The Supreme Court on Monday examined the scope and adequacy of a preliminary inquiry before registration of an FIR in a disproportionate assets (DA) case, with a Bench comprising of Justice Vikram Nath and Justice Sanjay Kumar questioning whether the investigating agency had sufficiently verified the accused public servant’s known sources of income before initiating criminal proceedings.

During the hearing, the Bench observed that in cases involving allegations of disproportionate assets, the investigating agency should examine the public servant’s income and financial records and, where appropriate, seek an explanation regarding the assets before proceeding with the registration of an FIR. The Court queried how the agency could rely solely on source information without conducting a meaningful inquiry into the officer’s known sources of income.

Appearing for the Lokayukta, Advocate Vikram Hegde submitted that the issue was covered by the Supreme Court’s earlier decisions in Sudhakar Reddy and K.L. Gangadhariah, wherein the Court had held that a source report itself could constitute a preliminary inquiry in an appropriate case. He further submitted that the investigating agency had taken into account the approximate salary income of the government servant while preparing the source report.

On the other hand, Senior Advocate Amit Anand Tiwari, appearing with Mr. Anil Nishani for the accused public servant, argued that the inquiry was incomplete as it failed to adequately consider the respondent’s known sources of income, including income reflected in tax records, loans and gifted properties. It was contended that a proper preliminary inquiry would have enabled the investigating agency to verify these aspects before registering the FIR.

Dismissing the SLP, the Court  noted that the Lokayukta was at liberty to conduct preliminary inquiry afresh by examining the ITR and register FIR afresh if the assets of officer were found to be disproportionate, as the High Court had held.