Holding

The Supreme Court set aside the High Court's order, upheld the FIR and the letters rogatory, and held that the High Court lacked jurisdiction to quash the FIR and that audi alteram partem does not apply at the investigative stage.

Summary

The Supreme Court examined the Union of India's and CBI's challenge to a Delhi High Court order that quashed the FIR registered against W.N. Chadha in the Bofors scandal and set aside the letters rogatory issued to Swiss authorities. The Court held that the FIR disclosed a prima facie offence and that the High Court had no jurisdiction under Article 226 to quash it. It ruled that the issuance of letters rogatory by the Special Judge was lawful, that the rule of audi alteram partem does not apply at the investigative stage, and that the Special Judge had jurisdiction under Section 166A of the Criminal Procedure Code. The Court also rejected the High Court's reliance on confidential documents and its finding that the contract was bona fide. Consequently, the appeal was allowed, the High Court judgment was set aside, and the FIR and letters rogatory were reinstated.

Issues considered

The High Court's jurisdiction to quash an FIR under Article 226 of the Constitution.
Whether the issuance of letters rogatory violated the principle of audi alteram partem and natural justice.
Whether the Special Judge had jurisdiction to issue letters rogatory before Section 166A was enacted.
Whether the FIR prima facie disclosed any offence against W.N. Chadha.
The locus standi of public interest litigants and of the accused to challenge the FIR and letters rogatory.
The propriety of the High Court's use of confidential documents in reaching its conclusions.

Legislation cited

Bankers' Books Evidence Act, 1891s. 4, s. 5
Code of Criminal Procedure, 1973s. 166A, s. 166A (as introduced by 1990 amendment), s. 166B, s. 397, s. 401, s. 482
Constitution of Indias. Article 21, s. Article 22, s. Article 226
Foreign Exchange Regulations Act
Income Tax Act
Indian Penal Code, 1860s. 120B, s. 161, s. 162, s. 163, s. 164, s. 165A, s. 409, s. 420, s. 468, s. 471
Prevention of Corruption Act, 1947s. 5(1)(d), s. 5(2), s. 5(2)/5(1)(c)

Subjects

FIR quashletter rogatorynatural justiceaudi alteram partempublic interest litigationlocus standicriminal procedureBofors scandalSwiss bank accountsArticle 226

Judgment

A UNION OF INDIA AND ANR.
v.·
W.N. CHADHA

DECEMBER 17, 1992

B [S. RATNAVEL PANDIAN AND K. JAYACHANDRA REDDY, JJ.]

Code of Criminal Procedure, 1973-Sections 166A, 166B and 448-Let-
ter rogatory-lssuance or-Principle of audi a/teram partem-Applicability
of-Jurisdiction of High Court to quash FIR.
c Constitution of India, 1950-Article 226-High Coult in writ jurisdic-
tion-Whether entitled to quash FIR.

Public Interest Litigation-Prosecution-:-Locus to initiate as well as
resist withdrawal-Public interest litigation-:-Applicability to criminal proceed-
D ings.

Natural Justice-Doctrine of-Audi alteram partem-Rule-Ap-
plicability of-In issuance of letter rogatory.

Criminal Trial-:-Bofors case-Jurisdiction of High Court to quash FIR.
E
Practice and Procedure-Expunction qf remarks by High Court-When
arises.

Words and Phrases-Letter rogatory-Meaning of.

F The respondent W.N. ~hadha was residing at Dubai in United Arab
Emirates (UAE). He had his first agreement in 1978 with M/s A.B. Bofors
to provide representation services to it in India with regard to supply of
arms and ammunitions to the Indian Government, and it was extended
from time to time until the end of 1985.
'!'-

G In January, 1986, Bofors and Anatronic General Corporation '
Private Ltd. which was promoted by the respondent entered into a consult-
ancy agreement with Bofors in respect of its business in India. The case of
the respondent was that at no stage neither he nor any of hi~ concerns was
made an agent of Bofors, nor did he enter into negotiation with the
H Government of India on behalf of Bofors or commit or bind Bofors to any
594

~· -·. .
U.0.I. v. W. N. CHADHA 595

agreement or arrangement with the Government ~f India, and that he was A
to render administrative consultancy services of Bofors.

In August, 1980, the Ministry of Defence, approved a proposal
forwarded by Army Headquarters recommending the introduction of 155
mm Calibre medium guns both towed and self-propelled to. meet its
defence operational requirements. The choice for purchasing the said B
guns was shortlisted in December, 1982 to M/s Sofma of France, Mis A.B.
Bofors of Sweden, M/s International Military Services of U.K., and Mis
Yoest Alpine of Austria.
. . .

In April, 1984 the Cabinet Committee on Political Affairs approved C
the proposal for procurment of 155 mm guns along with reiated equip-
ments and ammunition at a total estimated cost of its. 1600 crores, and in
May, 1984 a Negotiating Committee comprising the Defence Secretary,
Scientific Adviser, Secretary Expenditure, Financial Adviser and Deputy
Chief of the Army Staff was set up which. started its delibration in June
1984 and decid~d that otters should be invited from the aforesaid four D
shortlised firms, and on 4th March, 1986 the Negotiating Committee
·expressed the view that Bofors gun had a clear edge over the Sofma gun
of France with which view the then Deputy Chief of the Army Staff also
agreed.

On 12th March, 1986 the Negotiating Committee recommended that
E
a letter of intent might be issued to Bofors to the effect that the Govern-
ment of India would be willing to award the contract to them subject to
the condition of being satisfied on all aspects of the purchase, licenced
production, credit and other arrangements. Finally, the order was placed
by the Government of India on 24th March, 1986 for the supply of 410 F
numbers of 155 mm Field Hewitzer 77-B gun system.

On 17th April, 1987, some newspapers in India gave pro~inent
coverage to the Swedish Radio Broadcast made on the previous day,
broadcasting that bribes have been paid to senior Indian politicians and
key Defence figures to win the Government of India contract awarded to ·G
Bofors on 24th March, 1986.

The aforesaid news item was again broadcast by Swedish Radio on
17th April, 198'7 claiming that it had documentary proof of pay-offs in 4
instalments to the Indian accounts in Swiss Banks. This news item was H
596 SUPREME COURT REPORTS [1992) SUPP. 3 S.C.R.

A refuted by Bofors denying the allegations of paying any kickback to Indian
Politicians or officials in respect of the deal.

On the 20th April, 1987 the then Minister· of Defence made a suo-
motu statement in the Lok Sabha that the Government of India did not
employ any representative/agent for the contract and added that for ad-.
B ministrative services ex. hotal bookings, transportation etc. the services of
a local firm was used. A similar statement was also made in the Rajya
S~bha on 21st April, 1987.

The issue created a furore both in the Lok Sabha and the Rajya
·sabha arid several issues were also raised by Membe~s about the quaiity
and suitability of the gnns selected for procurement.

On 20th April, 1987 the then Prime Minister intervening in the
debate in the Lok Sabha remarked that if evidence were brought regarding
involvement of middleman of payoffs or bribes or commi.ssions it will be
D seen that nobody however high up is allowed to go free.

A demand was made for a probe into the matter by a Parliamentary
Committee. When the matter stood thus the Swedish Embassy in India
fonvarded a copy of the report dated 1st June, 1987 of the Swedish
E National Audit Bureau with a note to the Ministry of External Affairs that
only a part of the report was .being made available on account of the
Swedish bank secrecy requirement.

On 28th August, 1987 the Joint Parliamentary Committee was set up
to make a probe into the matter and it submitted its report on 22nd April,
F 1988 with its conclusions and also with the dissenting note of one of its
members. The report was presented to the Lok Sabha on 26th April, 1988
and laid on the table of the Rajya Sabha on the same day.

There was a change in the Government. On 22nd January, 1990 the
G Superintendent of Police, CBI, registered a FIR under Section 120(8) read
with Sections 161, 162, 163, 164, and 165-A of the IPC read with Section
5(2), 5(1)(d) and 5(2)/5(1)(C) of the Prevention of Corruption Act, 1947
read with Sections 409, 420, 468 and 471 IPC against 14 accused of whom
three were named and the rest of the 11 accused were stated in general as
Directors/employees/hold.ers/beneficiaries.of account code and public ser-
H vants of the Government of India. The respondent was named accused
U.0.1. v. W. N. CHADHA 597

no.3. The First Information Report gave a detailed sequence of events A
relating to the purchase of guns from M/s A.B. Bofors of Sweeden and
various allegations regarding the payment of bribes/kickbacks and receipt
of illegal gratification and payments deposited by Bofors in three code
named accounts viz. "Lotus" in Suisee Bank Corporation, "Tulip" in
Manufacturers Hannover Trust Company, and "Mont Blanc" in Credit
Suisee, all in Geneva, Switzerland. It summed up that the facts and B
circumstances set out in the FIR disclose that the named and unnamed
accused persons and others had entered into a criminal conspiracy during
1982-1987 in pursuance of which the accused public servants obtained
illegal gratification in the form of money from Bofors, the Swedish Com-
pany, and by corrupt or illegal means or otherwise dishonestly abusing c
their Official position as public servants caused pecuniary advantage to
themselves, Bofors, the agents and others in the matter of processing and
award of the contract to Mis Bofors.

After the registration of the case, the Director CBI by his letter
dated 23rd January, 1990 followed by another letier dated 26th January, D
1990 requested the concerned authority in Switzerland for freezing/block-
ing certain bank accounts relevant to the case on which the Federal
Department of Justice and Police, Switzerland moved a Geneva and a
Zurich Judge who froze certain bank accounts on 29th January, 1990.
E
On 2nd Februery, 1990 the second_, appellant CBI requested Shri
R.C. Jain, Special Judge, Delhi, to issue a letter rogatory/r.equest to Swit-
zerland urgently for getting the necessary assistance so that the investiga-
tion can be conducted in Switzerland lest very important relevant evidence
would remain uncollected and the cause be frustrated.
F
The Special Judge after hearing the prosecution by his order dated
5th February, 1990 allowed the application of the CBI to issue the letter
rogatory.

The Examining Magistrate of Geneva decided on 26th March, 1990
though deciding to accept the aforesaid letter of request, on a challenge by G
two of the affected parties, the Criminal Court of Canton Geneva held that
the request for mutual judicial assistance presented by India did not in its
form satisfy the requirement of Article 28 of the Federal Act on Interna-
tional Mutual Assistance in the Criminal Matters and sent back the letter
rogatory for compliance of certain procedural formalities. H
598 SUPREME COURT REPORTS (1992] SUPP. 3 S.C.R.

A Thereafter, the CBI Submitted another applicatie)n to the Speciai
Judge on 16th Auglist, 1990 praying for issuance of an amended letter
rogatory to the competent judicial authority in the Confederation of Swit-
zerland.·

On 13th August, 1990 an Advocate Shri H.S. Choudhary claiming to
B be the General Secretary of an Organisation Rashtriya Jan Parishad - as
a public interest litigant tiled an application before the Special Judge
seeking certain prayers inclusive of not tO issue letter rogatory on the
request of theCBI unless the allegations against the named persons are
.established. and that no request for freezing the bank account be made to
.c Swiss Government etc~ . .

The Special Judge Shri V.S. Aggarwal dismissed the petition of the
advocate holding that he bad no locus standi. A criminal revision petition
was filed by H.S. Choudhary before the High Court which came up for
hearing before Justice M.K. Chawla who by his order dated 19th Decem-
D her, 1990 dismissed the petition holding that the petitioner had no locus
standi but the Single Judge took suo moto cognizance of. the matter in
exercise of power vested under Sections 397 and 401 read with Section 482
of the Code of Criminal Procedure and directed the issuance of show
cause notice to the CBI and the State as to why proceedings initiated on
E the filing of th~ FIR before the Special Judge be not quashed.

Shri H.S. Choudhary, 'the Union of India and several political par-
ties preferred appeals challenging the findings and correctness of the
order of Justice M.K. Chawla.

F . This Court by its order dated 27th August, 1991 allowed the appeal
of the Union of India and quas~ed the suo moto action of the High Court,
and by a detail_ed judgment rendered on 28th August, 1992 giving reason
in justification of the earlier order; confined the question only with regard
to the scope and object of public interest· litigation and the suo moto
G . exercise and inherent powers of the. High Court and held that H.S
Chowdhary did not have any locus standi to challenge the veracity of the
FIR and proceedings arising there~n and quashed the show cause notice
issued to the CBI and the State.

After this first round of public interest litigation was lost by Shri
H H.S. Chowdhary, Shri W.N. Chadha, the person who was one of the named

(
I
U.0.1. v. W. N. CHADHA 599

accused in the FIR entered into the arena and preferred a Criminal Writ A
-----... Petition before the High Court through his pairokar Shri S. Nandi of
Jlelhi challenging the legality and validity of the FIR ·dated 22nd January,
1990, the letter rogatory issued the Special Court by its order dated 5th
February, 1990 and the amended letter rogatory issued by the Special
Court on 21st August, 1990 and praying for quashing the FIR and all
.. other proceedings arising thereon• B

The appellants filed their counter affidavit in the main writ petition
and written submissions refuting all the challenges made by the respon-
dent. Though the High Court rejected many of the submissions on behalf
of the respondent, it allowed the writ petition on certain findings from c
various documents in letter dated 29.11.1985 of thf' then Chief of Army
Staff, report of the JPC, and the approval of the· CCPA in 1984.

The High Court held that there were no allegations even in the FIR
that any favour was shown by the Negotiating Committee to Mis A.B.
Bofors, in the FIR, no public servant has been named as accused in the D
absence of any public servant being brought as an accused the respondent
cannot be treated as an abettor, the respondent cannot be held to have
acted· as a middleman, he never represented on behalf of Bofors in the .
finalisation of the gun contract, no offence under any of the provisions as
mentioned in the FIR was made out, no offence under Section 409 or
E
under any other Sections of IPC was made out, no suit or any arbitration
proceeding had been initiated for recovery of the alleged commission.

In the result, the High Court allowed the writ petition and quashed
the impugned FIR, the letter rogatory issued on two occasions and other
proceedings taken and orders passed in pursuance of the said FIR. F
In the appeal to this Court the main grievance of the appellant •
UOI and CBI, was that the High Court without assimilating the averments
made in the FIR in the proper perspective and on a misconception that
the entire proceedings were plagued by procedural wrangles and con-
troversies entered· into the realm of conjectures and surmises and G
redered the manifestly erroneous findings, arrived at conclusions by over-
stepping its jurisdiction and thereby prevented crucial evidence from ever
surfacing which evidence otherwise could have been unearthed and to
collected to establish the allegtions made in the FIR, that there is no legal
bar in having requested the Special Court to issue letters rogatory/request H
J
600 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A for assistance to .co111petent judicial authorities in the confederation of
Switzerland for investigation and collection of evidence for solving the
.Bofors ~ystery because th_e investigating agency, viz. _the CBI has to
establish the names of the beneficiaries, the quantum of the amounts they
-were paid and the nature of their services even .by cutting through the
thicket of legal tangles. It was further s11bmitted that a bare perusal of the
B FIR manifestly demonstrates that huge payments have been depO!iited in
.the account of Svenska . Inc in Swiss Bank Corporation, the principal
·-
beneficiary of which is the i:espondent ~ W.N. Chadha, and that ther~ is a
clear
/
link.. between
. Svenska Inc.
.
Panama and Anatronic
-
General
. . Corpn.
. of
which tlie respondent is ~dmittedly the President.
c.
Cr!.M.Ps. were .
~lso tiled. .by S/Shri
. .
}>rashant - .
BhQs~an,
' .
George Fer-
nandes
.
and
•··.
Jaswant
.- . .
Singh
.
and it was
·_.
contended
.
that
.. . . .·
the.-
three
,·
petitioners
had preferred their respectiye SLPs as public interest litigations, touched
upon the .merits of the case ~nd supplements the suhl1lissioo of the UOI.
It was st~ted. that .there was repetitive attempts .of the .respondent to
b frustrate and fillbuster the proceedings ·of the prosecuti~n firstly through
H.S. Chowdhary as h's pro~ raising the ·same issues and secondly
through his Pairokar after having become unsuccessful in his · first at·
.tempt, and.· that the respondent. residing. in United Arab Emirates has
committed serious violation of the· provisions of the Foreign Exchange
E Regulations Act and Income Tax Act by keeping his account in foreign
country and that the FIR contains.suffi(:ient allegations that the respon-
dent had received huge amount for himself and for passing off to the
public servants ..·

F The· appeal and the petitions were contested on behalf of the respon·
dent, ~y contending that the entire allegations in the FIR do not constitute
any offence against any of the accused much Jes~ against him and they are
all frivolous, baseless and nQthing more than mud slinging. Further, the
conduct of the investigation agency in requesting the court to issue letter
rogatory and the authority of the Special Court in issuing letter rogatory
G on 5/7th February, 1990 and subsequently the· ratified letter rogatory
issued on 21/22nd August, 1990, indicates that.the entire criminal proceed·
ing is an aimless voyage or a roving expedition with oblique motive and
that the respondent has been caught in a political cross fire and which
smacks of .,ersonal vendetta. and in which he has absoiutely no role to I
H play.
L

/
U.O.I. v. W. N. CHADHA 601

A Crl.M.P. was filed by Shri K Madhavan Joint Director and A
Special Inspector General, CBI who was in charge of the investigation of
the case along with some other officers, that the High Court had taken a
serious note of a piece of paper pasted by the CBI on the letter rogatory
forwarded by the Special Judge to the Cantonal Court of Geneva, and
expressed its view that _the action of the Officer of CBI amounts to
tampering with the judicial records and disapproved the said action of the B
Officer. It was submitted that this disparaging observation was made by
the High Court without giving Mr. Madhavan any opportunity to explain
the circumstances under which the piece of paper was pasted.

On the questions whether: c
(A) The issuing of letter rogatory is opposed to law and violative of
the principles of natural justice and thereby has become liable to be
quashed.

(B) the issuing of letter rogatory is vitiated by non application of D
mind by the Special Judge, and (C) The First Information Report prima
facie discloses any offence against the respondent - W.N. Chadha, and is
there any material prima f acie connecting the respondent with the dealings
of Bofors in relation to the purchase of gun?

Allowing the appeal, this Court E
HELD: A.(1) 'Letter Rogatory' is a formal communication in writing
sent by a Court in which action is pending to a foreign Court or Judge
requesting the testimony of a witness residing within the jurisdiction of
that foreign Court may be formally taken thereon under its direction and
transmitted to the issuing Court making such request for use in a pending F
legal contest or action. This request entirely depends upon the Comity of
Courts towards each other, that is to say, on the friendly recognition
accorded by the Court of one nation to the laws and usages of the Court
of another nation. [634-B,C]
G
Collins English Dictionary : Black's Law Dictionary : Webster's En-
cyclopaedic Unabudged Dictionary of the English Language, referred to.

