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                 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.

No. 3342 of 2011.

3. The  aforesaid  Criminal  Miscellaneous  Cases  were

filed  under  Section  482  of  the  Code  of  Criminal

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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

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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-

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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

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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.

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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.

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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.

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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

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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,

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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

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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

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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

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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

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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