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State Of Madhya Pradesh v. Arjun Singh And Others
Factual and Procedural Background
In 1987, Shri Kailash Joshi, then Leader of the Opposition in the Madhya Pradesh Legislative Assembly, filed Writ Petition No. 3909 of 1987 alleging irregularities in a lottery run by the Churhat Children’s Welfare Society. Acting on the High Court’s judgment dated 20 January 1989 in that matter, the State Government established a Commission of Inquiry on 24 February 1989 with four terms of reference (hereinafter “original reference”).
While the Commission was still functioning, the Government issued a second notification on 29 March 1990 enlarging the terms of reference (hereinafter “second reference”) to include three additional clauses, labelled (A)–(C). Shri Arjun Singh challenged this second notification in Writ Petition No. 1681 of 1990. On 4 March 1992, the Madhya Pradesh High Court quashed the entire second notification, holding that it reflected non-application of mind and an invalid exercise of power under Section 3 of the Commissions of Inquiry Act, 1952.
The State of Madhya Pradesh appealed to the Supreme Court against that decision. Special leave was granted, and the present judgment disposes of the appeal.
Legal Issues Presented
- Whether the State Government had validly exercised its power under Section 3 of the Commissions of Inquiry Act, 1952 when it issued the notification dated 29 March 1990 enlarging the scope of the existing inquiry.
- Whether the High Court was correct in quashing the entire second notification for non-application of mind.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Supreme Court examined each clause of the second reference in light of the already-existing original reference:
- Clauses (A) and (B): The Court observed that these matters were “already covered” by the terms of the original reference. Because the Commission could investigate them under the original mandate, expanding the inquiry through a new notification was unnecessary. No objection was raised by either side to this conclusion.
- Clause (C): The Court drew a distinction within this clause:
- The portion concerning whether lottery proceeds had been used to construct the mansion at Kerwa Dam was implicitly covered by Term 1 of the original reference (“how the share of the profit … has been utilised”). Therefore, the Commission could examine this aspect without the need for enlargement.
- The specific direction to inquire into “at what cost [Shri Arjun Singh] and his family members have acquired and built his mansion at Kerwa Dam and from where they got the funds for that purpose” lacked any supporting material before the Government. The Court held that the High Court was therefore justified in quashing this part for want of relevant material and for constituting a “fishing enquiry.”
The Supreme Court emphasised that although the State may establish further inquiries, any such decision must rest on objective, tangible material rather than vague allegations or hearsay.
Holding and Implications
Appeal Disposed Of; High Court’s quashing of the impermissible portion of Clause (C) affirmed.
Consequences for the parties are as follows:
- The Commission of Inquiry remains empowered, under the original 24 February 1989 reference, to investigate all matters encompassed by Clauses (A) and (B) of the second notification and the permissible portion of Clause (C) dealing with possible diversion of lottery proceeds.
- The impugned directive to probe the personal costs and sources of funding for the Kerwa Dam mansion stands quashed.
- The State Government is free to issue a fresh notification establishing a new commission, provided that such action is based on concrete, objective material.
No broader legal precedent was set; the judgment primarily clarifies the scope of the existing inquiry and the standards for governmental satisfaction under the Commissions of Inquiry Act, 1952.
N.M Kasliwal, J.— Special leave granted.
2. This appeal by the State of Madhya Pradesh is directed against the judgment of the Madhya Pradesh High Court dated March 4, 1992 in Miscellaneous Petition No. 1681 of 1990, quashing the notification dated March 29, 1990.
3. Shri Kailash Joshi, the then Leader of Opposition in the Legislative Assembly of the State of Madhya Pradesh filed a Writ Petition (M.P No. 3909 of 1987) on October 18, 1987. Appropriate directions were sought from the Court in the matter of a lottery conducted by Churhat Welfare Society and the petitioner highlighted illegalities, irregularities and misuse of powers by high officials and public men in the Government. The said writ petition was decided on January 20, 1989. The Government of Madhya Pradesh in pursuance to the aforesaid judgment issued a notification on February 24, 1989 appointing a commission of enquiry presided over by Shri Justice S.T Ramalingam, Judge of the Madras High Court. The terms of reference were stated as under:
“(1) How the affairs of the Churhat Children's Welfare Society are conducted and how the share of the profit derived and the money collected through lottery has been utilised?