2. In the instant case, it is seen from the records that the First
Information Report was laid before the Special Court on 22nd January,
· 1990. On 23rd January, 1990, the request was made by the Director of CBI H
602 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A followed by another letter of request dated 26th January, 1990 to the
concerned authorities in Switzerland for freezing, blocking certain bank
accounts relevant to the case. The Federal Department of justice and
Police, Switzerland moved the judge of Geneva and the concerned Judge
of Zurich who on being prim a f acie convinced of Jo al criminality 11nd the
need for investigation in Switzerland froze the relevant bank accounts on
B 26th January, 1990 as intimated by the Federal Department.of Justice and
Police through the Embassy of India in Switzerland. As these bank ac-
counts have been blocked upto 28th February, 1990, it became necessary
for freezing the accounts beyond the said date. The mutual assistance
agreement dated 20th February, 1989 necessitated the sending of a letter
C rogatory to Switzerland urgently for getting the necessary assistance for
the investigation to be conducted in Switzerland lest very valuable and
relevant evidence would remain uncollected and the cause of Justice would
suffer. It was only under those pressing circumstances that the DSP, CBI
the Investigating Officer submitted an application on 2nd February, 1990
D before the Special Judge praying issue .of letter rogatory with certain
enclosures for assistance to the competent judicial authorities in the
Confederation of Switzerland. The Special Judge after satisfying himself
accepted the request and by order dated 5th February, 1990 issued letter
rogatory request enclosing therewith the copies of certain documents on
7th February, 1990 to the competent judical authorities in the Confedera-
E tion of Switzerland. The Federal Department of Justice and Police, Berne
found the letter rogatory in order and forwarded the same to the Examin-
ing Magistrate of Geneva who after satisfying himself in respect of the
letter rogatory accepted the same on 26th March, 1990 and commenced
the Investigation as requested. While it was so, two of the affected parties
F in Geneva filed appeals to the Criminal Court of Canton of Geneva which
passed an order on 3rd July, 1990 on the appeals, expressing its view that
the letter r.ogatory did not in its form satjsfy the requirement of Article 28
of the Federal Act of the International Mutual Assistance in Criminal
Matters and annulled the order of admissibility of mutual judicial assis·
tance handed down by the Examining Magistrate on 26th March, 1990 and
G sent back the letter rogatory for compliance of certain procedural· for-
malities. This order dated 3rd .July, 1990 was submitted to the Special
Court in India on 16th August, 1990 with some enclosures since the CBI
got the copy of the order dated 13th August, 1990 from the Delhi Ad·
ministration. [634-D-H; 635·A·G]
H

!
U.O.l. v. W. N. CHADHA 603

3. In the second application dated 16th August, 1990 the CBI re~ A
quested the issue of an amended letter rogatory request. The Special
Judge who took charge of the Special Court issueft note of compliance and
amended letter rogatory on August 22, 1990. [635-H]

4. At the time when the first letter rogatory was sent by Special'
Judge Section 166-A of the Criminal Procedure Code was not in vogue. It B
was only thereafter an Ordinance viz. the Cri.minal Procedure Code
(Amendment) Ordinance, 199o was promulgated coming into force from
19th February, 1990. Section 166-A(1) was introduced. Thereafter the
Criminal-Procedure Code Amendment Act of 1990 was enacted on 20th
April, 1990 conferring power only on the CrirniD.al Court but not of the (
Investigating Officer or any Officer superior to the rank of the Investigat-
ing Officer to issue a .letter of request to a foreign country for collection
of evidt!nce. [636-B,C]

-· The-High Court proceeded on the ground that the Special Judge had
not complied with the principle of audi alteram partem and also had not L
applied his mind to the facts and circumstances of the case before issuing
letters rogatocy, in the matter and quashed the issuance thereof. [637-E]

5. The amended letter rogatory issued on 22nd August, 1990 has got
legal sanction under Section 166-A of the Criminal Procedure Code not· I
withstanding the fact that this provision was not in the statute on 5th
February, 1990. [637-G]

6. The rule of audi a/teram partem is not attracted unless the impugned
order is shown to have deprived a person of his liberty or his property. In the
~
instant case, no such consequences have arisen from the letter rogatory. If
the letter rogatory is accepted by the foreign Court and acted upon it will then
disclose only the relevant facts about the identity of the account holders,
quantum of the amounts standing in the names of the individual account
holders representing the credit of Bofors i:noney and the nature of such
accounts. The follow up consequences would be that the corpus of the offence (
would be preserved intact from preventing, the withdrawal of the money from
those accounts or closure of the accounts by the account holders till the merit
of the case is decided. [639-B,C]

7. The Special Judge in Delhi is not possessed with any power or
authority to deprive the liberty of the respondent residing out of the
604 SUPREME COURT REPORTS [1992) SUPP. 3 S.C.R.

A jurisdiction of the Indian Courts and having his property in question in
the foreign country. Only ·in a case where a public officer has got such a
power the question of fair play in action will be attracted. [639-D]

8. The rule of audi alteram partem is a rule of justice and its
application is excluded where the rule will itself lead to injustice. There is
B exclusion of the application of audi alteram partem· rule to cases where
nothing unfair can be inferred by not affording an opportunity to present
and meet a case. This rule cannot be .applied to defeat the ends of justice
or to make the law 'lifeless, absurd, stultifying and self-defeating or
plainly contrary to the common sense of the situation' and this rule may
C be jettisned in very exceptional circumstances where compulsive necessity
so demands. (639-F-H] ·

A.S. de Smith's Judicial Review of Administrative Action, 4th Ed. at
page 184; Smt. Maneka Gandhi v. Union of India, (1978) l SCC 248;
Schmidt v. Sec~etary of State for Home Affairs, (1969) 2 Chancery Division
D 149; Wiseman and Anr. v. Borneman and others Law Reports 1971 Appeal
~ses 297; Pear/berg v. Varty (Inspector of Taxes) 1972 "I Weekly Law
Reports 534; Regina v; Barnet and Camden Rent Tribunal Ex.p.Frey Invest-
ments Ltd. Law Reports (1972) 2. Q.B.D. 342; Herring v. Templeman and
Ors., (1973) 3 All England Law Reports 569; R v. Peterborough Justice ex.p.
E Hicks, (1977) 1 W.L.R. 1371; Indian Explosive _Ltd. (Fertiliser Division)
Panki, Kanpur v. State of Uttar Pradesh and Ors., (1981) 2 L.LJ. 159 and
Norwest Holst Ltd. v. Secretary of State for Trade, (1978) 1 Ch.Div. 202,
refer~ed to.

9. When the investigating is not deciding any matter exctpt collect-
F ing the material~ for ascertaining whether a plima f acie case is 1,pade out
or not and a full enquiry in case of filing a report under Section 173(2)
follows in a trial before the Court or Tribunal pursuant to the fili~g of the
report, it cannot be said that at that stage, rule of audi alteram partem
superimposes an obligation to issue a prior notice and hear the accused
G which the sta~ute does nt>t . expressly recognise. The question is not
wh~ther audi alteram partem is implicit, but whether the occasion for its
attraction exists at all. {641-G,H]

10. Under the scheme of chapter XII of the Code of Criminal
Procedure, there are various provisions under which no prior notice or
H ·opportunity of being heard is conferred as a matter of causP- to an accused
U.0.I. v. W. N. CHADHA 605

person while the proceeding is in the stage of an investigation by a police A
officer. The field of investigation of any cognizable offence is exclusively
within the domain of the investigating agencies over which the courts
cannot have control and have no power to stifle or impinge upon the
proceedings in the investigation so long as the investigation proceeds in
compliance with the provisions relating to investigation. [642-A-C]
B
State of Haryana v. Bhajan Lal, [1992] Suppl. 1 SCC 335 at 359;
Emperor v. Khwaja Nazir Ahmed, AIR 1945 PC 18 and State of Bihar v.
JA.C. Saldanha, (1967] 3 SCR 668, referred to.

11. The accused has no right to have any say as regards the manner and C
method of investigation. Save under certain exceptions under the entire
scheme of the Code, the accused has no participation as a matter of right
during the course of the investigation of a case instituted on a police report
till the investigation culminates in filing of a final report under Section
173(2) of the Code or in a proceeding instituted otherwise than on a police
report till the process is issued under Section 204 of the Code, as the case may D
be. Even in cases where cognizance of an offence is taken on a complaint
notwithstanding the said offence is triable by a Magistrate or triable ex·
elusively by the Court of Sessions, the accused has no right to have participa·
tion till the process is issued. In case the issue of process is postponed as
contemplated under Section 202 of the Code, the accused may attend the
subsequent inquiry but cannot participate. [642-E-F) E

12. So long as the investigating agency proceeds with his action or
investigation in strict compliance with the statutory provisions relating to
arrest or investigation of a criminal case and according to the procedure
established by law, no one can make any legitimate grievance to stifle or F
to impinge upon the proceedings of arrest or detention during investiga-
tion as the case may be, in accordance with the provisions of the Code of
Criminal Procedure. (644-B]

13. It may be stated that there is no question of attachment of money
of the respondent or any of the accused, named or unnamed, standing to G
the credit of the account holders in Swiss banks linked with Bofors but it
was only freezing ~f the accounts as per the request made by the Director,
CBI by his letter dated 23th January, 1990 and followed by another letter
dated 26th Janua.ry, 1990 and thereafter pursuant to the request through
letters rogatocy for judicial assistance i~ SWitzerland. But for the request HJ
606 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A made by the letter rogatory, the Swiss law obliges withdrawal of all the
instructions to block the account. [644-D]

14. When the respondent himself has not come forward with any
specific case stating as to what was the quantum of the amount standing
to his credit in Swiss banks and in w~at manner he is now a~eved by
B the letter rogatory and in what way he is now deprived of his properties,
it is incomprehensible as to how the High Court has come to the con-
clusion that the respondent is deprived of his property. Similarly, any one
of the other named or unnamed accused or any third party, not named in
the FIR, has not come forward with a complaint of grievance on account
c of the freezing of the accounts. (644-H, ·645-A,B]

15. Merely because the Speeial ·Judge heard counsel for the CBI
before issuing letter rogatory the respondent cannot make such a com-
plaint that he should have also been given prior notice to present his case.
The stage of investigation is only at the door. The order sought for from
D the Special Judge by the CBI is only for process of judicial assistance from
the competent judicial authorities in the Confederation of Switzerland for
investigation and collection of evidence. In such a case the accused bas no
right to raise the voice of opposition. (646-C,D]

16. The facts and circumstances of the instant case do not attract
E
the audi alteram partem rule requiring a prior notice and an opportunity
of being heard to the respondent. The respondent has never been
prejudiced and deprived of his right to property due to the alleged non-
compliance of the principle of audi alteram partem. [646-E]

F B.(1) After having gone through the orders of the Special. Court
dated 5th February, 1990 and 21st August, 1990 and all the connected
records placed before the Court, the Special Judges cannot be found fault
to have issued letter rogatory casually or mechanically but only applying
their mind and on being satisfied that the FIR constitutes a congnizable
G offence or offences that a "competent officer under the Code of Criminal
Procedure has made a request for issuance of letter rogatory. [650-C,D]

. 2. There is no other option except to hold that the High Court has
used confidential documents which the Court were not to have used for the
reasons, firstly those documents are stated to have been daimed as secret
IH documents, and secondly ignoring the request of the CBI said to have been
U.0.1. v. W. N. CHADHA 607

made and without notice to the appellants herein. Besides free use of the A
documents, some portion of the documents are extensively quoted. The
only inescapable inference that could be drawn in those circumstances
would be that the High Court has made up its mind as to the expediency
of quashing the letter rogatory and thereafter has conveniently made use
of those documents for the end product. [649-H; 650-A]
B
3. Absolutely no reason is seen to sustain the conclusion of the High
Court that the issue of the letter rogatory suffers from non application of
mind by the Special Judge.

Kekoo J. Maneckji v. Union ofIndia, (1980) 86 Cr. U 258, referred to. C

4. The order of the High Court quashing the letter rogatory dated
5/7th February, 1990 and the rectified letter rogatory dated 21/22nd
August, 1990 issued in pursuance of the orders passed by the Special
Judge are unhestitatingly set aside. (650-D]
D
5. The respondent who is a named accused in the FIR has no locus
standi at this stage to question the manner in which the evidence is to be
collected. However, it is open for the respondent to challenge the admis-
sibility and reliability of the evidence only at the stage of trial in case the
investigation ends up in filing a final report under Section 173 of the Code
indicating that an offence appears to have been committed. (652-D] E

6. A scrutiny of the judgment demonstrably shows that the High
Court has gone through some original records which by their very nature
could not have been made available by the respondent. The original
documents were produced by the Government in a sealed cover for the F
Court's perusal with an oral request not to reveal the documents to the
other side and to make use of them in the judgmen~ besides orally
claiming privilege. However the High Court has not only referred to these
documents but also very much relied upon them. In fact, the High Court
has reproduced a relevant portion of the letter dated 29.11.1985 of the then
Chief of Army Staff and also a portion of the minute of the Negotiating G
Committee recorded on 4th March, 1986, and drew its final conclusion
regarding the procedure followed from the very proposal of the contract
till its finalisation was in accordance with the well established Procedure.
Based on the correspondence exchanged between Bofors and the
authorities of the Government of India and the opinion of the then Attor- H
608 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A ney Genera) of India contained in paras 8.6 and 8.16 of the report of the
JPC the High Court held that the petitioner (W.N. Chadha) cannot be
called _a middleman as he never represented on behalf of Bofors for the
finalisation of the contract. [653-F,H]

7. According to the High Court, when there is no reference to any
B agent or middle man in the contract and when the procedure followed for
finalisation of the contract has been perfect, there can be no case of
cheating under Section 420 IPC or abetment of cheating against the
respondent as well as under any of the penal provisions mentioned in the
FIR. As there' is no aJJegation of wrongful gain or loss levelled against any
C of the named and unnamed accused by Bofors or their agents barring the
media reports, there is no question of offences under Secti~ns 468 and 471
having been committed. Further in the absence of any material indicating
criminal breach of trust, there cannot be any offence under section 409
IPC even on the basis of the allegations as contained in the FIR. The non
filing of any suit and the failure to initiate any arbitration proceeding for
D the recovery of the alleged commission by the Government support the -
conclusion that there is no breach of trust. [656-E,G]

C.(1) The Court is constrained to observe that it is terribly shocked
on seeing that the High Court· bas gone out of its authority and over-
E stepped ·its province by making use of certain original records -and then.
on the basis of the said records proceeded to examine the entire procedure
followed right from ·the proposal up to- the finalisation of· the contract •
between Bofors and Government of India and its genuineness and bona
fide and ultimately atf'lxed its seal of judical approval holding that the
F contract is perfect and bona fide. It has waded through the entire original
records produced before it by the Government for its perusal and on the
strength of those documents raised the two questions, namely, whether the
proper procedure in the execution of the contract was followed and
whether the contract finalised was perfect and bona fide-and answered
--
them in the affirmative, and in favour of the respondent and prejudicial
G to the appellants. [656-H; 657-A-C]

2. The High Court was not at all justified in making use of those
documents for its findings especially in a case of this nature where there
are serious and outrageous allegations. One is therefore constrained to
H observe that the High Court has prejudged the issued and thereby laid
U.O.I. v. W. N. CHADHA 609

down the foundation for its subsequent findings for quashing the entire A
proceedings. [657-F]

3. There is no doubt every court has its plenary powers to deliberate
upon every issue agitated before it as well as any other issue arising on the
materials placed before it in the manner known to law after giving a prior
notice and affording an opportunity of being heard. This power of dis- B
charging the statutory functions whether discretionary or obligatory
should be in the interest. of justice· and confined within the legal permis-
sibility. In doing so, the Judge should disengage himself of any irrelevant
and extraneous materials which come to his knowledge from any source
other than the one presented before him in acc;ordance with law and which C
are likely to influence his mind one way or the other. [657~G, HJ

4. When the entfre matter is only at a preliminary s~ge and when
the investigation has yet to go a long way to gather the requisite evidence
the Court cannot come to a conclusion one way or the other on the plea of
ma/a fide at such a stage. Further in case the investigation discloses that D
the entire proceeding has been initiated only with malafides, probably the
prosecution itself may throw the case overboard; [662-A,B)

Janta Dal v.B.S. Chowdhary, [1991) 3 SCC 756 • [1992) 4 SCC 305
arid Sheonandan Paswan v; State of Bihar, [1987) 1SCC288, referred to.
E
5. There was no tampering of judicial letter rogatory but only addi-
tional particulars were furnished for ready reference of the names of the
account holders as contained in the letter dated 26th January, 1990. Even
if it is to be held that the piece of paper should not have been pasted, leave
apart the explanation offered since Shri V.S. Aggarwal has approved the F
letter rogatory with the pasted piece of paper on being satisfied of the
circumstances under which it was pasted, the CBI cannot be ostracised.
(664-F,G]

6. It must be noted by pasting that slip Shri Madhavan has not
added any additional information on his own. Therefore, the rema.-k of the G
High Court, as prayed for in the Cr.M.P. is expunged. In view of this
finding, held that the High Court was not ~orrect in holding that this has
amounted to tampering of judicial records. [664-H]

7. The CBI all through is maintaining stoic silence unmindful of all H
610 SUPREME COURT REPORTS (1992] SUPP. 3 S.C.R.

A the scornful criticism and villification levelled against it, and is relentless-
ly and tirelessly fighting all the litigations so that it can successfully
proceed with the investigation and collect all the materials to espouse the
cause of justice. To ·say that the prosecution has failed to name any one of
the public servants as ari accused even after 31 months from the registra-
tion of the case, is a very uncharitable criticism. A survey of the various
B proceedings of this litigation reveals that the investigating agency, viz. CBI
was fettered at every stage and made to spare its energy more in Court
proceedings than in proceedings with the investigation. Only if the inves-
tigation is freely allowed without any hindrance, the investigating agency
can collect all the requisite particulars and bring the names of those
c public servants on record, the secrecy ofwhich, it is said, is deeply buried
in various places and under various Departments. (665-F-H]

8. Proceeding under the Passport Act cannot have any bearing in
this proceeding initiated for quashing the FIR even though the impound-
ing of the passport is to secure the presence of the respondent for the
D investigation purposes in connection with the case on hand. (666-G]

9. The self contradictory findings of the High Court itself gives a
frontal attack to the impugned judgment, rendering it unsustainable both
in law and fact.
E
10. It is now shown that the Swiss authorities are coming forward to
give full co-operation and assistance in the collection of evidence at their
end. Therefore, when all those are extending their helping hands though
so far yet so close, there is no reason to forestall the investigation. [670-B]

F 11. There are certain provisions in the Cr.PC which authorise a
police officer to register a case and investigate the matter if there is any
reason to suspect the commission of an offence or reasonable suspicion of
commission of an offence. The expression 'reason to suspect' as occurring
in section 157(1) is not qualified as in Section 41(a) and (g) of the Code,
G wherein the expression "reasonable suspicion" is used. Therefore, what
section 157(1) requires is that the police officer should have reason to
suspect with regard to the commission of an offence. (670-E,F]

12. The JPC itself has felt some suspicion as regards the existence
of middleman. This gives room for a probe especially when there is scope
H of getting sufficient assistance to make the probe. (670-C]
U.O.I. v. W. N. CHADHA [PANDIAN, J.] 611

13. The investigation is only at an infant stage and it has to go a long A
way to collect all the materials. Only after requisite particulars are col-
lected by the investigating agency, the further course of action would be
decided. Whatever it may be, without the battle lines being properly drawn
the Court will not be justified in making any further positive pronounce-
ment on the merits of the serious and cloudy issues involved in this case
de hors the findings recorded in this judgment, [673-B,C] B

14. In spite of the finding of this Court inlanata Dal, the High Court
has grossly erred in quashing the FIR, the same has resulted in a glaring
injustice, namely, that the investigation into grave and serious crime has
got scotched and all the efforts so far taken by the investigating agency in C
digging out the requisite evidence got hurried. [673-FJ

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
567 of 1992.

From the Judgment and Order dated 2.9.1992 of the Delhi High D
Court in Crl. Writ No.· 501 of 1991.

WITH

Crl. M.P. Nos. 4999, 5201, 5160 of 1992.
E
Altaf Ahmed, Ashok Bhan and C.V.S. Rao for the Appellants.

Rajendra Singh, Dinesh Mathur, Ashok Grover, Rahul P. Dave,
Krishan Kumar and Ms. Ruby Anand for the Respondent.

The Judgment of the Court was delivered by F

S. RATNAVEL PANDIAN, J. The above appeal is preferred before
this Court challenging the judgment of the High Court of Delhi dated 2nd
September 1992 rendered in Criminal Writ No. 501/91 knocking down the
very registration of the First Information Report and all the proceedings G
arising thereon including the issue of letters rogatory in the second round
of the bout of this litigation.

The first round of the litigation came before this Court on an appeal
preferred by Sh. H. S. Chowdhary challenging the order of the learned
Single Judge, Justice M.K. Chawla of the High Court of Delhi dated 19th H
612 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A December, 1990 dismissing his petition on the ground that he has no locus
standi to file his petition and a few other appeals preferred by the Union
of Ind1a·and some political parties which had been seriously litigated before
this Court on the earlier occasion and resulted in the pronouncement of
an order dated 27th August 1991, :giving only the conclusions and the final
judgment on 28th AtiguSt 1992 vide Janta Dal v. H.S. Chowdhary (1991] 3
B sec 756 '!" _(1992 ] 4 sec 305 the decisions of which were rendered by this
Bench.

