| CITATION | 2024 INSC 275 |
| DATE OF JUDGMENT | 5TH APRIL, 2024 |
| COURT | SUPREME COURT OF INDIA |
| PETITIONER | OPERATION MOBILIZATION INDIA & ORS. |
| RESPONDENT | STATE OF TELENGANA & ORS |
| BENCH | JUSTICE PRASHANT KUMAR MISHRA, JUSTICE VIKRAM NATH |
INTRODUCTION
The case of Operation Mobilization India & Ors. vs. State of Telangana & Ors. involves a legal dispute concerning jurisdictional issues, financial matters, and operational continuity of educational institutions. The core aspects of the case include a jurisdictional dispute between the State CID Unit and the CBI regarding investigations under the Foreign Contribution (Regulation) Act, the freezing of the petitioners’ accounts impacting their ability to manage expenses, allegations of contempt, and the directive for maintaining financial transparency. The Court’s judgment is crucial in resolving these complexities and ensuring the fair and lawful resolution of the case.
FACTS OF THE CASE
The case involves an FIR (First Information Report) filed by respondent no. 3 on 29th September 2016 under Sections 409, 420, 477(A), and Section 37 of the Foreign Contribution (Regulation) Act 2010. The investigation was initially conducted by the Economic Offences Wing (CID), Telangana State. The petitioners challenged the FIR in various legal proceedings, including SLP where the courts directed the investigation to be concluded expeditiously and allowed the petitioner to raise grievances regarding the progress of the investigation.
In W.P. No. 13044 of 2019, respondent no. 3 sought directions for the investigation by the Central Bureau of Investigation (CBI), which was declined by the Deputy Inspector General of Police, CBI, ACB, Hyderabad. Subsequently, on 21st November 2020, after more than four years since the FIR was lodged, the CID Telangana State froze the accounts of the petitioners. The petitioners then approached the Supreme Court seeking relief regarding the freezing of their accounts and the ongoing investigation.
The State of Telangana, in an application filed during the proceedings, mentioned that the CBI is the competent authority to conduct the investigation as the amount involved is more than one crore. They requested the court to permit them to file a charge sheet or to entrust the investigation to the CBI based on subsequent revelations through the investigation.
Additionally, an Interlocutory Application (I.A.) No. 48029 of 2021 was filed by the respondent State of Telangana, enclosing a letter dated 24th March 2021 addressed to the Ministry of Home Affairs. This letter highlighted the accused A-2, Joseph D’Souza filing a Special Leave Petition in the Supreme Court of India.
The case also involves a Contempt Petition (Civil) No. 105 of 2024 filed by GOWRIPAGA ALBERT LAEL against JOSEPH GREGORY D’SOUZA & ORS. The judgment mentions the disposal of all pending applications, including the contempt petition.
The case involves complex legal proceedings, including challenges to the freezing of accounts, requests for CBI investigation, and directives regarding the maintenance of financial records by the petitioners.
ISSUES RAISED
Whether the State CID Unit or the CBI is the competent authority to investigate cases under the Foreign Contribution (Regulation) Act when the amount involved exceeds one crore.
Whether the freezing of the petitioners’ accounts by the CID Telangana State on 21st November 2020 has adversely affected their ability to manage salary and institutional expenses.
Whether the actions of the petitioners warrant contempt proceedings, as alleged by the private respondents, and the appropriate course of action regarding this issue.
Whether the petitioners are complying with the directive to maintain proper and complete statements of accounts, have them audited by a Chartered Accountant, and provide quarterly statements to the Investigating Officer or Trial Court.
Whether the measures taken by the Court are sufficient to ensure the smooth functioning of the 103 educational institutions run by the petitioners while addressing legal concerns and financial transparency.
CONTENTION OF PETITIONER
The contentions put forth by the petitioners in the case of Operation Mobilization India & Ors. vs. State of Telangana & Ors. include:
The petitioners contested the jurisdiction of the State CID Unit to conduct the investigation under the Foreign Contribution (Regulation) Act, arguing that the CBI should be the competent authority for cases involving amounts exceeding one crore.
The petitioners challenged the freezing of their accounts by the CID Telangana State on 21st November 2020, seeking relief from the court regarding the impact of this action on their ability to manage salary and institutional expenses.
The petitioners expressed their willingness to comply with the court’s directives to maintain proper and complete statements of accounts, have them audited by a Chartered Accountant, and provide quarterly statements to the Investigating Officer or Trial Court 6.
The petitioners highlighted that they were running 103 institutions across 18 states in the country, along with more than a dozen primary health centers. They emphasized the need for funds to sustain these institutions and centers, expressing their intention to keep them operational.
These contentions reflect the petitioners’ stance on key issues such as jurisdiction, account freezing, compliance with legal requirements, and the operational sustainability of their educational institutions amidst the legal proceedings.
