SOCIO-ECONOMIC OFFENCES

Unit 4
Investigation and Prosecution
Topic 4.2
Central Bureau of Investigation(CBI)
Mr.Anant Singhal
Assistant Professor
[email protected]
 Suggested Readings
• Santhanam Committee Report on Prevention of
Corruption (1962–1964)
• Delhi Special Police Establishment Act 1946
• Profolic’s Socio economic Offences by Profolic Law
Publication
• Law relating to socio economic Offences by Dr.
Nuzhat Parveen Khan
• Textbook on Socio Economic Offence by K.D.Gaur
 Unit Objectives
• To know about the working of CVC,CBI,CID, ED
etc.
• To understand the investigation and
prosecution under socio economic offences.
• To know Roles and functions of the
investigative authorities.
 Introduction
• The Central Bureau of Investigation (CBI), functioning under Dept. of
Personnel, Ministry of Personnel, Pension & Public Grievances,
Government of India, is the premier investigating police agency in India.
• It is an elite force playing a major role in preservation of values in public life
and in ensuring the health of the national economy.
• It is also the nodal police agency in India, which coordinates investigation
on behalf of Interpol Member countries.
• Central Bureau of Investigation (CBI) is the premier investigating police
agency in India.
• It provides assistance to the Central Vigilance Commission and Lokpal.
• It functions under the superintendence of the Deptt. of Personnel, Ministry
of Personnel, Pension & Public Grievances, Government of India - which
falls under the prime minister’s office.
• The CBI is not a statutory body but derives its power to
investigate from the Delhi Special Police Establishment Act,
1946.
• The establishment of the CBI was recommended by
the Santhanam Committee on Prevention of Corruption
(1962–1964).
• In 1963, the CBI was established by the Government of India
with a view to investigate serious crimes related to defence of
India, corruption in high places, serious fraud, cheating and
embezzlement and social crime, particularly of hoarding, black-
marketing and profiteering in essential commodities, having all-
India and inter-state ramifications.
• With the passage of time, CBI started investigations in
conventional crimes like assassinations, kidnappings, hijackings,
crimes committed by extremists, etc.
 Historical background
• At an early stage of World War-II, the Government of India realised that vast
increase in expenditure for war efforts had provided opportunities to unscrupulous
and anti-social persons, both officials and non-officials, for indulging in bribery and
corruption at the cost of public and the Government.
• It was felt that Police and other Law Enforcement Agencies under the State
Governments were not in a position to cope with the situation. An executive order
was, therefore, passed by the Government of India in 1941, setting up the Special
Police Establishment (SPE) under a DIG in the then Department of War with
mandate to investigate cases of bribery and corruption in transactions with which
War and Supply Department of the Government of India was concerned.
• At the end of 1942, the activities of the SPE were extended to include cases of
corruption on Railways also, presumably because the Railways were vitally
concerned with movement and supply of war material.
• CBI was further strengthened by addition of an Economic Offences Wing by a
Government of India Resolution dated 29.2.1964. At this time, CBI had two
investigation Wings; one called the General Offences Wing which dealt with cases
of bribery and corruption involving employees of Central Government/PSUs and the
other Economic Offences Wing, which dealt with cases of violation of fiscal laws.
• In September, 1964 a Food Offences Wing was formed to collect intelligence regarding
hoarding, black marketing, smuggling and profiteering in food grains and take up such cases
having inter-state ramifications in view of the situation prevailing at that time. It was merged
in the Economic Offences Wing in 1968.
• With the passage of time, requests were made by various quarters for CBI to take up
investigation even in conventional crimes like assassinations, kidnappings, hijackings, crimes
committed by extremists, violation of Official Secrets Act, large scale Banks and Insurance
Frauds etc. and others specific cases like Bhagalpur Bindings, Bhopal Gas Tragedy etc.
• Since early 1980's, constitutional courts also started referring cases to CBI for
enquiry/investigation on the basis of petitions filed by the aggrieved persons in cases of
murders, dowry deaths, rape etc.
• In view of these developments, it was decided in 1987 to have two investigation Divisions in
CBI namely Anti Corruption Division and Special Crimes Division, the latter dealing with cases
of conventional crimes as well as economic offences.
• Even after the establishment of Special Crimes Division, Special Cells were created to take up
investigations in important & sensational cases of conventional nature, e.g., Special
Investigation Team (SIT) was constituted in 1991 to investigate cases relating to the
assassination of Shri Rajiv Gandhi, Special Investigation Cell-IV was created in 1992 to
investigate cases relating to the demolition of Babri Majid in Ayodhya and Special Task Force
was created in 1993 to take up investigation relating to bomb blast in Bombay. Bank Frauds
and Securities Cell was created in 1992 to investigate cases related to Bank Frauds &
Securities scams.
