The Supreme Court on Thursday directed the Central Bureau of Investigation to release within a week, the passport of arms dealer Suresh Nanda, allegedly involved in receiving a kickback in the Rs 1,150-crore Barak missile deal.

The court held that the investigating agency failed to follow the proper procedure laid down in the law for impounding the passport.

"We set aside the Delhi High Court's order and direct the CBI to hand over the passport to Nanda within a week," a Bench comprising Justices P P Naolekar and Markandey Katju said.

It said the CBI had erroneously taken Nanda's passport in its custody by following the Code of Criminal Procedure (CrPC) instead of the Passport Act which specifically says that any issues relating to passport has to be dealt in accordance with the special law.

"It appears that passport cannot be impounded except by passport authority. Retaining of passport by CBI is not in accordance with law as there is no order from passport authority," the Bench said.

"The Passport Act is a special Act, while CrPC is a general Act. A special Act always overrules the general rule," the Bench said, adding that "no steps were taken by the CBI to impound the passport under the special Act. However, it left open to CBI to start fresh procedure for impounding the passport of Nanda in accordance with law".

"It shall be open to the CBI to approach the Passport Authority to impound the passport (of Nanda) in accordance with law," the Bench said, when Additional Solicitor General Amarendra Sharan submitted that the investigating agency should be allowed to approach the passport authority.

The CBI had alleged that Nanda had received Rs 400 crore from abroad which was not disclosed.