Central Bureau Of Investigation vs Arvind Khanna

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.1572 OF 2019 [Arising out of S.L.P.(Crl.)No.1420 of 2017]

Central Bureau of Investigation ... Appellant

Versus

Arvind Khanna ... Respondent

J U D G M E N T

R. Subhash Reddy, J.

1. Leave granted.

2. This civil 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. Signature Not Verified

No. 3342 of 2011.

Digitally signed by SATISH KUMAR YADAV Date: 2019.10.17 17:14:22 IST Reason:

3. The aforesaid Criminal Miscellaneous Cases were

filed under Section 482 of the Code of Criminal Crl.A.@ SLP(Crl) No. 1420 of 2017 2

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 Crl.A.@ SLP(Crl) No. 1420 of 2017 3 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.”

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- Crl.A.@ SLP(Crl) No. 1420 of 2017 4

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 Crl.A.@ SLP(Crl) No. 1420 of 2017 5

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 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. Crl.A.@ SLP(Crl) No. 1420 of 2017 6

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.

Crl.A.@ SLP(Crl) No. 1420 of 2017 7

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

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. Crl.A.@ SLP(Crl) No. 1420 of 2017 8

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 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 Crl.A.@ SLP(Crl) No. 1420 of 2017 9

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, Crl.A.@ SLP(Crl) No. 1420 of 2017 10

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.

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 Crl.A.@ SLP(Crl) No. 1420 of 2017 11

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 Crl.A.@ SLP(Crl) No. 1420 of 2017 12

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.

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 1 (1996) 11 SCC 482 2 (2013) 7 SCC 789 Crl.A.@ SLP(Crl) No. 1420 of 2017 13

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 Crl.A.@ SLP(Crl) No. 1420 of 2017 14

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.

.................... J.

[R. Banumathi]

.................... J.

[R. Subhash Reddy]

NEW DELHI, October 17, 2019