CASE ANALYSIS OF

VINEET NARAIN V. UNION OF INDIA

1 SCC 226

By:-
Jahanvi Tuli
3rd Year, BBA. LL.B
Kirit P. Mehta School of Law
Email: jahanvituli2000@gmail.com

December 25th, 2020

www.probono-india.in

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 ABSTRACT
The following is a brief case analysis of the case titled VineetNarain v. Union of India [ 1 SCC 226]
or popularly known as Jain Hawala Case. It is considered as a landmark case that helped to restore
the faith in rule of law in India. This case has been read, summarized and analyzed broadly under
the following headings: facts of the case, issues at hand, arguments from both sides, legal aspects
involved and overview of the judgment. In this case, the Supreme Court dealt with the issues of
autonomy of Central Bureau of Investigation and other special investigating agencies that failed to
investigate high ranking officials and powerful politicians and criminals. A writ petition under
Article 32 of the Indian constitution seeking courts to ensure proper investigation into the scam. the
court reconstructed the structure of the vigilance and recommended committee for the protection of
these agencies and to prevent any further abuse of power. The Supreme Court’s decision in this case
reconstructed the structure of the vigilance and recommended committee for the protection of the
agencies to prevent any abuse of power.

Keywords: Rule of law, Central Bureau of Investigation, Article 32

BRIEF FACTS OF THE CASE

• On 25th March 1991, one Ashfak Hussain Lone, alleged to be an Official of the terrorist
organization HizbulMujahideen, was arrested in Delhi. Consequent upon his interrogation, raids
were conducted by the Central Bureau of Investigation (CBI) on the premises of Surender Kumar
Jain, his brothers, relations, and businesses.

• The CBI seized two diaries and two notebooks from the premises which contained initials of the
high-ranking bureaucrats indicating payments.

• The gist of the allegations made in the hawala case petition was that financial support was given
to terrorists by clandestine means using tainted funds from “hawala” transactions. The CBI had
failed to investigate this properly and prosecute those involved.1

• Consequently, VineetNarain filed a writ petition under Article 32 of the Indian constitution
seeking courts to ensure proper investigation into the scam. Based on the allegations made against
the accused, the C.B.I when conducted the investigations under the monitoring of the court 14

1 G.P. Joshi, ‘From hawala scam to Coalgate, full circle for Supreme Court’ (The Hindu, 3 May 2013)
<https://www.thehindu.com/opinion/op-ed/from-hawala-scam-to-coalgate-full-circle-for-supreme-court/
article4677411.ece> accessed 25 April 2020
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 people were charge-sheeted in the first instance, and over time the names keep adding on further
investigation.

• Owing to this corruption and lacuna of legislation to protect the autonomy of the special
investigating agencies, the court reconstructed the structure of the vigilance and recommended
committee for the protection of these agencies and to prevent any further abuse of power in cases
where high ranking officials were involved.

ISSUES OF THE CASE

• The first issue was regarding the need for the insulation of investigating agencies from any
extraneous influence to ensure the continuance of the good work they have commenced.

• Whether CBI had failed in its responsibility to investigate allegations of public corruption.

ARGUMENTS FROM THE APPELLANT SIDE

The appellants arguments were divided into 2 broad categories-firstly to the seeking justice by the
investigation of the hawala scam by the C.B.I properly as the appellant has claimed that the C.B.I
failed to properly discharge their duties by investigating the matter owing to the power and
influence of the people involved as some of them were eminent bureaucrats while others were high
ranked politicians. Also, the appellant requested the court to uncover the scam and prosecute the
accused if found guilty, and secondly, they asked for a proper remedial structure to ensure that this
doesn’t happen again as this politico-bureaucrat-criminal nexus will continue to hinder the agencies
in discharging their duties.

LEGAL ASPECTS

• CONTINUING MANDAMUS

It was, in this case, the term ‘continuing Mandamus’ was coined. Verma CJ held that in certain
cases it was more advantageous to not hear the matter through and issue a simple mandamus,
leaving it to the authorities to comply with it, but instead, to keep the matter pending while
investigations were being carried on and ensuring that this was done by monitoring them from time
to time and issuing orders in this behalf. It was held that in certain cases the issuing of a writ of

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mandamus to the agencies would be futile and, therefore it was decided to issue directions from
time to time and keep the matter pending, requiring the agencies to report the progress of the
investigation so that monitoring by the court could ensure continuance of the investigation. This act
was thus termed as continuing mandamus.2

In this case, the reach of the writ of mandamus was extended, and monitoring was taken over only
because the superiors to whom the investigating authorities were supposed to report to were
themselves involved or suspected to be involved in the crimes that were to be investigated.

