Nemi Chand Jain @ Chandraswami And ... vs Central Bureau Of Investigation ...
2006 Latest Caselaw 1717 Del

JUDGMENT

Badar Durrez Ahmed, J.

1. This revision petition is directed against the order on charge dated 23.12.1998 as well as the formal charges framed on the same date itself by the learned CMM, Delhi. The petitioner No. 2 (Kailash Nath Aggarwal @ Mamaji) and petitioner No. 4 (Ram Kumar Singh Sengar) have passed away during the pendency of this revision petition. They along with petitioner Nos. 1, 3 and 5 and one Dr. P. C. Reddy were the trustees in the Trust known as Vishwa Dharmayatan, which is the petitioner No. 6.

2. The allegation against the petitioners is that they contravened provisions of the Foreign Contribution (Regulation) Act, 1976 (hereinafter referred to as the said Act). It is alleged that the petitioner No. 6 (hereinafter referred to as "the Society") received foreign contributions, though in Indian currency, in 1992 and 1993. The same were deposited in UCO Bank, Hauz Khas Branch, New Delhi. The violation that has been alleged is that in the application for registration under Section 6 of the said Act, the nominated bank was State Bank of Bikaner & Rajasthan, Saket Branch. There are other deposits also in other banks such as Central Bank of India, Gulmohar Park and Bank of Rajasthan, Janpat in 1994-95. All these deposits and receipts are said to be in violation of the provisions of Section 6(1) of the said Act and, therefore, the offence punishable under Section 23 of the said Act is said to be made out. Apart from this, the further allegation is that the Society contravened the provisions of Section 13 of the said Act by not maintaining and/ or not submitting accounts of the contributions so received and the manner in which they were spent. By doing so, the Society, therefore, became liable for punishment under Section 25 of the said Act.

3. Apart from these allegations, there is also the allegation that the petitioners committed the offences under Section 406 read with Section 120-B IPC. The operative portion of the order on charge reads as under:

From the above facts and circumstances, the charges laid do not appear ground-less. A strong suspicion is raised on perusal of the materials placed before me, leading to a prima facie opinion as to the existence of factual ingredients constituting offence Under Section 120-B IPC, Sec 406 IPC, Under Section 23 read with Section 6 of F.C.R.A and Under Section 25 read with Section 13 of F.C.R.A.

The charge that was framed against the petitioners reads as under:

I, R. K. Gauba Chief Metropolitan Magistrate Delhi do hereby charge you accused Nemi Chand Jain @ Chandra Swami, Kailash Nath Aggarwal @ Mamaji, Rikab Chand Jain, Dr. Pratap Chandra Reddy, Ram Kumar Singh Senger, Vikram Singh & M/s Vishwa Dharmayatan Trust as under:

That you during the period in between 1992 and 1995 at Delhi agreed amongst yourselves and others known to do or cause to be done an illegal act by illegal means to wit, to misappropriate the foreign contributions received in the name of Vishwa Dharmayatan Trust, and in furtherance of the said criminal conspiracy took the permission from Ministry of Home Affairs, Central Government of India to get foreign contribution in A/C No. 135-A opened in the State Bank of Bikaner and Jaipur, Saket, Delhi and you received as many as 11 contributions to the tune of Rs. 2,28,88,638/- from different persons of different foreign sources but you dishonestly did not deposit the said amounts in the said A/C No. 135-A with State Bank of Bikaner & Jaipur, Saket, Delhi rather you credited the said amounts in (i) A/C No. 1895 UCO Bank, Hauz Khas, (ii) A/C No. 8888, Central Bank of Rajasthan, Janpath, Delhi in place of A/C No. 135-A without any prior permission of M. H. A. dishonestly and you also neither maintained any account nor submitted and return in respect of the said amount to M. H. A. within prescribed period and dishonestly committed criminal breach of trust by misappropriating the said amounts, and you thereby committed an offence punishable Under Section 120-B r/w 406 IPC and Under Section 6, 13 r/w 23 F.C.R. Act, 1976 and within my cognizance.

Secondly that you during the said period at the said place, being entrusted or having dominion over the Foreign Contributions to the tune of Rs. 2,28,88,638/- committed the criminal breach of trust by misappropriating the same for your own use dishonestly.

And you thereby committed an offence punishable Under Section 406 IPC and within my cognizance.

Thirdly that you during the said period at the said place dishonestly received foreign contributions to the tune of Rs. 2,28,88,638/- from different foreign sources and credited the same in A/C No. (i) A/C No. 1895 UCO Bank, Hauz Khas, (ii) A/C No. 8888, Central Bank of Rajasthan, Janpath, Delhi in place of A/C No. 135-A with State Bank of Bikaner and Jaipur, Saket, New Delhi without the prior registration of aforesaid three banks i.e, (i) UCO Bank (ii) Central Bank of India and (iii) Bank of Rajasthan for taking foreign contributions from Ministry of Home Affairs, Government of India.