_ The synoptical resumptfon of the case, of the prosecution leading to
the initiation of the proceedings in:dusive of the organic synthesis of the
C events and the circumstances veering the case have been encapsuled and
presented in the order and judgment of thi~ Court rendered in the first
round of the batch of appeals. -Nonetheless, to assimilate the controversial
issues both legal and factual involved, we would like to give a terse sketch,
shorn of the detailed facts of the case, as borne out from the records, which
has given rise to this appeal.
D
The respondent, namely, W.N. Chadha who is now residing at Dubai
in United Arab Emirates (UAE) had his first agreement in 1978 with Mis
AB. Bofors (hereinafter referred to as 'Bofors') to provide representation
services to it in India with regard to supply of arms and ammunition to
E Indian Government. The terms of the said representation services agree-
ment were extended from time to time until the end of 1985. However, in
January 1986, Bofors and Anatronic General Corporation Private Ltd. (for
short 'AGC') promoted by the respondent entered into a consultancy
agreement in 1986 with Bofors in respect of its business in India. According
F to the respondent, at no. stage he or any of his concerns was made agent
of Bofors.. S~ilarly, he or his .concern was not entitled to· enter .into
negotiations wi_th Government of India o.n behalf of Bofors or to commit
or to bind Bofor.s to any agreement or arrangement with the Government
of India but as stated supra, he was to render administrative consultancy
services to Bofors.
G
The Ministry of Defence; Government of India approved in August
1980 a proposal forwarded by Army Headquarters recommending, inter-
alia, the introduction of 155 mm calibre medium guns both towed and
self-propelled to meet its defence operational requirements. The choice for
H purchasing the said guns was shortlisted in December, 1982 to (1) M/s

'--
U.O.L v. W. N. CHADHA [PANDIAN, J.] 613

Sofma of France, (2) M/s A.B. Bofors of Sweden (Bofors), (3) M/s Inter- A
national Military Services (IMS) of U .K. and (4) M/s Yoest Alpine of
l.ustria.

In April 1984; the Cabinet Committee on Political Affairs ('CCPA'
for short) approved the proposal for procurement of 155 mm guns along · B
with certain related equipments and ammunition at a total estimated cost
of Rs. 1600 crores. In May 1984, a Negotiating Committee comprising of
the Defence Secretary as the Chairman, Secretary (DP&S), Scientific
Adviser to Raksha Mantri (i.e. Secretary, Research and Development),
Secretary (Expenditure), Additional Secretary, Department of Economic
Affairs, Financial Adviser, Defence Services and the Deputy Chief of Army C
Staff as Members was constituted for detailed negotiations with the various
suppliers.

The Negotiating Committee started its deliberation in June 1984 and
decided that fresh sealed technical and commercial offers should be invited D
from the four shortlisted firms. After the offers were received from the
aforesaid four firms, technical and commercial negotiations were held with
all the said firms iind thereafter revised offers were invited and the same
were received on 1st September. Offers were also invited from the ammuni-
tion manufacturers. After seeking certain clarifications from. the aforesaid E
firms with a view to evaluate the offers of alJ the competitions, all the four
firms submitted fresh commercial offers on 10th May 1985. Thereafter,
members of the Negotiating Committee requested the Army Headquaters
to give their recommendations of the guns acceptable to them taking into
account the technical aspects, delivery schedule etc. and dearly indicate
their preference from amongst the acceptable guns. The then Deputy Chief F
of the Army Staff told the committee that the French gun was the best and
the Swedish gun was the second best and that if the price difference was
marginal, they should go for the former. The recommendations of the Army
Headquarters to shortlist only Mis Sofma of France and M/s A.B. Bofors
of Sweden for further negotiations were accepted by the Ne,gotiating
Committee which, however, felt that the choice between the two was open G
and it would depend on a combination of technical and financial considera·
tions. The above two shortlisted firms were called for negotiation in the
middle of December 1985. Three ammunition manufacturers were also
called in the middle of January 1986. The commercial, contractual and
technical aspects of purchase and licence production were negotiated with
the said two firms. H
614 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A On 4th March 1986, the Negotiating Committee expressed the view
that Bofors gun had a clear edge over Sofma gun of France with which
view the then Deputy Chief of the Army Staff also agreed. On 12th March
1986, the Negotiating Committee recommended that a letter of intent might
be issued to Bofors to the effect that the Government of India would be
willing to award the contract to them subject to the condition of being
B satisfied on all aspects of the purchase, licensed production, credit and
other arrangements. Finally, the order was placed by the Government of
India to Bofors on 24th March, 1986 for the supply of 410 numbers (400
plus 10 free) of 155 mm ·Field Howitzer 77-B gun system/spare guns vide
contract No. 6 (9)/84/D (GS-IV) for a total amount of SEK 8410.66 million
·c (Swedish Kroners) equivalent to abount Rs. 1437.72 crores. The related
conctract for supply of the gun package (towed) and other related agree-
ments/contracts were concluded, approved and signed on 24th March 1986
with Bofors.

D On 17th April 1987, some newspapers in India gave prominent
coverag~ to a Swedish Radio broadcast made on the previous day, broad-
castig that bribes had been paid to senior Indian politicians and key
Defence figures to win the contract awarded by the Government of India
to Bofors on 24th March 1986.

E The above news item was again broadcast by Swedish Radio on 17th
April 1987 claiming that it .had documentary proof of pay-offs in four
installments to Indian accounts in Swiss banks and it had checked with
Skandinaviska Enskilds Banken, the bankers for Bofors. This news item
was refuted by Bofors denying the allegations of paying any k!ckbacks to
F Indian politicians or officials in respect of the deals. The Government of
India also issued a statement on 17th April 1987 itself denying the allega-
tions of payments of alleged kickbacks. On 20th April 1987, Shri K.C. Pant,
the then Minister of Defence made a suo-moto statement in the Lok Sabha
stating inter-alia, that the Government of India did not employ any repre-
sentative/agent for the contract and added that "for administrative services,
G e.g. hotel bookings, transportation, forwarding of letters, telexes etc., they
use 'the services of a local firm". The then Defence Minister added that "if
any evidence is produced inv~lving violations of the law, the matter will be
thoroughly investigated and the guilty, whoever they may be punished." A
similar statement was also made by the Minister of State for Defence in
H the Rajya Sabha on 21st April 1987.
\,
- U.O.I. v. W. N. CHADHA [PANDIAN, J.] 615

This issue created furore both in the Lok Sabha and the Rajya Sabha. A
Several issues were raised by the Members of both houses not only with
regard to the alleged kickbacks paid by Bofors for winning the contract but
also about the quality and suitability of the gun selected for procurement.

On 20th April 1987, Shri Rajiv Gandhi, the then Prime Minister of
India intervening in the debate in the Lok Sabha reaffirmed the statement B
of Minister for Defence in the following words:

"........And like Panditji has said now, you show us any
evidence, we do not want proof. We will bring the proof.
You show us any evidence that there has been involvement c·
of middlemen, of payoffs or of bribes or commissions; we
will take action and we will see that nobody however
high-up is allowed to go free."

Again the then Minister for Defence made the assurance based on
the statement of the then Prime Minister. D
A demand was made by the Members of both Houses - Lok Sabha
and Rajya Sabha - to make a probe into the matter by a Parliamentary
Committee. When the matter stood thus, on 4th June, 1987, the Swedish
Embassy in India forwarded a copy of the report dated 1st June, 1987 of
the Swedish National Audit Bureau ('SNAB' for short) with a note to the E
I

Ministery of External Affairs, Government of India, stating that what is
made available to the Government of India was only one part of the report
of the SNAB but not the report in its entirety and the rest was withheld by
the Government of Sweden on Jhe bank secrecy requirement. (The sum-
mary of the observations of sNAB is extracted in the Report of Joint F
Parliamentary Committee).

It may be noted that the said Report did not disclose the names of
the recipients of the kickbacks. The then Prime Minister after having the
discussion about this matter with the Leaders of the opposition parties on
17th June, 1987 decided to request to the Speaker of the Lok Sabha and G
the Chiarman of the Rajya Sabha to set up a Joint Parliamentary Commit-
tee (for short JPC). As both the Speaker and the Chairman declined to set
up the JPC on their own motion, on 29th June, 1987 the then Minister for
Defence (Shri K.C. Pant) moved a motion in the Lok Sabha for appoint-
ment of the JPC, and added in justification of the constitution of the same H
A
616 SUPREME COURT REPORTS [1992) SUPP. 3 S.C.R.

that "The Government has nothing to hide. The Government wants to get
at the truth and that is why this Committee has b.een set up." Accordingly,
-
the JPC was constituted. on 28th August, 1987 to make a probe into the
above allegations. The. JPC submitted its Report on 22nd April, 1988 with
its conclusions and also with the dissenting note of one of its members. The
said Report of the JPC was presented to Lok Sabha on 26th April, 1988
B and then laid on the table of the Rajya Sabha on the same day. Inspite of
the report of the JPC, the allegations of malpractices in the deal with
Bofors, payments of kickbacks and receipt of illegal gratification were
persistently reiterated and the matter was reJentlessly agitated. In the
meanwhile, there was a change in .the Government.
c
Thereafter, · on 22nd January, .1990 the Superintendent of· Police;
CBI/DSPE/ACU-IV, New Delhi registered the impugned First Information
Report in Cr4ne No. RC l(A)/90/ACU-IV under Section 120-B read with
Sections 161, 162, 163, 164 and 165-A of the Indian Penal Code read with
D Sections 5 (2), 5 (l)(d) and 5(2)/5(1)(c) of the Preventation of Corruption
Act, 1947 read with Sections 409, 420, 468 and 471 of the Indian Penal
Code against 14 accused of whom three are named, they being (1) Shri
Martin Ardbo, former President of M/s A.B. Bofors, ·Sweden, (2) Shri
Chadha alias Win Chadha, S/o Shri Assa Nand, President of M/s Anatronic
General Corporation/Anatomic General Companies Ltd., C/4, Main
E Market, Vasant Vihar, New Delhi and Shri G.P. Hinduja, New Zealand
Hoi.lse, Hay Market, London SW-1. The rest of the 11 accused are stated
in general as Directors/employees/holders/beneficiaries of account code
and public servants of the Government of India. The prefatory note of the
First Information Report reveals that the case was registered •ion the basis
F of reliable information received from certain sources, certain facts and
circumstances that have become available, media reports, report dated 1st
June 1987 of the Swedish.National Audit Bureau (SNAB), ·certain facts 11

cqntained in the report dated 22nd April, 1988 of the Joint Parliamentary ':.1
i'
Committee (JPC) and the report dated 28th April, 1988 of the Comptroller
and Auditor General of India (CAG)". Tlie First Information Report gives
G a detailed sequence of the events relating to the purchase of gtms from M/s
\)
A.B. Bofors, Sweden and the related agreements entered thereupon in ,.
violation of the Government's policy i.e. not to involve any agent and the '
existing Iaw of this land. Various allegatioq.s are mentioned in the FIR \
regarding the payi;nent of bribes/kickbacks and receipt of illegal gratifica- l ,_
H tion. It is furtlJ,er averred in the First Information Report that .even in the
U.O.I. v. W. N. CHADHA [PANDIAN, J.] 617

letter dated 3.10.86 sent to the Swedish National Bank, Bofors had referred A
to some of the payments to Svenska Inc. and the code name 'Mont Blane'
as· "commission payments" and that the payment to M/s Mores-
co/Moineao/SA.JPitco, Geneva was deposited by Bofors in three code name
accounts, namely, '"Lotus" in Suissee Bank Corporation, 2 Rue de law
Confederatio 1204, Geneva "Tulip" in Manufacturers Hannover Trust
Company, 84 Rue du Rhone, 1204, Geneva and "Mont .Blane" in Credit B
Suissee, 2 Place Belle Air, 1204, Geneva and that these payments to code
name accounts are without mentioning or disclosing the payers' names.
Ultimately, reference was also made in paragraph 112 of the FIR to the
· statement of Mr. Thulholm, Chairman of Noble Industries.
c
In the FIR, it is summed up that the facts and circumstances set out
in the FIR disclose that the above named and unnamed accused persons
and others had entered into a criminal conspiracy at New Delhi and other
places during 1982-87 ~n pursuance of which the accused public servants
obtained illegal gratification in the form of money from Bofors, a Swedish
company through the agent firms/companies/persons as motive or reward D
for such public servants who by corrupt or illegal means or by otherwise
dishonestly abusing their official position as public servants caused
pecuniary advantage to themselves, Bofors, the agents and others in the
matter of the said contract finalised on 24th March 1986 and that there is
reason to believe that in pursuance of the said criminal conspiracy, the
impugned payments were made by Bofors and obtained by the above E
firms/companies/persons as gratifications and as motive or reward for their
inducing or having induced, by corrupt or illegal means or by the exercise
of Personal influence, the said public servants of the Government of India
in the matter of processing and award of the said contracts to Bofors and
that the public servants had also abetted the same.
F
After the registration of the case, the Director, CBI by his letter
dated 23rd January, 1990 followed by another letter dated 26th January,
1990 requested the concerned authority in Switzerland for freezing/block-
ing certain bank accounts said to be relevant to the case, on which the
Federal Department of Justice and Police, Switzerland moved a Geneva G
and a Zurich Judge who froze certain bank accounts on 29th January, 1990.
It was, however, pointed out that the relevant accounts would remain
frozen till 28th February, 1990 and that further necessary assistance would
be rendered only on receipt of the letter rogatory from a competent judicial
authority in India. H
618 SUPREME COURT REPORTS (1992] SUPP. 3 S.C.R.

A On 2nd February, 1990, the second appellant (C.B.I.) requested Shri
.:r
R.C. Jain, Special Judge, Delhi to issue a letter rogatory/request to Swit-
zerland urgently for getting the necessary assistance so that the investiga-
tion can be conducted in Switzerland lest very important and relevant
evidence would remain uncollected and the cause of justice would be
frustrated.
B
The Special Judge after hearing the prosecution allowed the applica-
tion by his order dated 5th February, 1990. The said order reads thus :

"In the result, the application of the CBI is allowed to the
extent that a request to conduct the necessary investigation
c and to collect necessary ewi.dence which can be collected
in Switzerland and to the extent directed in this order shall
be made to the Competent Judicial Authorities of the
Confederation of Switzerland through the Ministry of Ex-
ternal Affairs, Government of India subject to the filing of
D the requisite/paper undertaking required by the Swiss Law
and assurance for reciprocity."

It appears that though the Examining Magistrate of Geneva decided
on 26th March, 1990 to accept the letter of request, on a challnege by two
.of the affected parties, the Criminal Court of Canton of Geneva held that
E the request for mutual judicial assistance presented by India did not in its
form satisfy the requirement of Article 28 of the Federal Act on Interna-
tional Mutual Assistance in Criminal Matters (for short 'IMAC') and sent
back the letter rogatory for compliance of certain procedural formalities.
Thereafter, the CBI submitted another application to the Special Judge on
16th August, 1990 praying for issuance of an amended letter rogatory to
F the competent judic,:ial authority in the Confederation of Switzerland. It was
also prayed to have the~ptoceedings on this application in camera since the
proceedings arising thereon involve sensitive aspects. By that time, Shri
V.S. Aggarwal assumed charge as Special Judge in place of Shri R.C. Jain.
~-

It was at this relevant time i.e. on 13th August, 1990 Shri H.S.
G Chowdhary, an. Advocate claiming to be the General Secretary of an
Organisation named as Rashtriya Jan Parishadas a public interest litigant
filed Criminal Miscellaneous Case No. 12of1990 before the Special Judge
seeking certain prayers inclusive of not to issue letter rogatory on the
request of the CBI unless the allegations against the named persons are
H established and that no reque~t for freezing bank account be maC.e to Swiss
U.0.l. v. W. N. CHADHA [PANDIAN, J.] 619

Government etc. The details of the prayers are given in our judgments in A
[1991] 3 SCC 756 and [1992] 4 SCC 305. The Special Judge, Shri V.S.
Aggarwal dismissed the petition of Shri H.S, Chaudhary on 18th August
1990 holding that he has no locus standi. Then the Special Judge for the
reasons mentioned in his order issued (1) Note of compliance and (2)
Amended Letter rogatory on August 21, 1990.
B
It may be recalled that H.S. Chaudhary filed a criminal revision
before the High Court of Delhi which came up for hearing before Justice
M.K. Chawla who by his order dated 19th December, 1990 dismissed the
revision petition holding that H.S. Chaudhary had no locus standi to
present the revision but took suo moto cognizance of the matter in exercise C
of powers vested on him under Sections 397 and 401 read with Section 482
of the Criminal Procedure Code and directed the issuance of show cause
notice to the CBI and the State calling them "as to why the proceedings
initiated on the filing of FIR No. RC 1 (A)/90/ACU-IV dated 22.1.90
pending in the Court of Shri V.S. Aggarwal, Special Judge, Delhi, be not D
quashed."

On being aggrieved by the order of Justice M.K. Chawla, H.S.
Chaudhary preferred an appeal challenging the findings of the High Court
that he had no locus standi and the appellant herein (Union of India) and
several politieal parties such as Janata Dal, Communist Party of India E
(Marxist) and Indian Congress (Socialist) preferred appeals canvassing the
correctness of the order of Justice M.K. Chawla taking suo moto cog-
nizance and issuing notice calling upon the CBI and the State to show cause
as to why the proceedings initiated on the strength of the FIR be not
quashed. One independent writ petition was also filed for the same relief F
· as sought for by the political parties. This Court by its Order dated 27th
August, 1991 allowed the appeal of the Union of India and quashed the
suo moto action of the High Court but reserved the reasons to be given
later on vide Janata Dal v. H.S. Chowdhary, (1991] 3 SCC 756. Thereafter,
this Bench rendered its final judgment on 28th August, 1992 giving the
reasons in justificatioin of its earlier order. In the final judgment, this Court G
confined the question only with regard to the scope and object of public
interest litigation and the suo moto exercise and inherent powers of the
High Court and ultimately held that H.S. Chowdhary did not have any locus
standi to challenge the veracity of the First Information Report and the
proceedings arising thereon and quashed the show cause notice issued to H
620 SUPREME COURT REPORTS {1992] SUPP. 3 S.C.R.

A the CBI and the State. However, in the earlier Order itself, we expressed
our view as regards the right of parties aggrieved by initiation of criminal
proceedings.to challenge.the said proceedings, in the following words:

"Even if there are million questions of law to be deeply
gone into and examined in a criminal case of this nature
B registered against specified accused persons, it is for them
and them alone to raise all such questions and chclnenge
the proceedings initiated against them at the appropriate
time before the proper forum and not for third parties
u~der the garb of public interest litigants."
c After the first round of the bout (i.e. the public interest litigation)
was lost by H.S. Chowdhary, Shti W.N. Chadha, the respondent herein who
is one of the named accused in the FIR has entered into the arena by
preferring Criminal Writ No. 501 of 1991 before the High Court of Delhi
through his pairokar, Shri S. Nandi of Delhi challenging the legality and
D validity of the First Information Report dated 22nd January, 1990 and the
letter ·rogatory . issued by the Special Court vide its order dated 5th
February, 1990 and the amended letter rogatory issued by the Special
Court on 21st August, 1990 and praying for quashing. of the F.I.R. and all
other proceedings aris·ing thereon inclusive of the letters rogatory and for
restraining th.b' appellants from further proceeding in the investigation on
E the basis of the FIR.
It appears from the ju(;igment . of the High Court that a volley of
attacks had been triggered on against th~ entire criminal pr~ceedings
inclusive of the registration of the case, the main contention of which are
as follows:
F
(1) The report of the JPC pertaining to the subject matter
of the inipugned FIR would constitute a legal bar not only
for the registration ofthe FIR and the continuation of the
investigation in pursuance of it but also for any further
., inquiry or investigation by the CBI or trial of any offence
G with regard to the subject matter of the proceedings in
question which had been deeply gone into by the JPC and
finally decided as borne out from the Report of the JPC.

(2) The first Information Report does not disclose the
H commission of any offence and at .any rate againf t the
U.0.1. v. W. N. CHADHA [PANDIAN, J.] 621

respondent even assuming that the respondent had A
received certain amount by way of winding up char-
ges/commission through some other company.

(3) The very fact that no civil case has yet been filed by the
Governmen.t of India for recovery of the so-called commis-
sion in India and elsewhere by invoking the arbitration B
clause of th.e contract, the entire controversy is to be held
as being based on mere conjectures. and surmises.

(4) The report of the JPC clearly reveals that the Bofors
gun was best amongst the other available guns and was
offered at the minimum price.
c
(5) Though 31 months have passed by since the registratjon
of the FIR, no public servant has been brought on record
as accused so far.
b
(6) The FIR was conceived with a ma/a fide motivation of
the persons in authority and the criminal proceeding has
been initiated with an oblique purpose.