The Court has extended its functions through the writ of mandamus in a similar manner in several
cases before and after this case.3

VIEW OF THE COURT

The Court agreed that the CBI had failed in its responsibility to investigate allegations of public
corruption.  It laid down guidelines to ensure independence and autonomy of the CBI and ordered
that the CBI be placed under the supervision of the Central Vigilance Commission (CVC), an
independent governmental agency intended to be free from executive control or interference.  This
directive removed the CBI from the supervision of the Central Government thought to be partly
responsible for the inertia that contributed to the CBI’s previous lack of urgency with respect to the
investigation of high-ranking officials.  The CVC was now responsible for ensuring that allegations
of corruption against public officials were thoroughly investigated regardless of the identity of the
accused and without interference from the Government.
The Supreme Court in its verdict had pronounced that measures to be shield the CBI director from
outside interference and make the director’s post more transparent.
The measures are:
• The CBI directors shall have minimum tenure of two years, regardless of the date of his
superannuation.
• The CVC shall be responsible for the efficient functioning of CBI.
• The transfer of an incumbent director, CBI in an extraordinary situation, including the need for
him take up a more assignment, should have the approval of the selection committee.

2Shreemanshu Kumar Dash, ‘Writ of Continuing Mandamus in matters of PILs: A Step towards Development of
Environmental Jurisprudence’(2017) 22(8)IOSR Journal Of Humanities And Social Science (IOSR-JHSS)
<http://www.iosrjournals.org/iosr-jhss/papers/Vol.%2022%20Issue8/Version-9/E2208092635.pdf> accessed 25
April,2020
3 Supra note 3
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The Supreme Court has laid down these measures recognizing the need to provide permanent
insulation to agencies such as CBI against influences to enable them to discharge their duties in the
manner required for proper implementation of the rule of law.

OVERVIEW OF THE JUDGEMENT

The judgment in this Jain-Hawala case was a historic and a path-breaking judgment. It identified
the loopholes in the structural and procedural system of special agencies and provided for a strong
and independent system of checks and balances so that these agencies can discharge their duties
efficiently. Along with that it also struck down the arbitrary provision of the single directive which
was shielding the govt. servants from the investigation. The decision clarified the picture on the
investigating agencies such as CBI/ED and their supporting subsystems such as prosecution
agencies and nodal agencies. Overall, the judgment upheld the rule of law which is the
constitutional bedrock.

The Court’s directions pertaining to structural relief were followed by the executive in the
immediate aftermath of the decision but without a detailed investigation into individual cases it is
not possible to assess the extent to which they were enforced.

The Court in this case had struck down the validity of a directive issued by the Ministries and
Departments in the Central Government that required the CBI to seek approval of the Central
Government before pursuing investigation against bureaucrats of the level of Joint Secretary and
above on grounds that it violated the independence of the investigative process. However, the
Central Vigilance Commissioner Act, 2003, reinstated this requirement. The primary purpose of the
case was to compel a proper investigation into the scam. The focus of the judgment on the future
and autonomy of the CBI may have been a way to divert attention from the issue of the scam. And
as regards the directions of the court relating to the CBI, these were heavily diluted by politicians
during implementation which resulted in the CVC being essentially toothless and controlled by the
government. 

CONCLUSION

Effectively addressing public corruption is essential for the sustainable realization of economic and
social rights since the impact of corruption often overlaps with violations of economic and social

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rights. This case is thus a step in the right direction in providing a mode of accountability in public
life. This case is also significant because the Supreme Court liberally interpreted its powers under
the Constitution to devise various innovative procedural techniques. These include: the appointment
of amicus curiae to provide assistance to the court on legal issues: exercising supervisory
jurisdiction to monitor implementation and delivering detailed directions to the executive and
formulating guidelines to fill a legislative vacuum on the issue of public corruption. This case
created public awareness regarding the issue of corruption, and inspired people to engage with the
judicial system through the process of public interest litigation

REFERENCES

JOURNALS

· Gibran Naushad, ‘UNSHIELDING THE GOVERNMENT SubramaniamSwamy v.

Director, CBI: A case analysis’ (2014) 4(1) Nirma University Law Journal.

· MihikaPoddar and BhavyaNahar, ‘‘CONTINUING MANDAMUS’ – A JUDICIAL

INNOVATION TO BRIDGE THE RIGHT-REMEDY GAP’ (2017) 10(8)NUJS LAW
REVIEW.

· Shreemanshu Kumar Dash, ‘WRIT OF CONTINUING MANDAMUS IN MATTERS OF

PILS: A STEP TOWARDS DEVELOPMENT OF ENVIRONMENTAL
JURISPRUDENCE’ (2017) 22(8) IOSR Journal Of Humanities And Social Science (IOSR-
JHSS).

BRIEF ABOUT THE AUTHOR

JahanviTuli is 3rd Year BBA LLB student from Kirit P. Mehta School of Law, NMIMS, Mumbai.
Her interest areas include the criminal jurisprudence, Constitutional law, and women & child rights.