UNION OF INDIA AND ANR. v. W.N. CHADHA
Citation: [1992] SUPP. 3 S.C.R. 594; 1992 INSC 347
Court: Supreme Court of India
Bench: S. RATNAVEL PANDIAN , K. JAYACHANDRA REDDY
Judgment date:
Case summary
1992 INSC 347. Supreme Court of India judgment dated 1992-12-17. UNION OF INDIA AND ANR. v. W.N. CHADHA. Read the judgment and case details on LawSphereX.
Judgment text
A UNION OF INDIA AND ANR. v. · W. N. CHADHA DECEMBER 17, 1992 B [S. RATNAVEL PANDIAN AND K. JAYACHANDRA REDDY, JJ. ] c 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. 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. E 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. 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 G 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. 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 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 E 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 Bofors on 24th March, 1986. ·G 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 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 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.
B c 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. 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. 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.
E F 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 A B . c 598 SUPREME COURT REPORTS (1992] SUPP. 3 S. C. R. 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 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 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 B .. . other proceedings arising thereon • 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 under any other Sections of IPC was made out, no suit or any arbitration E 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- G troversies entered· into the realm of conjectures and surmises and 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 J bar in having requested the Special Court to issue letters rogatory/request H 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 B c. thicket of legal tangles. It was further s11bmitted that a bare perusal of the 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. 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 E committed serious violation of the· provisions of the Foreign Exchange 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 H play. ·- I 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: (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.
c (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 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 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] 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, E F G · 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 B need for investigation in Switzerland froze the relevant bank accounts on 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 E 7th February, 1990 to the competent judical authorities in the Confedera- 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] 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. B 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] B c 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 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 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] E F 16. The facts and circumstances of the instant case do not attract 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] 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] 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. B Kekoo J. Maneckji v. Union of India, (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] 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] 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] B 7.
According to the High Court, 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 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. 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 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] E F 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 A B c D E 610 SUPREME COURT REPORTS (1992] SUPP. 3 S. C. R.
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 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 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 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. 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. 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 S. RATNAVEL PANDIAN, J. The above appeal is preferred before E F 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 D has given rise to this appeal. 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 ('CCP A' 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 A B ·c 614 SUPREME COURT REPORTS [1992] SUPP. 3 S. C. R. 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 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 (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 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 c· 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 616 SUPREME COURT REPORTS [1992) SUPP. 3 S. C. R. - A 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 B said Report of the JPC was presented to Lok Sabha on 26th April, 1988 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 E General Corporation/Anatomic General Companies Ltd.
, C/4, Main 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 G and Auditor General of India (CAG)". Tlie First Information Report gives 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 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.
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 B c 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 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 E 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.
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- F 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 B c D 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. 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 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 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 . :r ~- 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: B c "Even if there are million questions of law to be deeply gone into and examined in a criminal case of this nature 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. " 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 the basis of the FIR. E F G 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: .
, (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 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. ] respondent even assuming that the respondent had 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 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. (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. (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 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 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- • 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~ 621 A B c b E F G 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. c (2) The Memorandum of Understanding is incompetent because India's Ambassador in Switzerland has no authority to negotiate or execute such a document.
(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. . E F . G H 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- 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 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: "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 Committee of both Houses of Parliament and having gone . U. 0. 1. v. W. N. CHADHA [PANDIAN, J. ] into substantial evidence we are of the opi,nion that we also cannot totally ignore the conclusions arrived at by the JPC.
" 623 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. 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 A B 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 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. 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 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. E F G H 624 A B c SUPREME COURT REPORTS . (1992} SUPP. 3 S. C. R. . 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 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 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. E F G 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. · 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 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 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. ] "With respect, we are also of the view that 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. · 625 (emphasis supplied) A 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 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 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 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 the said FIR by its impugned judgment dated 2nd September, 1992. c D E F 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 F G H 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 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- 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 . any bank account which has been frozen or for the return ' U. 0. L v. W. N. CHADHA [PANDIAN, J. ] or release of any informatio~ or documents till the S. L. Ps 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. " 627 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 A B 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 in the proper perspective and on a 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
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