(7) The letters rogatory are liable to be quashed on the
grounds; firstly that the Special Judge had no jurisdiction E
to issue letter rogatory and secondly he had not complied
with the principle of audi alteram partem in the sense that
he failed to issue notice to the respondent who is a named
accused in the FIR and to afford him a reasonable oppor-
tunity of being heard before issuing letter rogatory on 5/7th F
February, 1990
.
as well on 21/22nd.
August, 1990.

(8) The Special Judge had erred.both in law and on fact in
issuing the letters rogatory. as he failed to appreciate that
the FIR does not disclose the involvement of the accused
persons whose properties are attached and rights are af- G
• fected by the letters rogatory .

(9) The allegations in the F.l.R do not constitute any
offence against the respondent warranting an investigation,
leave apart the question ~f dual criminality~ H
622 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A In addition to the above contentions, the respondent has also raised
some more legal contentions before the High Court, those being:

(1) That the Memorandum of Understanding (MOU)
entered into between India and Switzerland is neither a
Treaty nor an enforceable contract between the two
B Governments.

(2) The Memorandum of Understanding is incompetent
because India's Ambassador in Switzerland has no
authority to negotiate or execute such a document.

c (3) The Memorandum of Undertanding was not sub-
sequently ratified by the President of India or by the
Parliament.

The appellants besides filing their counter affidavit to the main writ
D petition made their written submissions refuting all the challenges made by
the respondent.

The High Court rejected the contention of the respondent that MOU
is not a Treaty holding, "We do not find any merit in this contention."
Similarly, the High Court rejected the second contention of the respon-
.E dent that the Ambassador of India in SWitzerland has no authority to
negotiate and execute the MOU holding that such a contention "is also
without merit in view of the letter of credence, a copy of which has been
annexed by the respondents along with their additional written submis-
sions." As regards the contention that the, MOU was not ratified, it has
been held "We also do not find any merit in the third contention that MOU
F was not ratified by the President or Parliament as there is no express
provision in !vfOU envisaging its ratification".

Dealing with the contention .raised on behalf of the respondent that
the Report of the JPC constitutes a bar to the registration of the FIR and
the continuation of the investigation, the High Court observed as follows:
.G
"Since there is no provision in the Code of Criminal Pro-
cedure barring investigation by CBI in a case where the
matter has been inquired into by JPC, we do not find any
merit in this contention. But JPC being a High Power
H Committee of both Houses of Parliament and having gone
U.0.1. v. W. N. CHADHA [PANDIAN, J.] 623

into substantial evidence we are of the opi,nion that we also A
cannot totally ignore the conclusions arrived at by the JPC."

The above observation shows that the High Court did not favour the
contention that the report of the JPC constitutes a legal bar for the
registration of the FIR and continuation of the investigation.
B
Though the High Court rejected some of the submissions made on
behalf of the respondent as abovementioned, allowed the writ petition on
the other grounds and gave the followings findings drawing strength from
various documents, namely, the letter dated 29.11.1985 of the then Chief
of Army Staff, report of the JPC, the approval of the· CCPA in 1984
regarding the proposal for procurement of 155 mm guns along with certain C
related equipments and ammunition, the negotiations of the Negotiating
Committee comprising of high ranking officials, the report of the Comp-
troller and Auditor General of India dated 26th April, 1989 containing the
comments regarding the engagement of agents in the Bofors deal, the
opinion of the then Attorney General, embodied in the JPC Report etc.
The findings are: D
1. The decision regarding the finalisation of the contract
with Bofors was taken in accordance with well established
procedure.

2. Bofors had brought down their price compared to the E
competitive Sofma and gave other concessions amounting
approximately to Rs. 10.5 crores even after the issuance of
letter of intent. All this clearly shows that the procedure
adopted for finalisation of the contract with Bofors was
perfect and bona fide.
F
3. There is no allegation even in the FIR that any favour
was shown by the Negotiating Committee to M/s A.B.
Bofors.

4. In the FIR, no public servant has been named as an
G
accused.

5. Though no stay was granted to proceed with the inves-
tigation, even after expiry of more than 31 months from the
date of the registration of the FIR, CBI has failed to name

.. any public servant as an accused. H
624 SUPREME COURT REPORTS .(1992} SUPP. 3 S.C.R.

A . 6. In the absence of any public servant being brought as an
accused, the respondent cannot be treated as an abettor.

7. As Bofors, as borne out from the reconls, bas been
cor.responding directly with the authorities of the Govern- .
ment of India, the respondent cannot be held to have acted
B as a middleman; The respondent never represented on
behalf of Bofors in the finalisation of the contract and if at
all anybody is alleged to have played any role in the finalisa-
tion of the contract, it is AE Services Ltd. with whom the
association of the respondent has· not been· alleged even in
c the FIR.

8. The dominant factors in the finalisation of the contract
were the price and quality of the gun system.

9. No offence under any of ~he proVisions as mentioned in
D the F.LR. is made out.

10. No offence either under Section 409 or under any other ·
sections of IPC is made out in the F.l.R. No suit has been
filed or any arbitration proceeding has been initiated for
recovery of the alleged com~ssion. ·
E
The High Court has also made reference to the Judgment of this
Court 28th August, 1992 (Supra) in which this Court after examining the
FIR did not agree with a positive assertion of Justice M.K. Chawla stating
"that the FIR filed by the CBI in this case on the face of it does not disclose
any offenee." For proper understanding, we would like to reproduce the
F earlier ·observatiOn of this Court in the above cited case which reads as
follows:

'We have carefully and scrupulously gone through the First
Information Report and we are unable to share this view
of Mr. Justice Chawla, quite apart from the other grounds
G
oil which the accused may like to attack the First Informa-
tion Report."
,' :·

After .making reference .to the above ·Observation, the High Court in
its impugned judgment has recorded the following finding in unequivocal
H and unambiguous terms:
11111
U.O.l. v. W. N. CHADHA [PANDIAN, J.] 625

"With respect, we are also of the view that it may not be correct A
to say that the FIR on the face of it does not disclose any
offence against any one, named or unnamed accused. ·

(emphasis supplied)

Notwithstanding of the above specific fmding, the High Court B
rendered the following conclusion:

"But while dealing with the issues raised by the petitioner,
in this case, we have come to the conclusion that if the
allegations made in the FIR are read by themselves or along
with the conclusions by JPC (which was a high powered
c
committee, representing both Houses of P::rliament),
which are based on evidence collected by the said Com-
mittee and conclusions arrived at by us, explained herein-
above, which are again based on the records of .the case,
and further that CBI has failed to name any public servant D
as an accused in the case, even after the expiry of more
than 31 months from the registration of the case, as ex-
plained earlier, no offence is made out against the
petitioner under Sections 120B, IPC read with Sections 161,
162, 163, 164 and 165A of the IPC read with Section 5(2)/5
(1) (d) and 5(2)/(5)(1) (c) of the Prevention of Corruption
E
Act, 1947 read with Sections 409, 420, 468 and 471 IPC."

In the result, the High Court allowed th~ writ petition and quashed
the impugned First Information Report, the letters rogatory issued on two
occasions and other proceedings taken and orders passed in pursuance of F
the said FIR by its impugned judgment dated 2nd September, 1992.

It appears from the judgment under challenge that after the judg-
ment was reserved by the High Court, an application being Crl. M. 334· of
1992 was filed by Shri Prashant Bhushan, Advocate as a public interest
litigant expressing his grievance that no proper submission was made as G
regards the legality of the issue of letter rogatory and the competence of
the Special Court in issuing the same. Such submissions were made in the
form of a written argument. The High Court after issuing notice to the
counsel for the CBI as well as the respondent herein and hearing the
parties held that all the relevant points mentioned in the written argument H
~
626 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A filed by Shri Prashant Bhushan were fully argued by the counsel for the
CBI and, therefore, the allegations made against the counsel for CBI are
unfounded and accordingly disposed of that application.

The facts and the sequ~nce of events of this case which we have
chronologically narrated more in a summary way than in describing the
B galaxy of facts in detail in order to avoid prolixity clearly show ·that while
Shri Harinder Singh Chaudhary was seaking quashing of the letter
rogatory, FIR and all other proceedings arising thereon as a public interest
litigant on behalf of the accused named and unnamed inclusive of this
respondent in the FIR, the respondent (W.N. Chadha) was inexplicably
C silent but only after Harinder Singh Chaudhary had miserably become.. .
unsuccessful in his attempt of thwarting the criminal proceedings even at
the door step on the gound that he had no locus standi, the respondent
(W.N. Chadha) has come out of his shell - that too - through his Paiorkar
and challenged the criminal proceedings raising various questions which,
of couse, are available to him de hors the questions which have already
D been decided and CQncluded by this Court during the first round of
litigation. In fact, we ourselves in our earlier order dated. 27th August 1991
have expressed the view ~hat it is only for the aggrived parties inclusive of
this respondent to agitate .and challenge the criminal-proceedings at the
appropriate time before the proper forum.
E
The appellants, namely, the Union of India through its Secretary,
Ministry of Home Affairs, New Delhi and the Central Bureau of lnvestiga~
tion through its Director have, without loss of time, appr()ached this Court
by preferring the SLP even on 4th September, 1992 along with a petition
for ad-interim ex-parte stay. A three~ Judges Bench of this Court presided
F over by Hon'ble the Chief Justice took the matter on the very same day
i.e. on 4.9.1992 and passed the following order:

"Issue notice, Learned counsel for the respondent accepts
notice. To come up for admission on 17th September, 1992,
preferable before a Bench presided over by Hon'ble Pan-
G dian, J.

In the meantime, it is directed that the impugned judgment
of the High Court shall not be utilised before any Cantonal
Court or Authority for the purpose of obtaining release of
H .any bank account which has been frozen or for the return
'
U.0.L v. W. N. CHADHA [PANDIAN, J.] 627

or release of any informatio~ or documents till the S.L.Ps A
are disposed of or till further orders ..

Learned counsel for the respondent states that respondent
will not make any application for the release of any docu-
ments in his favour till "further orders on the basis of the
impugned judgment." B

Thereafter on 17.9.1992, this Court to which one of us (S. Ratnavel
Pandian, J) was a party granted leave and directed the interim order
passed on 4.9.1992 to continue and in addition made a further direction
that the impugned judgment shall not be utilised for any purpose until C
further orders.

The core of the grievance of ~e appellants ~ that the High Court
without assimilating the averments made in the First Information Report
a
in the proper perspective and on misconception that the entire proceed-
ings are plagued by procedural wrangles and controversies has entered into D
the realm of conjectures and surmises and rendered the manifestly er-
roneous impugned findings. According to them, the conclusions arrived at ·
by the High Court by overstepping its jurisdiction are totally opposed to
the well established principles of law laid down by a series of decisions of
this Court. Further, it is contended that this impugned ·verdict has
prevented the crucial evidence from ever surfacing which evidence other- E
wise could have been unearthed and collected to establish the allegations
made in the FIR.

Seriously challenging the findings of the High Court, Mr~ Altaf
Ahmad, the learned Additional Solicitor General assisted by M/s C.V. F
Suba Rao and Ashok Bhan, learned advocates has articulated that the High
Court by slipping and stumbling on many slippery grounds has rendered
its findings which are not only opposed to law but also are contumacious.
According to him it surprises in extreme that the High Court has tliought
that in exercise of its prerogative powers under Article. 226 of the Constitu-
tion, it could quash the F.I.R. even though the said FIR discloses the G
offence/offences against the named and unnamed accused and the inves-
tigation has not yet commenced in its true sense except a preliminaiy effort
of obtaining some information from the ~wiss banks as regards the names
of the account holders and to have an access to secret bank accounts linked
with the Bofors payments. The learned Additional Solicitor General sub- H
628 SUPREME COURT.REPORTS [1992] SUPP. 3 S.C.R.

A mits that there is an overwhelming weight of authority in favour of his·view
that the FIR cannot be quashed if the allegations do make a prima facie
case. He cited some decisions of thisCourt spelling out the circumstances
under which the High Court cauld ·exercise its discretion.

In continuation of his submission, the learned Additional· Solicitor
B General submits that there is no leg~l bar' in having requested the Special
Court to issue letters rogatory/request for assistance to the competent
judicial authorities in the Confederation of Switzerland for investigation
and collection of evidence for solving the Bofors mystery because the
investigating agency, namely; the CBI has to establish the names of the
C beneficiaries, the quantum of the amounts they were paid and the nature
of their services even by cutting through the thicket of legal tangles. By the
impugned judgment quashing letters rogatory, the High Court has now
subverted and forestalled the collection of the requisite vital and valuable
particulars which lie buried in Swiss vaults and that unless the embargo
D now created by the impugned judicial pronouncement is removed by setting
aside the impugned judgment, the CBI will be· paralysed and precluded
from unearthing the evidence and the wider conspiracy with international
dimensions and bringing the culprits within the dragnet of prosecution and
that the entire proceedings taken so far will be frustrated and halted.
E
Regarding the finding of the High Court that even after 31 months
from the registration of the case, the CBI not only failed to produce any
material against anyone of the accused inclusive of the respondent but also
could not name even a single public servant as accused, it is submitted that
F the logic of tbis line of reasoning is totally fallacious in law and on fact,
and this finding will be fraught with serious consequences, resulting in the
destruction of the investigation so far carried out. According to the Addi-
tional Solicitor General~ it is only during the course of the investigation,
the,ldentity of the accused persons can be brought on record; but in the
present case, unfortunately the CBI is not allowed to have access to the
G bank accounts which would alone reveal the identity of the accused per-
sons. Further, ever since the registration ·of the case various attempts
were/are made by initiating multiple proceedings as aforementioned to
thwart -the investigation by putting spoke in its wheel at every stage.
iherefore, the delay has occasioned more due to the multiple obstructions
H put forth by H.S. Chowdhary and tb~reafter by the present respondent and
U.0.1. v. W. N. CHADHAJPANDIAN, J.] 629

it is not due to any procrastination on the part of the prosecution and that A
it cannot be said that the case is kept dangling endlessly without any
evidence against anyone of the accused.

The learned Additional Solicitor General has seriously urged that a
bare perusal of the FIR manifestly demonstrates that huge payments have
been deposited in the account of Svenska Inc. in Swiss Bank Corporation, B
the principal beneficiary of which is the respondent, W.N. Chadha. He
clarifies the above submission stating that there is a clear link· between
Svenska Inc. Panama and Anatronic General Corproation of which the
respondent is admittedly the President, as described in detail in paragraphs
53-59 of the FIR, a persual of which will leave no doubt whatsoever that c
Svenska Inc. Panama is just a front Company and belongs to the respon-
dent. According to him, there are sufficient materials indicating the invol-
vement of the respondent in the commission of the offences in question. It
is further stated that the connection between Svenska Inc. Panama and
AGC is discernible from the agreements of the years 1978, 1984 and 1986 D
entered into by Bofors with the two aforementioned concerns.

Finally, he requested this Court to pronounce the verdict as early as
possible.

It may be mentioned in this connection that the first Bench presided E
over by the Chief Justice while issuing notice on 4.9.1992 in this appeal also
issued notice in Criminal M.P. No. 4999/92 seeking for leave to file a SLP
by Shri Prasbant Bhushan. There is a foot-note in the order dated 4.9.92
reading "SLP filed by Mr. Prashant Bhusban shall also be put up along with
this petition." Apart from this petition two other unnumbered SLPs are also F
filed - (1) by Shri George Fernandes through his counsel Prashant Bhushan
; and (2) another by one Shri Jaswant Singh through his counsel Ms.
Kamini Jaiswal alongwith two Criminal M.P. Nos. 5201 and 5160 of 1992
seeking leave to file the special leave petitions. Mr. Shanti Bhushan, the
learned senior counsel who appeared in the unnumbered two SLPs filed
by Prashant Bhushan addressed this Court on the question of locus standi G
as both the SLPs are public interest litigations. Mr. Ram Jethmalani, the
learned senior counsel appeared in the unnumbered SLP filed by Jaswant
Singh and addressed his arguments. Both the learned counsel while ad-
dressing their arguments on locus standi of all the above three petitioners
in preferring their respective SLPs which are public interest litigations H
630 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A incidentally touched upon the merits of the case and supplemented the
submissions of the Additional Solicitor General. Mr. Jethmalani ·waxed
eloquent on the disastrous consequences that are likely to follow due to
the quashing of the F.I.R. and the entire other proceedings and charac-
terised the impugned judgment as being a judicial transgression and Castra-
tion of the criminal law of this land. He said that· the allegations made in
B the FIR are very serious and outrageous in nature and· the circumstances
veering the case bear chilling evidence and that if such evidence is buried
fathoms deep pursuant to the impugned judgment, the people of this nation
who are having and reposing great trust and confidence in judiciary will
loose their faith in the entire system of judicial administration. He con-
c tinues to state that the repetitive attempts of the respondent to frustrate
and filibuster the proceedings of the prosecution - firstly through H.S.
Chowdhary as his proxy raising the Sl:lille issues and secondly through his
Pairokar after having become unsuccessful in his first attempt are nothing
but a ploy to escape the clutches of law. According to him the respondent
residing in United Arab Emirates has committed serious violation of the
D
provisions of the Foreign Exchange Regulations Act and Income Tax Act
by keeping his account in foreign country and that the FIR contains
sufficient allegations that the respondent had received huge amount for
himself and for passing off to the public servants, and therefore, in order
to purify the stream of justice, the impugned judgment of the High Court
E has to be quashed. The learned counsel has further urged that the respon-
dent on the pretext of false reasons of health is purposely residing in
United Arab Emirates with which country there is no extradition treaty and
to which country Indian summons and warrants cannot reach and there-
fore, the respondent who is an out-law is not at all entitled to the assistance
of the law of this country.
F
According to the respondent, even the entire allegations in the FIR
do not constitute any offence against any of the accused much less against
him and they are all frivolous, baseless and nothing 11?-0re than mud
slinking. Further, he has started attacking the conduct of the investigating
G agency in requesting the Court to issue letter rogatory and the authority of
the Special Court in issuing letters rogatory on 5/7th February, 199o and
subsequently the ratified letter, rogatory issued on 2i/22nd August, 1990. ·
In short, before the High Court his effort was to show that the entire
criminal P.roceeding is an aimless voyage or a roving expedition with
oblique motive and that he has been caught in a political cross fire which
H smacks of personal vendetta and in which he bas absolutely no role to play.
U.0.1. v. W. N. CHADHA [PANDIAN, J.] 631

The above breathtaking deliberation and debate made. before the High A
Court has yielded the desired effect of quashing the F.I.R., letters rogatocy,
and all other proceedings arising therefrom, as pointed out earlier. · -..:.

The vital issues involved in this case have stirred much debate before
this Court on the previous occasion which was the first round of litigation
by a public interest litigant and the result is the pronouncement of the B
preliminary order in August 1991 followed by the detailed judgment there-
for in August 1992 as repeatedly pointed out in the preceding part of this
judgment. The vital part of the conclusion of our detailed judgment reads
thus:

"However, it has become necessary atleast to deal with the
c
first alleged illegality. We are constrained to do so because
of the assertion of the High Court; that being "that the First
Information Report on the face of it does not disclose any
offence.......................
D
We have carefully and scrupulously gone through the First
Information Report and we are unable to share this view
of Mr. Justice Chawla, quite apart from the other grotinds
on which the accused may likely to attack the First Infor-
mation Report. None of the named accused came before
E
Mr. Justice Chawla raising this question of lack of allega-
tions and particulars in the FIR· so as to constitute any
offence, muchless a cognizance offence."

The above conclusions clearly spell out that this Court did not share
the view that the First Information Report does not disclose any offence F
but however the other questions which might be available for the accused
persons to attack the First Information could be availed of.

To understand the above conclusions, it is relevant to note that one
of the propositions for consideration set out by Mr. Justice M.K. Chawla
for his suo moto consideration was whether the First Information Report G
filed by the CBI does disclose any offence.

Notwithstanding the above finding of this Court, the High Court in
its impugned judgment has examined various legal and factual issues
inclusive of the question whether the First Information Report does "dis-
close any offence against the named and unnamed accused persons and H
632 SUPREME COURT REPORTS {1992] SUPP. 3 S.C.R.

A pronounced its final verdict. In fact, the High Court has taken on its
sli.oulder some of the issues which were not really agitated upon by the
respondent about which we would deal in the later part of this judgment.

