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TMI Blog2022 (6) TMI 1387X X X X Extracts X X X X X X X X Extracts X X X X ..... ification, 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 to the affairs of the Indian Red Cross Society, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 functions are not vested within the powers/jurisdiction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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, Thiruvannamalai (xvi) P. Sathish Kumar, Chennai vs. State of Tamil Nadu, Rep. by the Inspector of Police Team-II, CCB Chennai [2014 (2) CTC 60] 9. Stressing the poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lishment 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. Protection under Section 19 of the Prevention of Corruption Act available. State Police handing over investigation is the State call, which petitioners cannot question. 13. The Indian Red Cross Society-Tamil Nadu Bran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demics, 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 Regular Case in RC 032 2020A0023, on 28.12.2020, under Sections 120B and 409 of IPC and under Section 13(2) r/w Sec. 13(1)(a) of Prevention of Corruption Act (as amended in 2018) against the petitioners. Section 3 of the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 on the consent of the State and Central Governments is because of the statements made by him. Mr. S.M. Deenadhayalan, the learned counsel for R7, National Headquarters of IRCS, submitted that after getting legal opinion, approval under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cretary, 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, Home (POL. VII) Department issued, wherein the State Government accorded consent under Delhi Special Police Establishment Act to the Central Government. On 12.06.2020 impugned Gazette Notification has been issued by the second respondent, approval of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 documents. No physical verification of the fixed assets undertaken; recoveries in term of agreements with tenants have not made; expenditures towards replacement in the Blood Bank is done without approval, even not rectified subsequently; difference in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .(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 authorize him to perform such duty is the sine qua non of the definition of the public servant contained in Section 2(c)(viii) of the PC Act. The expressions 'office' and 'public duty' appearing in the relevant part of the PC Act would therefore require a close ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioners 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 any grants from the Government is not correct. Indian Red Cross Society has been formed on the corpus available from public donation, as could be seen from the Act. Further, prime properties have been allotted by the Central Government as well as respective Governments for the Headquarters and its bran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 petitioners is with regard to action taken by the Government pertaining to dissolving of the Managing Committee and Kerala State taking over the Management by appointing the District Collector, which is the issue involved in the case of Sunil C. Kurien, Chairman, State Branch, Indian Red Cross Society, Thiruvanantha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ah. 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 is on the allegation of fraudulent activities and actions detrimental to the interest of the Indian Red Cross Society, Tamil Nadu Branch and the Financial Establishment to the CBI for investigation. Thus, the first respondent states it is transfer of complaint to the CBI. In the body of the Government Order, the alle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercise 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, who has been entrusted with such investigation, to be a member of CBI or above the rank of Sub-Inspector. 44. In this case, on the complaint of the third respondent, finding no involvement of State Government Officials and also finding seriousness of the offence and the involvement of Headquarters Officials and others, found it appropriate, for CBI to conduct inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 beyond the Union Territories to a State, the same is not permissible unless a State grants its consent for such an extension within the area of the State concerned under Section 6 of DSPE Act. Obviously, the provisions are in tune with the federal character of the Constitution, which has been held to be one of the basic structures of the Constitution. As could be seen from Article 226 of the Constitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articularly 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) SCC 594, the Hon'ble Supreme Court observed that while determining whether a provision is mandatory or directory, in addition to the language used therein, the Court has to examine the context in which the provision is used and the purpose it seeks to achieve. Further, whether the provision is mandatory or directory, depends upon the intent of the legislature and not upon the language with which the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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