Court says Enforcement Directorate could bring alleged omission to trial court’s notice, but material on record did not prima facie justify additional charges in JKCA funds misappropriation case
Srinagar, Sept. 25, 2026: The Jammu and Kashmir and Ladakh High Court on Friday partly allowed a petition filed by the Directorate of Enforcement (ED) in the JKCA funds misappropriation case, setting aside a trial court’s finding that the agency had no locus standi to seek addition of charges. However, the Court declined to add charges under Sections 411 and 424 of the Ranbir Penal Code (RPC), holding that the material presently on record did not prima facie disclose the essential ingredients of those offences.
Justice Sanjay Parihar was hearing a challenge to the Chief Judicial Magistrate (CBI Cases), Srinagar’s order dated March 22, 2026, which had dismissed the ED’s application for addition of charges. The ED had sought inclusion of Sections 411 and 424 RPC in a case arising out of alleged misappropriation of funds allotted by the Board of Control for Cricket in India (BCCI) to the Jammu and Kashmir Cricket Association (JKCA).
According to the ED, the CBI charge-sheet already contained material showing that funds earmarked for cricket development were diverted through unauthorized accounts and transactions, and that the conduct of the accused attracted offences relating to receiving stolen property and dishonest concealment or removal of property. The agency also argued that it had been granted liberty by higher courts to approach the trial court and therefore its application could not be rejected on maintainability grounds.
The respondents opposed the plea, contending that the CBI investigation had disclosed only offences under Sections 120-B, 406 and 409 RPC, and that the ED was attempting to use Section 216 CrPC as a collateral route to overcome difficulties in its PMLA proceedings. They argued that the accused were alleged principal offenders in the misappropriation scheme, not receivers of stolen property.
The High Court observed that the trial court had erred in rejecting the ED’s locus standi, especially since earlier orders had permitted the agency to move the application. The Court held that an application bringing an alleged omission to the notice of the court cannot be thrown out merely because it is filed by a party other than the prosecuting agency. The trial court was required to examine the material on merits and decide whether the ingredients of the proposed offences were prima facie made out.
At the same time, the Court carefully distinguished between the principal offence of criminal breach of trust and the separate offence of receiving stolen property. Referring to settled law, including Supreme Court precedents, the Court held that the material in the CBI charge-sheet showed participation in the alleged conspiracy and misappropriation, but not a distinct and subsequent receipt or retention of stolen property as required for Section 411 RPC. For the same reason, the Court found no prima facie basis for Section 424 RPC on the present record.
The Court also noted that Section 216 CrPC gives the trial court wide power to alter or add charges at any stage before judgment, but that power must be exercised only on the basis of material on record and with due safeguards for the accused. It clarified that if fresh evidence emerges during trial, the trial court remains free to revisit the issue.
Ultimately, the petition was partly allowed: the rejection of the ED’s locus standi was set aside, but the request to add charges under Sections 411 and 424 RPC was rejected for want of prima facie material.
Bottom Line :
Application by Directorate of Enforcement seeking addition of charges under Sections 411 and 424 RPC dismissed due to lack of prima facie evidence. Trial Court's rejection of locus standi for Directorate of Enforcement overturned; liberty granted to reconsider the charges during trial if further evidence emerges.
Statutory provision(s): Section 216 CrPC, Sections 411 and 424 RPC, Sections 120-B, 406 and 409 RPC, Section 410 RPC, Section 3 PMLA, Section 4 PMLA
