In a setback to CBI which maintained that there was no kickback involved in Rs 16,000-crore Scorpene submarine deal, the Delhi High Court on Thursday directed it to conduct a fresh preliminary inquiry and file a report before it.

A Bench comprising Justice T S Thakur and Justice Veena Birbal granted three months' time to the investigating agency to complete the inquiry.

"We direct preliminary inquiry to be initiated by the CBI on the complaint (alleging kickbacks in the deal) and be completed within three months," the Bench said, adding that it was not expressing any opinion on the merit of the case.

The Bench also said that if any cognisable offence was made out after the inquiry then an FIR be lodged by the investigating agency against the accused persons.

But the Bench made it clear that in case the agency decided to close the case after the inquiry then it had to satisfy the Court that there was no evidence of kickbacks involved in the deal.

"If the inquiry does not disclose the offence then the IO will file the status report and also the order of the competent officer passed on the basis of report," the court said.

Earlier, Additional Solicitor General Gopal Subramanium appearing for the agency contended that he had taken instruction from the CBI Director and there was no problem in conducting a preliminary inquiry.

Petitioner Prashant Bhushan, however, expressed doubt on CBI's assurance and said, "It (CBI) has not done anything during the last 21 months and it would submit a report without conducting proper inquiry. There is a need to conduct full-fledged investigation in the case."

"They would face contempt if they do not conduct inquiry," the Bench said, allaying his fears.

After the order was dictated the ASG pleaded the Bench that the word 'preliminary inquiry' used in the order be replaced with 'complaint inquiry'. But the court said, "Whatever term you use, it is the preliminary inquiry."

The Court was hearing a  PIL filed by an NGO Centre for Public Interest Litigation seeking CBI probe in the Scorpene submarine deal.

The government finalised the Rs 16,00O crore deal with French company, Thales, in October 2005. The petition alleged that there were middlemen involved in the deal which was against government's policy.

It also alleged that 4 per cent kickbacks were paid in the deal and the Government was trying to protect the middlemen who were influential people.

The petition referred to some e-mail messages and telephonic conversations allegedly between Thales officials and the middlemen.