The Supreme Court has clarified that a preliminary inquiry is not mandatory in every case filed under the Prevention of Corruption Act and does not constitute a vested right of the accused. 

A bench comprising Justices Dipankar Datta and Sandeep Mehta stated that the primary purpose of a preliminary inquiry is not to assess the truthfulness of the received information but to determine whether it discloses the commission of a cognizable offense.

"The preliminary inquiry is not mandatory in every case under the PC Act," the bench said in its verdict delivered on February 17.

"If a superior officer is in seisin of a source information report, which is both detailed and well-reasoned and such that any reasonable person would be of the view that it prima facie discloses the commission of a cognisable offence, the preliminary inquiry may be avoided," it said.

The Supreme Court delivered its verdict on an appeal by the Karnataka government, challenging a March 2024 judgment of the state high court, which had quashed an FIR filed by the Karnataka Lokayukta police against a public servant under the Prevention of Corruption (PC) Act.

The public servant was accused of amassing assets disproportionate to his known sources of income. The case raised the issue of whether conducting a preliminary inquiry was mandatory before registering an FIR under the PC Act or if a source information report could serve as a substitute.

Citing previous rulings, the bench stated, "Applying these principles to the case at hand, it is perspicuous that conducting a preliminary inquiry is not sine qua non for registering a case against a public servant accused of corruption." The court reiterated that while a preliminary inquiry might be desirable in certain cases, including those under the PC Act, it is neither a vested right of the accused nor a mandatory requirement for FIR registration.

The court emphasized that the necessity of a preliminary inquiry depends on the specific facts and circumstances of each case. It also found that the high court had erred in quashing the FIR solely due to the lack of a preliminary inquiry.

Referring to Section 17 of the PC Act, which governs the authority to investigate, the bench noted that the superintendent of police had, after reviewing a source information report from November 2023, determined that it prima facie established offenses under the Act. Consequently, the superintendent directed the deputy superintendent of police to register an FIR and proceed with the investigation.

"We are of the opinion that the high court gravely erred while imposing unwarranted fetters on the investigation agency in corruption cases by carving out a framework of administrative hurdles, which may have the potential of incapacitating law-enforcement agencies," it said.

The Supreme Court criticized the high court's approach, stating that by imposing elaborate pre-investigation procedures and unnecessary procedural barriers, it risked undermining the effectiveness of law enforcement.  

Emphasizing the legislative intent behind the Prevention of Corruption Act, the court noted that the law was designed to establish a robust mechanism for investigating corruption-related offenses. It cautioned against introducing procedural hurdles that could serve as a shield for corrupt officials, thereby defeating the very purpose of the legislation.

"While interpreting such procedural laws, it must be borne in mind that the interpretation should facilitate and not frustrate the investigation of potential criminal activities, particularly in cases involving serious allegations of corruption," it said.

The court emphasized that a fair investigation should not be interpreted as serving only the accused; rather, it must align with the law and adhere to the due procedure established under it.  

The bench further noted that the superintendent of police holds the administrative authority to instruct subordinates to register an FIR upon receiving a factual report that prima facie indicates the commission of offenses punishable under the Prevention of Corruption Act.

"The high court erred in coming to the conclusion that the order dated December 4, 2023, passed by the superintendent of police, was directly passed under section 17 of the PC Act, thereby violating the mandatory provisions of the PC Act," it said.