And you thereby committed an offence punishable Under Section 23 r/w 6 of the FCR Act and within my cognizance.

Fourthly that you during the said period, at the said place received foreign contributions to the tune of Rs. 2,28,88,638/- from different foreign sources received in A/C No. 135-A with State Bank of Bikaner and Jaipur, Saket, New Delhi but you did not credit the said amount in the said account nor did you maintain the bank accounts and misappropriated the same. And you thereby committed an offence punishable Under Section 25 r/w 13 of FCR Act, 1976 and within my cognizance.

4. Mr Nayar, the learned senior counsel who appears on behalf of the surviving petitioners submits that the charges are not made out and the petitioners are entitled to be discharged. His first submission is that the offences under Section 406 and 120-B IPC are clearly not made out because there is no material to support any allegation of criminal breach of trust. He submits that none of the beneficiaries of the Society/Trust have come forth and submitted that the money that was received by the Society was not expended for the purposes and objects of the Society. He also submitted that the contributions that have been received were by way of donations and, therefore, did not constitute entrustment and, therefore, there was no question of any criminal breach of trust. He submits that the allegations with regard to conspiracy were directed only towards the offence of criminal breach of trust and since the offence of criminal breach of trust is not made out, therefore, there is no question of there being any conspiracy for carrying out the said offence. Accordingly, he submitted that neither Section 406 nor Section 120-B IPC was made out and, therefore, the charges have been wrongly framed under these provisions.

5. Mr Nayar next submitted that even the offences under the said Act were not made out. He submitted that by virtue of Section 61 of the said Act, no association can accept foreign contribution unless the association registers itself with the Central Government in accordance with the rules made under the Act and agrees to receive such foreign contributions only through such branches of the bank as it may specify in its application for registration. He submitted that the Society had made an application sometime in 1984-85 and it had got the registration on 23.04.1985. The bank that was stipulated in the application was the State Bank of Bikaner and Rajasthan, Saket Branch, New Delhi. He submitted that the proviso of Section 6 needs to be considered in the present case. The proviso, according to Mr Nayar, provides that if any association, which includes the present society, obtains any foreign contribution through any branch other than the branch of the bank which has been specified in the application, then it is open to the Central Government to issue a notification in the official gazette directing that such association/society shall not, after the date of the issuance of the notification, accept any foreign contribution without the prior permission of the Central Government. In the context of this proviso, Mr Nayar submitted that since the petitioners had received contributions in a bank other than the branch specified in the application, the Central Government did, in fact, issue a notification on 16.05.1996 under the said proviso. He submits that there has been no violation of this notification by the Society. Therefore, according to him, there is no violation of the provisions of Section 6 of the said Act. He, further submitted that because there was no violation of Section 6 of the said Act, the provisions of Section 232 thereof could not come into play and it is only Section 25 which is the residuary section for providing penalties, which would come into play. Therefore, it is his first submission with regard to the said Act that the charge under Section 6 read with Section 23 of the said Act is not made out. The second submission with regard to the provisions of this Act is that if the offence punishable under Section 25 is to be made out then it being punishable up to one year would carry along with it the limitation period of one year prescribed under Section 468 of the Code of Criminal Procedure, 1973. He submits that cognizance in this case was taken on 12.05.1998, i.e, beyond the period of one year and, therefore, the charge under Section 25 would be barred by limitation. He submitted that this point was specifically taken before the learned CMM, who did note the raising of this issue but did not return any finding thereon.

6. Mr Nayar further submitted that the petitioner No. 5 Vikram Singh became a trustee of the Society on 02.06.1995, i.e, after the alleged commission of the offence. Therefore, in any event, he cannot be involved in any of the alleged offences.

7. The learned Counsel for the CBI submitted arguments in support of the order on charge as well as the charge that has been framed. He submitted that no interference with the order is called for inasmuch as all the charges have been appropriately framed. In particular, he referred to the judgment of the Supreme Court in the case of State represented by CBI v. M. Kurian Chief Functionary of the cross 2001 (3) Scale 7 to submit that the offence under Section 23 of the said Act was clearly made out. He referred to the following passage in the said decision:

