Re Court of the Special Judge Delhi, India

HCMP000390/1994

1994, MP No. 390

HEADNOTE

A Special Judge in Delhi, India by a Letter of Request, some 300 pages long, requested the Hong Kong Court to obtain a substantial body of evidence in relation to a large corruption case in India.

On a preliminary point as to whether the Court had jurisdiction under S.77B of the Evidence Ordinance to grant such an order:

1994, MP No. 390

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

______________________

______________________

Coram: The Hon. Mr. Justice Sears in Chambers

Dates of hearing: 5 - 8 December 1994

Date of judgment: 8 December 1994

___________________

J U D G M E N T

___________________

1. This is an application to set aside an order of the 4th March of this year granted by Deputy Judge Daniell upon an 'ex parte' application of the Crown, pursuant to the Evidence Ordinance (Cap. 8) for evidence to be obtained in Hong Kong pursuant to a Letter of Request. When the matter originally came before me, it appeared at that time that there may well be some argument as to whether or not the judge had jurisdiction to make the order he did, and it was adjourned for the purpose of the Court being better informed upon Indian law. An affidavit as to Indian Law was filed on behalf of the applicants and one on behalf of the Indian Court.

2. This case has taken some time to try. This is not any criticism of Counsel, but it has necessitated a detailed analysis of Indian Criminal Procedure. I am very grateful to Counsel for their able and helpful submissions which they have made. I have been considering this over the last two days. I do not consider it necessary to reserve my judgment, so that whichever party loses may wish to appeal at the earliest opportunity.

3. The order is sought to be set aside on two grounds: first, that there was no jurisdiction in the Court to make such an order and secondly, the application is flawed by being a "fishing expedition", as it is submitted that what is sought is evidence in the nature of pretrial discovery. The well- known case of Rio Tinto Zinco Corporation v. Westinghouse Electric Corporation [1978] AC547 sets out the principles and problems which arise in this type of Letter of Request.

4. The parties have agreed that I should first determine the point as to jurisdiction. It arises in this way. By virtue of S.77B of the Evidence Ordinance, the provisions of S.75 which is dealing with the obtaining of evidence for civil proceedings abroad applies to criminal proceedings. The Court therefore must be satisfied, first that the application is made pursuant to a request issued by or on behalf of a court (the requesting court), exercising jurisdiction in a country or territory outside Hong Kong. Here the court is the Special Judge of Delhi. Secondly, that the evidence to which the application relates is to be obtained for the purposes of criminal proceedings which have been instituted or whose institution is likely if the evidence is obtained. The application is made by the Registrar of the Supreme Court on behalf of the Court in Delhi. It says in its request to this Court set out in a Letter of Request of great length, that a criminal proceeding has been instituted in the Court of Mr. Gupta, a Special Judge in Delhi.

5. The issue I have to decide on this preliminary matter is whether or not proceedings have been instituted. The subsection also contains the words "or whose institution is likely", but the case put forward is that the proceedings have in fact been instituted. I confess it has puzzled me somewhat, as there was probably seen to be some problems, why the other limb was not relied upon, but it has not been and therefore I must decide this matter on the way the case has been presented.

6. The background is that the applicants before the Court are Mr. Binoy Jacob (Binoy), Mr. Krishnamurthy Chandra and a number of companies. The Letter of Request seeks to examine the procedures of the Bank of Credit & Commerce and a variety of banking documents relating to the applicants and also other companies. The Hong Kong Telephone Co. is also sought to be examined for the purpose of production of certain documents namely, telephone print-outs of incoming and outgoing overseas telephone calls between the 2nd December 1992 and the 31st January 1993 in respect of some of the applicants and a number of other named persons.

7. A memorandum of facts found at Annexure 2 and also a First Information Report coming from the Delhi Special Police Establishment, demonstrates that the allegation against Binoy and the other applicants arises out of a large corruption case, where the main conspirator is said to be Venkataraman Krishnamurthy (V.K.) involving the awarding of very substantial construction contracts, for example, thermal power projects and other storage projects, with a number of well-known Japanese and American companies. It is said that bribes of over US$10m. were paid by these multinational Companies to V.K., and the money was distributed among a variety of people and companies. Some accounts were opened by Chandra Krishnamurthy and Binoy and the monies, to use a global term were laundered in Hong Kong amongst other places. That is a general sketch of what the criminal allegation involves.

