Must the CBI seek fresh consent under section 6 of the DSPE Act, 1946 for each new individual found connected with the crime once consent is granted?

These writ petitions arise from two serious complaints lodged by the petitioner bank dated 02.12.2022 and 14.07.2023, a public sector institution, relating to massive loan frauds involving Rs.13.11 crores and Rs.3.84 crores respectively.

The complaint dated 02.12.2022 (subject matter of WP(MD)No. 21743 of 2024) pertains to an alleged fraud involving Rs.13,11,12,502/-, which falls within the financial threshold prescribed for mandatory CBI reporting. It involved allegations against M/s.GPR Resources Pvt. Ltd., a private company that had availed a working capital loan of Rs.4 crores on 29.03.2019, which was subsequently enhanced to Rs.12 crores on 09.03.2020. The company submitted title deeds as collateral, supported by an RTI reply allegedly issued by the Thoothukudi Municipal Corporation (Letter No. F1/467/2020 dated 24.02.2020). Later, it was discovered that the RTI document had been manipulated and did not match the version held by the Municipal Corporation, indicating forgery and collusion by the accused with public officials.

The complaint dated 14.07.2023 (subject matter of WP(MD)No. 19001 of 2024) involves an amount of Rs.3,84,41,396/- as of 03.07.2023, which also falls within the threshold limit for mandatory CBI reporting. It relates to allegations against M/s.Kaizen International Lines, a firm involved in the export of stone boulders, which had obtained a cash credit facility of Rs.1.20 crores on 08.02.2019, later enhanced to Rs.3 crores on 17.08.2019, and also availed a GECL loan of Rs.0.60 crores on 30.05.2020. The SBI Fraud Identification Committee found that the property mortgaged as security was fictitious and that the mortgagors did not possess any legal title. The total loss to the bank was assessed at Rs.3,84,41,396/- as of 03.07.2023.

Despite the alarming magnitude of the frauds and their clear qualification under RBI and Ministry of Finance guidelines for referral to the Central Bureau of Investigation (CBI), the matter has languished without investigation and without even registering the FIR, not due to legal complexity, but due to bureaucratic indifference and institutional arrogance on the part of both the State Government and the CBI. This made the petitioner to knock the doors of this Court by filing these writ petitions.

Learned Special Public Prosecutors appearing for CBI submitted that though they have received the complaints, they could not proceed further by registering the same, inasmuch as they have not received the consent from the State, as required u/s.6 of the Delhi Special Police Establishment Act [inshort 'DSPE Act'].

Learned Additional Advocate General appearing for the State claimed that consent, as required u/s.6 of the DSPE Act, has been accorded vide G.O.(2D)No.290, Home Department, dated 20.09.2024 and G.O. (2D)No.98, Home Department, dated 01.04.2025 and as such, nothing prevents the CBI to register a case on the complaints of the petitioner Bank and to proceed with the investigation.

Learned Special Public Prosecutor for CBI responded that the above said Government Orders have been issued by restricting the investigation only as against few accused, ie., the consent granted by the State is in the form of accused specific, instead of complaint specific. The complaints have been lodged not only as against named accused, but also as against unknown public servants and unknown private persons. Since the State has restricted the consent as against the named accused, the CBI is now prevented from proceeding further as against the unknown public servants and private persons. Therefore, they are not in a position to register a case and proceed with the investigation.

Heard the arguments advanced by the learned Counsel on either side and perused the materials placed on record.

It is the Delhi Special Police Establishment Act, 1946 [DSPE Act] which deals with the constitution of a special police force which has now come to be known as the Central Bureau of Investigation (CBI). Under Section 3 of the DSPE Act, the Union Government may by notification specify the offence or class of offences which can be investigated by this police force. Under this Act, a member of DSPE can exercise the power of investigation in the offence or offences as specified in Section 3 within the Union Territories. However, for exercising power of investigation outside the Union Territories, even in respect of offences specified under Section 3 of DSPE Act, a notification extending jurisdiction in the State or States outside Union Territory is required to be issued by the Union Government under Section 5 of the DSPE Act.

