SRINAGAR: The Jammu and Kashmir and Ladakh High Court has rejected the Enforcement Directorate’s plea to add charges under Sections 411 and 424 of the Ranbir Penal Code in the alleged Jammu and Kashmir Cricket Association funds-misappropriation case, holding that the material presently available does not prima facie establish the ingredients of either offence. At the same time, the court set aside the trial court’s finding that the ED lacked locus to move an application seeking addition of charges.
Justice Sanjay Parihar, in a judgment pronounced on September 25, 2026, partly allowed a criminal revision petition filed by the Directorate of Enforcement against orders passed by the Chief Judicial Magistrate (CBI Cases), Srinagar, on March 22 and March 30, 2026. The High Court held that although the ED could bring relevant material or information to the notice of the trial court, the material on record did not justify adding charges under Sections 411 and 424 RPC at this stage.
The court also left open the possibility of adding or altering charges later if evidence emerging during the trial establishes the ingredients of those offences.
The ED had challenged the trial court’s March 22 order dismissing its application seeking addition of charges under Sections 411 and 424 RPC. It had also challenged the March 30 order to the extent that these offences were omitted when charges were framed against the accused.
The underlying case arose from a CBI investigation into alleged misappropriation of funds received by the JKCA from the Board of Control for Cricket in India. The CBI case was registered under Sections 120-B, 406 and 409 RPC.
According to the prosecution case placed before the High Court, the BCCI had remitted approximately Rs.112.13 crore to the JKCA for development and promotion of cricket in Jammu and Kashmir, of which the CBI alleged that approximately Rs.43.69 crore had been misappropriated.
The CBI charge-sheet alleged that Ahsan Ahmad Mirza, along with other accused, was involved in a conspiracy through which JKCA funds were diverted through unauthorised banking operations and transactions.
The charge-sheet was presented on July 16, 2018, alleging criminal conspiracy, criminal breach of trust and misappropriation of JKCA funds. Charges under Sections 120-B, 406 and 409 RPC were framed against Mohammad Saleem Khan, Ahsan Ahmad Mirza, Mir Manzoor Gazanfar, Bashir Ahmad Misger, Dr Farooq Abdullah and Gulzar Ahmad Beigh. Two of the accused, Mir Manzoor Gazanfar and Gulzar Ahmad Beigh, were subsequently tendered pardon by the competent Magistrate.
The ED had registered ECIR No. SRZO/01/2018 on the basis of the CBI case and initiated proceedings under the Prevention of Money Laundering Act.
However, proceedings initiated against accused Ahsan Ahmad Mirza under the PMLA had earlier been quashed by the High Court in proceedings arising out of CRM(M) No. 160/2020. The court had held, among other things, that in the absence of a scheduled offence, the ED lacked jurisdiction to register the ECIR and launch prosecution under Section 3 of the PMLA.
While quashing those proceedings, the High Court had reserved liberty to the ED to approach the trial court for alteration of charge, if otherwise permissible in law.
The ED subsequently sought addition of Sections 411 and 424 RPC, relying on Section 216 of the Code of Criminal Procedure.
The respondents argued that the CBI investigation itself had not disclosed offences under Sections 411 or 424 RPC and that the application was filed only after the Supreme Court’s judgment in Pavana Dibbur v. Directorate of Enforcement, which had clarified the circumstances in which a conspiracy under Section 120-B could constitute a scheduled offence under the PMLA.
Senior Advocate Syed Faisal Qadri, appearing for respondent No. 5, opposed the ED’s plea.
The respondents argued that the CBI, after investigating the case, had found offences under Sections 120-B, 406 and 409 RPC alone and that the ED could not effectively reopen or supplement that investigation by seeking addition of a scheduled offence.
The defence also argued that Section 216 CrPC could not be used as a collateral mechanism to overcome the jurisdictional difficulty faced by the ED under the PMLA after the law declared in Pavana Dibbur.
Qadri and other defence counsel further maintained that Sections 411 and 424 RPC were distinct offences and could not simply be applied to persons who were themselves alleged to be principal participants in the criminal conspiracy and the alleged criminal breach of trust.
The defence relied on the distinction between the principal offender and a person who subsequently receives or retains stolen property. The court recorded the respondents’ argument that the accused, having been arraigned as principal offenders for alleged offences under Sections 406 and 409 read with Section 120-B RPC, could not simultaneously be treated as receivers of the same property under Section 411 on the same factual foundation.
The High Court examined Section 411 RPC in detail.
The court noted that Section 410 RPC gives an extended meaning to “stolen property” and includes property in respect of which criminal misappropriation or criminal breach of trust has been committed. But that, by itself, does not make every person accused of the underlying offence liable under Section 411.
Section 411, the court held, requires material showing dishonest receipt or retention of stolen property, along with knowledge or reason to believe that the property was stolen.
The court distinguished the present case from Mir Nagvi Askari v. CBI, relied upon by the ED. In that case, the stolen property had been transferred to and received by another accused after it had acquired the character of stolen property through the principal offence.
In the JKCA case, however, the respondents had been projected in the CBI charge-sheet as participants in the principal conspiracy through which the funds were allegedly misappropriated.
