Supreme Court Clarifies Jurisdiction and Stay on Orders Framing Charges under Prevention of Corruption Act

Stay of Proceedings Limited to Six Months Unless Exceptionally Extended; High Courts’ Inherent Powers to Intervene Affirmed but to be Exercised Sparingly

In a landmark judgment delivered on March 28, 2018, the Supreme Court of India in the case of Asian Resurfacing of Road Agency Pvt. Ltd. v. Central Bureau of Investigation addressed critical questions pertaining to the jurisdiction of High Courts over orders framing charges under the Prevention of Corruption Act (PC Act), 1988, and the scope for stays on such proceedings.

The Court was called upon to resolve the conflicting views among various Benches of the Supreme Court and High Courts regarding whether orders framing charges under the PC Act are interlocutory in nature, and consequently, whether revision petitions or writ petitions under Articles 226 and 227 of the Constitution challenging such orders are maintainable. Further, the Court deliberated on the permissibility and conditions for granting stays on proceedings in corruption cases.

Key Findings and Directives:

1. Nature of Order Framing Charge:

 The Court held that an order framing charge is neither purely interlocutory nor a final order but falls in an intermediate category. Therefore, jurisdiction of the High Courts is not barred even though revision petitions under Section 397(2) Cr.P.C. are not maintainable against such orders. The High Courts can entertain challenges under Section 482 Cr.P.C. or Articles 226 and 227 of the Constitution but only in rare and exceptional cases to correct patent illegality or lack of jurisdiction.

2. Inherent Powers of High Courts:

 Affirming the constitutional status of High Courts as superior courts of record under Articles 215 and 226, the Court recognized their inherent powers under Section 482 Cr.P.C. as constitutional, not merely statutory. These powers can be invoked to prevent abuse of process or secure ends of justice, including in PC Act trials, but must be exercised sparingly and cautiously.

3. Stay of Proceedings:

 The Court reiterated that Section 19(3)(c) of the PC Act prohibits stay of proceedings on any ground other than failure of justice due to irregularity in sanction. Consequently, stays in corruption trials should be extremely rare. The Court emphasized that where stays are granted, a speaking order must specify exceptional circumstances justifying the stay without prejudicing speedy trial interests. Proceedings should not be adjourned indefinitely and must conclude expeditiously, ideally within two to three months.

4. Automatic Lapse of Stay Orders:

 To address the chronic delay caused by indefinite stays, the Court directed that all pending cases where stays on trial proceedings are operating shall have such stays lapse automatically after six months from the date of this judgment unless a speaking order extends the stay. For future stays, the period shall be six months unless similarly extended by reasoned order. Trial courts are empowered to fix dates for resumption of proceedings post expiry of stay unless an extension order is produced.

5. Expeditious Trial Mandate:

 The judgment underscored the legislative intent and constitutional mandate for expeditious disposal of corruption cases to uphold the rule of law and public confidence. It recognized that delays erode justice and public trust, and hence, judicial discipline requires strict limitation on interlocutory challenges and stay orders.

6. Balancing Individual Rights and Societal Interests:

 While protecting the fundamental rights of accused persons, the Court emphasized that the High Courts must balance these against the societal interest in curbing corruption effectively and swiftly.

Background of the Case:

The case arose from an FIR dated March 7, 2001, against Asian Resurfacing of Road Agency Pvt. Ltd. and others for alleged corruption involving fake invoices during road work contracts. After charges were framed, the appellants challenged the charge framing order through revision and writ petitions, leading to divergent judicial views and a reference to the Supreme Court.

Important Observations:

- The Court overruled earlier inconsistent precedents such as Satya Narayan Sharma v. State of Rajasthan to the extent they barred inherent jurisdiction under Section 482 Cr.P.C. for appropriate intervention.

- The mandate for day-to-day trial as per Section 4(4) of the PC Act was highlighted as crucial for speedy justice.

- The Court cautioned against using Articles 226 and 227 as “appeals in disguise” to re-appreciate evidence at the charge framing stage.

- The judgment called upon all High Courts to issue directions to prevent undue delay in trials.

Impact:

This judgment serves as a vital guideline for courts across India to ensure that proceedings under the Prevention of Corruption Act are not stalled indefinitely by interlocutory challenges and stay orders. It reinforces judicial restraint in entertaining petitions challenging charge framing, mandates strict timelines for disposal, and affirms the constitutional powers of High Courts to intervene in exceptional cases to prevent miscarriage of justice.

The directive to automatically lapse stays after six months aims to drastically reduce pendency and delays in corruption and other criminal and civil cases, thereby strengthening the rule of law and public faith in the justice delivery system.

Statutory provisions

Prevention of Corruption Act, 1988 Sections 4(4), 19(3)(b), 19(3)(c), 22, 27; Code of Criminal Procedure, 1973 Sections 228, 397, 482; Constitution of India Articles 21, 215, 226, 227

Asian Resurfacing of Road Agency Pvt. Ltd. v. Central Bureau of Investigation, (SC) : Law Finder Doc Id # 993357