CONTENTION OF RESPONDENT
The contentions presented by the respondent, State of Telangana, in the case of Operation Mobilization India vs The State of Telangana include:
The respondent argued that the State CID Unit was not authorized to conduct investigations in cases of the Foreign Contribution (Regulation) Act (FCRA) when the amount involved exceeded one crore. They contended that the CBI was the competent authority for such investigations based on a notification issued by the Ministry of Home Affairs.
The respondent requested the court to either permit the CID Telangana State to continue further investigation and file a charge sheet or to entrust the investigation to the CBI, ACB, as deemed fit.
The respondent sought orders to stay the attachment of accounts dated 21st November 2020 concerning salary and institutional expenses, based on subsequent revelations through the investigation.
The respondent emphasized the need for proper investigation procedures and the potential involvement of the CBI in cases where the amount involved exceeded one crore under the FCRA.
These contentions reflect the respondent’s position on crucial aspects such as jurisdictional authority, account freezing, investigation continuation, and financial oversight in the context of the legal dispute with the petitioners.
JUDGEMENT
The judgment given by the Supreme Court in the case of Operation Mobilization India vs The State of Telangana on 5th April 2024 included the following key points:
The court disposed of all pending applications, including the contempt petition, without going into the contempt question, leaving it open for the investigating agency or the Trial Court to monitor the utilization of accounts by the petitioners for salary and institutional expenses.
The court made the interim order dated 7th April 2021 absolute, with a condition that the petitioners must maintain proper and complete statements of accounts, get them audited by a Chartered Accountant, and provide quarterly statements to the Investigating Officer or Trial Court regularly.
The court did not record any finding on the allegations of withdrawal from accounts for purposes other than salary and institutional expenses.
The court acknowledged the petitioners’ operation of 103 institutions and primary health centers across the country and emphasized the importance of maintaining proper accounts for the smooth functioning of these establishments.
The court addressed the challenges related to the FIR, freezing of accounts, and the authorization of investigative agencies, ensuring that the investigation and legal proceedings were conducted in accordance with the law.
These points summarize the judgment rendered by the Supreme Court in the case, highlighting the decisions and directions provided to both the petitioners and the State of Telangana.
ANALYSIS
The case of Operation Mobilization India vs The State of Telangana involved complex legal issues surrounding the Foreign Contribution (Regulation) Act (FCRA), investigations by different agencies, freezing of accounts, and the operation of multiple institutions by the petitioners. Here is an analysis of the case based on the information provided:
Jurisdictional Dispute: The respondent, State of Telangana, raised a jurisdictional dispute regarding the authority of the State CID Unit to conduct investigations under the FCRA when the amount involved exceeded one crore. They argued that the CBI was the competent authority based on a notification by the Ministry of Home Affairs. This jurisdictional issue added complexity to the case.
Freezing of Accounts: The CID Telangana State froze the petitioners’ accounts, leading to legal challenges and the need for court intervention. The court addressed the freezing of accounts and stayed the attachment concerning salary and institutional expenses, allowing the petitioners to continue utilizing their accounts for these purposes.
Contempt Petition: A contempt petition was filed by GOWRIPAGA ALBERT LAEL against JOSEPH GREGORY D’SOUZA & ORS. The court decided not to delve into the contempt question, leaving it open for monitoring by the investigating agency or Trial Court.
Operational Challenges: The petitioners operated 103 institutions and primary health centers across 18 states, highlighting the significance of financial resources for their continued operation. The court emphasized the importance of maintaining proper accounts and auditing them to ensure transparency and compliance with legal requirements.
Court’s Decision: The Supreme Court made the interim order absolute, directing the petitioners to maintain proper accounts, get them audited, and provide regular statements to the Investigating Officer or Trial Court. The court’s decision aimed to facilitate the smooth functioning of the institutions while ensuring compliance with legal procedures.
Overall, the case highlighted the significance of financial transparency, compliance with legal procedures, and the court’s role in ensuring the fair and lawful conduct of investigations. The judgment provided a framework for addressing the challenges faced by the petitioners while upholding the principles of accountability and due process in legal proceedings.
CONCLUSION
In the case of Operation Mobilization India vs The State Of Telangana, the Supreme Court addressed complex legal issues surrounding the Foreign Contribution (Regulation) Act (FCRA), the freezing of accounts, and jurisdictional disputes between investigative agencies. The court’s judgment emphasized the importance of maintaining proper accounts, conducting audits, and providing transparency in financial matters, especially concerning the operation of numerous institutions by the petitioners.
By making the interim order absolute and directing the petitioners to maintain and audit their accounts, the court ensured the smooth functioning of the institutions while upholding legal requirements. The decision to stay the attachment of accounts for salary and institutional expenses reflected a balanced approach to address the operational needs of the petitioners while respecting the investigative process.
In conclusion, the case involved a mix of jurisdictional disputes, financial challenges, and legal complexities related to investigations and freezing of accounts. The court’s judgment focused on balancing the petitioners’ operational needs with the requirements of the law, emphasizing transparency and compliance in financial matters.
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