Judges: J.S. Verma, C.J., S.P. Bharucha and S.C. Sen, JJ.

Facts:

On 25th March, 1991, one Ashfak Hussain Lone, alleged to be an Official of the terrorist organisation Hizbul Mujahideen, was arrested in Delhi. Consequent upon his interrogation, raids were conducted by the Central Bureau of Investigation (CBI) on the premises of Surender Kumar Jain, his brothers, relations and businesses.

Along with Indian and foreign currency, the CBI seized two diaries and two note books from the premises. They contained detailed accounts of vast payments made to persons identified only by initials. The initials corresponded to the initials of various high-ranking politicians, in power and out of power, and of high-ranking bureaucrats.

The gist of the allegations in the writ petitions is that Government agencies like the CBI and the revenue authorities had failed to perform their duties and legal obligations inasmuch as they had failed to investigate matters arising out of the seizure of the "Jain diaries".

The apprehension of terrorists had led to the discovery of financial support to them by clandestine and illegal means using tainted funds obtained through 'havala' transactions. This had also disclosed a nexus between politicians, bureaucrats and criminals, who were recipients of money from unlawful sources, given for unlawful consideration.

The CBI and other Government agencies failed to investigate the matter, take it to its logical conclusion and prosecute all persons who were found to have committed an offence.

Nothing having been done in the matter of investigating the Jains or the contents of their diaries, consequently the writ petitions were filed by the Petitioner on 4th October, 1993, in the public interest under Article 32 of the Constitution of India.

Issues:

(i) Whether it is within the domain of judicial review and it could be an effective instrument for activating the investigative process which is under the control of executive?

(ii) Whether there was violation of the Rule of Law?

(iii) Whether there is need to examine the structure of these agencies and to consider the necessary steps which would provide permanent insulation to the agencies against extraneous influences to enable them to discharge their duties in the manner required for proper implementation of the rule of law?

Law:

Constitution of India - Article 14 - State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.

Constitution of India - Article 141 - Law declared by the Supreme Court shall be binding on all Courts within the territory of India.

Constitution of India - Article 142 - Any decree or order passed by the Supreme Court to do complete justice was enforceable throughout the territory of India.

Constitution of India - Article 144 - Advises civil and judicial authorities to act in aid of the Supreme Court.

Contentions:

Petitioner

(i) Government agencies like the CBI and the revenue authorities had failed to perform their duties and legal obligations inasmuch as they had failed to investigate matters arising out of the seizure of the "Jain diaries"

(ii) There is need for the insulation of these agencies from any extraneous influence to ensure the continuance of the good work they have commenced.

(iii) A nexus between high-ranking politicians and bureaucrats who were alleged to have been funded by a source linked with the source funding the terrorists. In view of the funding also through foreign currency, some undesirable foreign elements appeared to be connected.

(iv) This is a grave situation posing a serious threat even to the unity and integrity of the nation.

(v) It is of utmost public importance that this matter is examined thoroughly by this Court to ensure that all Government agencies, entrusted with the duty to discharge their functions and obligations in accordance with law, do so, bearing in mind constantly the concept of equality enshrined in the Constitution and the basic tenet of rule of law: "Be you ever so high, the law is above you"

(vi) Everyone against whom there is reasonable suspicion of committing a crime has to be treated equally and similarly under the law and probity in public life is of great significance.

Respondent

(i) Government agencies like the CBI and the revenue authorities had not failed to perform their duties and legal obligations inasmuch as they had also not failed to investigate matters arising out of the seizure of the "Jain diaries".

(ii) The Single Directive acts as a restriction only on the CBI, but is inapplicable against the general power of the State Police to register and investigate any such offence under the general law, i.e. CrPC.

(iii) It is not an inhibition against a complaint being lodged under the CrPC before the competent court for any such offence.

(iv) CBI being a special agency created by the Central Government, it was required to function according to the mandate of the Central Government which has constituted this special agency for specified purpose.

