After the audit reports are received in the
Parliament/State Legislature, they are scrutinized by the PAC.
In the State of Karnataka, having regard to the rules of
procedure and conduct of business in Karnataka Legislative
Assembly (Article 208(1) of the Constitution), the Committee is
formed consisting of not more than 20 members, who are
elected from the members of the Assembly and the Council
according to the principle of proportionate representation by
means of single transferable voting system. The Committee
scrutinizes the appropriation of the accounts of the State
Government vis-a-vis the report of the CAG. The duration of
the Committee being limited to one year, a system is evolved
by selecting the paragraphs from the audit report for detailed
examination. During the course, the Ministers and the
Executives of the Departments will be called upon to take
corrective action and to furnish a proposed action to be taken
in respect of the audit report. Thereafter the report of the
Committee will be placed before the House. In the matter of
Arun Kumar Agrawal (supra), it was observed that the CAG
report is always subject to scrutiny by the Parliament and the
Government can always offer its view point on the report of
the CAG. In Paras-67 and 68 it was held thus:
“67. The question that is germane for consideration
in this case is whether this Court can grant reliefs
by merely placing reliance on the CAG’s Report.
The CAG’s Report is always subject to
parliamentary debates and it is possible that PAC
can accept the ministry’s objection to the CAG
Report or reject the report of the CAG. The CAG,
indisputably is an independent constitutional
functionary, however, it is for Parliament to decide
whether after receiving the report i.e. PAC to make
its comments on the CAG’s Report.
We may, however, point out that since the
report is from a constitutional functionary, it
commands respect and cannot be brushed aside
as such, but it is equally important to examine the
comments what respective Ministries have to offer
on the CAG’s Report. The Ministry can always
point out, if there is any mistake in the CAG’s
report or the CAG has inappropriately appreciated
the various issues. For instance, we cannot as
such accept the CAG report in the instance case”.
The Division Bench of the High Court of Sikkim in
Subba Associates –vs- Union of India (MANU/SI/0002/2005)
was dealing with a situation wherein the search and seizure
operation under Section 132 of the Income Tax Act were
carried out on the basis of the preliminary draft and unsigned
report of CAG with regard to the business of lottery of the
State of Nagaland - The final CAG report was subsequently
laid before the Legislative Assembly and was referred to PAC
- The Legislative Assembly found the CAG report to the
unsustainable - The contention was the CAG report did not
acquire legal authenticity and could not be construed as
information within the meaning of Section 132(1) of the
Income Tax Act. The High Court observed that, CAG report is
a legislative paper and is a property of the House and its
members. . . . . . It is the exclusive prerogative of the House
and its members to deliberate on the same as the report falls
within the special jurisdiction of the House or its Committee. .
. . The executive or the judiciary cannot be in legal and/or
constitutional possession of the said report. The Division
Bench of the Gauhati High Court in M.S.Associates –vs-
Union of India (Manu/GH/0322/2005) addressing similar
issue regarding ‘information’ within the meaning of Section
132 of the Income Tax Act, though was of the opinion that the
CAG report is initially meant for the Parliament/Legislature,
and undoubtedly a property of the House, further held that
for the purpose of starting an investigation into evasion of tax,
the source of information is not material; when the legislature
itself has not restricted the authorities concerned under
Section 132 supra from acting upon the information which
may be derived from the report of the CAG which has not
been laid/discussed by the State legislature, it would be
realistic to hold that the legislative intendment is that even if
the authority concerned received the information about
evasion of tax from the report of the CAG, there is no legal
impediment on the part of the authorities concerned to act
upon such information.
In my considered opinion the view taken by the
Gauhathi High Court is more realistic. In this era of
advanced Information Technology with the enablement
conferred on the citizen of the country to have easy access to
information by way of Right to Information Act, 2005, it is
unrealistic to presume CAG report as a confidential
document, till it meets finality in the Parliament or the
Legislature. The Code no where contemplates a Police Officer
acting under Section 157 of the Code to publish the source of
information which drives him to register a suo moto complaint
in respect of a cognizable offence. Likewise it is always open to
a concerned/aggrieved informant to approach the
jurisdictional Police even on suspicion about commission of a
cognizable offence, to be dealt in accordance with Section
154(1) of the Code. But the concern is, availing the CAG
report as the basis for registration of the criminal case
subjecting the same to the test of trial in a criminal court
which has no jurisdiction to adjudicate the question raised in
the CAG report. The CAG report wherefore since not available
for judicial scrutiny, in my considered opinion, cannot be
used as a foundation to build up a criminal case and cannot
be made a part of investigation. As such, if an informant
has a reasonable suspicion about the commission of
cognizable offence he has every right to move the criminal law
into motion by way of a formal information oral/writing to the
concerned Court and the concerned Police if warranted can
ascertain truthfulness or otherwise of the information so
received by holding preliminary enquiry within the period
stipulated by the Apex Court as at Lalitha Kumari’s case
(supra) and then register the criminal case if the enquiry
probabalises commission of a cognizable offence.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF JANUARY 2016
BEFORE
THE HON’BLE MRS.JUSTICE RATHNAKALA
WRIT PETITION NO.41228 OF 2015 (GM-RES)
SHRI B.S.YEDDYURAPPA
Vs
THE STATE OF KARNATAKA
Read full judgment here;click here
Print Page
Parliament/State Legislature, they are scrutinized by the PAC.
