2020 (2) TMI 804 - HC - Indian Laws

Court quashes FIR for lack of enquiry, errors in asset valuation, and upholds jurisdiction despite objections

Thommandru Hannah Vijayalakshmi T.H. Vijayalakshmi, Versus Central Bureau of Investigation C.B.I.

The court quashed the FIR due to lack of preliminary enquiry, errors in income and asset calculations, inclusion of non-existent assets, and overvaluation ... Maintainability of FIR registered - disproportionate assets or not - excess value of property shown - contention of the petitioners is that the sale price realized is One Crore, there is no justification to reduce the same by a sum of ₹ 27.50 lakhs - HELD THAT:- This Court concludes that the F.I.R. is registered without application of mind by the respondents, in a mechanical and whimsical manner. It is evident that the respondents did not provide any prima facie material to sustain a charge under Section 109 of I.P.C., and Section 13 (1) (e) of the Prevention of Corruption Act and the F.I.R. is unsustainable on its very face even without considering the evidence of the petitioners. By omission to conduct a preliminary enquiry, the respondents have simply acted upon the unverified Source Information contrary to the mandatory rules of the C.B.I. Manual. On this F.I.R., if any investigation is now proceeded with, it will be a futile, meaningless and vexatious exercise. This Court finds that the F.I.R. is liable to be quashed and is hereby quashed - Petition allowed - decided in favor of petitioner. Issues Involved:1. Lack of Preliminary Enquiry before FIR Registration.2. Miscalculation of Income and Assets.3. Inclusion of Non-Existent Assets.4. Overvaluation of Assets.5. Jurisdiction of the High Court.Detailed Analysis:1. Lack of Preliminary Enquiry before FIR Registration:The petitioners argued that the FIR was registered without conducting a preliminary enquiry, which is mandatory as per the CBI Manual and judicial precedents. The respondents admitted in their counter affidavit that no preliminary enquiry was conducted before the FIR registration. The court noted that the CBI Manual mandates a preliminary enquiry to verify the source information before registering an FIR, especially in cases involving public servants. The court emphasized that the lack of preliminary enquiry and the reliance solely on unverified source information led to the mechanical and arbitrary registration of the FIR.2. Miscalculation of Income and Assets:The court examined the discrepancies in the income and asset calculations provided in the FIR. The petitioners submitted their Income Tax Returns (ITRs) and other declarations, which showed higher income than what was stated in the FIR. The court found that the total income declared by the petitioners in their ITRs was Rs. 2,47,63,542, whereas the FIR mentioned only Rs. 1,39,61,014, resulting in a difference of Rs. 1,08,02,528. The court concluded that this miscalculation significantly impacted the determination of disproportionate assets.3. Inclusion of Non-Existent Assets:The FIR included assets that were no longer in possession of the petitioners at the end of the check period. Specifically, an immovable property in Bangalore, sold by the 2nd petitioner, was still listed as an asset. The court noted that this inclusion was erroneous and indicated a lack of due diligence in the FIR preparation.4. Overvaluation of Assets:The court scrutinized the valuation of the house constructed by the 1st petitioner. The FIR stated a higher value for the house than what was assessed by an approved valuer. The court found that the approved valuer's report, accepted by the Income Tax Department, valued the house at Rs. 4,14,21,800, whereas the FIR inflated this value to Rs. 5,15,50,000. Additionally, the FIR separately listed the value of an elevator already included in the house valuation, further inflating the asset value by Rs. 10,00,000.5. Jurisdiction of the High Court:The respondents argued that the High Court of Telangana lacked jurisdiction since the FIR was registered in Chennai. However, the court had previously ruled that it had jurisdiction as most of the cause of action arose within its territorial limits. This ruling was not challenged and had attained finality.Conclusion:The court concluded that the FIR was registered without proper verification and contained significant errors in asset and income calculations. The lack of a preliminary enquiry, as mandated by the CBI Manual, further invalidated the FIR. The court found no prima facie case of disproportionate assets against the petitioners and quashed the FIR, setting aside all subsequent proceedings. The court ordered the release of seized assets and unfrozen bank accounts of the petitioners.