CENTRAL BUREAU OF INVESTIGATION versus ARVIND KHANNA
[2019] 13 S.C.R. 470, Supreme Court of India, 2019
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
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SUPREME COURT REPORTS
[2019] 13 S.C.R.
CENTRAL BUREAU OF INVESTIGATION
v.
ARVIND KHANNA
(Criminal Appeal No. 1572 of 2019)
OCTOBER 17, 2019
[R. BANUMATHI AND R. SUBHASH REDDY, JJ.]
Foreign Contribution (Regulation) Act, 1976 – s. 23 r/w. s. 4
– Foreign Contribution (Regulation) Act, 2010 – s. 35 r/w. s.3 –
The respondent-petitioner received a sum of Rs. 9,04,84,770/- from
eight foreign entities – FIR was filed by the appellant-CBI alleging
violation of provisions under FCRA, 1976 u/s. 23 r/w. s.4 – Additional
CMM took cognizance u/s. 35 r/w. s. 3 of the Act, 2010 –  Appellant
filed revision on the ground that when offence was committed, the
FCRA, 1976 was in force – The Revisional court held that Additional
CMM committed ‘jurisdictional error’, thereby providing that
cognizance was deemed to have been taken u/s. 23 r/w. s.4 of Act,
1976 – Thereafter, respondent sought quashing of the FIR, charge-
sheet and further consequential order on the ground that the amount
which he had received was a gift from his father – Respondent also
alleged that Revisional Court had passed the order without issuing
notice to him – High Court quashed the FIR with all proceedings
emanating thereto – On appeal, held: The High Court proceeded
on the premise that the appellant had admitted the receipt of foreign
contribution from his father – However, the case of appellant was
that foreign contributions were received by the respondent from
different entities in the foreign
country, without the permission from
the Government – There was a serious factual dispute – The High
Court recorded findings on several disputed facts – Defence of the
accused is to be tested after appreciating the evidence during the
trial – The High Court made the wrong assessment at the stage,
when the matter was taken cognizance by the Competent Court –
Insofar, the order passed by the Revisional authority is concerned,
the same is quashed and remitted to the Revisional Court for fresh
consideration after issuing notice to the respondent – Thus, the
impugned order of the High Court set aside.
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Allowing the appeal, the Court
HELD : 1. This Court is of the view that the impugned
order passed by the High Court is not sustainable. In a petition
filed under Section 482 Cr.P.C., the High Court has recorded
findings on several disputed facts and allowed the petition. Defence
of the accused is to be tested after appreciating the evidence
during trial. The very fact that the High Court, in this case, went
into the most minute details, on the allegations made by the
appellant-C.B.I., and the defence put-forth by the respondent,
leads to a conclusion that the High Court has exceeded its power,
while exercising its inherent jurisdiction under Section 482
Cr.P.C. [Para 19] [477-F-H]
2. The assessment made by the High Court at this stage,
when the matter has been taken cognizance by the Competent
Court, is completely incorrect and uncalled for. [Para 20]
[478-A]
3. From a reading of the impugned order, it appears that
the High Court has proceeded on the premise that the appellant
has admitted the receipt of foreign contribution from his father,
who is an Indian passport holder. In fact, it is not so. It is a case
of the appellant-CBI, that the foreign contributions were received
by the respondent from different entities in the foreign country,
without permission from the Government. On the other hand,
the case of the respondent, in defence, is that he has received
such funds from his father. The High Court has taken into
consideration the statement, alleged
to have been made by
respondent’s father on 11.07.2006 and one of the statements
given on behalf of one of the entities by the name ‘New Heaven
Nominees’. It is a defence of the respondent that the foreign
entities which have sent the funds to the respondent are from
available funds, standing to the credit of respondent’s father.
[Para 21] [478-B-D]
4. The correctness of the defence whether such amounts
were received by the respondent from his father or not is a serious
factual dispute. It is not an admitted position, as recorded by the
High Court. The correctness of the defence of the respondent is
to be gone into only after appreciating the evidence during the
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trial. Merely, by referring to statements alleged to have been
made by father of the respondent and also on behalf of one of the
entities i.e New Heaven Nominees’, the High Court has committed
an error in recording a finding in favour of the respondent. The
High Court also committed an error in observing that, even
otherwise, there is material to show that funds were indeed a gift
from father of the respondent and the prosecution has neither
disputed the said fact as false nor alleged that the funds in question
did not belong to the father of the respondent. The said
observation made by the High Court is also contrary to the record.
