TaxTMI 
TaxTMI 
2015 (12) TMI 1294
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....rt in Criminal Revision No.02/2011 filed by the Central Bureau of Investigation (CBI). While allowing the said revision petition, order dated 05.07.2011 was substituted providing that deemed cognizance has been taken under Section 23 read with Section 4 of the Foreign Contribution (Regulation) Act, 1976 (hereinafter shall be called 'FCRA, 1976'). 3. Since the issues raised in both the petitions are inter-related, therefore, both these petitions were heard together and are decided together by this common judgment. 4. Brief facts of the case are that the petitioner held the office of Member of Legislative Assembly (MLA), Punjab, from 24.02.2002 to 27.02.2007. During holding of said office from 06.03.2002 to 04.03.2006, he received a sum of Rs. 9,04,84,770/- (Nine Crores Four Lacs Eighty Four Thousand Seven Hundred Seventy) from his father Mr. Vipin Khanna, albeit, through eight foreign entities, one of which is known as New Heaven Nominees'. The other seven entities are managed by an entity known as 'CI Law Trust'. The Ministry of Home Affairs by letter dated 18.12.2006 had sanctioned investigation in terms of Section 28 FCRA, 1976 alleging that the petitioner received funds withou....
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....of such LRs, which can be seen from letter dated 11.02.2010, which states that witnesses' statements will be sent in due course and also makes it clear that notice had been issued only to one of the eight foreign entities, i.e., CI Law Trust Group. 8. Mr. Nigam pointed out that vide letter dated 26.11.2010 sanction issued to prosecute the petitioner under Section 27 FCRA, 1976, is based on violation of Section 8 (e) FCRA, 1976, i.e., receipt of funds from a relative but without prior permission of the Central Government. 9. The learned senior counsel further submitted that CBI filed the chargesheet on 13.12.2010 alleging violation of Section 4 read with Section 23 FCRA, 1976. The incomplete execution of LRs has been stated in para 16.9 of chargesheet, whereby stated as under:- "In order to verify the nature of these remittances, Letters Rogatory (LR) issued by this Hon'ble Court u/s 166 A Cr.P.C. on 16.12.2008 was sent to the United Kingdom on 08.01.2008 in February, 2010, a part execution report of the LR was received from U. K. This part execution report contains copies of documents relating to instructions given by remitting entity to the remittance bank to transfer the stipu....
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....edings pending before the learned ACMM. 13. Being aggrieved by order dated 20.08.2011 passed by the learned Revisional Court, the petitioner filed a second petition bearing Crl. M.C.No.3342/2011 under Section 482 of the Code of Criminal Procedure, 1973, wherein while issuing notice, proceedings pending before the Trial Court were stayed. 14. Mr. Nigam submitted that since offences were now compoundable under Section 41 (1) FCRA, 2010, petitioner filed an application dated 04.06.2012 before the Ministry of Home Affairs seeking composition of offences in terms of Section 41 FCRA, 2010, however, the Ministry of Home Affairs by order dated 28.04.2014, rejected the same. Thereafter, the petitioner challenged said rejection order vide W.P. (Crl.) No. 1168/2014, while setting aside the same vide order dated 08.07.2014, this Court directed that a fresh hearing be given to the petitioner. Accordingly, the same was granted to the petitioner in the said compounding proceedings on 09.03.2015, which is still pending for decision. 15. Mr. Nigam, submitted that case of the prosecution is that the sanction for investigation under Section 27 FCRA, 1976, and sanction for prosecution under Section....
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.... the categories of transactions exempted from the Act and further makes all offences compoundable. Thus, viewed in the present facts, FCRA, 2010 is more lenient legislation than the FCRA, 1976. 18. Mr. Nigam submitted that in the case of T. Barai v. Henry Ah Hoe & Anr., (1983) 1 SCC 177, the Hon'ble Supreme Court held so, notwithstanding Section 8(1)(c), (d) & (e) of the Bengal General Clauses Act, 1899, which is pari material with Section 6 of the General Clauses Act and relied upon by the Prosecution. In Paras 17 and 22 to 25, the Apex Court observed as under: "17. ......................................................................... ..........The submission is that in view of Clause(c), (d) and (e) of Sub-section(1) of Section 8 of the Bengal General Clauses Act, 1899 which provide that if any law is repealed then unless a different intention appears, the repeal shall not affect any liability incurred under any enactment so repealed or affect any legal proceeding or remedy in respect of such liability, penalty or punishment as aforesaid. It is said that there was a liability incurred by the commission of an offence punishable under Section 16(1)(a) of the Act as amended b....