Such a notification extending jurisdiction cannot be issued without the consent of the State Government involved as specified under Section 6 of the Act. It is under this provision that the concept of General or Specific Consent arises. While certain States have provided general consent, i.e., consent is provided for a category of cases without permission required for each individual case, other States have issued notifications withdrawing such general consent and therefore, case specific consent is required.

In State of West Bengal & Others v. Committee for Protection of Democratic Rights, West Bengal & Others [(2010) 3 SCC 571], the Hon'ble Supreme Court has observed as follows:

From the above, it is clear that the purpose of consent under Section 6 is to protect the principles of federalism by obtaining permission of the State Government before investigation is carried out by the CBI. However, the same cannot be used to obstruct investigations into large scale frauds and economic offences.

It is also pertinent to note the decision of the Hon'ble Supreme Court in M.Balakrishna Reddy v. Director, CBI, New Delhi [2008 (4) SCC 409], wherein it was held that there is no specific mode or manner to grant consent under Section 6 of the Act. The relevant portion is extracted thus:- “71. ... Section 6 which speaks of consent of State Government for the exercise of powers and jurisdiction of the Special Establishment neither refers to 'notification' nor 'order'. It merely requires consent of the State Government for the application of the Delhi Act. Parliament, in our considered opinion, advisedly and deliberately did not specify the mode, method or manner for granting consent though in two preceding sections such mode was provided. If it intended that such consent should be in a particular form, it would certainly have provided the form as it was aware of different forms of exercise of power. It, therefore, depends on the facts of each case whether the consent required by Section 6 of the Delhi Act has or has not been given by the State Government and no rule of universal application can be laid down.”

In this case, the issue regarding consent arose because the State of Tamil Nadu has withdrew the General Consent for investigation by the CBI vide G.O.(Ms)No. 286, Home Department, dated 14.07.2023. Therefore, the CBI is required to obtain specific consent from the State Government in line with Section 6 of the Delhi Special Police Establishment Act, 1946.

The main issue raised by the learned Special Public Prosecutors for CBI is that the specific consent granted by the State does not mention about “Unknown Public Servants and Unknown Private Individuals” and therefore, it may pave room for the other Public Servants / other Private Individuals, who might be added as accused during the investigation, to challenge that a valid consent was not obtained as against them before registration of the case.

A pertinent legal question arises for consideration that when a State Government grants consent under Section 6 of the Delhi Special Police Establishment Act, 1946, to investigate an offence allegedly committed by a specific person, can the CBI, during such investigation, proceed against others — including public servants or private individuals — who are found to have aided or abetted the principal accused, without obtaining fresh or post-facto consent?

To answer this, the provision itself must be considered. Section 6 of the DSPE Act reads:

This provision is a federal safeguard — designed to protect the autonomy of States from unsolicited intrusion by central investigative agencies. It mandates that, for the CBI to exercise jurisdiction within a State, the State Government’s consent must be obtained. Once such consent is granted, whether in general terms or in respect of a particular offence committed by a particular accused, the CBI gains lawful entry into the State’s jurisdiction for the purpose of that investigation. At that point, the CBI is invested with all powers under the Code of Criminal Procedure, 1973 to investigate the offence in its entirety.

Thus, even if the original consent mentions only a particular named individual (say, X), and during the investigation it emerges that others (say, Y and Z) were also involved, the investigation can extend to them. To hold otherwise would defeat the very purpose of criminal investigation, which is exploratory and evidence-driven by nature. In the opposite, requiring the CBI to obtain fresh consent for every additional accused person identified mid-investigation would paralyse the entire process, anchor the agency to administrative bottlenecks, and risk allowing those complicit in the offence to tamper with evidence or evade timely scrutiny, all under the shield of procedural technicality.

One possible reason for the CBI’s hesitation in proceeding with the investigation might have been its concern over how to deal with the potential accused public servants who were not named in the original consent. It is in this context that the Court considers it necessary to clarify the distinct legal role of prosecutorial sanction under the Prevention of Corruption Act, 1988.

Consent under Section 6 of the DSPE Act, which is jurisdictional in nature, enables the CBI to carry out investigation into a notified offence within the territory of a State. Sanction, on the other hand, under Section 19 of the Prevention of Corruption Act, 1988, which operates at the post-investigation stage, is a condition precedent for prosecuting public servants in a court of law.