[Para 22] [478-E-F]
5. So far as the order passed by the Revisional Authority is
concerned, if any adverse order is passed by the Revisional Court,
without issuing notice to the respondent, it is open to the High
Court to set aside the order and remit the matter back for fresh
consideration but, at the same time, it is not open to allow the
Revision in its entirety. [Para 25] [479-C]
Ahmedabad Urban Development Authority v. Manilal
Gordhandas and Ors. (1996) 11 SCC 482 : [1996] 6
Suppl. SCR 79 ; Mohit Alias Sonu and Anr. v. State of
Uttar Pradesh and Anr. (2013) 7 SCC 789 : [2013] 7
SCR 86 – referred to.
Case Law Reference
[1996] 6 Suppl. SCR 79
referred to
Para 24
[2013] 7 SCR 86 
referred to
Para 24
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No. 1572 of 2019.
From the Judgment
and Order dated 30.11.2015 of the  High Court
of  Delhi at New Delhi in Crl. M.C. No. 2784 of 2011.
Rana Mukherjee, Sr. Adv., Devashish Bharuka, B. K. Satija,
A. K. Sharma, Ms. Sarvshree, Mukesh Kumar Maroria, Advs. for the
Appellant.
Mahesh Jethmalani, Sr. Adv., Sandeep Kapur, Debmalya Banerjee,
Ravi Sharma,    Ms. Apoorva Pandey, Gudipati G. Kashyap, A. S. Aman,
Aviral Kapoor, Vardaan Wanchoo, Mrs. Manik Karanjawala, Mayank
Maini (for M/S. Karanjawala & Co.), Advs. for the Respondent.
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The Judgment of the Court was delivered by
R. SUBHASH REDDY, J.
1. Leave granted.
2. This criminal appeal is filed by the Central Bureau of
Investigation (for short ‘CBI’), through the Investigating Officer, CBI/
SPE, ACP, New Delhi, aggrieved by the common judgment and order
dated 30.11.2015, passed by the High Court of Delhi at New Delhi in
Crl. M.C. No. 2784 of 2011 and Criminal M.C. No. 3342 of 2011.
3. The aforesaid Criminal Miscellaneous Cases were filed under
Section 482 of the Code of Criminal Procedure (for short ‘Cr.P.C.’).
Vide Crl. M.C. No. 2784 of 2011, the respondent-petitioner sought
quashing of First Information Report (for short ‘F.I.R.’) bearing No.
RC-AC-1-2007-A-0003 dated 02.04.2007, charge sheet dated 13.12.2010
and the order dated 05.07.2011, passed by the learned Additional Chief
Metropolitan Magistrate-01 (ACMM), Patiala House Courts, New Delhi.
4. By order dated 05.07.2011, the Additional Chief Metropolitan
Magistrate took cognizance of the offence under Section 35 read with
Section 3 of Foreign Contribution (Regulation) Act, 2010 (for short
‘FCRA, 2010’) and issued summons to the respondent-petitioner. Vide
Crl. M.C. No. 3342 of 2011, the respondent-petitioner sought quashing
of the order dated 20.08.2011, passed by the learned Revisional Court in
Criminal Revision No. 02/2011, filed by the appellant herein.
5. While allowing the 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 (for short ‘FCRA, 1976’).
6. By the aforesaid common order passed by the High Court, in
exercise of powers under Section 482 of Cr.P.C., the operating portion
of the order, as contained in paragraph 82, reads as under:
“In view of the facts recorded above and the law discussed, I am
of the opinion that the material placed on record with chargesheet
by prosecution is not sufficient even to frame charge against the
petitioner. Therefore, I hereby quash the FIR mentioned above
with all proceedings emananting thereto with liberty to the Central
Government to compound the case of the petitioner under Section
41(1) FCRA, 2010.”
CENTRAL BUREAU OF INVESTIGATION v.
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7. The respondent-petitioner was a Member of Legislative
Assembly (MLA), Punjab from 24.02.2002 to 27.02.2007.