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....to reduce the punishment. 25. It is settled both on authority and principle that when a later statute again describes an offence created by an earlier statute and imposes a different punishment, or varies the procedure, the earlier statute is repealed by implication. In Michell v. Brown. Lord Cambell put the matter thus: "It is well settled rule of construction that, if a later statute again describes an offence created by a former statute and affixes a different punishment, varying the procedure, the earlier statute is repealed by the later statute See also Smith v. Benabo [1937] 1 All. E.R. 523." In Regina v. Youle (1861) 158 E.R. 311 Martin, B. said in the oft-quoted passage: "If a statute deals with a particular class of offences, and a subsequent Act is passed which deals with precisely the same offences, and a different punishment is imposed by the later Act, I think that, in effect, the legislature has declared that the new Act shall be substituted for the earlier Act." 19. Mr. Nigam further submitted that even the International Covenant on Civil and Political Rights, 1966, Article 15, Clause-1, ratified by India states that "No one shall be held guilty of any crim....
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....rmission from the Central Government for receipt of funds from a relative. The sanctioning authority was thus of the mind that while funds have been received from a relative, no prior permission was taken from the Central Government. 23. Learned senior counsel has referred to the following provisions of law:- " Section 40 of FCRA, 2010. "Bar on prosecution of offences under the Act: No court shall take cognizance of any offence under this Act, except with the previous sanction of the Central Government or any officer authorised by that Government in this behalf. Section 27 of FCRA, 1976 "Bar to the prosecution of offences under the Act: No court shall take cognizance of any offence under this Act, except with the previous sanction of the Central Government or any officer authorised by that Government in this behalf." 24. He submitted that after the repeal of FCRA, 1976 and the enactment of FCRA, 2010, in terms of Section 54 (2)(a) FCRA, 2010, only those Sections taken "which would include sanction orders" under the old Act and which are not inconsistent with the new FCRA, 2010 would remain alive and saved. Under Section 4 (e) FCRA, 2010, receipt of funds from a relative i....
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....f claim does not come within the purview of Section 11 of the Act, we are of opinion that the proviso of Section 4 of the Act clearly shows that the claim filed under the ordinance would be treated as one filed under the Act with all the consequences attached thereto.........." 29. Ld. Senior Counsel further submitted that by the very language of Section 6, this provision would apply "unless a different intention appears" from the new Act. The different intention is to be established from an overall reading of the provisions of the new FCRA Act, 2010, and if they manifest an intention contrary to Section 6 as held in the case of Mohar Singh (Supra). There is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. Hence, Section 41 FCRA, 2010, specifically makes all offences in which prosecution has not been instituted as being compoundable. The Supreme Court in the case of General Officer Commanding Rashtriya Rifles Vs. Central Bureau of Investigation & Anr.....
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..... Prior to the repeal of the 1976 Act, the prosecution had only filed the charge sheet on 31.12.2010 and can at best could expect or hope for a conviction and penalty/punishment which may follow. Section 6 does not save such abstract rights or possibilities or expectations. It applies to specific events which have occurred under the old Act. 34. To strengthen his arguments, on the issue raised above, learned senior counsel has relied upon the decision of the Apex Court rendered in M.S. Shivananda Vs. Karnataka State Road Transport Corporation & Ors., (1980) 1 SCC 149, wherein it has been held as under:- "13. It is settled both on principle and authority, that the mere right existing under the repealed Ordinance, to take advantage of the provisions of the repealed Ordinance, is not a right accrued. Sub-section (2) of Section 31 of the Act was not intended to preserve abstract rights conferred by the repealed Ordinance ..... 14. What were the "things done" or "action taken" under the repealed Ordinance? The High Court rightly observes that there was neither anything done nor action taken and, therefore, the petitioners did not acquire any right to absorption under sub-clause (3) ....