While Section 6 consent serves as the constitutional permission for the CBI to “enter” the State’s domain and initiate investigation, the consent's function ends with the lawful commencement of investigation. Once such entry is validly secured, the investigating agency is not expected to obtain repeated consents for each person found involved during the investigation, so long as the newly implicated persons are connected to the same offence or transaction. Asking otherwise would render the process of investigation hostage to procedural redundancies, and allow culpable individuals to evade scrutiny simply because they were not named at the threshold stage.

In contrast, sanction under Section 19 is intended to protect public servants from vexatious or frivolous prosecution. It is a prosecutorial safeguard—not an investigative barrier. The process of collecting evidence, questioning suspects, or filing final reports is not contingent on such sanction. The distinction between entry/jurisdiction and prosecutorial clearance must therefore be maintained to preserve both investigative efficacy and individual safeguards.

In Sri Shashi Kumar Shivanna v. The Government Of Karnataka [2020 SCC OnLine Kar 5018], the Karnataka High Court has explained the difference between consent under the DSPE Act and sanction under the Prevention of Corruption Act and the same is reproduced as follows: “24. The word “consent” is phonetically, etymologically and textually different from the word “sanction” and a world of difference pervades between the two and can never be used interchangeably. Though the respondent No. 1 has termed it as sanction under Section 6 of the DSPE Act, 1946 in the impugned order, yet what can be granted is only a consent and nothing more. The word “consent” admits of myriad definitions as per its use in various legislations such as consent in contractual matters, consent in offences relating to human body, consent for establishment under the Environmental laws. In so far as the word “consent” found in Section 6 of the DSPE Act, 1946, it only means a “permission” of the concerned State in the Constitutional scheme of things. On the other hand, the word “sanction” found in Sections 17A and 19 of the PC Act, 1988, Section 197 in the Criminal Procedure Code inheres a thoughtful application of mind to ascertain whether the record placed before the Authority bears out enough material to proceed to prosecute. The requirement of application of mind while granting “sanction” is intended to avoid frivolous or vexatious proceedings being adopted, particularly against public servants in the discharge of their official duties. ...”

From the above, the distinction between consent and sanction is clear. While granting sanction, the concerned authority is required to apply their mind in respect of whether sufficient materials exist to continue with prosecution and whether the prosecution is frivolous or vexatious. On the other hand, there is no such requirement in the case of granting specific consent under the DSPE Act and the purpose of consent is to allow a police force constituted by the Central Government to exercise jurisdiction in a particular State. Once this difference is understood, it is clear that there is no justification for the State to sit over the proposals for grant of consent.

Therefore, this Court answers the question in the affirmative that once jurisdiction has been validly conferred through consent to investigate the offence, the CBI need not seek fresh or post-facto consent each time a new individual — public or private — is found connected with the crime. Any contrary practice has no foundation in law and only impedes justice. Therefore, the CBI ought to have proceeded further and thereafter, sought for a clarification, instead of sleeping over the matter.

It is very well possible that the role of certain individuals / presently unknown persons might surface during the course of investigation. Hence, when consent in respect of any individual involved is provided, the CBI can begin investigation into the complaint and it is illogical to expect the CBI to become aware of every individual involved even before investigation has commenced. The terms “unknown private individuals and unknown public officials” not being included in the Specific Consent is not a justification for non-registration of FIR and stalling investigation into the alleged offence.

Judicial authority supports this view. The Hon'ble Supreme Court in Tapan Kumar Singh v. State of Bihar [(2003) 6 SCC 175], held that an FIR need not name all the accused. Similarly, in Fertico Marketing & Investment Pvt. Ltd. v. CBI [AIR Online 2020 SC 953], the Hon'ble Supreme Court held that once consent is given, the investigation can proceed even against other individuals subsequently identified.

Considering the manner in which the complaints of the petitioner Bank have been handled by both the State Government and the CBI, this Court, while inclined to pass a detailed order with strong observations, reserved the matter for passing final orders on 30.04.2025. However, in the meantime, the CBI was directed to proceed with the complaints without any further delay.

