# U.0.I v. W. N. CHADHA

- **Citation:** [1992] Supp. 3 S.C.R. 594
- **Court:** Supreme Court of India
- **Decided:** 1992-12-17
- **Case number:** Criminal Appeal No. 567 of 1992
- **Bench:** S. Ratnavel Pandian, K. Jayachandra Reddy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/u-0-i-v-w-n-chadha-11657
- **Pages:** 80

## Headnote

c
Code of Criminal Procedure, 1973-Sections 166A, 166B and 448-Letter 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 jurisdiction-Whether entitled to quash FIR.
Public Interest Litigation-Prosecution-:-Locus to initiate as well as
resist withdrawal-Public interest litigation-:-Applicability to criminal proceedD ings.
E
Natural Justice-Doctrine of-Audi alteram partem-Rule-Applicability 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 consultancy 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 equipments 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 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, 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,

## Text

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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-Letter 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 jurisdiction-Whether entitled to quash FIR.
Public Interest Litigation-Prosecution-:-Locus to initiate as well as
resist withdrawal-Public interest litigation-:-Applicability to criminal proceedD ings.
E
Natural Justice-Doctrine of-Audi alteram partem-Rule-Applicability 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 consultancy 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 equipments 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 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, 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 suomotu 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 serH
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 Company, 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/blocking 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 Switzerland urgently for getting the necessary assistance so that the investigation 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 International 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 Switzerland.·
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 DecemD 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 parties 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 respondent. 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 overstepping 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
.
•··.
.- .
.
.
·_.
.
.. . .
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.-
,·
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 respondent 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 Encyclopaedic 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 accounts 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 Confederation of Switzerland. The Federal Department of Justice and Police, Berne
found the letter rogatory in order and forwarded the same to the Examining 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· formalities. 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 Investigating 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 Investments 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 collectF
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 investigation 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 conclusion 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 complaint 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 noncompliance 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 admissibility and reliability of the evidence only at the stage of trial in case the
investigation ends up in filing a final report under Section 173 of the Code
indicating that an offence 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 overE
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 disB
charging the statutory functions whether discretionary or obligatory
should be in the interest. of justice· and confined within the legal permissibility. In doing so, the Judge should disengage himself of any irrelevant
and extraneous materials which come to his knowledge from any source
other than the one presented before him in 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 additional particulars were furnished for ready reference of the names of the
account holders as contained in the letter dated 26th January, 1990. Even
if it is to be held that the piece of paper should not have been pasted, leave
apart the explanation offered since Shri V.S. Aggarwal has approved the
letter rogatory with the pasted piece of paper on being satisfied 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 relentlessly 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 registration 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 investigation is freely allowed without any hindrance, the investigating agency
can collect all the requisite particulars and bring the names of those
public servants on record, the secrecy 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 impounding of the passport is to secure the presence of the respondent for the
investigation purposes in connection with the case on hand.