In particular, the court noted that the allegation against Bashir Ahmad Misger was that he facilitated unauthorised banking operations that enabled the alleged diversion and misappropriation. The material did not disclose that he subsequently received or retained the funds as stolen property.
“The essential factual foundation necessary for invoking Section 411 RPC is, therefore, absent at this stage,” the court held.
The court also noted that the ED had referred to an alleged Rs.50 lakh transaction involving the account of Nisar Ahmad Sultan and subsequent transfer to Ahsan Mirza, as well as transfers involving the personal account of Gulzar Ahmad Beigh.
But even accepting those allegations at face value for the limited purpose of considering a charge, the court held that the role attributed to Bashir Misger remained that of facilitating the alleged diversion and misappropriation. There was no material showing that any portion of the allegedly misappropriated amount had been received in his personal account as stolen property.
The court attached significance to the position taken by the CBI, which had conducted the predicate-offence investigation.
The CBI maintained that its investigation had disclosed offences under Sections 120-B, 406 and 409 RPC and that the trial court had accordingly framed charges under those provisions. It also maintained that its investigation had not disclosed material warranting charges under Sections 411 and 424 RPC.
The High Court noted that the prosecution case emerging from the CBI charge-sheet was essentially one of criminal conspiracy, criminal breach of trust and misappropriation of JKCA funds received from the BCCI.
The alleged misappropriated amount was quantified at approximately Rs.43.69 crore.
While rejecting the substantive plea for additional charges, the High Court disagreed with the trial court’s approach on the question of the ED’s locus.
The trial court had earlier recorded that the ED’s application was maintainable after liberty had been granted to it to approach the court. Yet it subsequently dismissed the application on the ground that the ED lacked locus standi.
The High Court held that once the trial court had earlier treated the application as maintainable, and the High Court and Supreme Court had reserved liberty to the ED to approach it, the trial court could not simply reject the application on the ground of lack of locus without examining the effect of those earlier orders.
Justice Parihar, however, made it clear that the grant of liberty to approach the trial court did not mean that Sections 411 and 424 RPC had been established.
“It did, however, require the Trial Court to consider the contention placed before it and independently determine, on the basis of the material forming part of the record, whether the ingredients of the offences sought to be added were prima facie disclosed,” the judgment states.
The High Court said that the ED could, at least for the limited purpose, bring relevant information or material to the notice of the trial court. It referred to Section 66 of the PMLA, under which information or material having a bearing on investigation of the predicate offence may be communicated to the investigating agency.
Section 216 does not guarantee addition of charges
The court also clarified the scope of Section 216 CrPC.
It held that the provision gives the criminal court wide power to alter or add a charge at any time before judgment is pronounced, but the power belongs to the court and must be based on material that prima facie discloses the offence sought to be added.
An application by a party or informant can bring relevant material or an omission to the court’s notice, but it cannot give that party an independent right to insist that a particular charge be added.
The court relied upon the Supreme Court’s judgment in Anant Prakash Sinha v. State of Haryana, explaining that an application pointing out an omission in the charge cannot be rejected merely because the statutory power under Section 216 is exercisable by the court itself.
But the ultimate decision has to be based on the court’s independent assessment of the material on record.
The High Court stressed that Section 216 is a procedural source of power and cannot supply substantive ingredients of an offence that are absent from the record.
The judgment also dealt with the implications of the absence of a scheduled offence for the ED’s PMLA jurisdiction.
The court noted that Sections 406 and 409 RPC do not find place in Part A of the PMLA Schedule. It referred to the Supreme Court’s judgment in Vijay Madanlal Choudhary v. Union of India, which held that PMLA proceedings cannot proceed on a notional or presumptive assumption that a scheduled offence has been committed.
The High Court further noted that its earlier judgment quashing the PMLA proceedings against Ahsan Mirza remained operative because there was no stay of that judgment as on the date of the present decision.
It also referred to Pavana Dibbur, observing that merely because Section 120-B finds mention in the PMLA Schedule, every criminal conspiracy does not automatically become a scheduled offence. The conspiracy must relate to an offence that itself appears in the Schedule.
The court nevertheless held that these jurisdictional consequences could neither be used as a reason to add a charge nor as a reason to refuse one. The question of adding Sections 411 or 424 had to be decided independently on the material forming part of the predicate-offence proceedings.
The High Court ultimately found that the material presently available did not prima facie establish the ingredients of Section 424 RPC either.
The court observed that Section 424 requires material relating to dishonest or fraudulent concealment or removal of property, or assistance in such concealment or removal. It found that the factual foundation necessary to invoke the provision had not been demonstrated from the material forming part of the charge-sheet.
The court therefore upheld the trial court’s conclusion that sufficient material existed to proceed against the accused under Sections 120-B, 406 and 409 RPC.
At the same time, it preserved the trial court’s statutory power to add or alter charges during the trial if evidence subsequently brings out another offence.
The High Court consequently partly allowed the ED’s revision petition.
It set aside the trial court’s finding that the ED had no locus to move the application for addition of charges. However, it rejected the ED’s substantive prayer for adding Sections 411 and 424 RPC on the material presently available.
The rejection, the court clarified, is confined to the material presently before the trial court. It will not prevent the trial court from exercising its powers under Section 216 CrPC if further material or evidence emerges during the trial warranting alteration or addition of charges.