· We shall now examine the tenability of the various grounds on the
basis of which the High Court has rendered its impougned judgment.
B Firstly we shall deal with vital grounds relating to the issue of letters
rogatory.

Whether issue of letter rogatory is opposed to law and violative of the principle
of natural justice and thereby has become liable to be quashed?

C It appears from the impugned judgment that it has been contended
before the High Court that there is no jurisdiction to issue letter rogatory
hy the Special Judge unless he is satisfied with regard to the extent of dual
criminality and the prima f acie involvement of the accused persons whose
property or rights are sought to be affected by the letter rogafory. This
being a.condition precedent, the Special Judge could exercise his jurisdic-
D tion only after giving prior notice and affording a reasonable opportunity
of being heard to the named accused and the Special Judge by non-com-
pliance of that condition, has erred in law and on fact by issuing letter
rogatory. It has been urged that the Special Judge has failed to appreciate
that the Frist Information Report in this case does not disclose any offence
· whatsoever, leave apart any offence of dual criminality.
E
The above contentions were tested by the High Court on the anvil of
two i.!gal propositions, namely, (1) There is no compliance of the principle
of audi alteram partem, in that the Special Judge has not afforded any
reasonable opportunity of being heard before issuing the letter rogatory
and (2) The Special Judge has not applied his mind to all facts and
F circumstances of the case before passing his orders directing issue of letters
rogatory.

After making a long deliberation on the aspect of this question, the
High Court gave its conclusion quashing letters rogatory. as follows:
G "In view of the above discussion, we are of the view that
the Special Judge had jurisdiction to issue letter rogatory
on the basis of MOU 20th February, 1989 between Govern-
ment of India and Government of Switzerland and Section
166A Cr .P .C. Since in the present case, the learned Special
H Judge failed to issue notice and deemed (denied) oppor-
-r
U.0.1. v. W. N. CHADHA [PANDIAN, J.] 633

tunity of hearing to the petitioner whose property and A
rights were sought to be affected by the issue of the im-
pugned letter rogatory and further there was non-applica-
tion of mind by the learned Special Judge, we quash letters
rogatories issued in pursuance of the above orders dated
5th February, 1990 and 21st August, 1990 passed by the
learned Special Judge."
B

Before embarking upon a discussion on this question, we shall see
what the expres'sion 'letter rogatory' means.

The lexical meaning of the word 'rogatory' is given in 'Webster's
Encyclopedic Unabridged Dictionary of the English Language' as follows: C
"pertaining to asking or requesting"

'Collins English Dictionary' gives the meaning of the word 'rogatory'
as under:
D
"(esp. in legal contexts) seeking or authorised to seek
information"

Black's Law Dictionary (sixth Edition) at page 905 defines the expres-
sion 'letter rogatory' as follows:
E
"A request by one court of another court in an independent
jurisdiction, that a witness be examined upon inter-
rogatories sent with the request. The medium whereby one
country, speaking through one of its courts, requests
another country, acting through its own courts and by
methods of court procedure peculiar thereto and· entirely F
within the latter's control, to assist the administration of
justice in the former country.

A formal communication in writing, sent by a court in which
an action is pending to a court or judge of a foreign country, O
requesting that the testimony of a witness resident within
the jurisdiction of the latter court may be there formally
taken under its direction and transmitted to the first court
for use in the pending action.

This process was also in use, at an early period between H
634 SUPREME COURT REPORTS (1992] SUPP. 3 S.C.R.

A the several states of the Union. The request rests entirely
upon the comity of courts towards each other."

. It is clear from the above meaning of the said expression that 'Letter -
Rogatory' is a formal communication in writing sent by a Court in which
action is pending to a foreign Court or Judge requesting the testimony of
B a witness residing within the jurisdiction of that foreign Court may be
formally taken thereon under its direction and transmitted to the issuing
Court making such request for use in a pending legal contest or action.
This request entirely depends upon the comity of Courts towards each
other, that is to say, on the friendly recognition accorded by the Court of
one nation to the laws and usages of the Court of another nation.
c
It appears from the records that the First Information Report was
laid before the Special Court on 22nd January, 1990. On 23rd January, the
request was made by the Director of CBI followed by another letter of
D request dated 26th January, 1990 to the concerned authorities in Switzer-
...
land for freezing/blocking, certain bank accounts, relevant to this case. The
Federal Department of Justice and Police, Switzerland moved the Judge
of Geneva and the concerned Judge of Zurich who on being prima facie
convinced of dual criminality and the need for investgation in Switzerland
froze the relevant bank accounts in this regard on 26th January, 1990 as
ff intimated by the Federal Department of Justice and Police through the
Embassy of India in Switzerland. As per the intimation, the relevant
accounts in the bank has been blocked upo.n 28th February, 1990. There-
fore, it had become necessary for freezing the accounts beyond 28th
February, 1990 and to make a request for judicial assistance to Switzerland
p failing. which the Swiss law obliges the withdrawal of the instructions to
block the accounts. It is further disclosed from the records that the Federal
Department of Justice and Police at Berne which corresponds to the
Ministry of Law and Home of the Government of India have assured that
the Swiss authorities would render assistance in the investigation in Swit-
zerland in accordance with the mutual assistance agreement dated 20th
•G February, 1989 subject to the condition of the receipt of letter rogatory
from the competent judicial authority in India. This necessitated to send
letter rogatory to Switzerland urgently for getting the necessary assistance
for the investigation to be conducted in Switzerland lest very valuable and
relevant evidence would remain uncollected and the cause of justice would
H suffer. ·'
U.0.1. v. W. N. CHADHA [PANDIAN, J.] 635

It was only under those pressing pressing circumstances, the DSP, A
CBI/ACU-(IV)/DSPE, New Delhi (the investigating officer) submitted an
application on 2nd February, 1990 before the Special Judge praying issue
of letter rogatory with certain enclosures for assistance to the competent
judicial authorities in the Confederation of Switzerland so that during the
investigation of this case, the necessary evidence could be collected in
Switzerland and the investigation is taken to its logical conclusions as per B
the requirements of the law. The Special Judge after satisfying himself
accepted the request by its order dated 5th February, 1990 and issued letter
rogatory/request enclosing therewith the copies of certain documents on
7th February, 1990 to the competent judicial authorities in the Confedera-
tion of Switzedand. The Federal Department of Justice and Police, Berne C
found the letter rogatory in order and f9rwarded the same to the Examin-
ing Magistrate of Geneva for taking necessary action thereon. The examin-
ing Magistrate, Geneva after satisfying himself that the said letter of
rogatory was in order accepted the same on 26th March, 1990 and com-
menced the investigation as requested.
D
While it was so, two of the affected parties in Geneva filed appeals
in the Criminal Court of Canton of Geneva. The Criminal Court of Geneva
passed an order on 3rd July, 1990 on the appeals expressing its view that
the letter rogamry did not, in its form, satisfy the requirement of Article
28 of the Federal Act of International Mutual Assistance in Criminal E
Matters (IMAC) and annulled the order of admissibility of mutual judical
assistance handed down by the Examining Magistrate on 26th March, 1990
and sent back the letter rogatory for compliance of certain procedural
formalities. Jn that order, the Criminal Court of Canton, Geneva observed
that the provisional measures ordered by the Examining Magistrate, in F
particular, the seizure of documents and/or bank accounts are not affected
by the order.

The above order dated 3rd July, 1990 was submitted to the Special
Court in India on 16th August, 1990 with some enclosures since the CBI
got the copy of the order dated 3rd July, 1990 on 13th August, 1990 b:om G
the Delhi Administration. In the second application dated 16th August,
1990 the CBI requested to issue amended letter rogatory/request. The
Special Judge, Shri V.S. Aggarwal who by then took charge of the Special
Court issued Note of Compliance and amended letter rogatory on August
~~. H
636 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

Be it noted that on 5/7th February, 1990 when the first letter rogatory
was sent .by ,Shri R.C. Jain, Special Judge, Section 166-A of the Criminal
Procedure Code was not in vogue. It was only thereafter an Ordinance,
nainely, the ·Criminal. Procedure Code (Amendment) Ordinance, 1990 was
promulgated coming into force from 19th February, 1990. Section 166-A
(1) as introduced by the Ordinance authorised the investigating officer or
B an officer superior in rank to the investigating officer to issue a letter of
request. Sub-section (2) of Section 166-A of the Ordinance authorised the
Criminal Court to issue a letter of request in its discretion on an application
made by the investigating officer or any officer superior to the rank of
investigating officer. Section 166-B introduced by the above Ordinance
C deals with the letter of request from a country or a place outside India to
a Court or authority for investigation in India. Thereafter, the Criminal
Procedure Code (Amendment t\ct) 10of1990 was enacted on 20th April,
1990 conferring the power only on' the Criminal Court but not on the
investigating officer or any officer superior to the rank of investigating
D officer to issue a letter of request as introduced by the Ordinance.

It appears from the impugned judgment that though on behalf of the
respondent, a contention was raised that the Special Judge had no juris-
diction or power to issue letter rogatory on 5/7th February, 1990, the High
E Court except simply mentioning that contention in the discussion part of
its judgment and then proceeding with the counter submission made by the
learned counsel for CBI submitting that that the said letters_rogatory were
issued by the Special Judge on the strength of the memorandum of under-
standing between Government of India and Switzerland and in the dis-
charge of his obligation mandated on him by the Constitution and _the law,
F did not go into that question of the jurisdiction or power of the Special
Judge to issue letter rogatory on 5/7th February, 1990 despite the fact that
Copies of the letters rogatory alongwith their enclosures issued on 7th
February, 1990 ·and 22nd August, 1990 havt- been made available to the
Court. Section 166-A which was introduced after the issue of letter
G rogatory on 5/7th February, 1990 confers jurisdiction on the Special Judge
to issue such letters. The result is that there is no specific discussion with
regard to the authority of the Court in issuing the first letter rogatory.

In would be significant, in this connection, to refer to the remark of
H the High Court reading thus:
U.0.1. v. W. N. CHADHA [PANDIAN, J.] 637

"We may point out here.that in reply to written submissions A
filed by the petitioner, CBI had filed additional written
submissions and had stated therein that besides three con-
tentions mentioned in the preceding paragraphs, the
learned counsel for the petitioner, dming the course of oral
arguments, had not pressed the contention that the Special
Judge had no jurisdiction to issue the first letter rogatory B
on 5/7th- 2-1990."

There is no challenge before us to the iibove additional written
submission of the CBI.

The High· Court coming to the legal aspect has observed thus:
c
"Similarly once the power has been conferred on the
criminal court .to issue the letter rogatory, it follows that
the court will have to apply its mind arid give an opportunity
of hearing to the person whose property or rights are D
sought to be affected by letter rogatory."

P.J'ter observing so, the High Court proceeded only on the ground
that the Special Judge bas not complied with the principle of audi alteram
partem and also has not applied his mind to the facts and circumstances of
the case before issuing letters rogatory, as aforementioned. E
Therefore, we are not called upon to go into the question of the
jurisdiction of the Special Judge in issuing the letter rogatory but have to
deal only with the other two grounds on the basis of which the High Court
quashed the letters rogatory. '
F
It would not be out of place to mention here that as rightly pointed
out by the Additional Solicitor General that the amended letter rogatory
issued on 22nd August, 1990 has got legal sanction under Section 166-A of
the Criminal Procedure Code (for short 'Code') notwithstanding the fact
that this provision was Iiot in the statute on 5th February, 1990.
G
The High Court drawing strength from the decision of this Court in
)
Smt. Maneka Gandhi v. Union of India, [1978) 1 SCC 248; has observed
that the principle of audi alteram partem which mandates that no one shall
be condemned unheard is part of the rules of natural justice which is a
great humanising principle intended to invest law with fairness and to H
638 SUPREM~ COURT REPORTS [1992J SUPP. 3 S.C.R.

A secure justice. According to the High Court, there is a violent breach of
this principle in the case on hand; in that the respondent has not been put
on notice with regard to the issue of letter rogatory and afforded a
reasonable opportunity of being heard.

No doubt it is true that a seven-Judges -Bench of this Court in Smt.
B Maneka Gandhi has opened a new vista in the area of personal liberty as
enshrined under Article 21 of the Constitution and emphasised the audi
alteram partem rule which emphasis is of affording a fair opportunity of
being heard on prior notice to a party to whose prejudice an order is
intended to be passed by the Government or its officials. Further, it is
c stated by the High Court that all the safeguards in favour of an accused
contained in the Criminal Procedure Code have now become a part of the
constitutional provisions and they are governed by Articles i4, 19, 20, il
and 22 and that the procedure conte~plated under Article 21 requires that
it should not be arbitrary, fanciful, oppressive or discriminatory. Therefore,
D the failure on the part of the Special Judge in issuing notice to the
respondent and affording him a reasonable opportunity of being heard
vitiates the letters rogatory.

Countering the above arguments, the learned Additional Solicitor
General seriously contended that there is no provision conferring any right
E of audience on an accused before issuing letter rogatory the object of which
is to collect evidence which may be used against the accused during the
course of the trial. According to him, the accused has no right to control
or interfere with the manner in which the evidence is to be collected.
Chapter XII of the Code under the heading 'Information to the Police and
F other Powers to Investigate covering Sections 154 to 176 does not provide
for application of the concept of audi alteram partem for an accused from
the very inception of a criminal proceeding till its culmination in filing of
a report under Section 173 ofCr.P.C. He continues to state that an order
of the Court issued in exercise of the powers under Section 166-A of the
Code is only for the purpose of collecting the evidence and in the very :-
G nature of things such an order does not effect any right of an accused and,
therefore, the said order is beyond the purview of the High Court power
even under Section 397 of the Code. Hence there is no question of the rule
of audi alteram partem being attracted in the instant case. Therefore, the
only important question that arises for our consideration is whether the
H issue of letters rogatory on 5/7th February, 1990 and on 22nd August, 1990
U.O.l. v. W. N. CHADHA (PANDll}N, J.) 639

are liable to be quashed on the ground of non-compliance of the rule of A
audi alteram partem.

The rule of audi alteram paTtem is not attracted unless the impugned
order is shown to have deprived a person of his liberty or his property. In
the present case, no such consequences have arisen from the letter
rogatory. If the letter rogatory is accepted by the foreign Court and acted B
upon it will then disclose only the relevant facts about the identity of the
account holders, quantum of the amounts standing in the names of the
individual account holders representing the credit of Bofors money and the
nature of such accounts. The follow up consequences would be that the
corpus of the offence would be preserved intact by preventing the C
withdrawal of the money from those accounts or closure of the accounts
by the account holders till the merit of the case is decided.

In fact the Special Judge in Delhi is not possessed with any power
or authority to deprive the liberty of the respondent residing out of the
jurisdiction of Indian Courts and having his property in question in a D
foreign country. Only in case where a public officer has got such a power,
the question of 'fair play in acti.on' ·will be attracted. This rule was explained
by Lord Denning M.R. in Sch'midt v. Secretary of State for Home Affairs,
1969 (2) Chancery Division 149, stating that "where a public officer has
power to deprive a person of his liberty or his property, the general principle E
is that it has not to be done without his being given an opportunity of being
heard a.nd of making representations on his own behalf'.

The above explanation is quoted in Maneka Gandhi.

The rule of audi alteram partem is a rule of justice and its application F
is excluded where the rule will itself lead to injustice. In A.S de Smith's
Judicial Review of Administrative Action, 4th Ed. at page 184, it is stated
that in ~ministrative law, a prima facie right to prior notice and oppor-
tunity to be heard may be held to be excluded by implication in the
presence of some factors, singly or in combination with another. Those G
special factors are mentioned under items (1) to (10) under the heading
"Exclusion of the audi alteram partem rule'.

Thus, there is exclusion of the application of audi alteram partem rule
to cases where nothing unfair can be inferred by not affording an oppor-
tunity to present and meet a case. This rule cannot be applied to defeat H
640 SU,PREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A the ends of justice or to make the law 'lifeless, absurd, stultifying and
self-defeating or plainly contrary to the common sense of the situation' and
this rule may be jettisoned in very exceptional circ~mstances where com-
pulsive necessity so demands.

Bhagwati, J. (as the learned Chief Justice then was) in Maneka
B Gandhi speaking for himself, Untawalia and Murtaza Fazal Ali, JJ. has
stated thus:

"Now, it is true that since the right to prior notice and
opportunity of hearing arises only by implication from the
duty to a~t fairly, or to use the words of Lord Morris of
c Borth- y-Gest, from 'fair play in action', it may equally be
excluded where, having regard to the nature of the action
to be taken, its object and purpose and the scheme of the
relevant statutory provision, fairness in action does not
demand its implication and even· warrants its exclusion."
D
Thus, it is seen from the decision in Maneka Gandhi that there are
certain exceptional circumstances and situations whereunder the applica-
tion of the rule of audi alteram partem is not attracted.

Paul Jackson in Natural Justice at pages 112 and 113 observed thus:
E
"...... It was seen that ~y body making a decision affecting
party's right or legitimate expectation must observe the
rules of natural justice. Conversely a decision which does
not affect rights, because for example, it is a preclude to
F taking further proceedings in the course of which the party
concerned will have an opportunity to be heard, will, very
likely, not itself be subject to the requirements of natural
justice, or only in a modification form. A fortiori, th~
decision by, for example, the responsible Minister or offi-
. cial to initiate the procedure necessary to reach a prelimi-
G nary conclusion or to examine the existence of aprima facie
case can be taken without first giving the· person affected
a hearing.........."

See also (1) Wiseman .and Another v. Borneman and Others Law
H Report, 1971 Appeal Cases.297; (2)Pearlberg v. Viuty (Inspector of TOX£s),
U.O.I. v. W. N. CHADHA [PANDIAN, J.] 641

(1972) 1 Weekly Law Reports 534; (3)Regina v. Barnet and Camden Rent A
Tribunal, Ex. P. Frey Investments Ltd., Law Report, (1972) 2 Q.B.D. '3.42:
(4) and Herring v. Templeman and Others, (1973) 3 All England Law
Reports 569.

In R. v. Peterborough Justice, exp. Hicks, (1977) 1 W.L.R. 1371, it has
been held that search warrants under the Forgery Act, 1913 s. 13 may issue B
without the party aff~cted being heard~ .

A Division Bench of the Allahabad High Court in Indian Explo$ive
Ltd. (Fertiliser Division) Panki Kanpur v. State of Uttar Pradesh and Others,
(1981) 2 L.L.J. 159 after referring to the decision in Ragina (supra) and C
Non-vest Holst Ltd. v. Secretary of State for Trade, (1978) lCh. Div. 202 said
thus:

"Thus, it has been recognised by Judges of undoubted
eminence that a decision on .substantive rights of parties is
D
one thing and a mere decision that another body investigate
and decide on those substantive rights is quite another, and
the principle of hearing is not applicable to the latter class
of cases."

The principle of law that could be deduced from the above decisions E
is that it is no doubt true that the fact that a decision, whether a prim a f acie
case has or has not been made out, is not by itself determinative of the
exclusion of hearing, but the consideration that the decision was purely an
administrative one and a fullfledged enquiry follows is a relevant - and
indeed a significant - factor in deciding whether at that stage there ought F
to be hearing which the statute did not expressly grant.

Applying the above principle, it may be held that when the investigat-
ing officer is not deciding any matter except collecting the materials for
. ascertaining whether a prim a j acie case is made out or not and a full
enquiry in case of filing a report under Section 173 (2) follows in a trial G
before the Court or Tribunal pursuant to the filing of the report, it cannot
be said that at that stage rule of audi alteram partem superimposes an
obligation to issue a prior notice and hear the accused which the statute
does not expressly. recognise. The question is not whether audi alteram
partem is implicit, but whether the occasion for its attraction exists at all. H
642 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A Under the scheme of Chapter XII of the Code of Criminal Proce-
dure, there 'are ·various provisions· under which rio · prior notice or oppor-
tunity of being heard ·is conferred as a matter of course to an. accused
person while the proceeding is in the Stage of an investigation by a police
officer.

