Fuleshwar Gope vs Union of India & Ors.

Held: Validity of sanction should be challenged at the earliest instance available, before the Trial Court – If such a challenge is raised at an appellate stage it would be for the person raising the challenge to justify the reasons for bringing the same at a belated stage – Such reasons would have to be considered independently so as to ensure that there is no misuse of the right of challenge with the aim to stall or delay proceedings – On facts, keeping in view the submission made that the trial is underway and numerous witnesses (113 out of 125) already stand examined, no finding given on the challenge to the validity of the sanction qua the appellant and leave it to be raised before the trial judge, who shall, if such a question is raised decide, it promptly. [Paras 18, 51.1] Unlawful Activities (Prevention) Act, 1967 – s.45(2) – Cognizance of offences – Unlawful Activities (Prevention) (Recommendation & Sanction of Prosecution) Rules, 2008 – rr.3 and 4 – Time limit for making a recommendation by the Authority – Time limit for sanction of prosecution – Timelines in accordance with s.45(2) r/w rr.3 & 4 and the requirement of independent review, if necessary aspects of procedure, and non-adherence of which would vitiate proceedings under the UAPA:

Held: Timelines mentioned in rr.3 and 4 are couched in mandatory language and, thus, have to be strictly followed – This is keeping in view that UAPA being a penal legislation, strict construction must be accorded to it – Timelines imposed by way of statutory Rules are a way to keep a check on executive power which is a necessary position to protect the rights of accused persons – Independent review by both the authority recommending sanction and the authority granting sanction, are necessary aspects of compliance with s.45 of the UAPA – As regards appellant’s case that the timelines were not followed, the first sanction was granted more than a year after the recommendation was moved; and that there was no independent review on the part of both recommending authority and central government, as the sanction was merely granted within a day each, the gap between the first action against A-6 and the arrest of the appellant is a result of continuing investigation, as the appellant was made an accused in the second supplementary chargesheet, arising out of the same FIR; and since the investigation continued, the gap cannot be termed fatal so as to render the arrest of the appellant as unlawful or illegal – Grant of sanction is within the stipulated time – Furthermore, it cannot be said that there was non application of mind and lack of independent review. [Paras 20, 28.4, 41, 51.2]

Code of Criminal Procedure, 1973 – ss.218-222 – Misjoinder of charges – Violation of CrPC – Plea of the appellant that the transactions in connection with which he has been brought to the book were actually independent of the ones in which A-6 and other members were arrayed as accused; and that that there has been gross misuse of powers by the NIA and a violation ss.218-224 CrPC:

Held: ss.218-222 not violated – Appellant falls under the latter category-multiple persons in the same trial (appellant is A-17 out of a total of 20 accused persons) – Joint or separate trial is a decision to be taken by the trial judge at the beginning of the trial considering the possibility of prejudice; and causing judicial delay, if any – Language of s.223 is directory in nature, signified by the use of word ‘may’ – Joint trial, if held, after having considered the two factors given, cannot be said to be ipso facto prejudicial to the parties – It is alleged that A-6 who is the Chief of PLFI, extorts money from various persons and that the company A-20 of which the appellant is a director, is used to legitimise the proceeds of such unlawful actions – However, appellant’s case that there is no connection between the charges levied on A-6 and the transactions because of which he has been made an accused, whereas the prosecution submits that both A-6 and A-17 are part of the same, continuing, ongoing transactions – Whether or not actually the case is a question to be decided on the basis of evidence adduced at trial, and not at this stage, by this Court – Thus, it is left to the appellants to raise this issue before the trial judge, who shall, if such a question is raised, decide it promptly at the appropriate stage. [Paras 44.3, 45, 46, 52.1]

Unlawful Activities (Prevention) Act, 1967 – s.22A – Offences by companies – Statutory exemption u/s.22 A – Applicability to the appellant who claims to be unaware of the affairs of the company:

Held: Whether or not the exemption u/s.22A applies is a matter to be established by the way of evidence for the person claiming such exemption has to demonstrate that either he was not in charge of the affairs of the company which has allegedly committed the offence, or that he had made reasonable efforts to prevent the commission of the offence – This is a matter for the trial court to consider and not for this Court to decide at this stage, keeping in view that the trial is underway and proceeded substantially. [Paras 50, 52.2]

Unlawful Activities (Prevention) Act, 1967 – s.22A – Offences by companies – Applicability of s.22A:

Held: For application of s.22A, offence has to committed by a company; all persons who at the time of the offence were in control of, or responsible for, the company’s affairs shall be deemed guilty; such person would be saved from guilt as under if they can demonstrate that such act was not in their knowledge; they had taken reasonable care to prevent such offence from taking place – s.22A further provides that if it can be proved that the offence committed by the company was with consent; in connivance of; and attributable to neglect on the part of any promoter, director, manager, secretary or any other officer of the company, then they shall be held guilty. [Para 48]

Unlawful Activities (Prevention) Act, 1967 – s.45(2) – Cognizance of offences – Unlawful Activities (Prevention) (Recommendation & Sanction of Prosecution) Rules, 2008 – rr.3 and 4 – Time limit for making a recommendation by the Authority – Time limit for sanction of prosecution – Timelines, whether directory or mandatory:

Held: Timelines, generally speaking, as part of statutory framework are extremely essential to an effective, efficient and focused machinery of criminal investigation, prosecution and trial – All stakeholders to the smooth functioning of these procedures of law must do their part in realising such timelines – They are the essential aspects of right to speedy trial, which is enshrined u/Art.21 of the Constitution of India. [Para 22] ‘Application of mind’ – Concept of:

