore Rural, Chittradurga,
c Kilar and Tamkur."
{

Then why did the learned single judge countenance that there was no
notification empowering the XXI City Civil and, Sessions Judge to try such
cases? We are greatly distressed at the degree of superciliousness with which
the contention was dealt with by the learned single judge without even
D checking up whether there was any such notification. That apart, if the High
Court found that XXI City Civil and Sessions Judge, Bangalore is not
empowered to try such cases, how could that be a ground to quash the
criminal proceedin~s? At the worst that would be a ground to transfer the
case from that Court to the Court having jurisdiction to try the offence, and
E if no Court has been empowered till then, the criminal proceedings can be kept
in abeyance till the Government issues a notification conferring such power
on any other Court. Any way, since the Court which ordered framing of
charge against the respondent was legally empowered to t~ the offence
!"
alleged against the respondent i~ not necessary to keep the criminal
proceedings in abeyance so far as this case is concerned. We may point out
F ·that on. this aspect also Shri Kapil Sibal, learned senior counsel did not
dispute the stand adopted by the Solicitor General of India.

Learned Single Judge then proceeded to discuss the merits of the
evidence in this case. He made detailed reference to the materials placed by
G the prosecution for supporting the charge. When it was contended by the
Solicitor General of India that such a detailed analysis at this stage was
unwarranted Shri Kapil Sibal pointed out that even the trial court did the same
thing for deciding whether the charge should be framed or not. It is true that
the trial court should have avoided discussing the materials in such details
when it has chosen to frame charge. This court has stated in Kanti Bhadra
H Shah and anr. v. State of West Bengal, [2000] I SCC 722 that when a trial court
STATE BY CENTRAL BUREAU OF INVESTIGATION 1•. S. BANGARAPPA [THOMAS ,J.) 735
decides to frame charge it is not necessary to record reasO{ls thereof. We A
extract the relevant observations from that decision.

"If the trial Court decides to frame a charge there is no legal requirement
that he should pass an order specifying the reasons as to why he opts
to do so. Framing of charge itself is prima facie order that the trial
judge has formed the opinion, upon considering the police report and B
other documents and after hearing both sides, that there is ground for
presuming that the accused has committed the offence concerned .
......... .. .. ... ..... ... ...... If there is no legal requirement that the trial court
should write an order showing the reasons for framing a charge, there
is no need to further burden the already burdened trial courts with C
such extra work. The time has reached to adopt all possible measures
to expedite the Court procedures and to chalk out measures to avert
all roadblocks causing avoidable delays."

Learned Single Judge considered the statement of CW-36 (Annappa)
and CW-37 (Puttappa) and a score of other witnesses cited by the prosecution. D
High Court then entered upon a finding that it is not safe to rely on the
statement of some of those witnesses. Learned Single Judge undertook the
said exercise on the ground that trial court also discussed the prosecution
case at length to reach the prima facie finding that the sale deeds in the names
of Annappa and Puttappa are benami transactions. He reached the finding
that the trial court had gone wrong in accepting the statements of the above E
witnesses.

Shri Harish Salve addressed arguments to show that the purchases
made by the respondent in the names of Annappa and Puttappa are all benami
transactions and all such properties are actually the properties of the
respondent. He referred to other materials for supporting his contention. Shri F
Kapil Sibal, on the other hand, made an endeavour to show that those
properties cannot be counted in the account of the respondent.

Time and again this Court has pointed out that at the stage of framing
charge the Court should not enter upon a process of evaluating the evidence G
by deciding its worth or credibility. The limited exercise during that stage is
to find out whether the materials offered by the prosecution to be adduced
as evidence are sufficient for the Court to proceed further. vide State of MP.
v. Dr. Krishna Chandra Saksena, [1996] 11 SCC 439.

We have no doubt that the materials which prosecution enumerated are H
736 SUPREME COURT REPORTS [2000] SUPP. 4 S.C.R.

A sufficient to frame the charge for the offence under Section 313(2) read with
Section 13(l)(e) of the Act.

No doubt the prosecution has to establish that the pecuniary assets
acquired by the public servant are disproportionately larger than his known
sources of income and then it is for the pubJic servant to account for such
B excess. The offence becomes complete on the failure of the public servant to
account or explain such excess, vide M. Krishna Reddy v. State Dy.
Superintendent of Police, [1992] 4 SCC 45 and P. Nallammal and anr. v. State,
[1999] 6 SCC 559. It does not mean that the Court could not frame charge until
the public servant fails to explain the excess or surplus pointed out to be the
C wealth or assets of the public servant concerned. This exercise can be
completed only in the trial. K. Veeraswami v. Union of India, {1991] 3 SCC <
655 and State of Maharashtra v. lswar Piraji Kalpatri, {1996] 1 SCC 542. In
the latter decision the Court held thus:

"The opportunity which is to be afforded to the delinquent officer
D under Sec. 5(l)(e) of the Act [corresponding to Sec.13(l)(e) of 1988 Act
satisfactorily explaining about his assets and resources is before the court
when the trial commences, and not at an earlier stage."

For the above reasons we set aside the impugned judgment of the High
Court. We direct the trial Court to proceed with the trial in accordance with
E law and to dispose it of as expeditiously as possible.

NJ. Appeal allowed.