TaxTMI 
TaxTMI 
2022 (6) TMI 1387
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....spondent and the consequential Gazette Notification, issued by the 2nd respondent in S.O. No. 46, dated 14.06.2020. 2. The petitioner/A3 in W.P. No. 2007 of 2021 is the former Treasurer, the 1st petitioner/A1 in W.P. No. 2031 of 2021 is the Chairman and the 2nd petitioner/A2 is the General Secretary; the petitioner/A4 in W.P. No. 2392 of 2021 is the former Treasurer and the petitioner/A5 in W.P. No. 5729 of 2021 is the Deputy Secretary of the Indian Red Cross Society, Headquarters, New Delhi. 3. The petitioners/A1 to A5, in Crime No. RCO322020A0023, dated 2812.2020, have challenged the Government Order in G.O.(Ms). No. 181, dated 09.04.2020, passed by the 1st respondent herein, issuing Notification under Section 6 of Delhi Special Police Establishment Act, 1946, to investigate the complaint made by the 3rd respondent herein and the consequential Gazette Notification, dated 14.06.2020, issued by the 2nd respondent. 4. The learned Senior Counsel appearing for the Petitioners would submit that the petitioners are the office bearers of Indian Red Cross Society. The third respondent given a complaint on 27.03.2020, to the fifth respondent, making certain allegations with regard....
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....w. Based on the aforesaid two documents, an approval dated 19.12.2020 accorded under Section 17A of the Prevention of Corruption (Amendment) Act, 2018 (hereafter the PC Amendment Act, 2018), by the 4th respondent is also non-est in law. Consequently, registration of FIR, dated 28.12.2020 in RC0322020A0023 registered by the SP: CBI, ACB, Chennai, is non-est in law. All the four illegal acts are interlinked, inseparable and not curable illegalities. Hence, all the above four acts originated from G.O.(Ms) No. 181, dated 09.04.2020 passed by the 1st respondent is without jurisdiction, to be quashed. 6. The Indian Red Cross Society Act, 1920 (in short, the Act) and subsequent amendments were passed by the Parliament of India and therefore, the Act is a Central Act, which comes under Seventh Schedule, List I- Union List of the Constitution of India. Hence, the Appropriate Government is the Central Government and therefore, granting consent under Section 6 of the Delhi Special Police Establishment Act, 1946 by the State Government of Tamil Nadu, is without jurisdiction and gross violation of Article 246 of Constitution of India. The Indian Red Cross Society, its composition and functio....
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....t vs. SH. Manshankar Prabhashankar Dwivedi [1972 (2) SCC 392] (vi) Govt. of Andhra Pradesh and others vs. General Manager, District Co-operative Central Bank Ltd. [2002 (7) SCC 631] (vii) K.K. Saksena vs. International Commission on Irrigation and Drainage and others [2015 (4) SCC 670] (viii) Pradeep Kumar Biwas vs. Indian Institute of Chemical Biology and others [2002 (5) SCC 111] (ix) Federal Bank Ltd., vs. Sagar Thomas and others [2003 (10) SCC 733] (x) Thalappalam Service Cooperative Bank Limited and others vs. State of Kerala and others [2013 (16) SCC 82] (xi) State of Punjab vs. Nirmal Kaur [2009 (13) SCC 418] (xii) S.S. Rana vs. Registrar, Coop. Societies and another [2006 (11) SCC 634] (xiii) M. Kumar vs. The State, Rep. by the Superintendent of Police, Villupuram District, Villupuram and others (xiv) M. Roshan Halima vs. The Government of Tamil Nadu, Rep. by its Director General of Police, Dr. Radharkishnan, Chennai and others (xv) United India Insurance Co. Ltd., Rep. by its Deputy Manager, Mr. R. Swaminathan, Vellore, vs. The Superintendent of Police, CBCID, Manthoppu Street, Thiruv....