• Over a period of time, some of the work originally allotted to the CBI was
transferred to other organisations. Part of the work relating to Crime Records and
Statistics Division was transferred to NCRB and that relating to Research Division
was transferred to BPR&D.
• Due to increased work load relating to Securities Scam cases and rise in economic
offences with the liberalization of Indian economy, a separate Economic Offences
Wing was established in 1994 consequent to the approval of reorganization plan of
the CBI. Accordingly, three investigation Divisions were created in CBI. (a) Anti
Corruption Division To deal with cases of corruption and fraud committed by public
servants of all Central Government Departments, Central Public Sector
Undertakings and Central Financial Institutions. (b) Economic Crimes Division - To
deal with bank frauds, financial frauds, Import Export & Foreign Exchange
Violations, large-scale smuggling of narcotics, antiques, cultural property and
smuggling of other contraband items etc. (c) Special Crimes Division To deal with
cases of terrorism, bomb blasts, sensational homicides, kidnapping for ransom and
crimes committed by the mafia/underworld.
• Over the years, the Central Bureau of Investigation has emerged as a premier
investigating agency of the country which enjoys the trust of the people,
Parliament, Judiciary and the Government. In the last 75 years, the organisation
has evolved from an anti corruption agency to a multi faceted, multi disciplinary
central police law enforcement agency with capability, credibility and legal
mandate to investigate and prosecute offences anywhere in India.
 Delhi Special Police Establishment Act, 1946
• After promulgation of the Act, superintendence of SPE was transferred to
the Home Department and its functions were enlarged to cover all
departments of the Government of India.
• The jurisdiction of SPE was extended to all the Union territories and the Act
provided for its extension to States with the consent of the State
Government. The Headquarters of SPE was shifted to Delhi and the
organisation was put under the charge of Director, Intelligence Bureau.
• In 1953, an Enforcement Wing was added to the SPE to deal with offences
under the Import and Export Control Act.
• With the passage of time, more and more cases under laws other than
Prevention of Corruption Act and violations of Import and Export Control
Act also came to be entrusted to the SPE.
• In fact, by 1963 SPE was authorised to investigate offences under 91
different sections of Indian Penal Code and 16 other Central Acts besides
offences under the Prevention of Corruption Act 1947.
• A growing need was felt for a Central Police Agency at disposal of the
Central Government which could investigate not only cases of bribery and
corruption, but also violation of Central fiscal laws, major frauds relating to
Government of India departments, public joint stock companies, passport
frauds, crimes on the high seas, crimes on the Airlines and serious crimes
committed by organised gangs and professional criminals.
• Therefore, the Government of India set up Central Bureau of Investigation
by a resolution dated 1st April, 1963 with the following divisions:
– Investigation & Anti Corruption Division (Delhi Special Police
Establishment)
– Technical Division
– Crime Records and Statistics Division
– Research Division
– Legal and General Division
– Administration Division
• CBI derives power to investigate from the Delhi Special Police
Establishment Act, 1946 Section 2 of the Act vests DSPE with
jurisdiction to investigate offences in the Union Territories only.
• However, the jurisdiction can be extended by the Central
Government to other areas including Railway areas and States
under Section 5(1) of the Act, provided the State Government
accords consent under Section 6 of the Act.
• The executive officers of CBI of the rank of Sub Inspector and
above, exercise all powers of a station office in-charge of the
police station for the concerned area for the purpose of
investigation.
• As per Section 3 of the Act, Special Police Establishment is
authorised to investigate only those cases, which are notified
by the Central Government from time to time.
 Type of Cases are Handled by the CBI
• Anti-Corruption Crimes - for investigation of cases under the
Prevention of Corruption Act against Public officials and the
employees of Central Government, Public Sector Undertakings,
Corporations or Bodies owned or controlled by the Government
of India.
• Economic Crimes - for investigation of major financial scams
and serious economic frauds, including crimes relating to Fake
Indian Currency Notes, Bank Frauds and Cyber Crime, bank
frauds, Import Export & Foreign Exchange violations, large-scale
smuggling of narcotics, antiques, cultural property and
smuggling of other contraband items etc.
• Special Crimes - for investigation of serious and organized
crime under the Indian Penal Code and other laws on the
requests of State Governments or on the orders of the
Supreme Court and High Courts - such as cases of terrorism,
bomb blasts, kidnapping for ransom and crimes committed by
the mafia/the underworld.
• Suo Moto Cases - CBI can suo-moto take up investigation of
offences only in the Union Territories.
– The Central Government can authorize CBI to investigate a
crime in a State but only with the consent of the concerned
State Government.
