TEESTA SETALVAD AND ANOTHER Vs. CENTRAL BUREAU OF INVESTIGATION, ECONOMIC OFFENCES WING, FORT, MUMBAI AND ANOTHER

JUDGEMENT

(1.) This application is moved for anticipatory bail as the Central Bureau of Investigation, Economic Offences Wing, Mumbai has registered the case against the applicants/accused who are apprehending arrest in C.R. No.E00006 of 2015 for the offences punishable under section 120B of the Indian Penal Code and sections 35, 37 sections 3, 11 and 19 of the Foreign Contributions (Regulation) Act, 2010 (for the sake of brevity, hereinafter referred to as "the Act"). It is the case of the prosecution that the applicants/accused are the Directors of one company, namely, Sabrang Communication and Publishing Private Limited (for the sake of brevity, hereinafter referred to as "the Company"). The Company is working on the socio, economic issues on national level and the said company had sought funding in the nature of donations from foreign organisation i.e., Ford Foundation, to the tune of 290000 USD from 2004 by way of two agreements i.e., 2004 and 2006. As per the case of the prosecution under the Act, it is necessary for any organization working on such issues is required to seek permission of the Central Government; so also registration of such company under the Act is mandatory. It is the case of the prosecution that the applicants/accused have committed various offences under the Act. The applicants/accused have misused the said funds for their personal requirements. Pursuant to the letter written by the Government of Gujarat dated 10.3.2015 to the Ministry of Home Affairs and Ministry of Finance, Government of India, prosecution was initiated. The applicants/accused made application for pre-arrest bail before the Special Judge, CBI, which was rejected by order dated 24.7.2015 and, therefore, the applicants/accused are before this Court.

(2.) Mr.Chinoy, the learned Senior Counsel appearing for the applicants/accused, has submitted that it is a matter of interpretation of statute and the two agreements dated 5.4.2014 and 22.9.2006 between the Ford Foundation and the Company. These are the agreements for consultancy services and amount received is neither a donation nor a funding to the company. He submitted that the company has rendered the services to Ford Foundation which has engaged the company as it wanted to take the services on certain issues i.e., of communalism and caste based discrimination in India through action research, web based information and dissemination and development civil society network and media strategies. For this purpose, the services of the company were engaged and a payment was fixed for such services. He relied on the contents of the said agreements and submitted that the agreement is explicitly clear about the services rendered by the company. He has further submitted that when these amounts were paid by Ford Foundation, it deducted TDS and this shows that the amount given was a payment towards the services and not a donation. The Income Tax returns were also submitted by the company disclosing TDS and so also the company has claimed TDS and thus, this cannot be considered as a donation. The learned Senior Counsel further submitted that if at all it is not a donation , then it cannot be covered under the provisions of the Act. He relied on the explanation (iii) to section 2(h) of the Act. It reads thus :

(3.) He submitted that only bald statements in respect of misuse of foreign contribution and in respect of the threat to the national security are made. He pointed out relevant contentions in his application and submitted that the applicant/accused No. 1 is a social activist and has fought for the rights of minority in Gujarat. So this is a false implication, politically motivated by the Government. He further argued that the applicants/accused have been cooperating with the police in the investigation and, therefore, their custodial interrogation is not required. He submitted that all the ledgers, books of accounts from 2004 are available and they are produced before the Investigating Agency and if required, the applicants are ready to produce all the documents. He submitted that under such circumstances, the applicants/accused are to be protected by pre-arrest bail.