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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. = 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

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.
Leave granted.
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 petition seeking to
quash the complaint filed under Section 56 of Foreign Exchange Regulation
Act, 1973.

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.

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 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.

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, 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.

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.

We carefully considered the rival submissions and perused the documents.

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 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.

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 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.

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

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