High Court overturns order on FCRA compounding application, citing lack of reasoning. CBI involvement deemed improper.

The High Court set aside the order dismissing the compounding application under the FCRA due to lack of reasoning and improper involvement of the CBI. The matter was remanded to the competent authority for a fresh hearing with the petitioner present, as per the law, to issue a new decision on the compounding application.

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Issues: Challenge to the order dismissing the application for compounding of offence under FCRA, lack of reasoning in the order, CBI's involvement without being a necessary party, jurisdiction of the competent authority to hear the CBI.

Analysis:
The petitioner challenged the order dated 28th April, 2014, which dismissed the application seeking compounding of an offence under Section 23(1) read with 4(1) of the Foreign Contribution Regulation Act, 2010 (FCRA). The petitioner raised two primary grievances: first, the lack of reasoning in the order for disallowing compounding, and second, the involvement of the CBI in the proceedings without being a necessary party. The petitioner contended that the competent authority did not have jurisdiction to hear the CBI and sought the right to challenge the CBI's hearing before the competent authority.

Upon acceptance of notice, the learned counsel for the Union of India and CBI acknowledged the deficiencies in the impugned order. The counsel for the Union of India admitted that the order did not provide reasons for rejecting the compounding application and expressed no objection to remanding the matter back to the competent authority for a fresh hearing on this issue. Similarly, the counsel for the CBI recognized the violation of the principle of audi alterem partem by hearing the CBI without the petitioner's presence and agreed to a re-hearing in the petitioner's presence.

Consequently, in light of the statements made by the counsels for the Union of India and CBI, the High Court set aside the impugned order dated 28th April, 2014. The matter was remanded back to the competent authority for conducting a fresh hearing with the petitioner present, in accordance with the law, and to pass a new order on the compounding application. The petition was disposed of with the directive for the order to be issued immediately.

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