A plain reading of Section 23 would make it clear that any receipt of foreign contribution in contravention of the provisions of the Act or Rules made there under becomes punishable. Section 30 confers power on the Central Government to make Rules for carrying out the provisions of the Act. In exercise of such powers, the Central Government has framed the Rules called the Foreign Contribution (Regulation) Rules, 1976 [hereinafter referred to as 'the Rules']. The expression 'Form' has been defined in Rule 2(b) to mean a form appended to the rules. Rule 3 provides that an application for obtaining prior permission of the Central government to receive foreign contribution under Sub-section (1) of Section 5, or Clause (a) of Sub-section (2) of that Section, shall be made in Form FC-1. The aforesaid Form FC-1 at serial No. 5, stipulates that the applicant should intimate the mode/channel of receipt. The form also provides the declaration, which the applicant must declare to the effect that the particulars furnished by the applicant are true and correct. This form must be held to be a statutory form being appended to the Rules and being the form prescribed under Rule 3 for obtaining permission to receive foreign contribution. Reading the aforesaid provisions together and giving a literal meaning to the expressions contained in the aforesaid provisions, the conclusion is irresistible that receipt of contribution and depositing the same in a bank other than the bank indicated in the application form FC-1, would be a violation of the provisions of Section 6(1)(b) itself inasmuch as no association is entitled to accept foreign contribution, unless the association agrees to receive the foreign contribution only through such one of the branches of the bank, as it may specify in its application for registration. The violation being a violation of the provisions of Section 6(1)(b), it would constitute an offence under Section 23 and, therefore, the High Court, in our opinion, committed serious error in quashing the criminal proceedings on a finding that it does not tantamount to violation of any provisions of the Act.

He also supported the order on charge in respect of the offences under the Indian Penal Code.

8. Insofar as the IPC offences are concerned, I am in agreement with the learned Counsel for the petitioners that they are not made out. This is because there is no allegation of any entrustment or breach of trust made on the material on record. No beneficiary of the Society/ Trust has come forth to allege that the money that has been received by the Society has not been expended for the purposes and objects of the Society. I am also in agreement with the submission made by Mr Nayar that this is a case of donations, which amount to gifts/ transfers of money and not of entrustment. Therefore, there is no question of the offence under Section 405 IPC being made out, which is punishable under Section 406 IPC. The allegations of conspiracy are also with regard to this offence under Section 405 punishable under Section 406 IPC. The same would also not stand. Accordingly, the charges under Section 406 and 120-B IPC are not made out.

9. With regard to the offences under the said Act, I am in agreement with the learned Counsel for the CBI that the same are, prima facie, made out. The Supreme Court decision in the case of State represented by CBI v. M. Kurian (supra), is a clear authority on this point. In the present case the petitioner/ Society had moved an application in Form FC-8 read with Rule 3-A3 of the Foreign Contribution (Regulation) Rules, 1976. There was a stipulation contained in the application in Form FC-8 which reads as under:

The Association shall receive/ accept foreign contribution only through the branch of the State Bank of Bikaner and Jaipur located at Saket, New Delhi only. The separate bank account number of the Association in the said branch of the bank is 134.

A clear reading of the aforesaid stipulation in the form indicates that the Society undertook to receive/ accept foreign contribution only through the branch of the State Bank of Bikaner and Jaipur located at Saket, New Delhi and the bank account number of the said branch was also indicated. The contributions were received in banks other than the bank specified in the application and, therefore, this case clearly stands covered by the ratio of the aforesaid Supreme Court decision. Therefore, there is a violation of the provisions of Section 6(1) of the said Act and consequently the provisions of Section 23 of the said Act are attracted. Thus, the charge under Section 23 read with Section 6(1) of the said Act has been correctly framed against the Society. Insofar as the charge under Section 254 of the said Act is concerned, that also, in my view, has been appropriately framed because it has to be read with the provisions of Section 135 of the said Act which require the Society to maintain accounts of foreign contributions received by it and also to maintain a record as to the manner in which such contributions have been utilized. The allegations are that no such account was maintained nor was the manner of utilization of such contributions, recorded. Clearly, the charge under Section 25 read with Section 13 of the said Act has also been appropriately framed against the Society.

10. The point of limitation raised by Mr Nayar does not survive. Because I have observed above that the charge under Section 23 read with Section 6 of the said Act has been appropriately framed against the Society. this would carry with it the limitation period of three years. Since the offences under Section 23 and 25 of the said Act are to be tried together, by virtue of the provisions of Section 468(3) of the Code of Criminal Procedure, 1973, the period of limitation will have to be determined with reference to the period prescribed for the offence under Section 23 (which carries the more severe punishment). Cognizance has been taken within this period of three years. Thus, the plea of limitation is not tenable.

11. I now come to the question of framing of charges in respect of the individuals. Insofar as the petitioner No. 1 and 3 are concerned, the learned Counsel does not press their discharge in their individual capacities. However, with regard to the petitioner No. 5, Mr Nayar had already submitted that he joined the Society only on 02.06.1995, i.e, after the alleged contributions had been received. Therefore, there is no question of involving him in these offences. I am in agreement with this submission of Mr Nayar that the petitioner No. 5 Vikram Singh joined the Society only on 02.06.1995 after the contributions had been received, therefore, his involvement is not made out. He is accordingly discharged.

12. With these observations and directions, the impugned order stands modified accordingly. This revision petition stands disposed of. Since the petitioner No. 5, Vikram Singh is on bail and he has been discharged, his bail bonds and sureties shall also stand discharged.