B In State of Haryana v. Bhajan La~ [1992) Supp. 1 SCC 335 at 359, -.
this Court to which both of us (Ratnavel Pandian and K. Jayachandra
Reddy, JJ.) were parties after making referen.:e to the decision of the Privy
Council in Emperor v. Khwaja Nazir Ahmad, AIR 1945 PC 18 and the
decision of this Court in State of Bihar v. JA.C. Saldanha, [1967) 3 S.C.R.
c 668 has pointed out that "..............the field of investigation of any cognizable
offence is exclusively within the domain of the investigating agencies over
which the courts cannot ...have control and have no power to. stifle or
impinge upon the proceedings in the investigation so long as the investiga-
tion proceeds in compliance with the provisions relating to investiga-
D tion ......."

More so, the accused has no right to have any say as regards the
manner and method of investigation. Save under certain exceptions under
the entire scheme of the Code, the aC:cused has no participation as a matter
· of right during the course of the investigation of a case instituted on a
E police report till the investigation culminates in filing of a final report under
Section 173 (2) of the Code or in a proceeding instituted otherwise than
on a police report till the process is issued under Section 204 of the Code,
as the case may be. Even in cases where cognizance of an offence is taken
on a complaint notwithstanding that the said offence !s triable by a
F Magistrate or triable exclusively by the Court of Sessions, the accused has
no right to have participation till the process is issued. In case the issue of
process is postponed as contemplated under Section 202 of the Code, the
accused may attend. the subsequent inquiry but cannot participate. There
are various judicial pronouncements to this effect but we feel that it is not
necessary to reeapitulate those decisions. At the same time, we would like
G to point out that there are certain provisions under the Code empowering
the Magistrate to give an opportunity of being heard under certain
specified circumstances.

It may be noted that under Section 227 of the Code dealing with
H ·discharge of an accused in a trial before a Court of Sessions under Chapter
U.0.1. v. W. N. CHADHA (PANDIAN, J.]

XVIII, the accused is to be heard and permitted to make his submissions A
before the stage of framing the charge. Under Sectioin 228 of the Code,
the trial Judge has to consider not only the records of the case and
documents submitted there with but also the submissions of the accused
and the prosecution made under Section 227. Similarly, under Section 239
falling under Chapter XIX dealing with the trial of warrant cases, the
magistrate may give an opportunity to the prosecution and the accused of B
being heard and discharge the accused for the· reasons to be recorded in
case the Magistrate considers the charge against the accused to be ground-
less. Section 240 of the Code dealing with framing of charge also reaffirms
the consideration of the examination of an accused under Section 239
before the charge is framed. C

Under Section 235 (2), in a trial before a Court of Sessions and under
Section 248 (2) in the trial of warrant cases, the accuse~ as a matter of
right, is to be given an opportunity of being heard. Unlike the above
provisions which we have referred to above by way of illustration, the D
provisions relating to the investigation under Chapter XII do not confer
any right of prior notice and hearing to the accused and on the other hand
they are silent in this respect. ·

It is relevant and significant to note that a police officer, in charge
of a police station, or a police officer making an investigation can make E
and search or cause search to be made for the reasons to be recorded
without any warrant from the Court or without giving the prior notice to
any one or any opportunity of being heard. The basic objective of such a
course is to preserve secrecy in the mode of investigation lest the valuable
evidence to be unearthed. will be either destroyed or lost. We think tt F
unnecessary to make a detailed examination on this aspect except saying
that an accused cannot claim any right of prior notice or opportunity of
being heard inclusive of his arrest or search of his residence or seizure of
any property in bis possession connected with the crime unless otherwise
provided under the law.
G
True, there are certain rights conferred on an accused to be enjoyed
at certain stages under the Code of Criminal Procedure - such as Section
50 whereunder the person arrested is to be informed of the grounds of his
arrest and to his right of bail and under Section 57 dealing with p~rson
arrested not to be detained for more than 24 hours and under Section 167 'H
644 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A deatµig with the ·procedure if the investigation c3nnot be completed in 24
~ hours. - which are all in conformitY with the 'Right t~ Life' and 'Personal
Liberty' enshrined in Article 21 of. the Constitution ~nd the. valuable
safeguarqs ingrafued in Article. 22 of the Constitution for the protection of
. an arrestee (>r detenu in certairi cases .. But so long as an the investigating
agency pi:oceeds with his action or investlgatjon in strict compliance with
B .· the statutory proviSions relating to. arrest or investigation of a criininal case
· · and a~cording_to the procedure established by law,· no one can. make any
le~timate. grievance to. stifle or to rmpinge upon the proceedings of arrest
or detention cturing llivestigatioi:J. as the ~se m"ay be, in• accordance with
the provisions of the ·c~de of· Criillinal Procedure.
c
Incidentally, it. may be st~ted that there ~- no question of attachment
. ~f money of. th(!. respondeii"t. or any of. ~he accused, nanied or unnamed,
.. standing to the. credit of the account holders iri Swiss banks linked with
B,ofor.s mystery but it w~ oi:J.lyfreezmg of th~ a~ounts as per the request
D made· by the. Director, <;BI by his letter ~ated 23rd January, 1990 and
followed by anotherJetter dated 26th January, 1990 and thereafter pursuant
to the request through letters rogatory for judicial assistance in Switzer-
land. But for the request made by the. letter rogatory, the Swiss law obliges
· withdrawal of all the instrnctions to block the account. Therefore, we are
of the view that the detailed discussion of the High Court with reference
E to .the Criminal Law. Amendment Ordinance of 1944 though is not war-
ranted in. this regard. However, we will deal that Ordinfillce with relevant
provisions in the later partof this
judgment. .

If prior notice and an opportunity of hearing are to be given to an
F accused in every criminal case before taking any action against him, such
a procedure would frustrate the proceedings, obstruct the taking of proinpt
action as law demands, defeat the ends of justice and make the provisions
of ia\v relating to the investigation. lifeless, absurd and self-defeating.
Further, the scheme of the relevant statutory provisions relating to the
procedure of investigation does not attract such a course in the absence of
G any statutory obligation to the contrary.

Reverting to the facts, it is not the case of the respondent that he is
having any account'in Swiss banks corinected with Bofors mystery and that
that account is frozen to his prejudice. When the respondent himself has
H not come forward with any specific case stating as to what was the quantum
U.0.1. v. W. N.. CHADHA (PANDIAN, J.] 645

of the amount standing to his credit in Swiss banks and in what manner be A
is now aggrieved by the letter rogatory and in what way be is deprived of
his properties, it is incomprehensible as to how the High Court has come
to the conclusion. that the respondent is deprived of his property. Similarly,
any one of the other named or umiamed accused or any third party, not
named in the FIR,.has not come forward with a_ complaint of grievance on B
account of the freezing of the ac~ourits. .

It will be relevant in this - context to refer to a deciSion of the
Constitution Bench of this Court in M.P. Shanna and Ors. v. Satish
Chandra, District Magistrate, Delhi and Ors., [1954) SCR 1077 wherein it
has been held that "a power of ·search and ··seizure is· in any system of C
of
jurisprudence an overridmg power· the State for the protection of social
security and that power is necessarily regulated by law,"· and that a search
and seizure of a document urider the ·provisions of Sections 94 and 96 of
the Code·. of Criinitial Proeedure (old) ii;: not- a compelled production
thereof within the meaning ·of Article 20 (3) and hence does not offend the D
said Article;

Shri Rajindet Singh, learned senior ·counsel appearing for the
respondent made his submission that the Special Judge had acted
unilaterally in issuing the letter rogatory and without having a full dress .
enquiry. The learned counsel after referring to Section 91 of the Code E
corresponding to Section 94 of the old Code and to Sections 4 and 5 of
the Bankers' Books Evidence Act, 1891 and relying on a decision in Central
Btdzk of I11dia Ltd. v. P.D. Shamdasani, AIR 1938 Born. 33 _at 35 wherein
it has been held that a Magistrate making an order under Section 94 of the
Code (old) for production of documents does not thereby commit himself F
to the proposition that inspection of all the documents, the production of
which is ordered must necessarily follows and the party producing the
documents is not precluded from objecting to their subsequent inspection,
seriously contended that the banks should have_ been given prior notice and
heard. According to him, the banks, in such a circumstance, probably might
have objected to the production of the bank ac:Counts. G

We are unable to see any force in the above submission of Shri
Rajinder Singh because, firstly there is no request for production of the
doc-µments; secondly there is no prayer in the letter rogatory for production
of the entire account books and; thirdly till date no objection is taken by H
646 SUPREME COURT REPORTS ·[1992] SUPP. 3 S.C.R.

A the Swiss banks. It is pertine11-t to note that. the High Court has not found
fault with the validity of ·the letter rogatory on the ground of alleged
production of bank accounts or the failure of any notice to the Swiss banks.

It hllli been contended on behalf of the respondent that the Special
Judge has exhibited a partiality towards the respondent by not giving any ......
B' opportunity of being heard when the prosecution was given a right of
audience before iss9ing letter rogatory.

Merely because t~e Special Jlidge heard counsel for the CBI before
issuing letter rogatory the respondent cannot make such a complaint that
he should have also been given prior notice to present his case as we have
c repeatedly pointed out-that the stage of investigation is only at the door.
The order sought for from the Special Judge by CBI is only for process
of judicial assistance from the competent judicial authorities in the Con-
federation of Switzerland for investigation and collection of evidence. In
such a case the accused has no right to raise the voice of opposition.
D
For the aforementioned discussion, we hold that the facts and cir-
cumstances of the case do not attract the audi alteram partem rule requiring
a prior notice and an opportunity of being heard to the respondent and
that the respond;nt has ~ever been prejudiced and deprived of his right to
E property due to the alleged non-compliance of the principle of audi alteram
partem.

Whether the issue of letter rogatory is vitiated by non-application of mind by
the Special Judge?

F The High Court for drawing its conclusion that the issue of letter
rogatory suffers from non-application of mind and the said letter was
issued in a very casual and mechanical manner prejudicial to the respon-
dent has given the following reasons:

(a) By the letter rogatory, not only the information regard-
G ing assets owned/possessed by many persons (besides the
named accused) including certain Indian citizens who are
neither named in the First Information Report nor is there
any allegation against them has ~een asked for but also the
Swiss authorities are requested to freeze the bank accounts
H of all those persons.

t
I
U.0.1. v. W. N. CHADHA [PANDIAN, J.] 647

(b) The Special Judge did not apply his mind to all the A
points raised by the Cantonal Court for rectification of the
letter rogatory issued on 5/7th February, 1990.

- (c) The Special Judge has notat all applied bis mind before
issuing the amended letter rogatory to the objections raised
· by the Cantonal Courtof Geneva withtegardto-the pasting
·of a piece of paper containing certain riani'es which were·
B

·earlier mentioned in- the letter dated 26th January, 1990
given by Mr. M.K. Madhavan, CBI to the Federal Depart-
ment of Justice and Police. The non-reference to the earlier
letter of the CBI in the letter rogatory issued by the Special c
. Judge on 5/7th February, 1990 and also its absence as one
of the annexures to the letter rogatory show that the letter
- rogatory issued by the Special Judge had been tampered
with.
D
(d) The CBI in its note of compliance clarifying the obser-
vations of the o~der of 3rd July, 1990 of the Criminal Court
of Geneva not only referred to the Criminal Law Amend-
ment Ordinance, 1944 which empower the District Judge
to pass ad interim orders attaching the money or other
property but also enclosed a copy of the same for the E
purpose of showing the power of the Criminal Courts in
India. Under Section 4(1) of the said Ordinance a District
Judge is empowered to pass an ad intertim order attaching
the money or other property alleged to have been procured
by means of any offence but in terms of Section 4(2) of the F
said Ordinance the District Judge was required to issue a
notice to the person whose money or other property is
being attached; accompanied by copies of the order, the
application and affidavits and to the evidence if any
recorded calling upon the person to show cause why the
order of attachment should not be made absolute. G

(e) When the CBI itself has relied upon the provisions of
the above Ordinance, the Special Judge ought to have
complied with the mandate of Section 4(2) by issuing a
show cause notice to the respondent. H
648 SUPREME COURT REPORTS (1992] SUPP. 3 S.C.R.

A · Though in the Writ petition, this ground has not been specifically
taken in the nanner in which the learned Judges have framed the question,
however, under ground No. (Z), it is pleaded:

''That the Special Judge ought to have conducted a prelimi-

B
nary enquiry by trying to look iri.to the entire materials
placed before him by thoroughly investigating before acting
pursuant to the First Information Report, which in the
respectful submission of the petitioner, the learned Judge
-
failed to do so, thus causing miscarriage of justice to th.e
petitioner ..... "

C From the judgment, it is .seen that certain documents which are said
to have been claimed as secret and confidential documents by the ASG are
taken into consideration for reaching to the conclusion that there was
non-application of mind.

Then the puzzling question that comes up for consideration is as to
D how all the correspondence, namely, the copy of the order of the Canton
Court of Geneva and the note of· compliance of the CBI came to the
knowledge of the High Court especially when these documents were not
available with the respondent and notproduced by the Court. The clue for
answering the above question is found in the judgment itself which reads
thus:
E
"We may point out here that pursuant to our directions
copies of the origii:ial letter rogatory along with their
enclosures issued on 7th February, 1990 and 22nd August,
1990 have been made available to us."

F In yet another part of the impugned judgment, it is stated as follows:

"From records, we, however, find that through letter
rogatory information regarding assets owned/possessed by
many persons (besides the named accused) including cer-
tain Indian citizens, who are neither named accused in the
G
FIR, nor there is any allegation against them in the FIR
has been asked for and even the Swiss Authroties were
requested· to freeze their bank accounts."

In this connection, the additional grounds filed by the appellants may
H be taken note of.
U.0.1. v. W. N. CHADHA [PANDIAN, J.] 649

Ground No. 'N' of the additional grounds reads thus: A
"It is submitted that the. entire original record was offered
to the High Court in confidence from which the High Court
has even quoted.................... "

Ground No. 'Q' of the additional grounds, the appellants have stated B
thus:

"............. High Court has recorded findings beyond the
scope of arguments urged at the bar on behalf of respon-
dent herein and the pleadings on record."
c
· During the argument before this Court, the Additional Solicitor
General reaffirms that certain secret and confidential documents at the
instance of the court ~ namely the letters of the CBI to the Federal
Department of Justice and Police, Berne, Switzerland' dated 23rd and 26th
January, 1990, the order dated 3rd July, 1990 of the Cantonal Court, the D
note of compliance of the CBI, the letters of the Chief of Army Staff, the
minutes of the meeting of the Negotiating Committee etc.. etc. were handed
over in a sealed cover with an oral request not to reveal the docUD1ent to
the other side or to refer them in the judgment since otherwise the
Government would be claiming privilege on the said documents. In other
words, oral privilege was claimed under Section 124 of the Evidence Act. E
The Additional Solicitor General continues to state that the High Court
unfortunately despite the oral request made on behalf of the CBI has freely
made use of those confidential documents inclusive of the copy of the order
of the Cantonal Court. Leaving apart the submission made by the learned
Additional Solicitor General before this Court, the impugned judgment F
itself pellucidly discloses that the High Court has considered certain docu-
ments which were not placed by the respondent before it, but evidently by
the appellants and has relied upon those documents for quashing the
letters rogatory on the ground of non-application of mind. In fact, Mr.
Prashant Bhushan in his unnumbered SLP has supported the plea of the G

-
Additional Solicitor General. No specific objection has been raised from
the side of the respondent with regard to the oral request made by the CBI
not to make use of those confidential documents in the judgment.

In these circumstances, we have no other option except to hold that
the High Court has used all those confidential documents which the Court H
650 SlJPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A ought not to have used for the reasons, firstly those documents are stated
to have been clauned as ~ecret documents and secondly ignoring the
request of the CBI said to be made and without notice to the appellants
herein. Besides free use of the documents, some portion of the documents
are extensively quoted. The only inescapable inference that could be drawn
in those circumstances would be that the Court has made up its mind as
B to the expendiency of quashing the letter rogatory and thereafter has
conveniently made use of those documents for the end product. .

Be that as it may, after having gone through the orders of the Special
Court dated 5th February 1990 and 21st August 1990 and all the connected
C records placed before the Court, the Special Judges cannot be found with
to have issued letter rogatory casually or mechanically but only after
applying their mind and on being satisfied that the FIR constitutes a
cognizable offence or offences and that a competent officer under the
Code of Criminal Procedure has made a request for issuance of letter
rogatory.
D
Hence we see absolutley no reason to sustain the conclusion of the
High Court that the issue of letter rogatory suffers from non-application
of mind by the Special Judge.

In this connection, we would like to refer to a decision of the Bombay
E High Court in Kekoo J. Maneckji v. Union of India, 1980 (86) Cr.LI. 258.
In that case a request was made by the CBI to the Magistrate for issuing
letter rogatory through the Ministry of External Affairs, Govt. of India,
New Delhi to the District Court of the United States for the Western
District of Washington for issuing directions to the Washington Mutual
F Savings Bank, Citadel to make available certain documents duly certilied
under an affidavit to the CBI, the investigating officer in that case in India.
The request was granted by the learned Magistrate, which order was
challenged as illegal in the High Court. It appears that the documents
called for came into possession of the CBI. Having regard to the facts of
G the case while rejecting the challenge made by the petitioner, Chandurkar,
J. (as he then was) while dismissing the wirt petition observed:

"Now, assuming for a moment that the order of the learned
magistrate is wholly illegal and without jurisdiction as a
result of that order these documents have already come
H into the possession of the investigating agency...................... .
U.O.I. v. W. N. CHADHA [PAND!f\N, J.] 651

Once the documents are in the possession of the investigat- A
ing agency, assuming that they are received by following a
procedure which is illegal in the eye of law, that would not
by itself make the evidence irrelevant or inadmissible. The
value to be attached to the evidence will depend on its
relevancy and consequently its admissibility and whenever
such documents are produced before the appropriate B
Court, notwithstanding the manner in which those docu-
ments could come into the possession of the prosecuting
agency, they would still be tendered in evidence by the
prosecution after satisfying the Court about their admis-
sibility and relevancy under law." c
Sawant, J. (as he then was) while agreeing with the dismissal of the
petition added his opinion stating thus:

"This is admittedly a stage where the prosecuting agency is D
still investigating the ciffences and collecting evidence
against the accused. The petitioner, who is the accused, has
therefore, no locus standi at this stage to question the
manner in which the evidence should be collected. The law
of this country does not give any right to the accused to
control, or interfere with, the collection of evidence. The E
only stage at which the accused can come in the picture
vis-a-vis the evidence, is the stage when the evidence is
sought to be tendered against him, and he can challenge it
only on the ground that the evidence is inadmissible. That
is why, according to me, the petition cannot be said to be F
a person aggrieved at this stage, and hence he cannot claim
any relief from this Court by filing a petition either under
Art. 227 of the Constitution or under Section 397 or 482 of
the Code of Criminal Procedure as has been done in this
case ..........................
G
That is why, even assuming that the provisions of Section
91 Cr.P.C. were not open to be invoked for getting the letter
rogatory issued, the petitioner-accused is not the person
who can complain against such issuance. Hence, this peti-
tion was liable to be dismissed in limine on the short ground H
652 SUPREME COURT REPORTS (1992) SUPP. 3 S.C.R.

A that the accused had no locus standi to file the same. It
matters, therefore, very little whether the documents were
received or were yet to be received in this country when
the petition was filed. Even if the documents were yet to
be received in this ._country, we would have still dismissed
the petition on the aforesaid grounds.............................. ;.... .
B
.······ ........................... ····-········ ..................
.
·~····· .................................
The proseq.1t":ig agency in the present_ case could have
secured the said documents from the United States on its .
own and without reference .to a Court of l~w. There i.s ..
nothing in law to bar the pro~ecuting agency from collecting
c evidence in that manne_r."

For all the aforesaid reasons we unhesitatingly set aside the order of
the High Court quashing the letter rogatory \lated 5/7th February, 1990 and
the rectified letter rogatory dated 21/iincf August, 1990 issued u:i pur-
D suance of the orders passed by the Special Judge. The respondent who is
a named accused in the FIR has no locus standi at this stage to question
the manner in which the evidence is to be collected. However, it is open
for the respondent to challenge the admissibility and reliability of the
evidence only at the stage of trial in case the investigation ends up in filing .
a final report under Section 173 of the Code indicating that an offence .
E appears to have been committed.

Does the First Infonnation Report prim a f acie disclose any offence
against the respondent, W.N. Chadha and is there any material prim a f acie
connecting the respondent with the dealings of Bofors relating to the purchase
F of guns?