(v) Desirability of the Single Directive is supported on the ground that the officers at the decision-making level need this protection against malicious or vexatious investigations in respect of honest decisions taken by them.

Analysis:

Judicial review - Effective instrument for activating the investigative process which is under the control of executive

(i) There are ample powers conferred by Article 32 read with Article 142 of the Constitution to make orders which have the effect of law by virtue of Article 141.

(ii) There is mandate to all authorities to act in aid of the orders of this Court as provided in Article 144 of the Constitution. In a catena of decisions of this Court, this power has been recognised and exercised, if need be, by issuing necessary directions to fill the vacuum till such time the legislature steps in to cover the gap or the executive discharges its role.

(iii) In Vishakha and Others v. State of Rajasthan and Others, MANU/SC/0786/1997, elaborate guidelines have been laid down for observance in work places relating to sexual harassment of working women.

(iv) It is also one of the objectives of the judiciary mentioned in the Beijing Statement.

(v) Thus, an exercise of this kind by the court is now a well settled practice which has taken firm roots in our constitutional jurisprudence. This exercise is essential to fill the void in the absence of suitable legislation to cover the field.

Duty of the judiciary to enforce the rule of law

(i) Court should ensure that all Government agencies, entrusted with the duty to discharge their functions and obligations in accordance with law, do so, bearing in mind constantly the concept of equality enshrined in the Constitution and the basic tenet of rule of law: "Be you ever so high, the law is above you". Investigation into every accusation made against each and every person on a reasonable basis, irrespective of the position and status of that person, must be conducted and completed expeditiously. This is imperative to retain public confidence in the impartial working of the Government agencies.

(ii) The Seven Principles of Public Life by Lord Nolan are of general application in every democracy and one is expected to bear them in mind while scrutinizing the conduct of every holder of a public office. It is trite that the holders of public offices are entrusted with certain power to be exercised in public interest alone and, therefore, the office is held by them in trust for the people. Any deviation from the path of rectitude by any of them amounts to a breach of trust and must be severely dealt with instead of being pushed under the carpet.

(iii) If the conduct amounts an offence, it must be promptly investigated and the offender against whom a prima facie case is made out should be prosecuted expeditiously so that the majesty of law is upheld and the rule of law vindicated. It is the duly of the judiciary to enforce the rule of law and, therefore, to guard against erosion of the rule of law.

Structure of investigating agencies - Need for examination

(i) Constitution and working of the investigating agencies revealed the lacuna of its inability to perform whenever powerful persons were involved. For this reason, a close examination of the constitution of these agencies and their control assumes significance.

(ii) No doubt, the overall control of the agencies and responsibility of their functioning has to be in the executive, but then a scheme giving the needed insulation from extraneous influences even of the controlling executive, is imperative. It is this exercise which became necessary in these proceedings for the future. This is the surviving scope of these writ petitions.

(iii) Central Government realised that in order to improve the functioning of these agencies, it is essential to conduct an in-depth study of the selection process of these agencies. For the same purpose, the government constituted the Vohra Committee that was headed by the then Home Minister, Shri N.N. Vohra.

(iv) The report of the committee disclosed a powerful nexus between politicians, high ranking bureaucrats, and mafia gangs, illegal organizations, and the underworld.

(v) It recommended the establishment of a nodal agency under the Ministry of Home Affairs to compile all the information that was received from the Intelligence Bureau, CBI, and Research and Analysis Wing. On the recommendation of the committee, the Central Government constituted a body named as Independent Review Committee.

Conclusion:

The Court issued directions for rigid compliance till such time as the legislature steps in to substitute them by proper legislation and disposed the petitions.