In the State of Karnataka, having regard to the rules of
procedure and conduct of business in Karnataka Legislative
Assembly (Article 208(1) of the Constitution), the Committee is
formed consisting of not more than 20 members, who are
elected from the members of the Assembly and the Council
according to the principle of proportionate representation by
means of single transferable voting system. The Committee
scrutinizes the appropriation of the accounts of the State
Government vis-a-vis the report of the CAG. The duration of
the Committee being limited to one year, a system is evolved
by selecting the paragraphs from the audit report for detailed
examination. During the course, the Ministers and the
Executives of the Departments will be called upon to take
corrective action and to furnish a proposed action to be taken
in respect of the audit report. Thereafter the report of the
Committee will be placed before the House. In the matter of
Arun Kumar Agrawal (supra), it was observed that the CAG
report is always subject to scrutiny by the Parliament and the
Government can always offer its view point on the report of
the CAG. In Paras-67 and 68 it was held thus:
“67. The question that is germane for consideration
in this case is whether this Court can grant reliefs
by merely placing reliance on the CAG’s Report.
The CAG’s Report is always subject to
parliamentary debates and it is possible that PAC
can accept the ministry’s objection to the CAG
Report or reject the report of the CAG. The CAG,
indisputably is an independent constitutional
functionary, however, it is for Parliament to decide
whether after receiving the report i.e. PAC to make
its comments on the CAG’s Report.
We may, however, point out that since the
report is from a constitutional functionary, it
commands respect and cannot be brushed aside
as such, but it is equally important to examine the
comments what respective Ministries have to offer
on the CAG’s Report. The Ministry can always
point out, if there is any mistake in the CAG’s
report or the CAG has inappropriately appreciated
the various issues. For instance, we cannot as
such accept the CAG report in the instance case”.
The Division Bench of the High Court of Sikkim in
Subba Associates –vs- Union of India (MANU/SI/0002/2005)
was dealing with a situation wherein the search and seizure
operation under Section 132 of the Income Tax Act were
carried out on the basis of the preliminary draft and unsigned
report of CAG with regard to the business of lottery of the
State of Nagaland - The final CAG report was subsequently
laid before the Legislative Assembly and was referred to PAC
- The Legislative Assembly found the CAG report to the
unsustainable - The contention was the CAG report did not
acquire legal authenticity and could not be construed as
information within the meaning of Section 132(1) of the
Income Tax Act. The High Court observed that, CAG report is
a legislative paper and is a property of the House and its
members. . . . . . It is the exclusive prerogative of the House
and its members to deliberate on the same as the report falls
within the special jurisdiction of the House or its Committee. .
. . The executive or the judiciary cannot be in legal and/or
constitutional possession of the said report. The Division
Bench of the Gauhati High Court in M.S.Associates –vs-
Union of India (Manu/GH/0322/2005) addressing similar
issue regarding ‘information’ within the meaning of Section
132 of the Income Tax Act, though was of the opinion that the
CAG report is initially meant for the Parliament/Legislature,
and undoubtedly a property of the House, further held that
for the purpose of starting an investigation into evasion of tax,
the source of information is not material; when the legislature
itself has not restricted the authorities concerned under
Section 132 supra from acting upon the information which
may be derived from the report of the CAG which has not
been laid/discussed by the State legislature, it would be
realistic to hold that the legislative intendment is that even if
the authority concerned received the information about
evasion of tax from the report of the CAG, there is no legal
impediment on the part of the authorities concerned to act
upon such information.
In my considered opinion the view taken by the
Gauhathi High Court is more realistic. In this era of
advanced Information Technology with the enablement
conferred on the citizen of the country to have easy access to
information by way of Right to Information Act, 2005, it is
unrealistic to presume CAG report as a confidential
document, till it meets finality in the Parliament or the
Legislature. The Code no where contemplates a Police Officer
acting under Section 157 of the Code to publish the source of
information which drives him to register a suo moto complaint
in respect of a cognizable offence. Likewise it is always open to
a concerned/aggrieved informant to approach the
jurisdictional Police even on suspicion about commission of a
cognizable offence, to be dealt in accordance with Section
154(1) of the Code. But the concern is, availing the CAG
report as the basis for registration of the criminal case
subjecting the same to the test of trial in a criminal court
which has no jurisdiction to adjudicate the question raised in
the CAG report. The CAG report wherefore since not available
for judicial scrutiny, in my considered opinion, cannot be
used as a foundation to build up a criminal case and cannot
be made a part of investigation. As such, if an informant
has a reasonable suspicion about the commission of
cognizable offence he has every right to move the criminal law
into motion by way of a formal information oral/writing to the
concerned Court and the concerned Police if warranted can
ascertain truthfulness or otherwise of the information so
received by holding preliminary enquiry within the period
stipulated by the Apex Court as at Lalitha Kumari’s case
(supra) and then register the criminal case if the enquiry
probabalises commission of a cognizable offence.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF JANUARY 2016
BEFORE
THE HON’BLE MRS.JUSTICE RATHNAKALA
WRIT PETITION NO.41228 OF 2015 (GM-RES)
SHRI B.S.YEDDYURAPPA
Vs
THE STATE OF KARNATAKA
Read full judgment here;click here