– The Supreme Court and High Courts, however, can order
CBI to investigate a crime anywhere in the country without
the consent of the State.
 Appointment of Director of CBI
•Director, CBI as Inspector General of Police, Delhi Special Police Establishment,
is responsible for the administration of the organisation.
– Till 2014, the CBI Director was appointed on the basis of the DSPE Act,
1946.
•In 2003, DSPE Act was revised on Supreme Court’s recommendation in the
Vineet Narain case.
– A committee that had members from Central Vigilance Commission,
Secretaries from Home Ministry, Ministry of Personnel and Public
Grievances would send recommendations to Central Government for the
appointment of CBI Director.
•In 2014, the Lokpal Act provided a committee for appointment of CBI Director:
– Headed by Prime Minister
– Other members - Leader of Opposition/ Leader of the single largest
opposition party, Chief Justice of India/ a Supreme Court Judge.
– Home Ministry sends a list of eligible candidates to DoPT. Then, the DoPT
prepares the final list on basis of seniority, integrity, and experience in
the investigation of anti-corruption cases, and sends it to the committee.
• Director of CBI has been provided security of two year
tenure, by the CVC Act, 2003.
• In November 2021, the President promulgated two ordinances
to allow the Centre to extend the tenures of the directors of
the CBI and the Enforcement Directorate from two years to up
to five years.
– Amendments in DSPE Act:
• Provided that the period for which the Director holds the
office on his initial appointment may, in public interest, on
the recommendation of the Committee (the committee
led by the Prime Minister and leader of Opposition and CJI
as members) and for the reasons to be recorded in
writing, be extended up to one year at a time.
• Provided further that no such extension shall be granted
after the completion of a period of five years in total
including the period mentioned in the initial appointment.
 According to Section 6 of the Delhi Special Police
Establishment Act of 1946 under which the CBI functions, the
State’s consent is required to extend CBI investigation beyond
Union Territories.
• According to the CBI, such widespread withdrawal of consent
is rendering it redundant with regard to investigation of
corruption charges against Central employees and
undertakings working within the territorial jurisdiction of
various States.
• Impact on Pending Investigation: The withdrawal of general
consent does not affect pending investigation (Kazi Lendhup
Dorji v. CBI, 1994) or the cases registered in another State in
relation to which investigation leads into the territory of the
State which has withdrawn general consent, nor does the
withdrawal circumscribe the power of the jurisdictional High
Court to order a CBI investigation
• The Investigation & Anti-Corruption Division (Delhi Special Police
Establishment) was entrusted with the following mandate in the resolution
although it continued to derive its jurisdiction and powers from DSPE Act,
1946.
– Cases in which public servants under the control of the Central
Government are involved either by themselves or along with State
Government servants and/or other persons.
– Cases in which the interests of the Central Government, or of any public
sector project or undertaking, or any statutory corporation or body set up
and financed by the Government of India are involved.
– Cases relating to breaches of Central Laws with the enforcement of which
the Government of India is particularly concerned, e.g.
• Breaches of Import and Export Control Orders
• Serious breaches of Foreign Exchange Regulation Act,
• Passport frauds
• Cases under the Official Secrets Act pertaining to the affairs of the Central
Government.
• Cases of certain specified categories under the Defence of India Act or
Rules with which the Central Government is particularly concerned
• Serious cases of cheating or fraud relating to the Railways, or Posts &
Telegraphs Department, particularly those involving professional criminals
operating in several States.
• Crime on the High Seas
• Crime on the Airlines
• Important and serious cases in Union Territories particularly those by
professional criminals.
• Serious cases of fraud, cheating and embezzlement relating to Public Joint
Stock Companies.
• Other cases of a serious nature, when committed by organised gangs or
professional criminals, or cases having ramifications in several States including
Union Territories, serious cases of spurious drugs, important cases of
kidnapping of children by professional inter State gangs, etc. These cases will
be taken up only at the request of or with the concurrence of the State
Governments/Union Territories Administrations concerned.
• Collection of intelligence about corruption in the public services and the
projects and undertakings in the public sector.
• Prosecution of cases investigated by this Division.
• Presentation of cases before Enquiry Offices in which departmental
proceedings are instituted on the recommendation of this Division .
Vineet Narayan and others vs. Union of India
• Pursuant to the direction of Hon'ble Supreme Court in Vineet
Narayan and others vs. Union of India, the existing Legal
Division was reconstituted as the Directorate of Prosecution in
July 2001. As on date, CBI has the following Divisions:
• Anti Corruption Division
• Economic Offences Division
• Special Crimes Division
• Directorate of Prosecution
• Administration Division
• Policy & Coordination Division
• Central Forensic Science Laboratory
 Next Topic
• CID
• ED