STATE REP. BY C.B.I. AND ANR. versus M. KURIAN CHIEF FUNCTIONARY OF THE CROSS

Citation: [2001] 2 S.C.R. 706 · Decided: 26-03-2001 · Supreme Court of India · Bench: G.B. PATTANAIK · Disposal: Appeal(s) allowed

Judgment (excerpt)

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STATE REP. BY C.B.I. AND ANR. 
v. 
M. KURIAN CHIEF FUNCTIONARY OF THE CROSS 
MARCH 26, 2001 
[G.B. PATTANAIK AND U.C. BANERJEE, JJ.] 
Foreign Contribution (Regulation) Act, 1976-Sections 3(a), 5, 6, 20(3), 
23-Foreign Contribution (Regulation) Rules, 1976-Rule 3-Deposit of 
foreign contributions in undisclosed bank account by Registered Society in 
contravention of provisions of the Act-Criminal proceedings initiated quashed 
by High Coun-Held, provisions of the Act violated and hence constitutes 
offence under Section 23 of the Act-Quashing of Criminal proceedings will 
defeat the very purpose of the Act-Criminal Procedure Code-Section 482. 
Respondent-Society filed an application for registration under the 
provisions of the Foreign Contribution (Regulation) Act, 1976 disclosing 
the details of bank account for receiving foreign contributions. Registra-
tion was granted to the Society. The Society received foreign contribution 
of Rs. 3.65 lacs by way of Bank drafts. The Society deposited the drafts in 
an undisclosed bank account and failed to intimate the Central Govern-
ment as per the provisions of the Act. The Central Government issued a 
notification·under the Act requiring the Society to take prior permission 
from it before accepting contributions. The notification was quashed by 
the High Court on a Writ Petition filed by the Society. First Information 
Reports were lodged before C.B.I. against the Society. C.B.I. Submitted a 
charge-sheet under the provisions of the Act. The Society filed a petition 
before the High Court under Section 482 Cr.P.C. for quashing the criminal 
proceedings, which was allowed. Hence the present appeal. 
The appellant contended that under the provisions of the Act, the 
contravention/violation of any of the terms and conditions would consti-
tute the contravention of the provisions of the Rules made under the Act; 
that receiving foreign contributions through undisclosed mode or channel 
would constitute an infraction of the provisions of the Rules; that such 
infraction must be held to be punishable under Section 23 of the Act; and 
that the Act had been enacted to regulate the acceptance and utilization of 
foreign contribution or foreign hospitality by persons or associations with 
a view to ensure that parliamentary institutions, political associations and 
706 
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STATE REP. BY C.B.I. v. M. KURIAN CHIEF FUNCTIONARY OF THE CROSS 707 
other voluntary organisations may function in a manner consistent with 
the values of sovereign democratic republic. 
The Society contended that as per Section 23 of the Act, only the 
contravention of any provisions of the Act or Rules made thereunder is 
punishable; that the information provided in the application form and 
violation thereof would not constitute a contravention of the provisions of 
the Act or Rules; and that the penal statutes which create offences, must be 
construed strictly. 
Allowing the appeal, the Court 
HELD : 1.1. The main object of Foreign Contribution (Regulation) 
Act, 1976 was to regulate and keep a control over the acceptance and utili-
zation of foreign contributions. The entire purpose behind the Act was that 
the recipients of such foreign contribution may not act in a manner incon-
sistent with the values of the sovereign republic which our founding fathers 
have given to us. Without prohibiting the receipt of such foreign contribu-
tion, the Act intends to regulate the same and it is for that purpose, it is 
required that recipient of such contribution must intimate the Central Gov-
ernment in the manner prescribed by the Rules. Since several recipients did 
not send the intimations, for effectively monitoring the rece!pt of foreign 
contribution, Section 6(1) of 1976 Act was amended making it obligatory for 
the associations to get themselves registered with the Central Government 
and then they could accept the contribution only through a specified branch 
of a bank. The Act enables the Central Government to inspect the accounts 
of persons or associations. The Act also prohibits acceptance of foreign con· 
tribution under certain circumstances. This indicates the legislative intent 
and purpose behind the Act and, therefore, the provisions of the Act are 
required to be construed accordingly. (711-A-E] 
1.2. A plain reading of Section 23 of the Act would make it clear that 
any receipt of foreign contribution in contravention of the provisions of 
the Act or Rules made thereunder

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