(2) What is the amount collected draw-wise by the agent and the Society and what is the tax liability as per the Madhya Pradesh Lottery (Niyantran Tatha Kar) Adhiniyam, 1973?
(3) Whether any irregularities, illegalities and offences were committed in organising the lottery, holding of draws of lottery, distribution of prizes, and in that event the person responsible for the same;
(4) Any other matter incidental or connected with the above subject-matter of enquiry.”
4. For convenience we shall hereinafter mention the above reference as ‘original reference’. Government by notification issued under Section 11 of the Commissions of Enquiry Act, 1952 (hereinafter referred to as ‘the Act’) empowered the Commission to follow the procedure under the Act. During the pendency of the enquiry, the State Government by a fresh notification dated March 29, 1990 enlarged the terms of the original reference (in short ‘second reference’). The respondent Shri Arjun Singh filed a Writ Petition (M.P No. 1681 of 1990) challenging the second reference on several grounds. The High Court by judgment dated March 4, 1992 rejected all the grounds on which the notification of the second reference was challenged, but quashed the notification dated March 29, 1990 holding that it suffered from non-application of mind and invalid exercise of powers under Section 3 of the Act. The State Government aggrieved against the aforesaid judgment of the High Court has come in appeal before this Court.
5. The terms of second reference issued vide notification dated March 29, 1990 are reproduced as under:
“(A) The entire affairs and activities of Churhat Children's Welfare Society from its inception to the date of the High Court judgment including an enquiry into its assets, liabilities, income and expenditure, the illegalities committed by it and the official favour shown or given to it against the normal and legal procedure and the persons responsible for the same.
(B) Whether in the matter of grant of licence to Churhat Children Welfare Society under the M.P Lottery Adhiniyam to run the lottery and grant of tax exemption under Section 26 of the said Adhiniyam to the Society either in anticipation of the Cabinet approval or by the Cabinet, there was any abuse of power? If so, the persons/authorities responsible for the same.
(C) Since Shri Arjun Singh has failed to give explanation to the nation after the High Court's decision the enquiry be also made as to at what cost he and his family members have acquired and built his mansion at Kerva Dam and from where they got the funds for that purpose.”
6. The High Court took the view that in the facts of the case and as disclosed from the contents of the impugned notification, apart from the observations and the comments of the High Court (in M.P No. 3909 of 1987) there was no relevant material before the appropriate Government for enlarging the scope of existing enquiry which was set up only to comply with the directions contained in the operative part of the judgment of the High Court in the Churhat lottery case. The High Court further observed that the resolution or order of the appropriate Government dated March 23, 1990 which culminated in passing of the impugned notification on March 29, 1990, had not been produced before them, although a specific prayer for the same was made in the prayer clause of the petition. We have heard the learned counsel for the parties at length and have gone through the record.
7. In our opinion, so far as the terms of reference contained in clauses (A) and (B) of the second reference are concerned, the same are already covered in the terms of the original reference. Neither counsel controverted this position. In this view of the matter there can be no bar to the Commission to enquire into these matters under the original reference itself. Now, so far as clause (C) of the second reference is concerned, the original reference in term No. 1 itself covers the question as to how the affairs of the Churhat Children's Welfare Society are conducted and how the share of the profit derived and the money collected through lottery has been utilised. We further make it clear that nothing precludes the Commission from making an enquiry as to whether any profit derived or money collected through Churhat Lottery had been utilised for constructing the mansion/bungalow at Kerva Dam. But so far as the following portion of clause (C) of the second reference is concerned, the High Court rightly quashed the same as there was no relevant material before the State Government for enlarging the scope of existing enquiry under the original reference:
“The enquiry be also made as to at what cost he and his family members have acquired and built his mansion at Kerva Dam and from where they got the funds for that purpose.”
8. It is also made clear that this judgment does not preclude the State Government from appointing any commission of enquiry according to law after applying its mind to any fresh or further material placed before it. Such formation of opinion depends on the subjective satisfaction of an appropriate Government but should be based on an objective or real material and not merely on some vague allegations or hearsay evidence or to make fishing enquiry. The appeal is disposed of as aforestated. No order as to costs.
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