Held: Application of mind must form part of any judicial, quasijudicial or administrative order – To demonstrate the same, consideration of material placed before such authority must be reflected – It being a cerebral exercise, it is not within reason to set out any formula to explain what application of mind may actually mean or look like – It is to be ascertained in the facts and circumstances of each case – In the context of penal laws, authorities tasked with evaluating material prior to granting of sanction for prosecution, or the act of granting sanction itself must apply their mind to each and every facet of the material placed before it to arrive at the conclusion particularly so because the effect of the task at hand is immense – Grant/non-grant of sanction is what sets in motion the machinery of strict laws such as UAPA or TADA. [Paras 25, 26]

Unlawful Activities (Prevention) Act, 1967 – s.45(2) – Cognizance of offences – Procedure for sanction provided under the UAPA:

Held: Court is enjoined from taking cognizance without previous sanction either by the Central Government or the State Government, as applicable, and such sanction shall only be given after the report of the authority appointed by the Central Government or the State Government, as the case may be, has been considered – This authority is to make an independent review of the evidence gathered and make a recommendation to the government within a time bound manner – If any Court takes cognizance without prior sanction of the Government, Centre or State, the same shall be in contravention of the Act and thus, bad in law – This sanction is not a function of the Government alone and it can only be granted after an independent body, albeit appointed by the Government, makes an independent review of the evidence. [Paras 28, 28.1] Unlawful Activities (Prevention) (Recommendation & Sanction of Prosecution) Rules, 2008 – rr.3 and 4 – Time limit for making a recommendation by the Authority – Time limit for sanction of prosecution – Construction of:

Held: Penal statutes are statutes to be interpreted strictly – Rules flowing from statutory power, have the effect of a statute – s.52 of the UAPA grants power to the Central Government to make Rules for the purpose of carrying out the provisions of the Act – s.52(2)(ee) enables the Government to prescribe the time for recommendation and grant of sanction u/s.45 – Rules are unequivocal in both, using the word ‘shall’ as also providing a specfic time period for both activities, i.e., making recommendation and granting sanction – In matters of strict construction, when a timeline is provided, along with the use of the word ‘shall’ and particularly when the same is in the context of a law such as the UAPA, it cannot be considered a mere technicality or formality – It demonstrates clear intention on the part of the Legislature – Compulsion has been imposed, and for compliance with that compulsion, a timeline has been provided – While the legislation is aimed at curbing unlawful activities and practices detrimental to national security and accordingly, provides the authorities of the Government ample power to undertake and complete all procedures and processes permissible under law to that end, at the same time the interest of accused persons must also be safeguarded and protected – Time granted is only for consideration of the material collected by way of an independent review and then making a recommendation whereafter the sanctioning authority may then consider the materials as well as recommendation to finally, grant or deny the sanction – It is not for the purpose of the investigation itself, which understandably can be a time-consuming process, given the multiple variables involved – Timelines in such cases, serve as essential aspects of checks and balances and of course, are unquestionably important – Legislative intent is clear – Rules made by virtue of statutory powers prescribe both a mandate and a time limit – Same has to be followed – Strict adherence to the timeline mentioned in rr. 3 and 4 of the 2008, Rules to apply prospectively. [Paras 31, 32, 33] Unlawful Activities (Prevention) Act, 1967 – s.45(2) – Cognizance of offences – Independent review – Meaning – Plea that since both the recommending and the granting authorities took merely a day each in performing their respective functions, the requirement of an independent review which is to be undertaken by both authorities has been left unfulfilled thereby vitiating the sanction in question: Held: Independent review would mean a contemplation or study of the material gathered by the investigating officer to conclude as to whether or not a sanction to proceed under the provisions of the UAPA ought to be granted – Similarly, at the next stage, the sanctioning authority is to mull over and critically notice both the materials gathered as also the conclusion drawn by the recommending authority, in its act of granting sanction – Independence of this authority is sine qua non, without which it would have lost its entire purpose – Plea of the appellant that short amount of time taken in recommending and granting sanction, against him which is a sign of non-application of mind and lack of independent review, cannot be accepted – There is no question, as there rightly cannot be, on the competence of either of the authorities – Thus, solely on the ground that the time taken was comparatively short or even that other orders were similarly worded cannot call the credibility of the sanction into question – Thus, independent review as well as application of mind are questions to be determined by way of evidence and as such should be raised at the stage of trial, so as to ensure that there is no undue delay in the proceedings reaching their logical and lawful conclusion on these grounds – If it is raised belatedly, however, the Court seized of the matter, must consider the reasons for the delay prior to delving into the merits of such objections – Belated challenges on these grounds cannot be allowed to act as roadblocks in trial or cannot be used as weapons in shirking away from convictions arising out of otherwise validly conducted prosecutions and trials – Order passed by an administrative authority is not to be tested by way of judicial review on the same anvil as a judicial or quasi-judicial order – While it is imperative for the latter to record reasons for arriving at a particular decision, for the former it is sufficient to show that the authority passing such order applied its mind to the relevant facts and materials – Thus, no infirmity in the order granting sanction against the appellant – It is not incumbent upon such authority to record detailed reasons to support its conclusion and, as such, the orders challenged, cannot be faulted with on that ground. [Paras 37, 40, 41]

Words and phrases – Word independent – Meaning of: Held: Act, or evaluation is made in a way which is lone standing or which does not rely on any other factor, such as previous consideration or evaluation by another authority, to arrive at its conclusion – Independence, which is the state of being independent would also be instructive in the understanding – Review, as a concept is to be understood for it is the coming together of these two aspects which would form the understanding of the term ‘independent review’ – Import of the term independent review as can be understood, is a re-examination, scrutiny or critique of something which is not dependent or subject to control by any other factor or authority. [Paras 35-37]