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....erson against whom proceedings are initiated, is a public servant or discharges public duty. The cases under the Prevention of Corruption Act are within the ambit of section 3 of the Delhi Special Police Establishment Act, 1946 and hence, the impugned Government Order is legally sustainable. 12. Insofar as the ground locus standi raised by the petitioners with regard to the criminal complaint of the 3rd respondent, against the governing body of the Indian Red Cross Society, is concerned, the concept of locus standi is alien to criminal jurisprudence, criminal action can be taken up based on the complaint of any person, who informs of the commission of a cognizable offence. In the present case, before registration of case under Prevention of Corruption Act and IPC offence, the procedure under Sections 3, 5 and 6 of the Delhi Special Police Establishment Act, 1946 are complied. CBI can investigate as per Section 10(i) of the Manual, Section 17(A) under provision of Prevention of Corruption Act, is the starting point of investigation, public funds are involved, whether benefited or not from public funds investigation will reveal. The investigation now at the starting point. Protect....
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....further contend that the Indian Red Cross Society perform public duty in as much as its duties, inter alia, revolve around Maternity and Child Welfare, Nursing and Ambulance Work, mitigation of suffering caused by epidemics, earthquakes, famines, floods and other disasters. These duties are duties in discharge of which the State, the public and the community at large has an interest. Section 7 of the Indian Red Cross Society Act, 1920 read with the 1st Schedule to the said Act stipulates the objects towards which the funds of the Indian Red Cross Society can be applied. As per Section 4 of the Act of 1920, the Indian Red Cross Society is a body corporate and it has perpetual succession which is a characteristic feature of the word "office" used in the Prevention of Corruption Act. The members of the Indian Red Cross Society are public servants and the Prevention of Corruption Act applies to them, in view of Sections 2(b) and 2(c)(viii) of the said Act. 16. Mr. Sankaranarayanan, the learned Additional Solicitor General, and Special Public Prosecutor for CBI Cases filed a counter affidavit on behalf of respondents 2, 4 and 5 would submit that the CBI, ACB, Chennai registered a Reg....
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....a as Chairman, who is continuing since 2011. The said Manish Choudhary consented for a bribe of Rs. 2,00,000/-. As such, Manish Choudhary is accused in this case. The investigation is at initial stage and the contentions of the petitioners with respect to allegations made in the complaint will be looked into during the course of investigation. So, the averments made by the petitioners cannot be appreciated at this stage. They relied on the following decisions of the Hon'ble Apex Court, in support of their contentions. 1. M. Balakrishna Reddy Vs. Director, CBI, New Delhi reported in (2008(4) SCC 409). 2. The Central Bureau of Investigation, Bank Securities and Fraud Cell Vs. Ramesh Gelli and Others reported in (2016 (3) SCC 788) 19. Mr. Om. Prakash, the learned counsel appearing for the 8th respondent by filing a counter would submit that the 8th respondent is not a necessary party to the Writ Petitions. He is a retired person, carrying on honorary social activities and do not have any means to fight these litigations. He has been impleaded to show an illusory cause, as if the prosecution of the petitioners by the Central Bureau of Investigation (CBI) based ....
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.... Rs. 2,2604,000/- from the funds of Society to a Company viz., M/s. Surya Wind Farms, thereafter, transferred to his personal account; the overt act against the petitioner (A5) in W.P. No. 5729 of 2021, who is holding the post of Deputy/Joint Secretary, National Head Quarters, is that A1 managed fraudulent election to the Managing Committee with the support of A5, to tactfully allow the other accused to continue with their act of misappropriation. 23. The CBI registered FIR and conducted search in nine places and investigation proceeded, at that stage, the petitioners questioned the consent and concurrence given by the State Government. In this case, a complaint has been forwarded by the Deputy Secretary to Governor, Office of the Governor regarding the criminal misconduct, criminal breach of trust, misuse of funds, no proper audit of accounts, misappropriation of society funds and assets. It is seen that in this case, complaint was lodged on 27.03.2020, before the Joint Director of South Zone, Central Bureau of Investigation by the Deputy Secretary to Governor, Office of the Hon'ble Governor. Thereafter, on 09.04.2020, the impugned Government Order in G.O.(Ms). No. 181, Hom....
