Cannot Quash FIR On Ground That Issue Is Referred To Larger Bench: Apex Court Dismisses Plea By DK Shivakumar In Corruption Case

The Bench of Justice Bela M Trivedi and Justice Satish Chandra Sharma dismissed the petition.

Justice Trivedi remarked, “How High Court can stay the sanction granted under Section 6 [Section 6 of The Delhi Special Police Establishment Act, 1946 ('DSPE Act')]?... It is unheard of…I was really surprised to see that.”

Counsel for the Petitioner submitted, “That issue is over.”

Senior Advocate Mukul Rohatgi then appeared and said, “There are several issues which arise.”

Justice Trivedi remarks, “When you come, there are several issues which arise. (laughs)…Tell me how sanction orders can be stayed by the High Court. Section 6 Sanction order. Unheard of. How can the High Court grant such an order?”

Rohatgi said, “That has been withdrawn.”

Justice Trivedi asked, “What withdrawn?”

Rohatgi said, “Supreme Court dismissed the SLP against the stay. Against the stay, the Government came to the Supreme Court and it was rejected.”

Justice Trivedi replied, “We don’t interfere for so many reasons…That doesn’t mean that it is right.”

Rohatgi said, “So, any way, that is over now, we are now on a new question.”

Justice Trivedi said, “How the proceedings could be quashed?... This is 482…PMLA is also registered. ”

Rohtagi submitted, “That is quashed by the judgment of this Court. PMLA is quashed. The ground is that this Court has held that if the predicate offence is only 120B, which is conspiracy. It cannot be a standalone offence because it has to be piggy riding with some other offence. So if you just hold just 120B as a predicate offence, it is not a predicate offence, and therefore there can’t be any ED…I am now questioning the FIR lodged by the CBI and that it is completely illegal, is my question.”

He submitted that the date of FIR is October 3, 2020, and Section 17A of the PC Act has not been complied with which is subject to the judgment passed by the Court in Nara Chandrababu Naidu v. The State Of Andhra Pradesh And Anr. (Neutral Citation: 2024 INSC 41). “Your Lordship took one view, Justice Aniruddha Bose took another view. The issue is now referred to a larger bench. So simple point is, that Section 17A, having come in 2018, putting an embargo on inquiry and investigation in an FIR unless this provision is taken. Proceedings are in nullity.”, he said.

Justice Trivedi said, “As and when that judgment comes, it will apply to this case…That can be quashed on this ground alone.”

Rohtagi said, “The question is pending before a larger bench, one judge is held in my favour.”

Justice Trivedi said, “No quashing…41 lacs has been recovered from him?”

Rohatgi said, “That is income tax…Secondly, the income tax raid occurred on 02.08.2017. The income tax department based on that filed a criminal complaint against me on 13th June 2018.”

Justice Trivedi said, “That must be under the Income Tax Act.”

Rohatgi replied, “No. The Income-tax raid is one. The transactions of the event are one, in which an IT complaint has been filed. My second question is that there cannot be a CBI FIR of the same issue when Income tax is prosecuting.”

Previously, the Supreme Court had refused to interfere with the Karnataka High Court's order granting an interim stay on a CBI probe against Shivakumar.

Accordingly, the Bench refused to quash the FIR filed by the CBI.

The brief facts of the case are that the Income Tax Authorities conducted a raid on the house of Shivakumar and they alleged to have recovered Rs.8,59,69,100/- out of which Rs.41,00,000/- were recovered from Shivakumar. Subsequently, the Income Tax Authorities registered a complaint against him under the Income Tax Act and on the basis of the said offence, the Enforcement Directorate (ED) registered the FIR against Shivakumar for the offence punishable under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (for short 'PML Act'). They issued the notice to Shivakumar under Section 50 of the PML Act and then the ED sent a report to the Chief Secretary of Karnataka giving consent under Section 6 of The Delhi Special Police Establishment Act, 1946 (in short 'DSPE Act') and in turn, the Chief Secretary of Karnataka sanctioned, for prosecuting the case against the petitioner under the P.C. Act.

Accordingly, the CBI registered FIR on 03.10.2020 for the offence punishable under Section 13(1)(e) read with Section 13(2) of the P.C. Act. The petitioner challenged the FIR on various grounds.

The High Court had held, “Though the learned Senior counsels for the petitioner were contended that there cannot be two parallel proceedings for the same set of offence, both under PML Act registered by the ED and CBI for the P.C. Act, but, it is well settled by the Hon'ble Supreme Court that the proceedings before the ED is altogether different from the offences alleged to have been committed under the P.C. Act, whereas the ED proceedings for Money Laundering case and proceeding initiated by the Income Tax Authorities are pertaining to the tax evasions. Therefore, it cannot be said for the same offence, parallel proceedings initiated by three different agencies and hence, the contention of the petitioner counsels cannot be acceptable.”

Cause Title: D. K. Shivakumar v. Central Bureau of Investigation (Diary No. 47121/2023)