8. The Letter of Request, as I have said, is extremely long, and it is a part of the applicants' case that it is seeking in reality pre-trial discovery rather than evidence, but I am not dealing with that aspect. The first matter is how the Court approaches S.77B and how I make a judgment as to whether or not criminal proceedings have been instituted. In my judgment, that must mean instituted in or before the requesting Court, that is the Court of Mr. Gupta in Delhi. Although this is a Hong Kong Ordinance and it is construed in accordance with standard Hong Kong law, for me to discover whether these proceedings have been instituted in India is a matter of Indian law and the parties do not dissent from that approach.

9. It is not for me to decide whether the Indian institution of proceedings corresponds to Hong Kong law, I must have regard solely to the provisions of Indian law. For that purpose what are said to be experts have filed reports. The gentleman on behalf of the applicants is the Indian lawyer of Binoy and the short affidavit coming from India, is the Indian prosecutor. The judge himself, albeit that the document may have been drafted by someone else, has signed it in a variety of places and has said that criminal proceedings have been instituted in his Court and therefore I must have regard to the statement which he makes.

10. Mr. Bradley rightly points out to me that the Court's general approach ought to be to give proper weight to the request from the foreign Court, and it is clear that insofar as comity of nations is concerned, I should not seek to set aside this request, unless it is clear that this Court has no jurisdiction to deal with it.

11. By virtue of the Prevention of Corruption Act in India of 1988, Special Judges are appointed for corruption cases and in S.5(1) are found these words: "A Special Judge may take cognizance of offences without the accused being committed to him for trial and, in trying the accused person, shall follow the procedure prescribed by the Code of Criminal Procedure 1973 for the trial of warrant cases by the Magistrate", and under subsection (4), he is deemed to be a Magistrate. The Code of Criminal Procedure deals with the position of magistrates and this Special Judge, when I come to examine whether or not proceedings have been instituted, is in reality a Magistrate. It is therefore necessary to examine in detail the Code of Criminal Procedure which governs this type of situation.

12. The Code is divided into various sections which themselves have headnotes. In my judgment, it is standard construction to look at the headnote and these indeed are headnotes ascribed to the particular section by the Indian legislature. Chapter XII is headed "Information to the police and their powers to investigate". There is a distinction between what are called cognizable and non-cognizable cases and in the definition section cognizable case means a case in which a police officer may arrest without warrant. It is dealing with serious matters. Whenever a report is made to a police officer with regard to such a serious case, then there is an obligation on the police officer to investigate. The side note for section 157 is headed "Procedure for Investigation". This, in my judgment, is precisely what occurs. The police officer investigates the matter, but as part of that investigation process, he shall send a report to a Magistrate "empowered to take cognizance of such offence upon a police report". The importance of those words will become clear in a moment, and so what has happened here is that, on the 28th November 1992 from the Delhi Special Police Establishment was sent a First Information Report.

13. This is a report under S.157 of the Code. It sets out a variety of matters and under the heading "Information" is described the general background to the commission of an offence and it finishes by saying, thus V.K. by corrupt or illegal means abused his official position as a public servant in conspiracy with Binoy, K. Chandra, K. Jayakar and others and obtained huge pecuniary advantages for themselves and others. These facts constitute offences and it sets out the offences under the Prevention of Corruption Act. It is clear from the document that it is sent to the Special Judge in this Court in Delhi and it was received by Judge Gupta. He indeed, heard a bail application in respect of the case which he refused and this was allowed on appeal by the High Court of India. I have been referred to the appropriate documents. Under this Chapter, a judge does have some powers, and when I say judge I mean magistrate. He may direct an investigation under S.159, or, if he thinks fit, at once proceed, to hold a preliminary inquiry into, or otherwise to dispose of the case in the manner provided in the Code.