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....omplainant is the Deputy Secretary to Governor and the Government Order is also passed by the Governor. The complaint dated 27.03.2020, was given straight away to the Joint Director of CBI and no "complaint" was pending with the State Government at any point of time. 26. It is seen that the petitioners are holding office of the Managing Committee by conducting sham election. Huge financial irregularities to the tune of Rs. 2,26,04,000/- committed by an individual viz., Senthilnathan (A4), Ex-treasurer, in connivance with the other Managing Committee. Initially, the funds were transferred to the Company viz., M/s. Suriya Wind Farms, thereafter, to his personal account. When the diversion of IRCS fund by Senthilnathan was brought to knowledge of Dr. Harish L Mehta (A1), the Chairman, instead of making a police complaint, the said Senthilnathan was let to go scot free with just an apology letter, and was made to resign. 27. Further, during review of account, the Auditor finds that certain files, vouchers records found missing for the expenses made during the period of one Dr. Vadivel Mugundhan and the same ratified by the present Committee, not supported by valid and relevant do....
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....is situated at India Red Cross Society at No. 1, Red Cross Road, New Delhi-110001, which is well within the jurisdiction of the Delhi Special Police Establishment namely CBI, which is also the contention of the petitioner/A5. Hence, in the logical view, the G.O.(Ms) No. 181, dated 09.04.2020 itself is not mandatory, in view of the above Judgment. 31. The attention of this Court was also invited to the Judgment of the Hon'ble Supreme Court in State Vs. N.S. Ghaneswaran, reported in (2013 (3) SCC 595), wherein it is held that CBI can register FIR as per the procedure traceable in CBI Manual 6.10.1. Hence, there is no illegality in CBI registering FIR. Further, the Hon'ble Apex Court in Central Bureau of Investigation, Bank Securities and Fraud Cell Vs. Ramesh Gelli and Others reported in (2016 (3) SCC 788), held as follows:- 34. The definition of public duty in Section 2(b) of the PC Act, indeed, is wide. Discharge of duties in which the State, the public or the community at large has an interest has been brought within the ambit of the expression 'public duty'. Performance of such public duty by a person who is holding an office which requires or authoriz....
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....ffice bearers and the Managing Committee. The IRCS functioning as per the Act and Rules and codified procedures. IRCS do not receive any grants from Central and State Government and it is an independent Body, registered under the Societies Act. Hence, no case can be registered against the petitioners under the Provisions of Corruption Act. (ii) 3rd respondent has lodged a complaint directly to the 5th respondent on 27.03.2020, thereafter, Notification under Section 6 of DSPE Act was issued by the 1st respondent State Government on 09.04.2020. Following the same, Notification was issued by the 2nd respondent, under Section 5 of the Delhi Special Police Establishment Act, 1946, on 12.06.2020. The 7th respondent gave approval under Section 17A of the Prevention of Corruption Act, on 19.12.2020. Thereafter, the 5th respondent registered a case in Crime No. 23 of 2020, on 28.12.2020, for the offence under Sections 120B, and 409 IPC., and Sections 13(2) read with 13(1)(a) of the Prevention of Corruption Act, 1988 against six named persons and unknown public servants and private persons. 33. With regard to the first contention that the Indian Red Cross Society do not receive a....
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....anch receiving grants from the State Government and also from its Headquarters is confirmed. Apart from that, IRCS, Tamil Nadu Branch is allotted with one Acre prime property land in Egmore. Further, IRCS is given privilege of running the Blood Bank and also given exclusive rights to various other projects of Government of Tamil Nadu. Thus, the IRCS is receiving grants and also doing 'public duty', whereas, these receipts not properly accounted and submitted. The 8th respondent raised these issues brought out the misdeeds committed by the Office bearers of IRCS, viz., petitioners and others of the Society. The 3rd respondent, on receipt of complaints and particulars, thereafter, lodged the complaint to the 5th respondent. Thus, the contention of the petitioner that they will not come under the ambit of Prevention of Corruption Act, since they are not public servants, is not proper. By receiving the grants from the Government, the IRCS comes under the provisions of Prevention of Corruption Act. Further, the petitioners are doing 'public duty', as could be seen from the nature of duties they have been discharging. 36. Further, the citation referred by the petitione....