8. During the said period from 06.03.2002 to 04.03.2006, he
received a sum of Rs. 9,04,84,770/- (Rupees Nine Crores Four Lacs
Eighty-Four Thousand Seven Hundred and Seventy Only) from eight
foreign entities, one of these is an entity known as ‘New Heaven
Nominees’. The other seven entities are managed by an entity known
as ‘CI Law Trust’.
9. On the ground, that the foreign contribution received by the
respondent-petitioner was in violation of provisions under FCRA, 1976,
the appellant herein on 02.04.2007, registered the crime in F.I.R. No.
RC-AC-1-2007-A-0003 under Section 23(1) read with Section 4(1) of
FCRA, 1976.
10. It was the case of the respondent-petitioner, that the funds
which were received, were gifts from his father, Mr. Vipin Khanna, an
Indian passport holder. It was his case that the foreign entities through
whom such funds were sent, were holding the same on behalf of his
father, Mr.Vipin Khanna. After completing the investigation, charge-sheet
was filed and by order dated 05.07.2011, the Additional Chief Metropolitan
Magistrate had taken cognizance under Section 35 read with Section 3
of FCRA, 2010. As the offence was committed, when the FCRA, 1976
was in force, the appellant-CBI has filed Criminal Revision Petition No.
2 of 2011 before the Revisional Court i.e. the Special Judge, CBI-03,
New
Delhi. The Revisional Court, by order dated 20.08.2011, on the
ground that the learned Additional Chief Metropolitan Magistrate, New
Delhi has committed a “jurisdictional error”, by proceeding under the
wrong provision of law, allowed the Revision Petition, thereby providing
that cognizance is deemed to have been taken under Section 23 read
with Section 4 of the FCRA, 1976.
11. So far as such order passed by the Revisional Court is
concerned, respondent-petitioner has questioned the same, mainly on
the ground that the said order was passed without notice to him. At the
same time, the respondent sought quashing of the F.I.R., charge-sheet
and further consequential order, on the ground that the amount which he
has received, is a gift from his father, Mr. Vipin Khanna, who is an
Indian passport holder. The foreign entities, through whom such funds
were sent, were holding the same on behalf of his father. The respondent
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relied on the statement allegedly given by his father, Mr. Vipin Khanna,
on 11.07.2006 and also the statement dated 13.04.2007, issued on behalf
of New Heaven Nominees’, stating that the funds which were sent,
were from funds standing to the credit of respondent’s father, Mr. Vipin
Khanna. It was also pleaded that Income Tax Authorities, vide order
dated 11.12.2010, in proceedings under Section 147 of the Income Tax
Act, 1961, accepted the said receipts as gift, and the same is confirmed
by order dated 15.04.2014, passed by the Income Tax Appellate Tribunal
in ITA Nos. 1915 to 1917/DEL of 2010.
12. The appellant has filed an application, for issuance of Letters
Rogatory (LRs), which was allowed by the Trial Court vide order dated
10.12.2007, for the purpose of collection of evidence from United
Kingdom. Though they have received only part/incomplete execution of
such LRs, it was also the case of the respondent that FCRA, 1976 is
repealed and replaced by FCRA, 2010 with effect from 01.05.2011 and
Section 4 of FCRA, 2010, now removes the requirement of prior
permission from Central Government, before receipt of foreign
contribution. Further, it was pleaded that though cognizance of offence
was taken under Section 35 read with Section 3 of FCRA, 2010 and
summons were issued to the respondent, however, on Revision filed by
the C.B.I, same was allowed without notice to him.
13. After FCRA, 2010 has come into force, on the ground that
offence alleged against
the respondent is now compoundable under
Section 41 of the Act, respondent has filed an application dated 04.06.2012
before the Ministry of Home Affairs, seeking compounding of offence.
However, the Ministry of Home Affairs, by order dated 28.04.2014,
rejected the same. Thereafter, the respondent filed Writ Petition (Criminal)
No. 1168 of 2014 before the High Court, and the High Court vide order
dated 08.07.2014, allowed the petition and directed the authorities to
take decision afresh after hearing the respondent-petitioner. Thereafter,
no decision was taken.