For answering the first part of the above question the _High Court
has made a lengthy discussion with reference to the various documents and
examined them under various heads - namely,

G (a) Whether the decision for entering into and finalising
t!1c .contract was followed by the well established pro-
cedure? -
(b) Whether the contract finally entered is perfect and
H bona fide?
U.0.1. v. W. N. CHADHA [PANDIAN, J.) 653

(c) Whether the allegations made in the FIR do constitute A
an offence/offences against the respondent W.N.
Chadha? and

( d) Whether the non-tracing of the names of the unnamed
public servants or at least any one of them generally
mentioned in the FIR is entirely due to indolence or B
remissness on the part of CBI7

In dealing with the question of the procedure followed by the
Government of India in entering into the contract with Bofors the High
Court has traced the history commencing from the proposal for procure- C
ment of 155 mm guns along with certain equipments and ammunition
approved in April 1984 and ending with its finalisation on 24th March
1986, mostly relying on some original records inclusive of certain confiden-
tial documents which, according to the Additional Solicitor General, were
made available to the Court at its instance. The fact that original docu-
ments were made use of and relied upon by the High Court is strengthened D
by the following observation made in the impugned judgment itself:

"The urgency of acquisition of 155 mm gun is evident from
the letter dated 29th November, 1985 written by the then
Chief of Army Staff to the then Raksha Rajya Mantri (A),
which we have perused from the original record." E

A scrutiny of the judgment demonstrably shows that the High Court
has gone through some original records which in the very nature of them
could not have beeri made available by the respondent. As indicated above,
the Additional Solicitor General states that the original documents were F
produced by the Government in a sealed cover for the Court's perusal with
an oral request not to reveal the documents to the other side and to make
use of them in the judgment, besides orally claiming privilege. However,
the High Court has not only referred to those documents but also very
much relied upon them. In fact, the High Court has reproduced a relevant
portion of the letter dated 29.11.1985 of the then Chief of Army Staff and G
also a portion of the minutes of the meeting of the Negotiating Committee
recorded on the 4th March 1986. It was only on the basis of the above
documents the High Court drew its final conclusion regarding the proce-
dure followed from the very proposal of the contract till its finalisation.
The relevant conclusion reads thus: H
654 SUPREME COURT REPORTS (1992] SUPP. 3 S.C.R.

A "From the facts mentioned hereinabove, it is clear thatthe
decision regarding finalisation of the contract with Bofors
was not taken by one or two persons, it was based on the
recommendations of the Negotiating Committee of five
Secretaries. Financial Advisor and DCAOS and these
recommendations were dully examined and approved by
B then Secretaries of the various departments as also by the
then two Ministers of State for Defence, the then Finance
Minister and the then Prime Minister (as RM). Thus, the
decision was taken in accordance with the well established
procedure."
c
· (emphasis supplied)

After having recorded its finding with regard to the procedure
followed the High Court has passed on to the second question as regards
the bona fide nature of the contract.
D
By making reference to the keen competition between the two finally
short-listed firms, namely, M/s Bofors and Sofma and the lower price
quoted by Bofors than that of Sofma in addition to certain further conces-
sions amounting to approximately Rs. 10.5 crores, the Court held thus:

E "All this clearly s~ows that the procedure adopted for
finalisation of the contract with Bofors was perfect and bona
fide."

(emphasis supplied)

F The High Court,· after recording the above conclusions as regards the
procedure followed and the nature of the contract, has examine·d the vital
issue as to whether the allegations made in the FIR do constitute an
offence/offences under any of the provisions mentioned. in the FIR war-
ranting a thorough investigation against the respondent.
G Based on the correspondence exchanged between· Bofors and the
authorities of the Government of India and the opinion of the then Attor-
ney General of India contained in paras 8.6 anCi 8.16 of the report of the
JPC the High Court has held as follows:

H "The petitioner (W.N. Chadha) who ~as getting 1 lakh SEK
U.O.I. v. W. N. CHADHA (PANDIAN, J.] 655

per month for administrative services e.g. transportation, A
forwarding of letters, telex etc. cannot be called a mid-
dleman as he never represented on behalf of Bofors for the
finalisation of the contract as explained hereinabove. 11

Rejecting the contention on behalf of the CBI that the principal
beneficiary of payments made by Bofors to Svenska Inc. in connection with B
the gun deal in question is the petitioner who is owning the AGC, the High
Court has observed thus:
11
••••••• that contractual obligation between M/s Bofors on the

one hand and Svenska Inc. and AGC on the other had
existed much before the decision of the Government of
c
India taken in November, 1984 prohibiting the involvement
of agents and middlemen in relation to the gun contract."

It has been further concluded by the High Court:
D
11
it is clear that if at all anybody can be alleged having
•••••••••••••

played any role for finalisation of the contract, it is AE
Services Limited with whom association of the petitioner
has not been alleged even in the FIR."

The High Court has also held that the averments made in the FIR E
against the respondent on the basis of media reports are nothing but only
surmises and conjectures.

As regards the payment of SEK 1 lakh per month to AGC as
revealed by the letter dated 10th March, 1986 of Bofors-(vide para 96 of F
the FIR) it has been held by the court below that even as per the allegations
in the FIR the said amount paid to the respondent was legitimate one
towards the administrative services.

Then quoting the opinion of the then Chief of Army Staff recorded
in his letter dated 29th November, 1985, the opinion of the then Attorney G
General contained in paragraph 8.13 of the report of the JPC, the agree-
ment between Bofors and AGC dated 24th October, 1978 and another
agreement between Svenska Inc. Panama and Bofors entered into in
December, 1978 the period of which was further validated in 1984 the High
Court has held: H
656 SUPREME COURT REPORTS [1992) SUPP. 3 S.C.R.

A "After the Government oflndia's policy decision prohibit•
ing involvement of ag~nts, Bofors might have been required
to settle their contfactual obligations with their agents
which is a matter purely between Bofors and their former
agents. If Bofors made payments out of its own resources
as alleged by the CBI to their former agents as winding up
B charges or ~ommission in whatever form may be for ter-
mination of the earlier existing contract, it would not con-
stitute any criminal offence."

Thereafter referring to the opinion of the then Attorney General 1
c contained in paragraphs 8.7, 8.9 and clause 26 of the agreement entered
into between Government of India and Bofors it has held:

".......... that unless there is a specific allegation regarding
payment of any money to a public servant in India it cannot
be saicl that the amount paid by Bofors to any of his agents
D outside India.was a bribe meant for certain public servants."

According to the Court befow, when there is no reference to any
agent or middle man in the contract and when the procedure followed for
finalisation of the contract has been perfect, there can be no case of
cheating under Section 420 of the Indian Penal Code or abetment of
E
cheating against the respondent as well as under any of the penal provisions
mentioned in the FIR.

As there is no allegation of wrongful gain or loss levelled against any
of the named and unnamed accused by the Bofors or their agents barring
F the media reports, there is no question of offences .under Sections 468 and
471 having been committed. Further in the absence of any material indicat-
ing Criminal breach of trust, there cannot be any offence under Section
409 IPC even on the basis of the allegations as contained in the FIR.

The High Court has further pointed out that the non~filing of any
G suit and the failure to initiate any arbitration proceeding for the recovery
of the alleged commission by the Government supportthe conclusion that
there is no breach of trust.

At the outset we are constrained to observe that we are terribly
H shocked on seeing that the High Court has gone out of its authority and
U.0.1. v. W. N. CHADHA [PANDIAN, J.) 657

overstepped its province by making use of certain original records and then A
on the. basis of the .;aid records proceeded to examine the entire procedure
followed right from the proposal up to the finalisation of the contract
between Bofors and Government of India and its genuineness and bona
fide and ultimately affixed its seal of judicial approval holding that the
contract is perfect' and bona fide.
B
It is to be noted that the High Court appears to have waded through
the entire original records produced before it by the Government for its
perusal and on the strength of those documents, the Court has raised the
two questions, namely, whether the proper procedure in the execution of
the contract was followed and whether the contract finalised is perfect and C
bona fide-and answered both the questions in affirmative, that is in favour
of the respondent and prejudicial to the appellants.

The perusal of the impugned judgment clearly discloses that the
learned Judges of the High Court have freely used those documents which D
are said to be secret and confidential and not only referred but also quoted
certain portion of those documents in extenso as stated supra. According
to the learned A.S.G., the line of course taken by the High Court to its
conclusions on the seriously disputed questions of law and fact taking its
cue from the original records cannot be countenanced. In our view, the
documents (the copies of which are produced before us claiming to be E
secret documents) from their very nature could have never been in posses-
sion of any third party much less with the respondent and in such a case,
the High Court was not at all justified in making use of those documents
for its findings especially in a case of this nature where there are serious
and outrageous allegations. In these circumstances, one would be con- F
strained to observe that the High Court has prejudged the issue and
thereby laid down the foundation for its subsequent findings for quashing
the entire proceedings. No doubt every court has its plenary powers to
deliberate upon every issue agitated before it as well as any other issue
arising on the materials placed before it in the manner known to law after
giving a prior notice and affording an opportunity of being heard. This G
power of discharging the statutory functions whether discretionary or
obligatory should be in the interest of justice and confined ~thin the legal
permissibility. In doing so, the Judge should disengage himself of any
irrelevant and extraneous materials which come to his knowledge from any
source other than the one presented before him in accordance with law H
658 SUPREME COURT REPORTS (1992] SUPP. 3 S.C.R.
)
A and which are likely to influence his mind one way or the other. In this
context, it may be appropriate to recall the following view expressed by
Benchamin Govdozo in his Treaties 'The Judge as a Legislator'.

"The judge, even when he is free, is still not wholly free. He
is not to innovate at p1easure. He is not a knight-\errant
B roaming at will in pursuit of his own ideal of beauty or of
goodness. He is to draw his inspiration from consecrated
principles. He is not to yield to spasmodic sentiment, to
vague. and unregulated benevolence. He is to exercise a
discretion informed by tradition, methodized by analogy,
c disciplined by system ..... ;..............."

We feel that it is not necessary to go deep into the matter any further
except saying that the High Court is not justified in affixing its seal of
approval to the contract by holding it to be ·bona fide, on being executed
following the proper procedure.
D

E
For all the reasons stated above we without any hesitation quash
those finding with regard to the nature of the contract and the procedure
followed.

Now let us switch over to the later part of the question and examine
whether there are materials prima facie connecting the respondent with the
--
dealings of Bofors.

Admittedly the respondent ·was earlier Bofors' representative in
India appointed in the year 1978 and from January 1986 he was appointed
F as Bofors' Administrative Consultant. According to the respondent, in the
agreement covering the period upto the end of 1985, there was a provision
for the payment of commission on sales to him, .but his role during this
period was essentially supportive in nature and· not that of a full-fledged
agent who could bind Bofors in any way or enter into negotiation on their
G behalf.

The learned ASG referring to the secret part of SNAB report
published by Hindu in its issue dated 9th October, 1989 and certain other
relevant documents published in the issue of Indian Express and Statesman
of 13.10.1989 states that an Indian who had been agent of Bofors for 10-15
H years was the principal beneficiary of payment made by Bofors to Svenska
tJ.OJ. v. W. N. CHADHA [PANDIAN, J.] 659

Inc. in connection with the gun deal in question and that the respondent A
was very much connected with Svenska Inc. Of course, Mr. Rajinder Singh
has denied any connection of the respondent with Svenska Inc. and added
that if the period of 10 or 15 years mentioned by the learned ASG is
calculated backwards from 1985, it would show that the connection of the
alleged agent with Bofors should have started from 1975 and, therefore, B
the expression 'agent' as appeared in the Press could not refer to the
respondent who became the agent only in 1978. The arguments of Mr.
Rajinder Singh has been refuted_ by the ASG who relied on the statement
of the respondent before the investigating agencies engaged by JPC
wherein the respondent is stated to have admitted that he was a repre-
sentative of M/s Aerotronics General Agencies (for short 'AGA') and tried C
to sell some laser guns to India but was not successful and that some time
in 1975-76 this Company AGA was taken over by Bofors and it was
renamed as Bofors Aerotronics and this was his first C:ontract with Bofors.
On the basis of the above statement, the ASG has submitted that the
respondent was working with Bofors at least since 1975 which would D
unmistakably show that he was the sole beneficiary of the payment made
to M/s Svenska Inc. through his first formal agreement with the Bofors in
the name of Aerotronics General Corporation signed in 1978. According
to him, the fact that in 1978 there was a written contract between Bofors
and AGC, of which the respondent to admittedly the President - signed by E
the respondent on 24.10.1978 and by Bofors 21.12.1978 validating the
contract till 30.9.1981. Coinciding in point of time another agreement was
signed between Svenska Inc. Panama and Bofors signed by Svenska on
14.12.1978 and Bofors on 21.12.1978 validating upto 31.9.1981. The learned
ASG drew our attention to the similarities between the aforesaid agree-
ment of Bofors with Svenska Inc. and AGC. According to him on 11.3.1981 f.
through identical letters signed by Martin Ardbo (one of the named
accused in the FIR) who is the former President of Bofors, both agree-
ments i.e. one between AGC and Bofors and the other between Svenska
Inc. and Bofors were renewed for another period of three years upto
30.9.1984 and that in 1984 Bofors signed another agreement with Svenska G
Inc. and with AGC which are also having similarities. He continues to state
that Svenska Inc. Panama belonged to the respondent and the statement
made by Bofors President on 18.12.1986 before officials of the Swis~
National Bank makes it clear that the principal beneficiary in Svenska Inc.
is an Indian who has been an agent for Bofors for 10-15 years as alleged H
660 SUPREME COURT REPORTS (1992] SUPP. 3 S.C.R.

A in para-25 of the FIR. He further states that the description of the pay-
ments as commission or as winding up cost is not correct but the payment
was remitted by Bofors on 30.5.1986 to the account of Svenska Inc. with
Swiss Banking Corporation was to make payments to public servants in
Government of India as motivation or reward for such public servants who
helped finalisation of the contract by dishonestly abusillg their official
B
position. It is further submitted by the ASG that there are sufficient
materials co.nnecting the respondent with payment of the bribe amount and
therefore, the finding of the High Court that the amount paid to the
respondent was a legitimate one as the same was for administrative services
and the said amount could not .be. termed as bribe by any stretch of
C iltlagination absolutely incorrect and bereft of the incriminating documen-
tary evidence. The above argument advanced on behalf of the appellants
was stoutly resisted by the learned counsel for the respondent, according
to whom there was a clear understanding between Government of India
and Bofors that there should not be any middle man or agent and in fact
D the agreement finalised for purchase of the guns does not spell out the
engagement of any middle man or agent. ·

One should not lose sight of the fact that the oral understanding. has
not been incorporated in the written agreement about which there is no
E dispute. What is stated at the bar is that the oral understanding has been
confirmed by subsequent correspondence between the parties. The High
· Court has extensively quoted the opinion of the then learned Attorney
General and very much relied on it for its observation, reading thus:

"After the Government of India's policy decision prohibit-
F ing involvement uf agents, Bofors might have been required
to settle their contractual obligations with their agents
which is a matter purely between Bofors and their former
agents. If Bofors made payme~ts out of its own resources
as alleged by the CBI to their former agents as winding up
G charges or commission in whatever form may be for ter-
mination of the earlier existing contract, it would not con-
stitute any criminal offence."

Be that as }t may, we feel that it is not necessary to go deep into the
H matter mthe light of our earlier finding given in Criminal Appeal No.
304/91 etc. etc. the.Judgment of which is reported in, (1991] 3 sec 756 and
I U.O.I. v. W. N. CHADHA [PANDIAN, J.] 661

(1992) 4 SCC 305 under the caption Janata Dal v. H. S. Chowdhary wherein A
we have stated that we were unable to share the assertion ofMr. Justice
M.K. Chawla holding that the FIR on the face of it does not disclose any
offence, Further this Court has also expressed its feeling on the statement
of Justice Chawla in the following terms:

"While so, it shocks our judicial conscience that Mr. Justice B
M.K. Chawla before whom no aggrieved or affected party
had come challenging the FIR, has taken suo moto action
and recorded such a categorical assertaion that 'no offence'
thereby meaning much less a cognizable offence is made
out in the FIR." . · c
In fact, the High Court in its impugned judgment itself has recorded
its finding that .they are also of the same view as that of this. Court that it
may not be correct that the FIR does not disclose any offence against
anyone named or unnamed ~ccused which definitely Qi.eludes the respon- D
dent also. ·1n the background. of the finding of this Court and that of the
High Court it is not nece~"ary to go deep into the matter by referring to
various documents such as report of the JPC, the opinion of the then
learned Attorney General, report of the Comptroller and Auditor General
of India etc. lest it may affect either of the parties if the investigation ends
up with the trial of the case. Though we refrain from giving any positive E
finding with regard to the alleged payment of the bribe amount to the
respondent, the allegations made in the FIR under Section 154 of the Code
of Criminal Procedure prima f acie constitute the offence alleged therein.
Hence we set aside the finding of the High Court that no offence is made
out against the respondent under various provisions of the different F
Statutes.

It has been vehemently argued by the counsel for the respondent
saying that the allegations of corruption which are wrapped in a cocoon of
ambiguity, falsehood and vagueness were conceived with mala fide motiva-
tion of the persons in authority at the time of the registration of the case G
a~d the criminal proceedings were initiated only with an oblique political
purpose. According to the counsel, the investigation geared up by those
who were in power in the then outgoing Government in order to gain
mileage in the journey of their political career is highly polarised and
politicalised. H
662 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A The above argument cannot be countenanced. As observed in Bhajan
Lal, when the entire matter is only at a preliminary stage and when the
investigation has yet to go a long way to gather the requisite evidence the
Court cannot come to a conclusion one way or the other on the plea of
ma/a fide at such a stage. Further in case the investigation discloses that
the entire proceeding has been initiated only with ma/a jides, probably the
B
prosecution itself may throw the case overboard. Answering a similar
contention, Bhagwati, CJ in Sheonandan Paswan v. State of Bihar, [1987] 1
sec 288 has observed as follows:
"It is a well established proposition of law that a criminal
c prosecution, if otherwise justifiable and based upon ade-
quate evid_ence does not become vitiated on account of
ma/a jides or political vendetta of the first informant or the
complainant." ·

D The said observations made in Bhajan Lal and Sheonandan Paswan
in this regard apply with all force to the case on hand.

The submission that the Government has neither filed any civil suit
nor has initiated any arbitration proceeding to recover the amount of
alleged commission serves as one of the factors compelling the Court not
E to accept the case of the prosecution has to be simply mentioned only to
be
' .
rejected. We are of the view
.
that this submission is meritless.

The High Court appears to have taken a serious note of a piece of
paper pasted by the CBI on the letter rogatory forwarded by the Special
Judge to t~e Cantonal Court of Geneva and expressed its view stating,
F "Whatever explanation for this may be, we disapprove the said action of
the officer of CBI who had done this as it may amount to tampering with
the judicial records." ·

It has been vehemently contended on behalf of the appellants that
G the above observation of the High Court is unwarranted and unjustified
since the said observation was made without properly understanding the
circumstances under which the piece of paper containing certain names of
account holders became necessary to be pasted. In relation to this obser-
. vation, a Criminal Misc. Petition No. 6365 of 1992 is filed in this appeal by
H Shri K. Madhavan who was then the Joint Director and Special Inspector
U.O.I. v. W. N. CHADHA [PANDIAN, J.] 663

General of Police, Central Bureau of Investigation and was in charge of A
the investigation of the Bofors case alongwith some other officers and who
is now stated to have voluntarily retired from the service w.e.f. 1st Novem-
ber, 1992. According to Mr. Madhavan, this disparaging observation was
made by the High Court without giving him any opportunity to explain the
circumstances under which the piece of paper was pasted. Mr. N. B
Natarajan, learned senior Counsel for Madhavan explains the circumstan-
ces stating under Article 18 of the Federal Act on International Mutual
Assistance for Criminal Matters, a letter of request dated 23rd January,
1992 was given by the Director of CBI to the Federal Department of Justice
and Police, Federal Government of Switzerland, Berne requesting for thier C
assistance in the investigation and for freezing I blocking the credit balan-
ces/amounts available in various accounts in Swiss banks. Thereafter, a
supplementary request for freezing and blocking of more accounts was
given to the Federal Department of Justice and Police by Shri K. Mad-
havan on 26th January, 1990 in which he had given the particulars of the D
names of the account holders in respect of whose accounts the request for
freezing/blocking had been made. In continuation of his submission, he has
stated that a copy of the above letter was shown to Shri R.C. Jain, Special
Judge who had perused the same and that the then Additional Solicitor
General, Shri Arun Jaitley who appeared on behalf of the CBI before the
Special Judge in fact clarified to the learned Judge that the names men- E
tioned in that letter had been furnished on the basis of information received
by the CBI. But the learned Judge, Shri R.C. Jain has not encl~sed the
copy of the letter alongwith other annexures to the letter rogatory dated
7th February, 1990 forwarded to the Swiss authorities. It was under these
circumstances, Shri Madhavan happened to paste a slip containing the F
names of those account holders as contained in the letter dated 26th
January, 1990 and handed over the letter rogatory with the enclosures to
the Swiss authorities. But when the entire letter rogatory was sent back to
the Special Judge for compliance of certain procedural formalities, this
disputed piece of paper was also attached to the letter rogatory. There- G
after, the entire matter came before Shri V.S. Aggarwal, the then Special
Judge who after going through the entire records inclusive of the slip of
paper sent the amended letter rogatory. It is further stated that when Shri
V.S. Aggarwal, Special Judge enquired of the then Additional Solicitor
General as to whether the letter dated 26th January, 1990 had been shown H
664 SUPREME COURT REPORTS (1992].SUPP ..3 S.C.R.

