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                                                                              NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

     CRIMINAL APPEAL NO.  14    OF 2015 [ Arising out of  SLP (Crl.) No.7067 of 2014]

K.K.  Kuda         …     Appellant  

versus

Chief Enforcement Officer, Enforcement Directorate & Anr   ..Respondents

J U D G M E N T

C. NAGAPPAN, J.  

1. Leave granted.

2. This  appeal is  preferred  against  the  Judgment  

and  Final  Order  dated  02.09.2013  passed  by  the  High  

Court  of  Delhi  in  Criminal  Miscellaneous  Case  

No.5096/2006,  whereby  the  High  Court  dismissed  the

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petition seeking to quash the complaint filed under Section  

56 of  Foreign Exchange Regulation Act, 1973.

3. The  first  respondent  herein  issued  Show  Cause  

Notice dated 21.01.1994 under Section 51 of FERA, 1973  

against ANZ Grindlays Bank, the Account Holder  and three  

bank officials for having credited   Non-convertible Rupee  

Funds of Rs.1,15,00,000/-   (Rupees One Crore and Fifteen  

Lakhs only) during the period August to December, 1991  

received from Moscow,  into the Non-Resident (External)  

Account  of  Dr.  P.K.  Ramakrishnan  in   contravention  of  

Section 6(4), 6(5)   read with Section 49 of FERA, alleging  

that  it  had taken place with  the consent,  connivance of  

and attributable to the negligence on the part of the said  

Officials.  However,  by letter dated 10.7.2001 addressed  

to  the  appellant,  the  respondent  ordered  that  charges  

relating to ‘consent’ and ‘connivance’ shall stand deleted  

from the Show  Cause Notice dated 21.01.1994.

4. In  the  meanwhile,  Opportunity  Notice,  dated  

12.5.2002,  followed  by  Complaint  dated  29.5.2002,  was  

filed under Section 56 of FERA, 1973 against the persons  

abovenamed   for having credited Non-convertible Rupee  

Funds  into  the  Non-Resident  (External)  Account  of  the

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person concerned, alleging contravention of Section 6(4),  

6(5) read with S.49 of FERA   having taken place with the  

consent, connivance of and  attributable to the negligence  

of  the  Officials  and  the  Additional  Chief  Metropolitan  

Magistrate,   New Delhi, took cognizance of the complaint  

for  the  offence  under  Section  56 of  FERA on 29.5.2002  

itself  and issued summons to  the accused.   Challenging  

the same, the appellant herein and other Officials sought  

for quashing the complaint proceedings in their petition in  

Crl.M.C.No.5096/2006, on the file of the High Court, Delhi.  

While  the  matter  stood  thus,  the  adjudicating  authority  

passed the final  Order dated 14.5.2010 holding that the  

Officials of the Bank have not consented or connived in the  

performance of the official duties and they were negligent.  

The  High  Court  by  the  impugned  order  held  that  the  

prosecution of the accused persons shall  be confined to  

the  negligence  on  their  part  and  not  for  they  having  

consented  or  connived  in  the  commission  of  the  said  

offence.  The said order is under challenge before us.

5. Mr.  C.A.Sundaram,  learned  Senior  Counsel  

appearing  for  the  appellant,  strenuously  contended  that  

the  allegations  of  consent  and  connivance  had  been  

dropped by the respondent  vide letter  dated 10.7.2001,

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despite so,  complaint  was lodged  on the allegations of  

consent,  connivance  and  negligence  on  the  part  of  the  

officials  of  the  Bank  suppressing  the  facts  and  the  

respondent  is  guilty  of  suppressio  veri and  suppressio  

facto and on this ground itself, the complaint is liable to be  

quashed.  It is his  further contention that the complaint  

pertains  to  the  allegations  of  consent,  connivance  and  

negligence on the part of the officials for having credited  

Non-convertible  Rupee  Funds  of  the  Account  Holder  

concerned  and  the  cause  of  action  disclosed  therein  is  

composite and inseparable and it  cannot be quashed in  

part and    continuance of the complaint proceedings on  

the allegation of negligence would tantamount to abuse of  

the  process  of  law.   He  also  contended  that  taking  

advantage of Sunset clause under Section 49 of Foreign  

Exchange Management Act,  1999, without disclosing the  

issuance  of  reply  by  the  appellant  to  the  Opportunity  

Notice,  the  respondent  in  an  arbitrary  and  mechanical  

manner  filed  the  complaint  without  enclosing  a  single  

original document and in the absence of any material, the  

learned Magistrate could not have applied his mind and  

taken cognizance and summoning order is bad in law.

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6. Per contra, Mr. V.Shekhar, learned Senior Counsel  

appearing  for  the  respondents,  contended  that  the  

complaint  consists  of  three  components  and  even  

eschewing the allegation of consent and connivance, the  

prosecution  can  be  continued  on  the  allegation  of  

negligence and the impugned order is sustainable.

7. We carefully considered the rival submissions and  

perused the documents.

8. The crediting of Non-Convertible Rupee Funds in  

the  Non-Resident  (External)  Account  of  Dr.  

P.K.Ramakrishnan happened during the period August to  

December, 1991.    Three officials of ANZ Grindlays Bank  

were involved in it and Show Cause Notice was issued by  

Respondent No.1 on 21.1.1994 to the Bank as well as the  

Officials for contravention of Section 6(4), 6(5) read with  

Section 49 of FERA, alleging that it had taken place with  

the  consent,  connivance  of  and  attributable  to  the  

negligence on the part of the Officials.    It is true that the  

respondent  by  letter  dated  10.7.2001  ordered  that  the  

charges relating to ‘consent’ and ‘connivance’ shall stand  

deleted from the Show Cause Notice.  Though FEMA came  

into force  on 1.6.2000, Sunset clause under Section 49 of

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the  said  Act  provided for  filing  of  complaints  under  the  

FERA,  1973  till  31.5.2002.   Taking  advantage  of  it,  the  

Respondent No.1 issued Opportunity Notice to all the three  

officials  on  12.5.2002  and  lodged  the  complaint  on  

29.5.2002.  The Additional Chief Metropolitan Magistrate,  

New  Delhi,  on  the  same  day  took  cognizance  of  the  

complaint for the offence under Section 56 of FERA and  

issued summons.

9. In  spite  of  having  dropped  the  allegations  of  

‘consent’  and  ‘connivance’,  the  respondent  in  their  

complaint levelled allegations of all the three components,  

namely,  consent,  connivance  and  negligence.   The  

contention of the appellant that the cognizance was taken  

on irrelevant consideration, is to be countenanced.   There  

was  suppression  and  also  material  omission  in  non-

mentioning  of  reply  sent  by  the  appellant  to  the  

Opportunity  Notice,  in  the  complaint.   Further,  to  

substantiate the averments in the complaint, not even a  

single original document was enclosed.  It is not known as  

to,  on  what  material  the  Additional  Chief  Metropolitan  

Magistrate applied his mind, while taking cognizance of the  

statutory offence.  Though the allegation of negligence can  

be independently looked into, considering the standard of

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proof in criminal prosecution,    we are of the view that, in  

the present case, the continuance of prosecution against  

the appellant is not tenable in law and the proceedings are  

liable to be quashed.

10. The appeal is allowed and the impugned order is  

set  aside  and  the  proceedings  in  Criminal  Complaint  

No.704/2002,  on  the  file  of  the  Additional  Chief  

Metropolitan  Magistrate,  New  Delhi,  insofar  as  the  

appellant is concerned are quashed.  

……………………….J. (V. Gopala Gowda)

.………………………J.     (C.Nagappan)

New Delhi; January 06, 2015