What this Court is faced with is not merely a procedural delay, but a systemic failure of two public authorities, whose indifference and turf war have derailed the entire purpose of justice. This is not an administrative lapse, but a deliberate erosion of accountability. Conduct of the State:

The complaint dated 02.12.2022 (subject matter of WP(MD)No. 21743 of 2024) was received by CBI ACB, Madurai on 20.03.2023 through CBI ACB, Chennai vide letter dated 14.03.2023. Based on the above complaint, a proposal for obtaining consent under Section 6 of the DSPE Act along with draft notification was forwarded on 28.06.2023. On 22.08.2024, the State Government requested the CBI to forward a fresh proposal and the same was received by the CBI on 26.08.2024. The original complaint was returned by the CBI to the complainant on 27.08.2024 with an advice to take up the matter either before the High Court or Chief Secretary for issuance of direction to the CBI for registration of a case. On the basis of the same, the petitioner has filed WP(MD)No. 21743 of 2024, in which the Home Secretary was impleaded as a party on 16.08.2024. Only after the same, the State has issued a notification on 01.04.2025 granting specific consent as against M/s. GPR Resources Private Limited, Chennai and its directors alone. The same was received by the CBI on 05.04.2025.

Similarly, the another complaint dated 14.07.2023 (subject matter of WP(MD)No.19001 of 2024) was received by the CBI ACB, Madurai on 21.02.2024 through CBI ACB, Chennai vide letter dated 14.02.2024. A proposal for obtaining consent under Section 6 of the DSPE Act along with draft notification was forwarded on 07.05.2024. The State Government requested the CBI to forward a fresh proposal on 01.08.2024 and the same was received by the CBI on 06.08.2024. The original complaint was returned by the CBI to the complainant on 13.08.2024 with an advice to take up the matter either before the High Court or Chief Secretary for issuance of direction to the CBI for registration of a case. On the basis of the same, the petitioner has filed WP(MD)No.19001 of 2024. Only thereafter, the State Government has issued notification on 20.09.2024 granting specific consent as against M. Raja, Director, M/s Kaizen International Lines, Tuticorin District. The same was received by the CBI on 25.09.2024.

Since the notifications were silent on the role of Unknown Public Servants and Private Persons, the CBI raised the issue with the Additional Chief Secretary vide letter dated 06.12.2024 with a request to issue fresh notification, but no clarification / notification has been issued till now. In any event, in both the above instances, the facts reveal that there has been inordinate delay of 2-3 years in processing the papers and granting consent.

The State Government’s conduct in this matter is indefensible. The requirement of specific consent under Section 6 of the DSPE Act, 1946 exists to preserve federalism, not to provide a political shield for economic offenders. The manner in which proposals were returned for re-submission without assigning substantive reasons shows a bureaucratic attempt to stall rather than support lawful investigation. It is to be noted, the consent was not issued voluntarily, but only after the petitioner was forced to approach this Court, exposing the State’s reluctance to act even in the face of prima facie fraud involving public funds.

Even when consent was finally given, it was artificially narrowed to named private individuals, while the complaints clearly suggested collusion involving unknown public officials and other private persons. This person-specific consent shows a troubling attempt to micro-manage and limit the scope of investigation, which is not the function of the Executive. The State has no authority to dictate how or whom to investigate once consent is granted and doing so would amount to institutional interference with the investigative process. Such a selective approach reflects intentional obstruction. Conduct of the

The CBI has behaved no better. Despite receiving specific consent (even if limited), the CBI failed to register FIRs or initiate investigation. Prior to the grant of consent, which only came after the filing of these writ petitions, the CBI returned the complaints to the petitioner without taking any steps to initiate preliminary inquiry or follow-up action, and chose to remain inactive thereafter, despite having obtained the consent subsequently. A premier investigative agency cannot behave as if it is waiting for perfect instructions before acting. The refusal to register FIRs and begin even a preliminary investigation reflects a deeply troubling abdication of its statutory duty.

Instead of beginning inquiry into the named individuals and seeking clarification thereafter, the CBI chose to return complaints, raise correspondence, and remain idle. The result is predictable, ie., delay, loss of evidence, emboldening of the accused, and frustration of justice. This conduct is not only unacceptable, but is also unconstitutional. As an agency that operates under the umbrella of the Union Government, the CBI cannot hide behind formalities when the complaint discloses a cognizable offence and consent has been partially granted. Inaction in the face of serious financial crimes erodes public confidence in the credibility of the institution.