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....so far as may be, apply to such proceeding and references in the said sub-sections to the High Court shall be construed as references to the Sessions Judge." 17. It is thus clear that it is mandatory for the Sessions Judge while exercising his powers of revision not to make any order which would prejudice the accused or other person unless he had been given an opportunity of being heard." 36. Also in Bal Manohar Jalan Vs Sunil Paswan (2014) 9 SCC 640 Hon'ble Supreme Court held as under:- "5. The main contention of the learned counsel for the appellant is that though Section 401(2) of the Criminal Procedure Code stipulated that no order in exercise of the power to revision shall be made by the High Court to the prejudice of the accused unless he had an opportunity of being heard either personally or by pleader in his own defence, the High Court in criminal revision did not issue notice to the appellant herein who is Accused 4 in the first information report and without providing an opportunity to him has exercised jurisdiction under Section 401 CrPC by directing to proceed in accordance with law treating the protest petition as the complaint, to the prejudice of the appella....
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....r Section 202 or on receipt of the report from the police or from any person to whom the direction was issued by the Magistrate to investigate into the allegations in the complaint, the effect of such dismissal is termination of complaint proceedings. On a plain reading of sub-section (2) of Section 401, it cannot be said that the person against whom the allegations of having committed the offence have been made in the complaint and the complaint has been dismissed by the Magistrate under Section 203, has no right to be heard because no process has been issued. The dismissal of complaint by the Magistrate under Section 203-although it is :at preliminary stage-nevertheless results in termination of proceedings in a complaint against the persons who are alleged to have committed the crime. Once a challenge is laid to such order at the instance of the complainant in a revision petition before the High Court or the Sessions Judge, by virtue of Section 401(2) of the Code, the suspects get the right of hearing before the Revisional Court although such order was passed without their participation. The right given to 'accused' or 'the other person' under Section 401(2) of b....
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.... of Mr.Jaspal Singh that by reason of the impugned order the appellant was not prejudiced and in any event at the presummoning stage, he was not an accused, cannot be accepted. Sub-section (2) of Section 401 of the Code refers not only to an accused but also to any person and if he is prejudiced, he is required to be heard. 15. In Makkapati Nagaswara Sastri v. S.S. Satyanarayan, 1989CrlLJ617, this Court opined that the principle of audi alteram partem is applicable in a proceeding before the High Court. 16. Yet again, in P. Sundarrajan & Ors. v. R. Vidhya Sekar this Court held: "4. On the above basis, it proceeded to consider the material produced by the petitioner before it and without taking into consideration the defence that was available to the respondent proceeded to set aside the order of the Magistrate, and directed the said court to take the complaint on file and proceed with the same in accordance with law. 5. In our opinion, this order of the High Court is ex facie unsustainable in law by not giving an opportunity to the appellant herein to defend his case that the learned Judge violated all principles of natural justice as also the requirement of law of hearing ....
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....t he may not be prejudiced in defending himself. In issuing of a process under section 204 of the Code, the Magistrate does not decide the matter finally between the parties. By no stretch of imagination can it be said that while issuing the process an accused person is found guilty of the offence complained of. It only requires the accused person to appear before the Court and face and answer the allegations made by the aggrieved party........ 13. An order framing a charge against or issuing summons to an accused person is simply procedural in nature and does not terminate the matter finally before the Court; such an order leases the rights of the parties to be determined by the Court on adducing evidence. Howsoever, important or vital issue may have been decided in framing a charge or issuing summons against an accused person as the main matter still remains to be decided, the order is an interlocutory order and the fact that the order decides an important or a viral issue is by itself not material. It is now beyond the pale of controversy that if after the order the cause is still a live cause in which the rights of the parties are yet to be determined, the order has the attri....
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....n offence there is sufficient ground for proceeding". The words "sufficient ground for proceeding" again suggest that ground should be made out in the complaint for proceeding against the respondent. It is settled law that at the time of issuing of the process the Magistrate is required to see only the allegations in the complaint and where allegations in the complaint or the charge-sheet do not constitute an offence against a person, the complaint is liable to be dismissed". 44. Learned senior counsel submitted that this being strict position in law, learned Trial Court could not have issued the process against the petitioner and the learned Sessions Judge could not have substituted its own satisfaction as to the commission of an offence under the provisions of FCRA, 1976 and directed deemed cognizance, as had been done in the present case. 45. Further to another question, whether the donation given by an individual of Indian original and having foreign nationality is treated 'foreign contribution'? It is replied in the affirmative by stating that every donation from an Indian, who has acquired foreign citizenship, is treated as foreign contribution. This will also apply to PIO....