(I) Central Bureau of Investigation (CBI) and Central Vigilance Commission (CVC)

1. The Central Vigilance Commission (CVC) shall be given statutory status.
2. Selection for the post of Central Vigilance Commissioner shall be made by a Committee comprising the Prime Minister, Home Minister and the Leader of the Opposition from a panel of outstanding civil servants and others with impeccable integrity, to be furnished by the Cabinet Secretary. The appointment shall be made by the President on the basis of the recommendations made by the Committee. This shall be done immediately.
3. The CVC shall be responsible for the efficient functioning of the CBI. While Government shall remain answerable for the CBI's functioning, to introduce visible objectivity in the mechanism to be established for over viewing the CBI's working, the CVC shall be entrusted with the responsibility of superintendence over the CBPs functioning. The CBI shall V report to the CVC about cases taken up by it for investigation; progress of investigations; cases in which chargesheets are filed and their progress. The CVC shall review the progress of all cases moved by the CBI for sanction of prosecution of public servants which are pending with the competent authorities, specially those in which sanction has been delayed or refused.
4. The Central Government shall take all measures necessary to ensure that the CBI functions effectively and efficiently and is viewed as a non-partisan agency.
5. The CVC shall have a separate section in its Annual Report on the CBl's functioning alter the supervisory function is transferred to it.
6. Recommendations for appointment of the Director, CBI shall be made by a Committee headed by the Central Vigilance Commissioner with the Home Secretary and Secretary (Personnel) as members. The views of the incumbent Director shall be considered by the Committee for making the best choice. The Committee shall draw up a panel of IPS officers on the basis of their seniority, integrity, experience in investigation and anti-corruption work. The final selection shall be made by the Appointments Committee of the Cabinet (ACC) from the panel recommended by the Selection Committee. If none among the panel is found suitable, the reasons thereof shall be recorded and the Committee asked to draw up a fresh panel.
7. The Director, CBI shall have a minimum tenure of two years, regardless of the date of his superannuation. This would ensure that an officer suitable in all respects is not ignored merely because he has less than two years to superannuate from the date of his appointment.
8. The transfer of an incumbent Director, CBI in an extraordinary situation, including the need for him to take up a more important assignment, should have the approval of the Selection Committee.
9. The Director, CBI shall have full freedom for allocation of work within the agency as also for constituting teams for investigations. Any change made by the Director, CBI in the Head of an investigative team should be for cogent reasons and for improvement in investigation, the reasons being recorded.
10. Selection/extension of tenure of officers upto the level of Joint Director (JD) shall be decided by a Board comprising the Central Vigilance Commissioner, Home Secretary and Secretary (Personnel) with the Director, CBI providing the necessary inputs. The extension of tenure or premature repatriation of officers upto the level of Joint Director shall be with final approval of (his Board. Only cases pertaining to the appointment or extension of (enure of officers of the rank of Joint Director or above shall be referred to the Appointments Committee of the Cabinet (ACC) for decision.
11. Proposals for improvement of infrastructure, methods of investigation, etc. should be decided urgently. In order to strengthen CBI's in-house expertise, professionals from the revenue, banking and security sectors should be inducted into the CBI.
12. The CBI Manual based on statutory provisions of the Cr.P.C. provides essential guidelines for the CBI's functioning. It is imperative that the CBI adheres scrupulously to the provisions in the Manual in relation to its investigative functions, like raids, seizure and arrests. Any deviation from the established procedure should be viewed seriously and severe disciplinary action taken against the concerned officials.
13. The Director, CBI shall be responsible for ensuring the filing of chargesheets in courts within the stipulated time limits, and the matter should be kept under constant review by the Director, CBI.
14. A document on CBI's functioning should be published within three months to provide the general public with a feedback on investigations and information for redress of genuine grievances in a manner which does not compromise with the operational requirements of the CBI.
15. Time limit of three months for grant of sanction for prosecution must be strictly adhered to. However, additional time of one month may be allowed where consultation is required with the Attorney General (AG) or any other law officer in the AG's office.
16. The Director, CBI should conduct regular appraisal of personnel to prevent corruption and/or inefficiency in the agency.

