Supreme Court aims to end delays in corruption cases

By Karthik Somasundram and Sneha Jaisingh, Bharucha & Partners

In the words of Supreme Court Justice RF Nariman in Asian Resurfacing of Road Agency Pvt Ltd and Anr v Central Bureau of Investigation (28 March 2018): “The cancer of corruption has, as we all know, eaten into the vital organs of the state.” With the proliferation of white-collar crime, the Prevention of Corruption Act, 1988 (PCA), has gained even greater importance.

Karthik SomasundramPartnerBharucha & Partners
Karthik Somasundram
Bharucha & Partners

The object of the PCA is to quickly and without any delay bring to book government functionaries. To that end section 19(3)(b) and (c) of the PCA limits the power of a court to “stay” proceedings. The PCA permits stay only in case of an irregularity in the “sanction” to commence prosecution and also limits the revisionary powers of courts in respect of interim orders. Nevertheless, notoriously, trials are stayed and culprits remain at large for long periods of time.

A balance needed to be struck between the interests of an individual wrongdoer and the interests of society at large. The issue therefore begging consideration was “whether the express limitations of the powers of a court in section 19 of the PCA would also curtail the otherwise boundless inherent powers of a high court”. The Supreme Court answered by adopting a purposive and “harmonious” approach.

The court noted that the objective of the PCA was to combat corruption by public servants and there was a need for expeditious disposal of complaints so as to remove corrupt officials from public offices as soon as possible. To this end, the parliament had enacted provisions to limit interference during the trial. The court also examined the inherent powers of a high court and noted that such powers were vested by the constitution of India and could not be curtailed by statute. Therefore the limitations prescribed by section 19(3)(c) of the PCA would not affect the inherent power of the high court to entertain a challenge to interim orders passed during a prosecution under the PCA. However, there was a need to counteract the unintended consequence of causing delays and thereby rendering meaningless the legislative intent of quick disposal of cases under the PCA.

Sneha JaisinghSenior associateBharucha & Partners
Sneha Jaisingh
Senior associate
Bharucha & Partners

Having recognized the supremacy of the inherent powers of the high court, the Supreme Court determined that a “harmonious” approach was needed to deal with the interplay. In this endeavour, the court was guided by Supreme Court decisions on a similar conundrum arising from the prescribed limitation on the “revisionary power” of a high court under section 397(2) of the Code of Criminal Procedure, 1973. The Supreme Court, in those instances had ruled that the high court would be justified in exercising its inherent powers and interfering only to “prevent abuse of the process of any court or otherwise to serve the ends of justice” and that such power to interfere “should be exercised sparingly, that too only in rare and appropriate cases in extreme circumstances”.

Adopting similar principles in respect of prosecutions under the PCA, the Supreme Court ruled that a challenge to proceedings under the PCA must be entertained only in the rarest-of-rare cases. Further, the high court must ensure that: (i) the decision on the challenge is not delayed; (ii) if a stay on proceedings under the PCA is ordered, it should not be unconditional or for an indefinite duration; (iii) if the matter is not finally heard and stay was not extended by a reasoned order, the stay would automatically lapse; and (iv) if a stay of the trial under the PCA is ordered, the high court should hear the dispute on a day-to-day basis and conclude the hearing within two-three months.

The Supreme Court also ruled that an order framing a charge was not purely an “interim order”. In a fit case, such an order could be challenged in revision or using the high court’s writ jurisdiction, provided the challenge was limited to “lack of sanction”. Any other interpretation would defeat the purpose of the PCA.

Faced with judicial experience of inordinate and systemic delay in the disposal of cases, in addition to answering the reference, the Supreme Court also issued directions in respect of all civil and criminal trials: (i) where a “stay” is already operating, it will expire at the end of six months from the Supreme Court’s order (i.e. on 28 September 2018) and subsequently “stay” can only be by a reasoned order; and (ii) where stay is ordered of any trial after 28 March 2018, such order would expire at the end of six months, unless, extended by a reasoned order.

Will this judgment cure the cancer of delay? Only time will tell.

Karthik Somasundram is a partner and Sneha Jaisingh is a senior associate at Bharucha & Partners.

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