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....e petitioner was an MLA of Punjab from 24.02.2002 to 27.02.2007 and during this period he received foreign contribution to the tune of USD 19,52,735.20 equivalent to INR 9,04,84,770.33 in his Saving Bank Account No.522-002-002126-4 maintained with Standard Chartered Bank, New Delhi, from eight overseas companies/entities. It is also not in dispute that these eight entities are not registered/incorporated in India and none of them has been exempted from the definition of "Foreign Source", as defined in FCRA, 1976. It is also an admitted fact that the petitioner has neither sought prior approval of the Central Government for accepting the above said contribution nor intimated the Central Government about the receipt of such contribution. The transfer of money/contribution from the eight entities is a "foreign contribution" and falls within the purview of definition "foreign source" as defined in the FCRA, 1976. 50. Mr. Mann submitted that composite reading of Section 2 (1) (c) FCRA, 1976, along with explanation, creates a deeming fiction, that if the transfer of currency is received from a foreign source, it shall be deemed to be a foreign contribution. In other words, if the origin....
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....beneficiary receives full amount intact and the reference is included as part of the transfer". Even in the confirmation/intimation, the reference is specifically mentioned as "TSL Technology Ltd. June Budget Funds". 53. Mr. Mann submitted that similar references are made in all the 24 remittances. The remittances were utilized by the petitioner by issuing high value cheques issued from his account for almost equal/approximate amounts corresponding to the remitted amount, to the Companies, viz., M/s Clan Morgan Holdings Private Limited, M/s Dynamic Sales and Service International Private Limited, Tiger Corporation Private Limited and TSL Defence Technologies Private Limited, wherein the petitioner is neither a director nor shareholder. The entire transactions would reveal that the remittances were received by the petitioner as per the directions/instructions/reference given by the remitting party for a specific purpose/reference, which by no stretch of imagination could be termed as a gift or transfer by the petitioner from his father. 54. Further submitted, the documents submitted by the petitioner are not reliable as the basic scheme of these documents is that there is a docume....
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....bmitted that Sections 54(1) and 54(2) FCRA, 1976, stipulates that notwithstanding such repeal, anything done or any action taken or purported to have been taken under the repealed Act shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act, would protect actions, offences, punishment etc. It is submitted that Section 54(3) FCRA, 1976, prescribes that save as provided in sub-section (2), mention of particular matters in that sub-section shall not be held to prejudice or affect the general application of Section 6 of the General Clauses Act, 1897, with regard to the effect of repeal. 58. The issue whether for the purposes of computing the period of limitation under Section 468 Cr.P.C., the relevant date is the initiation of process or the date when cognizance is taken by the Court, has been decided by the Constitution Bench of the Apex Court in the case of Mrs. Sarah Mathew Vs. The Institute of Cardio Vascular Diseases by its Director Dr. K.M. Cherian & Ors., (2014) 2 SCC 62. The relevant portion of the same is reproduced below:- "37. We are inclined to take this view also becaus....
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....apter XXXVI of the Code of Criminal Procedure which provides limitation period for certain types of offences for which lesser sentence is provided draws support from this maxim. But, even certain offences such as Section 384 or 465 of the Indian Penal Code, which have lesser punishment may have serious social consequences. Provision is, therefore, made for condonation of delay. Treating date of filing of complaint or date of initiation of proceedings as the relevant date for computing limitation under Section 468 of the Code is supported by the legal maxim 'actus curiae neminem gravabit' which means that the act of court shall prejudice no man. It bears repetition to state that the court's inaction in taking cognizance i.e. court's inaction in applying mind to the suspected offence should not be allowed to cause prejudice to a diligent complainant. Chapter XXXVI thus presents the interplay of these three legal maxims. Provisions of this Chapter, however, are not interpreted solely on the basis of these maxims. They only serve as guiding principles. xxxx xxxx xxxx 51. In view of the above, we hold that for the purpose of computing the period of limitation under Se....
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....e W.P. (Crl.) No. 1168/2014, which was set aside by this Court vide order dated 08.07.2014 and directed a fresh hearing to the petitioner. Accordingly, a fresh hearing was granted on 09.03.2015, however, till date no decision is taken thereon by the Ministry. 63. The case of the prosecution is that sanction for investigation under Section 27 FCRA, 1976, and sanction for prosecution under Section 28 FCRA, 1976, were based on lack of prior permission and violation of Section 8(e) FCRA, 1976, i.e., receipt of gift from a relative without prior permission. Accordingly, the Ministry of Home Affairs sanctioned investigation on the ground that no prior permission was obtained from the Central Government for receipt of funds from a relative. Even the chargesheet filed by the CBI is only based on lack of prior permission from the Central Government. 64. As per the definition of 'foreign source' in Section 2 (1) (e) FCRA, 1976, only citizens of a foreign country or territory come under this category. Therefore, being an Indian, no foreign contribution regulatory legislation would apply on father of the petitioner. Thus, the provisions of FCRA, 1976 or FCRA, 2010, would be outside the realm....