14. Before the High Court, the quash petition filed by the respondent
was opposed by the appellant herein, stating that the petition filed under
Section 482 Cr.P.C, by the respondent, is not maintainable, as the
allegations made in the F.I.R and charge-sheet, prima facie discloses
the commission of offence under Section 23 read with Section 4 of FCRA
Act, 1976. The F.I.R. was registered on sanction by the Ministry of
Home Affairs, Government of India, vide letter dated 18.12.2006, by
CENTRAL BUREAU OF INVESTIGATION v.
ARVIND KHANNA [R. SUBHASH REDDY, J.]
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which, the appellant-C.B.I was authorized under Section 28 of the FCRA,
1976, to investigate receipt of foreign funds amounting to Rs.9.60 crores
by the respondent, who was the then MLA of Punjab, from eight overseas
Companies, without obtaining prior permission from the Central
Government. It was their case before the High Court that charge-sheet
was filed before the FCRA, 2010 came into force on 01.05.2011 and it
was further pleaded on their behalf that the Revisional Court has rightly
held that cognizance and summoning of the respondent is deemed to
have been taken under Section 3 read with Section 24 of FCRA,  1976.
It was categorically pleaded that benefit of Section 41 of FCRA, 2010 is
not available to the respondent, as the same is available only for the
offences committed under the Act of 2010.
15. The High Court, in common impugned order, has observed
paragraphs 60-62 as under:
“60. Admittedly, the amount in question has been received by
the petitioner from his father Mr. Vipin Khanna, who is an Indian
passport holder. The foreign entities through whom such funds
were sent were holding the same on behalf of his father. To this
effect, Mr. Vipin Khanna made a staement dated 11.07.2006,
whereby stated that these funds were sent on his instructions to
the petitioner. Moreover, vide statement dated 13.04.2007, New
Heaven Nominees’ stated that the funds sent to the petitioner by
way of gifts were from funds
standing to the credit of petitioner’s
father with them. Moreover, similar gifts or funds were also given
to the petitioner’s siblings, namely, Mr. Aditya Khanna, Mr. Naveen
Khanna and Ms. Vineeta Singh by Mr. Vipin Khanna, i.e, their
father. The statement dated 10.08.2007 made by CI Law Trust,
corroborated that funds sent to the petitioner were paid by way of
gifts from funds standing to the credit of Mr. Vipin Khanna and
further stated that similar gifts or funds were given to other siblings
mentioned above by father of the petitioner.
61. It is pertinent to mention that the Income Tax Authorities vide
order dated 11.12.2010 passed by the Commissioner of Income
Tax (Appeals) in proceedings under Section 147 of the Income
Tax Act, 1961, that similar income received by the petitioner from
the same CI Law Trust (formerly known as West Way) had been
treated as a ‘gift’ from the father of the petitioner. The above
order stands confirmed by order dated 15.04.2014 passed by the
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Income Tax Appellate Tribunal in ITA Nos. 1915 to 1917/DEL/
2010.
62. It is further important to note here that the Ministry of Home
Affairs by order dated 28.04.2014, rejected the compounding
application of the petitioner. Accordingly, the petitioner challenged
said rejection order vide 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.”
16. Initially, cognizance was taken by the trial  court under
provisions of FCRA, 2010. Aggrieved by the same, the appellant-CBI
has filed the Revision. The Revision Authority, by order dated 20.8.2011,
has allowed the Revision. The Revisional Authority, in its order dated
20.08.2011, has observed that the learned Additional Chief Metropolitan
Magistrate, New Delhi, has committed a “jurisdictional error” and has
proceeded under the wrong provision of law. It was further observed
that while allowing the Revision, cognizance is deemed to have been
taken under Section 23 read with Section 4 of the FCRA, 1976.
17. About the order of the Revisional Authority, mainly it was the
grievance of the respondent that Revisional Authority has passed the
order, without giving notice and opportunity.
18. We have heard Sri Rana Mukherjee, learned senior counsel
for the appellant and Sri Mahesh Jethmalani, learned senior counsel for
the
respondent and perused the impugned order and other material placed
on record.
19. After perusing the impugned order and on hearing the
submissions made by the learned senior counsels on both sides, we are
of the view that the impugned order passed by the High Court is not
sustainable. In a petition filed under Section 482 Cr.P.C., the High Court
has recorded findings on several disputed facts and allowed the petition.