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....oon.org /DOC/314, dated 31.07.2009 it is held that as per the creation of IRCS Delhi Branch by an Act of Parliament is a public authority like all the other State Branches. 39. The said proposition has been reiterated by the Hon'ble Supreme Court in the case of State of Gujarat vs. Mansukhbhai Kanjibhai Shah. Thus, the petitioners discharging the public duty is not in dispute. Hence, the case against the petitioners under the Prevention of Corruption Act can proceeded. 40. As regards the second contention is concerned, issuance of G.O.(Ms) No. 181, dated 09.04.2020, for fraudulent activities by issuing Notification under Section 6 of the Delhi Special Police Establishment Act is a colourable exercise, non-est and cannot be revisited. 41. On perusal of the said Government Order, it is seen that two documents have been referred to. Document No. 1 is the complaint of the third respondent, dated 27.03.2022, addressed to the fifth respondent, along with a letter dated 27.03.2022 of the complaint. Document No. 2, report of the Director General of Police, dated 09.04.2020. From the Government Order, it is seen that in the abstract, it is stated that the transfer of complaint ....
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....such powers, shall be deemed to be an officer in charge of a police station discharging the functions of such an officer within the limits of his station. 6. Consent of State Government to exercise of powers and jurisdiction.-- Nothing contained in section 5 shall be deemed to enable any member of the Delhi Special Police Establishment to exercise powers and jurisdiction in any area in a State, not being a Union territory or Railway, area, without the consent of the Government of that State.'' 42. On a plain reading of Section 3 of the Delhi Special Police Establishment Act, 1946, it is clear that the Central Government may, by notification in a Official Gazette, specify the offence or classes of offence, which are to be investigated by the Delhi Special Police Establishment [CBI]. 43. Section 5(1) of the Delhi Special Police Establishment Act, 1946, the Central Government may extend to any area the powers and jurisdiction of CBI for investigation of any offence. Section 5(2) of the Act, when an order has been passed under Section 5(1) of the Act, the CBI has to discharge the functions of the Police Officer of that area. Section 5(3), CBI Officer, wh....
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....t is to say, offence relating to criminal breach of trust by public servant, etc.);'' 47. Thus, the third respondent not only being Deputy Secretary of the Governor, even as a commoner, when an offence, coming to his knowledge as per Section 39 of Cr.P.C. has lodged the complaint. 48. Further, the contention of the petitioners is that, in the absence of no complaint pending before State Police, transferring the investigation or giving consent is not proper. From the Government Order, it is clearly stated it is transfer of complaint. Further, in Section 2(h) of Cr.P.C., investigation is defined as follows:- "2(h) "investigation" includes all the proceedings under this Court for the collection of evidence conducted by a Police Officer or by any person (other than a Magistrate), who is authorized by a Magistrate in this behalf." Section 154 of Cr.P.C. gives power to investigate. 49. The Hon'ble Supreme Court in the case of Fertico Marketing and Investment Private Limited and others vs. Central Bureau of Investigation and another [2021 (2) SCC 525], held that though the Central Government to extend the powers and jurisdiction of Members of the DSPE beyo....
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....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. The Judgments relied upon by the learned Senior Counsel appearing for the petitioner primarily relate to non-application of mind in the matter of granting sanction either under Section 197 of the CrPC or under Article 163 of the Constitution of India or under Section 19 of the PC Act, 1988 and thus cannot aid the petitioner.'' 51. Thus, it is seen that the grant of consent under Section 6 of the DSPE Act, 1946, is more in the nature of an administrative Order and does not require enormous rejigging, as the issue is whether to allow the investigation to be done by the CBI or not. 52. Further, in the case of State, Rep. by Inspector of Police, Chennai vs. N.S. Gnaneswaran reported in 2013 (3)....