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....nder the law in force at the time of commission of the offence. It is a fundamental right of every person that he should not be subjected to greater penalty than what the law prescribed, and no ex post facto legislation is permissible for escalating the severity of the punishment. But if any subsequent legislation would downgrade the harshness of the sentence for the same offence, it would be a salutary principle for administration of criminal justice to suggest that the said legislative benevolence can be extended to the accused who awaits judicial verdict regarding sentence. xxxx xxxx xxxx 34. There is inconsistency between the sentencing scope in Section 3(2) of TADA Act 1985 and in the corresponding provision in TADA Act 1987. The expression "in any enactment other than this Act" would, under Section 25, encompass even enactment which, though expired by efflux of time, continues to operate by virtue of any saving clause. Accordingly, the exclusivity of the extreme sentence contained in Section 3(2) of TADA Act 1987 must stand superseded by the corresponding benevolent provision in TADA Act 1987. It is a permissible course and the express prohibition contained in Article 2....
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....he petitioner, thus, has not one but two exemptions in his credit. 74. Therefore, investigating and prosecuting the petitioner for an offence for lack of prior permission from the Central Government as per Section 8 (e) FCRA, 1976, has now a complete exemption under Section 4 (e) FCRA, 2010 Act and continuation of the same would amount to an action taken under the FCRA, 1976 which is now rendered "inconsistent with the provisions of this Act" contained in Section 54 FCRA, 2010. Thus, it amount to removing such action from the ambit of protective saving provided by Section 54 FCRA, 2010. The prosecution has relied upon Section 6 (d) and (e) of General Clauses Act, 1897 and contended that the repeal shall not affect offences, investigations, legal proceedings which were commenced under the FCRA, 1976. This argument has been rejected by the Supreme Court in case of T. Barai (Supra) wherein the Apex Court has held that the accused would be entitled to the cover of all subsequent beneficial legislation, notwithstanding Section 8(1)(c), (d) and (e) of the Bengal General Clauses Act, 1899 which is pari material with Section 6 of the General Clauses Act and relied upon by the prosecution.....
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....en dealt with under Section 401 of the Cr. P.C. It lays down :- 'In the case of any proceeding the record of which has been called for by itself or which otherwise comes to its knowledge, the High Court may, in its discretion, exercise any of the powers conferred on a Court of Appeal by Sections 386, 389, 390 and 391 or on a Court of Sessions by Section 307 and, when the Judge composing the Court of revision are equally divided in opinion, the case shall be disposed of in the manner provided by Section 392." 11. Section 401(2) is to the following effect:"No order under this section shall be made to the prejudice of the accused or other person unless he has had an opportunity of being heard either personally or by Pleader in his own defence." 12. It is abundantly clear from the relevant provisions of law reproduced above that no order to the prejudice or an accused or any other person can be made unless the said accused or the said person had been given an opportunity of being heard. 13. Admittedly in the instant case an order to the detriment of the petitioners was passed by the learned Sessions Judge inasmuch as the learned Magistrate was directed to summon them under Sectio....
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.... is those foreign trusts and funds which are financed by a foreign country. The prosecution has not even adverted to foreign entities from whom the petitioner received the funds are companies or trusts/firms. The charge sheet has simply lumped on these entities by labelling them as overseas firms/companies/trusts whether these are collectively treated under Section 2 (1) (e) FCRA, 1976. The only barebones reference made in para 16.14 of the charge sheet is that bank account of such entities are in United Kingdom and hence, they are foreign sources. However, in my considered opinion, this is not the definition of a foreign source under the Act. 80. It is pertinent to mention here the question asked from "Foreign Donation of FCRA", whether the donation given by Non Residents Indian (NRIs) is treated as foreign contribution? The answer thereto is that the contribution made by a citizen of India living in another country (Non-Resident Indian), from his personal savings, through the normal banking channels, is not treated as foreign contribution. However, while accepting any donation from such NRI, it is advisable to obtain his passport details to ascertain that he/she is an Indian Pas....