A to his predecessor, Shri R.C. Jain, the Additional Solicitor General con-
firmed the same stating that the said letter was shown to Shri RC. Jain
and it was only thereafter the amended letter rogatory was forwarded to
the Swiss authorites with the piece of paper already pasted on the letter.
In other words, Shri V.S. Aggarwal, Special Judge has approved the piece
B of paper already pasted to the letter rogatory and forwarded the same and,
therefore, according to Shri Natarajan, the Higb Court without appreciat:.
ing and understanding the circumstances under which the piece of paper
was pasted has made this disparaging observation and requested that this
observation may be expunged. In support of the above arguments, a letter
C dated 16th November, 1992 of the then Additional Solicitor General, Shri
Arun Jaitley is produced which letter was given by Shri Arun Jaitley to the
query asked by Shri Madhavan in his letter dated 15th November, 1992. In
his letter, Shri Arun Jaitley has explained the entire matter which fully
supports the present plea of the applicant, Shri Madhavan. We in order to
satisfy ourselves perused the letter of Shri Madhavan dated 26th January
D and the typed piece of paper pasted on the letter rogatory and are satisfied
that the piece of paper containing the names of the account holders tally_
with the names mentioned in the letter dated 26th January, 1990 and that
it is only reproduction of one paragraph in verbatim.

E Though initially, Mr. Rajinder Singh took a serious objection to the
conduct of the CBI in pasting this piece of paper to the letter rogatory
without the permission of the Court, when confronted by the subsequent .
approval of Shri V.S. Aggarwal, Special Judge he had no answer to sustain
the remark of the High Court. We are now fully convinced that there was
·F no tempering of judicial letter rogatory but only additional particulars were
furnished for ready reference of the names of .the account holders as
contained in the letter dated 26th January, 1990. Even if it is to be held
that the piece of paper should not have been pasted, leave apart the
explanation offered since Shri V.S. Aggarwal has approved the letter
rogatory with the pasted piece of paper on being satisfied the circumstan-
G ces under which it was pasted, the CBI cannot be ostracised. It must be
noted by pasting that slip Shri Madhavan has not added any additional
informatioin on his own. Therefore, we expunge the remark of the High
Court, as prayed for in the Cr.M.P. In view of this finding, we hold that
the High Court was not correct in holding that this has amounted to
H tampering of judicial records.
U.0.1. v. W. N. CHADHA [PANDIAN, J.] 665

The High Court has taken into consideration two factors alongwith A
the conclusions arrived at by the JPC in its report for granting the relief
to the respondent despite its finding that the allegations in the First
Information Report discloses an offence against all the accused about
which we will deal in the later part of this judgment.

Of the two, first relates to the alleged failure on the part of the CBI B
to name any one of the public servants as an accused even after the 31
months from the registration of the case and the second relates to the
impounding of the passport of the respondent.

In dealing with the first question of the two, the High Court said: C

"............even after the expiry of more than 31 months from
the registration of the FIR, CBI has failed to name any
public servant as an accused."
D
The above reasoning of the High Court is neither legally nor factually
sustainable. As rightly pointed out by the Additional Solicitor General
whose submissions we have already summarised in the earlier part of this
judgment, it is not due to any indolence or procrastination on the part of
the investigation but it is due to the obstructions put on the track of
investigation for scuttling the same by approaching the judiciary firstly by E
Shri H.S. Chowdhary as public interest litigant and secondly by the respon-
dent through his pairokar. However, the CBI all through is maintaining
stoic silence unmindful of all the scornful criticim and vilification levelled
against it, and is relentlessly and tirelessly fighting all the litigations so that
it can successfully proceed with the investigation and collect all the F
materials to espouse the cause of justice. To say that the prosecution has
failed to ·name any one of the public servants as an accused even after 31
months from the registration of the case, is a very uncharitable criticism.
A survey of .the various proceedings of this litigation reveals that the
investigating agency, namely the CBI was fettered at every stage and made
to spare its energy more in Court proceedings than in proceeding with the G
investigation. Only if the investigation is freely allowed without any
hindrance, the investigating agency can collect all the requisite particulars
and bring the names of those public servants on record, the secrecy of
which, it is said, is deeply buried in various places and under various
Departments. Hence this reasoning is devoid of any merit. H
666 SUPREME COURT REPORTS (1992] SUPP. 3 S.C.R.

A In the penultimate paragraph of the impugned judgment, the High
Court has observed: ·

"......... .It may be noted here that pursuant to the registration
of the FIR against the petitioner his passport has been
· impounded. Non-bailable warrants for his arrest were is-
B sued and the sa~e have been quashed by a learned Single
Judge of this Court and the matter is now pending before
the Supreme Court. In these circumstances, it is a fit case
where investigation cannot be allowed to continue against
the petitioner."
c We are not able to see any logic in the above reasoning. When we
asked the counsel for the respondent as to whether this material of the
impounding of passport was placed before the High Court, he hesitatingly
stated that the order of the High Court in Crl. Misc. (Main) No. 1318 of
1990 titled Washeshwar Nath Chadha v. State, bas been reported in 1(1991)·
D 1 Delhi Lawyer 394, an:d thereby requested the Court to infer that the High
Court might have taken note of that reported judgment, though the judg-
-ment spells out nothing about the source of information in this regard. At
the instance of this Court, a copy of the reported jud~ent in Crl. Misc.
case has been placed before this Court by the respondent.
E
Be that as it may, the respondent who was the petitioner in the above
case filed a petition before the High Court under Section 482 Cr.P.C. read
with Article 227 of the Constitution seeking certain reliefs, namely, to
permit him to inspect the FIR which is the impugned FIR in this case, and
to quash the non-bailable warrants issued against him relating to a case
F
registered under the provisions of the Passport Act, 1967.

-We are surprised that the High Court has taken a serious view of the
impounding of the passport as being a supportive reason for its finding of
annulling the proceedings. In fact that proceeding under the Passport Act
.G cannot have any bearing· in this proceeding initiated for quashing the FIR
even though tt.e impounding of the passport is to secure the presence of
the respondent for the investigation purposes in connection with the case
on hand. However, in passing we would like to quote a sentence from the
order of that case, whatever purpose it may serve. The sentence reads
H " ..... .petitioner does not want the quashing of the FIR nor is he making a
U.0.1. v. W. N. CHADHA [PANDIAN,-J.l 667

request to this Court to interfere in the investigation of the case." A
(emphasis supplied)

It may be stated that the petitioner in that case is the respondent
herein and the FIR referred to above is the impugned FIR in the present
case. B

Now we shall pass on to a very important aspect of the case which
renders the very conclusions of the High Court quashing the FIR as highly
unsustainable.

Coming to the close of the judgment, the High Court itself has C
expressed its view stating "......it may not be correct to say that the FIR on
the face of it does not disclose any offence against any one, named or
unnamed accused" (emphasis supplied) which we have already extracted
above. Having held so, the High Court thought that in exercise of its powers
under Article 226, it could quash the FIR on its findings on the other issues. D
It surprises us as to how the High Court quashed the FIR after having
positively found that the FIR discloses an offence/offences against named
and unnamed accused which will include the respondent also. But in the
next breath, it is held that no offence is made out.

This Court, in its earlier proceedings, has rejected the content~on E
that the FIR does not disclose any offence. This observation is binding on
the High Court yet the High Court strangely by way of self-contradiction
has held that no offence is made out against the petitioner and thereby
stonewalled the CBI probe. This paradoxical fmding perhaps by the High
Court is sought to be justified by feebly relying on the fact that the
investigating agency has failed to name any public servant as an accused, F
on the conclusions of the JPC and also on the circumstances of the
impounding of the passport of the respondent. These aspects have been
dealt by us and we have categorically held that these aspects do not·in any
way affect: the contents of the validity of the FIR. Placing reliance on these
aspects which are irrelevant at this stage, the High Court ought not to have G
taken the extreme step of quashing the very FIR.

We,. therefore, are of the firm view that the self contradictory fmdings
of the High Court itself gives a frontal attac~ to the impugned jugement,
rendering it unsustainable both in law and fact. To put it ironically, the
impugned judgment 'profusely bleeds due to its self inflicted injury'. H
668 SUPREME COURT REPORTS (1992] SOPP. 3 S.C.R.

A Shri Rajinder Singh, the counsel for the respondent when confronted
with the above inconsistent conclusions, finding himself on a sticky wicket
unhesitatingly stated that he is not accepting the finding of the High Court
holding that the FIR discloses the offence which finding in his opinion is
an incorrect and incoherent finding. This reply of Shri Rajinder Singh
cannot be countenanced and accepted. The respondent cannot be per-
B mitted to blow hot and cold, thereby attacking orie part of the judgment as
erroneous and untenable and attempting to sustain the other part as being
well founded on sound reasonings.

It cannot be said that the Report of the JPC has · acquitted the
C respondent and others of all the charges levelled against them on appraisal
of the entire evidence. On the other hand, the Report spells out .that Bofors ,,
did not co-operate and the evidence. relating to the recipients of the
amount was not forthcoming. Though we are not inclined to make a
detailed survey .of the Report, it would .suffice to refer to some of the
conclusions of the JPC which would serve our purpose. For proper under-
D standing, we shall reproduce hereunder the relevant portions of some of
the conclusions, recorded. under Chapter IX of the Report of JPC.

Conclusion (vi)

"................ Despite persistent demands from the Govern-
E ment of India, Bofors declined to give details of these
paynients and the recipients thereof."

Conclusion No. (vii)

"Bofors have expressed inability to furnish copies of their
F initial as well as the termination agreements with the tree
companies to whom winding up costs were paid, on the
plea of commercial secrecy. They have complained that
such disclosure would be a breach of their confidentiality
agreement with these companies".
G
(;onclusion No. (ix)

"On the ground of commercial confidentiality, Bofors have
not furnished full details of the persons to whom winding
up costs were paid. Nobody has come forward with any
H evidence in regard to the identity of recipients of payments
U.0.1. v. W. N. CHADHA (PANDIAN, J.) 669

made by Bofors........... .lt has not been possible for either A
our investigating agencies or any other sources to find any
evidence regarding the identity of recipients. The Commit-
tee have, therefore, not been able to reach any conclusion
in regard to the identity of recipients".

Conclusion No. (xi) B

"There is no evidence to show that any middleman was
involved in the process of the acquisition of the Bofors gun.
There is also no evidence to substantiate the allegations of
commissions or bribes having been paid to anyone. There-
fore, the question of payments to any Indian or Indian
c
company whether resident in India or not, does not arise,
especially as no evidence to the contrary is forthcoming
from any quarter".

Conclusion No. (xii) D
"Mere suspicion as regards existence of middleman and/or
payments of commissions does not constitute sufficient
ground for intitiating action to terminate the contract with
Bofors or to raise claims for the reimbursement to Govern-
ment of payments made by Bofors to the three foreign E
companies".

Conclusion No. (xiii)

"There is no evidence to establish that the Bofors' payments
totalling SEK 319.4 million involved a violation of any F
Indian Law."

Conclusion No. (xiv)

"There is no evidence of any other payment having been
G
made by Bofors for winning the Indian contract."

A perusal of the above conclusions shows that the JPC was not able
to secure the entire evidence and that the Bofors also was not fully
cooperating with the enquiry furnishing the relevant documents and that,
the JPC submitted its report on the available materials collected' and the H
670 SUPREME COURT REPORTS (1992] SUPP. 3 S.C.R.

A legal opinion of the then learned Attorney General of India.

Now it is shown th~t the Swiss authorities are coming forward to give
full co-operation and assistance in the collection of evidence at their end.
Therefore, when all those are extending their helping hands though so far
yet so close, there is no reason to forestall the investigation. In fac~ Shri
B Rajiv Gandhi, the then Prime Minister of India himself wanted a complete
probe and made a statement in this behalf in the Lok Sabha on 20th April,
1987 which we have already extracted in our earlier part of this judgment.
However, it may be recalled, in this connection also, his statement reading
"You show us evidence we do not want proof, we will bring the proof''. This
c assurance was affirmed and reaffirmed on more than one occasion by the
Minister for Defence during the course of the discussion in the Parliament.
The JPC itself has felt some suspicion as regards the existence of mid-
dlemal)., but what the report says is that the mere suspicion does not
constitute sufficient ground for initiating action.

D It may not be out of place to state, in this context, that there are
certain provisions in the Criminal Procedure Code which authorise a police
officer to register a ·case and investigate the matter if there is any reason
to suspect the commission of an offence or reasonable suspicion of com-
mission of any offence. Section 157(1) requires an officer in charge of a
police station who 'from information received or otherwise' has reason to
E ·suspect the commission of an offence - that is a cognizable offence, be can
investigate the matter under Section 156. The expression 'reason to suspect
as occurring in Section 157(.1) is not qualified as in Section 41(a) and (g) .
of the Code, wherein the expression reasonable suspicion' is used. There-
fore, what Section 157(1) requires is that the police officer should have
'reason to suspect' with regard to the commission of an offence. See Bhajan
F Lla.

Therefore, the suspicion entertained by the JPC gives room for a
probe especially when there is scope of getting sufficient assistance to make
the probe. The opinion of the then learned Attorney General in the JPC .
G report was based only on the materials available on that day and at th'lt
stage, but not on the materials which are still to be unearthed and brought
over the surface.

This Court in Bhajan Lal has already examined the principle of law
in dealing with the exercise of the inherent power under Article 226 or the
H inherent powers under Section 488 of the Code in the matter of quashing
U.0.1. v. W. N. CHADHA [PANDIAN, J.) 671

the First Information Report and also has listed out the circumstances, by A
way of illustration though not exhaustively, under which the High Cour.t
can quash a FIR. We feel that it is not necessary to recapitulate the various
decisions of this Court which are already cited in the decision of Bhajan
Lal.

Cr.MP. Nos. 4999, 5201 and 5160 of 1992 B

All the above criminal miscellaneous petitions are filed seeking leave
to file appeals challenging the judgment impugned in this case. Admittedly,
none of them was a party to the proceeding in the High Court except Shri
Prashant Bhushan who filed his petition before the High Court, when the C
matter was reserved for judgment, as a public interest litigant making a
complaint that no proper submissions were made on behalf of the appel-
lants herein with regard to the legality of the issue of letter rogatory and
competence of the Special Judge in issuing letters rogatory. This petition
was disposed of by the High Court as the allegations in that petition were D
unfounded.

Before this Court, Shri Shanti Bhushan appearing on behalf of Shri
Prashant Bhushan stated that every crime is perpetrated only against the
society and that is why the State takes up the cause on behalf of the Society
and, therefore, these petitioners who evince their interest in the protection E
of the society should be granted. leave to canvass the correctness of the
impugned judgment as public interest litigants. In support of his submis-
sion, he placed reliance on the observation of this Court in Arunachalam
v. P.S.R. Sadhanantham and Another, (1979) 2 SCC 297 {para 5) anq Union
Carbide Corporation and Others v. Union of India and Others, (1991] 4 SCC F
584.

In Arunachalam, challenging the order of acquittal of the accused in
a case of murder passed by the High Court, the brother of the deceased
by name Arunachalam filed a SLP and obtained leave from this Court. A
doubt was raised about the competency of the private party as distin- G
guished from the State to invoke the jurisdiction of this Court under Article
136 of the Constitution. It was bnly in that context, Chinnappa Reddy, J.
observed that "We do not have slightest doubt that we can entertain
appeals against judgments of acquittal of the High Court at the instance of
private parties also." H
672 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A On going through the judgment, we are of the view that it will not
be of any assistance for the petitioners herein since none of them was a
party to the proceedings and moreover the investigating agency, namely,
the CBI and the Union oflndia who are the affected parties have preferred
the appeal.

B In Union Carbide Corporation, it has been said that any member of
the society must have locus to initiate a prosecution as well as to resist
withdrawal of such prosecution if initiated.

That proposition is also, in our opinion, cannot be availed of as the
C prosecution was initiated by the appellants herein and they are persecuting
and pursing the matter upto this Court. The proposition that any one can
initiate a criminal proceeding is not in dispute.

· We have already considered the locus standi of a third party in a
criminal case and rendered a considered finding in Janata Dal (supra)
D when this matter came before us in the first round of its litigation. Refer-
ence also may be made ~o Simranjit Singh Mann· v. Union of India and Anr.,
IT. (1992) 5 SC 441.

Before the.Supreme Court of United States, a similar question arose
in Whitmore v.Arkansas, [1990) 495 US 149, 109 L. Ed. 2d 135, 110 S. Ct.
E 1717, whether a next friend can invoke the jurisdiction of the Court when
a real party was not able to litigate his or 1=ter own cause. The Supreme
Court dismissed the writ of certiorari for want of jurisdiction on the ground
that Whitmore, an independent· person lacked standing to proceed in the
case. In. said case of Whitmore, reliance has been placed on a decision,
F namely, Gusman v. Marrero, 180 US 81, 87, 45 L. Ed. 436, 21, S. Ct. 293
(1901), in which it has been held thus:

"However friendly he may be to the doomed man and
sympathetic for his situation; however concerned he may
be lest unconstitutional laws be enforced, and. however
G laudable such sentiments are, the grievance they suffer and
feel is not special enough to furnish a cause of action in a
case like this. n •

In fact when this case oh hand came up before this Court arising out
H of the public interest litigation of Shri H.S. Chowdhary, some other political
U.0.1. v. W. N. CHADHA [PANDIAN, J.] 673

parties approached this Court as public interest litigants to challenge the A
impugned judgment in that case, but this Court rejected all those appeals
on the ground of locus standi.

For the above reasons stated above, all the Criminal Miscellaneous
Petitions are dismissed.
B
The investigation is only at an infant stage and it has to go a long
way to collect all the materials. Only after requisite particulars are col-
lected by the investigating agency, the further course of action would be
decided. Whatever it may be, without the battle lines being properly drawn,
the Court will not be justified in making any further positive pronounce- c
ment on the merits of the serious and cloudy issues involved. in this case
de' hors the findings recorded in this judgment. However, ·as we feel that
there may be a battle to be waged on a later occasion by the litigants if the
matter come up for trial, we do not propose to make any furt~er observa-
tions.
D
In the result, for the discussion made above, we set aside the im-
pugned judgement of the High Court quashing the letters rogatory - both
dated 5/7th February, 1990 and 21/22nd August, 1990 issued by the Special
Judge and the FIR registered by the CBI against the respondent under
various provisions of different Statutes and other proceedings and orders E
based on the said FIR.

Criminal Appeal No. 567 of 1992 is allowed accordingly. Crl. M.P.
No. 6365. of 1992 filed by Shri K. Madhavan to expunge the observation of
the High Court is also allowed. F
Before we part with this case, we have to observe that any views
expressed or observations made by this apex court should be borne in mind
and given effect to. In the instant case, inspite of the finding of this Court
in Janata Dal, the High Court has grossly erred in quashing the FIR, the
same has resulted in a glaring injustice, namely, that the investigation into G
grave and serious crime has got scotched and all the efforts so far taken
by the investigating agency in digging out the requisite evidence got buried. .
Therefore, we find it imperative to quash the impugned judgment of the
High Court.

N.V.K. Appeal allowed.