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2015 (12) TMI 1294 - HC - FEMAViolation of Section 23 (1) read with Section 4 (1) FCRA, 1976 - Petitioner received funds without obtaining prior permission of the Central Government - Held that - 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 statement 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. 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. prosecution had no right of revision against order dated 05.07.2011 passed by learned Trial Court being an interlocutory order and hence order dated 20.08.2011 passed by learned Additional Sessions Judge which is impugned in Criminal M.C. No.3342/2011 is without jurisdiction and a nullity. Moreover, in terms of Sections 397, 399 and 401(2) Cr. P.C., no order can be passed in exercise of revisionary jurisdiction without notice to the accused person, as was done by the learned Sessions Court in this case, thus, on this ground also the order is bad in law. - In view of the material placed on record by the prosecution, ingredients of offence under Section 4 FCRA, 1976, are not made out as foreign source , as defined under Section 2 (1) (e) FCRA, 1976, or the offence under Section 4 of the 1976 Act has attended by the prosecution. The prosecution has alleged violation of Section 4 read with Section 23 FCRA, 1976, by the petitioner. In order to do so, the prosecution has failed to contend that the petitioner has received all foreign contribution within the meaning of Section 2 (1) (c) FCRA, 1976, from a foreign source. However, such foreign source has been defined separately and categorically under Section 2 (1) (e) FCRA, 1976. As far as companies are concerned, only those which are the companies within the meaning of Section 591 of the Companies Act, 1956 where more than 50% of nominal value is held by the government or citizen of a foreign country or a corporation or trust, the society registered in a foreign country would come under Section 2 (1) (e) FCRA, 1976. As far as trusts are concerned, it 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. 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 Passport holder. Admittedly, father of the petitioner is an Indian Passport holder and transaction is through banking channel. - 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 emanating thereto with liberty to the Central Government to compound the case of the petitioner under Section 41(1) FCRA, 2010. - Decided in favour of appellant.
Issues Involved:
1. Quashing of FIR, chargesheet, and cognizance order. 2. Applicability of FCRA, 1976 vs. FCRA, 2010. 3. Validity of foreign contributions received as gifts from a relative. 4. Procedural lapses and jurisdictional issues in the revision petition. 5. Beneficial application of subsequent legislation. Detailed Analysis: 1. Quashing of FIR, Chargesheet, and Cognizance Order: The petitioner sought quashing of FIR No. RC-AC-1-2007-A-0003 dated 02.04.2007, the chargesheet dated 13.12.2010, and the order dated 05.07.2011 by the Additional Chief Metropolitan Magistrate (ACMM), which took cognizance under Section 35 read with Section 3 of the FCRA, 2010. The petitioner argued that the funds received were gifts from his father, an Indian passport holder, and not foreign contributions requiring prior permission from the Central Government. The court found that the funds were indeed gifts from the petitioner's father and thus did not constitute foreign contributions under the FCRA, 1976 or FCRA, 2010. 2. Applicability of FCRA, 1976 vs. FCRA, 2010: The petitioner contended that FCRA, 2010, which came into force on 01.05.2011, should apply, as it is more lenient and makes offences compoundable. The court held that the FCRA, 2010, expands the categories of exempted transactions and provides complete exemption for funds received from a relative. Therefore, the petitioner was entitled to the benefits of the more lenient FCRA, 2010, which supersedes the FCRA, 1976. 3. Validity of Foreign Contributions Received as Gifts from a Relative: The petitioner argued that the funds were gifts from his father, supported by statements from his father and the entities involved. The court noted that similar gifts were given to the petitioner's siblings and were treated as gifts by the Income Tax Authorities. The court concluded that the funds were indeed gifts from the petitioner's father and not foreign contributions requiring prior permission, thus falling outside the scope of both FCRA, 1976, and FCRA, 2010. 4. Procedural Lapses and Jurisdictional Issues in the Revision Petition: The petitioner challenged the order dated 20.08.2011 by the Revisional Court, which substituted the order of the ACMM and took deemed cognizance under FCRA, 1976, without issuing notice to the petitioner. The court found that the prosecution had no right of revision against the interlocutory order dated 05.07.2011 and that the Revisional Court's order was without jurisdiction and a nullity. The court emphasized that no order prejudicial to the accused can be made without giving them an opportunity to be heard, as mandated by Sections 397, 399, and 401(2) Cr.P.C. 5. Beneficial Application of Subsequent Legislation: The court referred to the principle that subsequent legislation that mitigates the severity of the law should be applied to the benefit of the accused. Citing the Supreme Court's judgment in T. Barai v. Henry Ah Hoe, the court held that the petitioner was entitled to the benefits of the more lenient FCRA, 2010, which provides exemptions for funds received from a relative and makes offences compoundable. Conclusion: The court quashed the FIR, chargesheet, and all proceedings emanating therefrom, directing the Central Government to consider compounding the case under Section 41(1) FCRA, 2010. The petitions were allowed, and the trial court record was ordered to be sent back to the concerned court. The applications Crl. M.A. Nos. 10129/2011 & 6144/2012 were dismissed as infructuous.
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