II. ENFORCEMENT DIRECTORATE

1. A Selection Committee headed by the Central Vigilance Commissioner and including the Home Secretary, Secretary (Personnel) and Revenue Secretary, shall prepare a panel for appointment of the Director, Enforcement Directorate. The appointment to the post of Director shall be made by the Appointments Committee of the Cabinet (ACC) from the panel recommended by the Selection Committee.
2. The Director, Enforcement Directorate like the Director, CBI shall have a minimum tenure of two years. In his case also, premature transfer for any extraordinary reason should be approved by the aforesaid Selection Committee headed by the Central Vigilance Commissioner.
3. In view of the importance of the post of Director, Enforcement Directorate, it shall be upgraded to that of an Additional Secretary/Special Secretary to the Government.
4. Officers of the Enforcement Directorate handling sensitive assignments shall be provided adequate security to enable them to discharge their functions fearlessly.
5. Extensions of tenure upto the level of Joint Director in the Enforcement Directorate should be decided by the said Committee headed by the Central Vigilance Commissioner.
6. There shall be no premature media publicity by the CBI/Enforcement Directorate.
7. Adjudication/commencement of prosecution shall be made by the Enforcement Directorate within a period of one year.
8. The Director, Enforcement Directorate shall monitor and ensure speedy completion of investigations/adjudications and launching of prosecutions. Revenue Secretary must review their progress regularly.
9. For speedy conduct of investigations abroad, the procedure to approve filing of applications for Letters Rogatory shall be streamlined and, if necessary, Revenue Secretary authorised to grant the approval.
10. A comprehensive circular shall be published by the Directorate to inform the public about the procedures/systems of its functioning for the sake of transparency.
11. In-house legal advice mechanism shall be strengthened by appointment of competent legal advisers in the CBI/Directorate of Enforcement.
12. The Annual Report of the Department of Revenue shall contain a detailed account on the working of the Enforcement Directorate.

III. NODAL AGENCY

1. A Nodal Agency headed by the Home Secretary with Member (Investigation), Central Board of Direct Taxes, Director General, Revenue Intelligence, Director, Enforcement and Director, CBI as members, shall be constituted for coordinated action in cases having politico-bureaucrat-criminal nexus.
2. The Nodal Agency shall meet at least once every month.
3. Working and efficacy of the Nodal Agency should be watched for about one year so as to improve it upon the basis of the experience gained within this period.

IV. PROSECUTION AGENCY

1. A panel of competent lawyers of experience and impeccable reputation shall be prepared with the advice of the Attorney General. Their services shall be utilised as Prosecuting Counsel in cases of significance. Even during the course of investigation of an offence, the advice of a lawyer chosen from the panel should be taken by the CBI/Enforcement Directorate.
2. Every prosecution which results in the discharge or acquittal of the accused must be reviewed by a lawyer on the panel and, on the basis of the opinion given, responsibility should be fixed for dereliction of duly, if any, of the concerned officer. In such cases, strict action should be taken against the officer found guilty of dereliction of duty,
3. The preparation of the panel of lawyers with the approval of the Attorney General shall be completed within three months.
4. Steps shall be taken immediately for the Constitution of an able and impartial agency comprising persons of unimpeachable integrity to perform functions akin to those of the Director of Prosecutions in U.K. On the Constitution of such a body, the task of supervising prosecutions launched by the CBI/Enforcement Directorate shall be entrusted to it.
5. Till the Constitution of the aforesaid body, Special Counsel shall be appointed for the conduct of important trials on the recommendation of the Attorney General or any other law officer designated by him.

Important Precedents:

(i) Anukul Chandra Pradhan v. Union of India, MANU/SC/1258/1996

(ii) K. Veeraswami v. Union of India, MANU/SC/0610/1991

(iii) Vishakha and Ors. v. State of Rajasthan and Ors. MANU/SC/0786/1997

(iv) Union Carbide Corporation and Ors. v. Union of India and Ors. MANU/SC/0058/1992

(v) Delhi Judicial Service Assn. Etc. v. State of Gujarat and Ors. Etc. MANU/SC/0473/1991