14. It is clear from a reading of this Chapter that this is all dealing with the investigation of the police and the process, which has taken place under S.157, informs the Court that such investigation is occurring. Included in this Chapter is the section by which the Indian Court asks the Hong Kong Court to provide the evidence - S.166A. From the documents which have been submitted, this section which was brought into being in 1990 and the explanatory note, (whose origin I do not know but it is found in the documents from India) acknowledges that under the new sections, assistance from authorized foreign investigating agencies and courts can be sought at the investigation stage. S.166A therefore permits India to seek requests from other countries in relation to matters being investigated. However, insofar as Hong Kong law is concerned, I can only grant such a Letter of Request if I am satisfied that proceedings have been instituted or are likely be instituted. S.173 is important. When the investigation is completed, the officer makes a report and sets out a number of matters, this has been described as a Charge Sheet.

15. Chapter XIV is headed "Conditions Requisite for Initiation of Proceedings" Section 190 is important and a magistrate may take cognizance of an offence upon a police report and the police report is the report under S.173 namely the Charge Sheet. Chapter XVI is headed "Commencement of Proceedings before Magistrates". If, in the opinion of a Magistrate taking cognizance of an offence there is sufficient ground for proceeding then he has power to issue summons or warrant and so forth (S.204). It appears therefore, in my judgment, from a perusal of the Indian Criminal Code that there are these three inter related but separate functions which occur. There is the investigative stage where the judge is notified of the investigation and given certain powers. There is his taking cognizance of the proceedings when he receives the police report, and then there is the Issue of Process under S.204.

16. The case for the Indian Court is that when the First Information Report is sent to the Judge's Court and registered in that Court then proceedings have been instituted. I should have referred to the definition of investigation in S.2(h): "it includes all the proceedings under this Code for the collection of evidence conducted by a police officer or by any person (other than the Magistrate) who is authorized by the Magistrate in this behalf." It appears therefore that the Magistrate himself does not investigate the matters, he does not have a investigative function, that is solely entrusted to the police. He does have, once the investigation is on hand, certain powers although they appear limited.

17. The unusual feature of this case is that the person said to be the main conspirator, who brought about this enormous corruption in India by obtaining these vast sums of money, has not even been arrested. Binoy has been arrested and is now on bail, and nobody has been charged with any offence. Although there has been an allegation, there has been no charge. It is accepted by Mr. Bradley that all that has happened so far is that the first power, that is the investigative power, is still under way. He submits that even though it is merely an investigation, nevertheless, this Court can grant the Indian Court the indulgence of obtaining evidence here which as I understand, although I have not gone through all the documents in detail, is to provide evidence on which one or more of these conspiracies may be charged.

18. In Hill v. Anderton [1982] 2 AER 963, Lord Roskill at p.971 said:-

"My Lords, it is of crucial importance to appreciate that the laying of an information is a matter for the prosecution just as the making of a complaint is a matter for the complainant. In each case it is for the prosecutor or the complainant to decide how the information or how the complaint shall be formulated. I agree with the Divisional Court in the present case that the commencement of criminal proceedings lies in the hands of the prosecutor. It is, in my opinion, the prosecutor's duty if he wishes to prosecute to prepare and lay the information before the magistrates' court, which means a justice of the peace or the clerk to the justices. The laying of an information before, or the making of a complaint to, a justice of the peace or the clerk to the justices to my mind means (in reference to a written information or complaint) procuring the delivery of the document to a person authorized to receive on behalf of the justice of the peace and the clerk to the justices. The acts of delivery and receipt are ministerial and I see no reason why the justices of the peace or the clerks to the justices should not delegate to an appropriate subordinate authority to receive the information which the prosecutor desires to deliver. It can sensibly be inferred that any member of the staff in the office of the clerk to the justices authorized to handle incoming post has such authority. Accordingly, once the information has been received at the office of the clerk to the justices, which today in most cases is likely to be at the magistrates' court house, the information will, in my view, have been laid. No more is required of the prosecutor to launch the intended criminal proceedings. Similarly with a complaint; once the complaint is received at the office of the clerk to the justices no more is required of the complainant. What happens thereafter is not within the province of the prosecutor or of the complainant but of the court."

19. That of course is a different situation from what is in the Indian Criminal Code, because although the First Information Report is sent, the Court does not take cognizance of the offence and does not deal with it in any shape or form, until it receives the police report, i.e. the charge sheet and then a process is adopted, similar to the English process. I therefore do not find Hill v. Anderton support for the submission that it is the First Information Report which initiates proceedings.