Defence of the accused is to be tested after appreciating the evidence
during trial. The very fact that the High Court, in this case, went into the
most minute details, on the allegtions made by the appellant-C.B.I., and
the defence put-forth by the respondent, led us to a conclusion that the
High Court has exceeded its power, while exercising its inherent
jurisdiction under Section 482 Cr.P.C.
CENTRAL BUREAU OF INVESTIGATION v.
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20. In our view, the assessment made by the High Court at this
stage, when the matter has been taken cognizance by the Competent
Court, is completely incorrect and uncalled for.
21. From a reading of the impugned order, it appears that the
High Court has proceeded on the premise that the appellant has admitted
the receipt of foreign contribution from his father Mr. Vipin Khanna,
who is an Indian passport holder. Infact, it is not so. It is a case of the
appellant-CBI, that the foreign contributions were received by the
respondent from different entities in the foreign country, without
permission from the Government. On the other hand, the case of the
respondent, in defence, is that he has received such funds from his father
Mr. Vipin Khanna. The High Court has taken into consideration the
statement, alleged to have been made by Mr. Vipin Khanna on 11.07.2006
and one of the statements given on behalf of one of the entities by the
name ‘New Heaven Nominees’. It is a defence of the respondent that
the foreign entities which have sent the funds to the respondent are
from available funds, standing to the credit of respondent’s father, Mr.
Vipin Khanna.
22. The correctness of the defence whether such amounts were
received by the respondent from his father or not is a serious factual
dispute. It is not an admitted position, as recorded by the High Court.
The correctness of the defence of the respondent is to be gone into
only
after appreciating the evidence during the trial. Merely, by referring to
statements alleged to have been made by father of the respondent, Mr.
Vipin Khanna, and also on behalf of one of the entities i.e New Heaven
Nominees’, the High Court has committed an error in recording a finding
in favour of the respondent. The High Court also committed an error in
observing that, even otherwise, there is material to show that funds were
indeed a gift from father of the respondent and the prosecution has
neither disputed the said fact as false nor alleged that the funds in question
did not belong to the father of the respondent. The said observation
made by the High Court is also contrary to the record.
23. When it is mainly the defence of the respondent that the funds
were received from his father, burden is on him to prove that he received
such funds from his father, as such, no permission was required. Even
with regard to applicability of provisions under FCRA, 1976, findings are
to be recorded after trial.
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24. Learned senior counsel Sri Mahesh Jethmalani, appearing for
the respondent, in support of his argument, relied on the judgment of this
Court, in the case of Ahmedabad Urban Development Authority v.
Manilal Gordhandas and Ors.1 Learned senior counsel also placed
reliance on the judgment in the case of Mohit Alias Sonu and Anr. v.
State of Uttar Pradesh and Anr.2. In this case, when the Sessions
Court refused to issue summons, on the ground that no prima facie case
is made out and when such order is challenged before the Revisional
Court, it was held that it was incumbent upon the Revisional Court to
give opportunity of hearing, as contemplated under sub-section (2) of
Section 4 of Cr.P.C.
25. So far as the order passed by the Revisional Authority is
concerned, if any adverse order is passed by the Revisional Court, without
issuing notice to the respondent, it is open to the High Court to set aside
the order and remit the matter back for fresh consideration but, at the
same time, it is not open to allow the Revision in its entirety.
26. For the aforesaid reasons, this appeal is allowed, impugned
common order dated 30.11.2015 is set aside. It is open for the trial court
to proceed from the stage at which the proceedings were stopped and to
decide the same in accordance with law, uninfluenced by any of the
findings and observations made by this Court or the High Court. So far
as the order dated 20.08.2011, in Crl. Revision Petition No.02/2011, passed
by
the Special Judge, CBI-03, New Delhi, we quash the same and remit
the matter to the Revisional Court for fresh consideration, after issuing
notice to the respondent. The respondent, without waiting for any formal
notice, shall make his appearance before the Revisional Court within a
period of four weeks from today. Thereafter, it is open to the Revisional
Court to fix a date for hearing, and pass an appropriate order, on its own
merits.
1 (1996) 11 SCC 482
2 (2013) 7 SCC 789
Ankit Gyan
Appeal allowed.
CENTRAL BUREAU OF INVESTIGATION v.
ARVIND KHANNA [R. SUBHASH REDDY, J.]