This Court is left with the unfortunate but unavoidable conclusion that the CBI allowed procedural obstacles to take precedence over its statutory duty to investigate and uncover the truth, thereby defeating the very purpose of its creation. The Larger Damage:

The petitioner Bank, being a public sector bank governed under the Banking Regulation Act, 1949, lodged complaints with the Central Bureau of Investigation (CBI) in accordance with the regulatory framework laid down by the the Reserve Bank of India (RBI) under the “Frauds – Classification and Reporting by Commercial Banks and Select Financial Institutions Directions, 2016”

It would be relevant to take note of circular No. F.No.4/5/2014- Vig., dated 13.05.2015, issued by the Ministry of Finance (Department of Financial Services) wherein it has been provided as follows:

The damage caused by this kind of conduct is not limited to one case. What is at stake is the public’s faith in the justice system. The petitioner bank, a statutory institution, complied with all procedural guidelines under the RBI and Ministry of Finance circulars. And yet, neither the Centre nor the State was willing to act, unless compelled by judicial direction. This is nothing short of a breakdown of institutional responsibility.

When agencies that are entrusted with the task of protecting the law, engage in passive resistance or selective permissions, they betray their constitutional obligations. Justice is delayed not due to complexity, but due to ego and politics. This Court cannot and will not be a silent spectator to such abdication of responsibility.

Accordingly, in exercise of powers under Article 226 of the Constitution, the following directions are issued:- 1. When the fraud amount exceeds the prescribed threshold, the CBI is not only entitled but obligated to act on the complaint received from a public sector bank, subject to the State's consent. Once such consent (even if specific to named individuals) is granted, the FIR should be registered without further delay, especially when the complaint clearly discloses a cognizable offence. 2. It is neither reasonable nor practical to expect the CBI to identify all individuals involved in the fraud at the stage of complaint or before initiating an investigation. Investigation is inherently a fact-finding process, and the identities of unknown public officials or private persons are often revealed only during the course of such investigation. 3. The practice of repeatedly asking the CBI to re-send proposals for consent, without assigning any substantive reasons, ought to be discouraged. This practice delays investigations, undermines administrative efficiency, and may indirectly facilitate the escape of offenders from legal scrutiny. 4. The State Government should maintain institutional consistency in handling requests for consent under Section 6 and not treat each matter as an isolated event requiring redundant paperwork once a proposal has already been vetted. 5. It is the duty of the Central and State Governments to work in tandem to set the mechanism in motion and not act in such a manner that roadblocks are being created in going after such offenders. 6. The Chief Secretary to the Government, State of Tamil Nadu and the first respondent / Zonal Head, CBI are directed to review the procedural delays and place internal accountability mechanisms in place to ensure such breakdowns do not recur.

This Court is compelled to observe that what has played out in this case is a clear example of how justice is delayed not because of legal hurdles, but due to administrative posturing. When State and Central agencies behave as if cooperation is a favour rather than a duty, the very idea of a fair investigation collapses.

Both the CBI and the State Government must be reminded — in no uncertain terms — that their loyalty lies with the Constitution and the rule of law, not to convenience, comfort, or political expedience.

Insofar as the present writ petitions are concerned, they are disposed of with the following directions: 1. This Court, while reserving the matter on 30.04.2025, had already directed the CBI to proceed with the complaints of the petitioner bank without further delay. The said direction is hereby reaffirmed, and the CBI is expected to act upon the same without any procedural hesitation. 2. If, during the course of investigation, the role of other individuals — whether public servants or private persons — comes to light in connection with the same offence, the CBI shall be at liberty to proceed against them, in accordance with law. 3. In the case of public servants under the control of the State Government, the investigating agency shall obtain sanction under Section 19 of the Prevention of Corruption Act, 1988, before launching prosecution, in accordance with law.

Registry is directed to forward a copy of this order to The Chief Secretary, Government of Tamil Nadu, Chennai; The Secretary to Government, Ministry of Home Affairs, New Delhi; and The Secretary to Government, Department of Personnel and Training, New Delhi, for administrative review of the coordination between the State Government and the CBI in such matters involving high-value financial frauds. There shall be no order as to costs.