Corruption threat to society, must be dealt with an iron hand: SC

Corruption poses a serious threat to society and must be dealt with an iron hand as it not only leads to abysmal loss to the public exchequer but also tramples upon good governance, the Supreme Court said on Monday while setting aside the anticipatory bail granted by the Gujarat high court to an IRS officer in a corruption case.

A bench of Justices Surya Kant and JK Maheshwari set aside the pre-arrest bail granted to Indian Revenue Service officer Santosh Karnani on an appeal by the Central Bureau of Investigation.

"The nature and gravity of the alleged offence should have been kept in mind by the high court. Corruption poses a serious threat to our society and must be dealt with iron hands. It not only leads to abysmal loss to the public exchequer but also tramples good governance," the apex court said.

It said the common man stands deprived of the benefits under social welfare schemes and is the worst hit.

"It is aptly said corruption is a tree whose branches are of an unmeasurable length, they spread everywhere, and the dew that drops from thence hath infected some chairs and stools of authority. Hence the need is to be extra conscious," the court said.

It clarified that it has expressed only prima facie opinion on the merit of the allegations for the limited purpose to refuse or grant pre-arrest bail.

"If Respondent No. 1 (Karnani) moves an application for grant of regular bail before an appropriate Court, the same shall be considered on its own merits and in accordance with law, uninfluenced by the observations made hereinabove," it said.

Allowing the CBI's appeal, it said the impugned judgment and order of the Gujarat high court dated December 19, 2022 is set aside and the anticipatory bail application of Karnani is dismissed.

The FIR was registered by the state anti-corruption bureau, Ahmedabad on a complaint on October 4, 2022.

Acting on the FIR, the local police had laid the trap the same day and recovered the bribe amount of Rs 30 lakh.

The investigation was later handed over to the CBI which re-registered the same FIR on October 12, 2022.

The complainant runs a construction company- Safal Construction Pvt. Ltd.

The top court noted, “In February 2019, Respondent No. 1 (Karnani), an IRS Officer, posted as Additional Commissioner of Income Tax, Ahmedabad, conducted a survey for the financial year 2018-19 under Section 133A of the Income Tax Act, 1961 against Safal Construction Pvt. Ltd. whereunder the group disclosed an additional income of Rs. 50 crores.”

Thereafter, in September 2021, search and seizure action was initiated by the Investigation Wing of Income Tax Department, Ahmedabad. On September 29, 2022, Karnani allegedly contacted the complainant and told him to meet him on October 3, 2022.

Accordingly, the complainant met Karnani at the Income Tax Office where he demanded illegal gratification of Rs 30 lakh to help the complainant with his case.

This conversation was recorded by the complainant on a Digital Voice Recorder which has been handed over to the investigating authorities, the bench noted.

The complainant lodged a complaint the next morning with ACB Police Station, Ahmedabad city at 07:15 hours and a trap was then laid.

Karnani refused to appear before the investigating authorities and later applied for anticipatory bail, which was granted by the high court, the apex court recorded in its order.

The top court said assuming that Karnani had some valid apprehensions that the actions of the ACB (state police) were actuated with extraneous reasons, he can no longer say so once the investigation had been transferred to CBI.

"We do not find any allegation of personal vendetta, victimisation, bias or ulterior motive against the Central Agency. In any case, CBI is expected to carry out a free, fair and dispassionate investigation with faithful observance to the rights of an accused, who is subjected to custodial interrogation,” the bench said.

"Having considered the nature of allegations, material on record and the settled legal principles on grant of anticipatory bail, we are of the view that, howsoever hard or harsh it may be, the High Court ought to have refrained itself from extending protection against arrest to Respondent No. 1 in exercise of its discretionary jurisdiction under Section 438 of the CrPC,” it said.

The bench said it is true that cancellation of bail must be done only for cogent and overwhelming reasons.

“Nevertheless, setting aside an unjustified order granting bail is distinct from cancellation of bail. This Court would not, invariably intervene into the judicial discretion exercised by the high court while granting bail to an accused. All that to be ensured is that the high court exercises its discretion judiciously, cautiously and strictly in conformity with the basic principles laid down by this court from time to time in a series of decisions,” it said.