20. That decision does, however, demonstrate that the commencement of criminal proceedings necessitates some act which transfers the criminal process from the prosecutor to the court; the court then embarks upon the criminal process and determines it.

21. An affidavit has been filed by Mr. Akshay Bipin, who appears to be a well qualified Indian Lawyer, albeit acting on behalf of Binoy and therefore in one sense, partisan, but he sets out the provisions of the Code and he provides two helpful authorities of the Supreme Court of India.

22. In Pala Singh v. State of Punjab [1972] AIR 2679 the court observed that the function of S.157 of the Code was to keep the Magistrate informed of the investigation of the cognizable offence so as to be able to control the investigation and give directions under S.159.

23. The Supreme Court in Jamuna Singh & Ors. v. Bhadai Shah [1964] AIR 1541 said:-

"The Code does not contain any definition of the words "institution of a case". It is clear however and indeed not disputed that a case can be said to be instituted in a Court only when the Court takes cognizance of the offence alleged therein. Section 190(1) of the Code of Criminal Procedure contains the provision for cognizance of offences by Magistrates. It provides for three ways in which such cognizance can be taken. The first is on receiving a complaint of facts which constitute such offence; the second is on a report in writing of such facts -- that is, facts constituting the offence -- made by any police officer; the third is upon information received from any person other than a police officer or upon the Magistrate's own knowledge or suspicion that such offence has been committed."

24. This was followed in Lakshminarayar v. Narayana [1976] AIR 1672. As far as this instant matter, the process so far has only got to the investigative stage. Although in one sense therefore, there is something in the nature of a proceeding, as a matter of Indian law I find as a fact that there has been no initiation of criminal proceedings.

25. There have been some administrative matters such as the sending of the First Information Report by the police and presented to the judge and it may be that the judge himself, for example, by the bail application has embarked upon a matter incidental to a criminal proceeding, but in my judgment, there has been no initiation of criminal proceedings according to Indian law. I accept also from Mr. Bradley although there is no authority for it, the passage at p.1213 of the Supreme Court Practice 1995 when the author says:-

"In relation to legal systems which do not recognise the distinction between the stages of pretrial and trial, as in the case of many European Continental systems, it seems the English Court may have to give effect to the request of the foreign court since all the material which such a Court gathers in the way of evidence forms part of the material on which that court makes its final adjudication, so that the evidence is equivalent to testimony at the trial."

26. This is dealing with the position as highlighted in the Westinghouse case, with regard to the gathering of evidence for the trial and pretrial discovery. I am dealing here with criminal proceedings where there is a Criminal Code. I am therefore permitted to concentrate on that, because it is the Code which tells me whether or not proceedings have been instituted. It is important to note that from S.204 a number of the sections start by saying:

"In any case where the proceeding have been instituted on the police report, the Magistrate shall ......"

27. In my judgment, the proceedings are instituted on the Magistrate taking cognizance of the offence when he receives one of the matters in S.190. These are the conditions precedent to him assuming jurisdiction. What he is doing before may be difficult to define, but in my judgment, there have not been initiated criminal proceedings because the criminal process has not been transferred to him so that there can be a determination.

28. A simple answer to this matter would be given if the judge had said that this evidence is required for the other limb of Section 77B, i.e. for criminal proceedings whose institution is likely. I have mentioned this in the course of argument a number of times. I do not appear to have been given a satisfactory explanation, save that the judge or whoever it is in India, has decided that proceedings have been instituted. It may be a problem, if it is necessary under the second limb to tie in the documents required, which are vast in number and the trawling exercise which will have to occur to demonstrate that those documents, if they are obtained, then proceedings are likely to be instituted. I do not know the precise answer to this and I only decide the matter which I have to decide. On this preliminary point, therefore, in my judgment, Deputy Judge Daniell had no jurisdiction to make the order he did, and I would set it aside.

Representation:

Mr. N.C.H. Bradley, S.C.C. for the Respondent.

Mr. Johnny Mok instructed by Messrs. Oldham, Li & Nie for the Applicants (Binoy Jacob, Triune Projects Limited, Triune Capital Limited, Goldstride Company and Far Swift Investment Limited)

Mr. Robert Whitehead instructed by Messrs. Haldanes for the Applicant (Link Universe Co. Ltd.)