Skip to content

Central Bureau of Investigation, Anti-Corruption Branch Vs. M.E. Shivalingamurthy - Court Judgment

LegalCrystal Citation
CourtKarnataka High Court
Decided On
Case NumberCriminal Revision Petition No. 838 of 2016
AppellantCentral Bureau of Investigation, Anti-Corruption Branch
RespondentM.E. Shivalingamurthy
.....mines and geology (a3), deputy conservator of forest, bellary (a4), personal assistant to a1 (a5), deputy director of mines and geology (a6), another private person (a7) and range forest officer, sandur (a8), conspired to commit theft of the government properties i.e., mineral ore, thus cheated the government; they trespassed into the forest area and other areas of the bellary district, carried out illegal mining and transported stolen iron by using the permit of m/s.amc and sold the same for gain, without carrying any mining by a1 and a2 after taking over m/s.amc from its earlier partners, in violation of mines of minerals (development of regulation) act, 1957 (for brevity 'mmdr' act). thus, they committed criminal conspiracy, theft, cheating, criminal breach of trust, criminal.....

(Prayer: This Criminal Revision Petition is filed under Section 397 R/W 401 of Cr.P.C., praying to setting aside the Judgment and Order of discharge of A3 Dated 08.10.2015 passed by the XLVI Addl. City Civil and S.J., and Spl. Judge and CBI Cases, Bangalore in Special (Corruption) Case No.116/2012 and allow this Crl.RP.)

1. The prosecuting Agency/Central Bureau of Investigation/Anti-Corruption Board ('CBI/ACB' for brevity) is aggrieved by the order dated 8th October 2015 passed on I.A.No.30 in Spl.C.C.No.116/2012 by the learned XLVI Addl.City Civil and Sessions Judge and Special Judge for CBI Cases, Bengaluru, whereby the application (I.A.No.30) filed by the respondent/accused No.3 under Section 227 of the Code of Criminal Procedure came to be allowed thereby discharging the accused from criminal charges.

2. A case in RC 18(A)/2011 was registered by the CBI/ACB, in pursuance of the orders of the Apex Court dated 29.3.2011 in Special Leave to Appeal (Civil) No.7366-7367/2010 and connected matters in which the direction was to investigate the illegalities committed in the matter of mining lease No.2434 of M/s.Associated Mining Company (for brevity 'M/s.AMC'). On registration of the complaint arraigning 20 known accused and others, after investigation, charge sheet was submitted against 8 accused persons, in respect of offences under Sections 120B, 379, 409, 420, 447, 468, 471 and 477A of IPC and Section 13(2) read with Section 13(1)(c) and (d) of the Prevention of Corruption Act, 1988. Subsequently, additional charge sheet is filed under Section 173(8) of Cr.P.C., in respect of offence under Section 409 of I.P.C.

3. To start with, one K.M.Vishwanath and K.M.Parvathamma were the partners of M/s.AMC. On induction of Accused Nos.1 and 2 as partners of M/s.AMC on 31-7-2009 by way of admission deed, on the next day itself previous partners Smt.Parvathamma and Sri.K.M.Vishwanatha retired from partnership. Accused Nos.1 and 2 took over liabilities, assets and leasehold rights over mining lease No.2434 of M/s.AMC.

4. The allegation of the prosecution in the nutshell is, the accused persons being the partners of M/s.AMC (A1 and A2/husband and wife), Director of Mines and Geology (A3), Deputy Conservator of Forest, Bellary (A4), Personal Assistant to A1 (A5), Deputy Director of Mines and Geology (A6), another private person (A7) and Range Forest Officer, Sandur (A8), conspired to commit theft of the Government properties i.e., mineral ore, thus cheated the government; they trespassed into the forest area and other areas of the Bellary District, carried out illegal mining and transported stolen iron by using the permit of M/s.AMC and sold the same for gain, without carrying any mining by A1 and A2 after taking over M/s.AMC from its earlier partners, in violation of Mines of Minerals (Development of Regulation) Act, 1957 (for brevity 'MMDR' Act). Thus, they committed criminal conspiracy, theft, cheating, criminal breach of trust, criminal trespass, forged the documents as genuine documents. They indulged in falsification of accounts and criminal misconduct, etc.

5. A2 to A7 by way of interim application under Section 227 of Cr.P.C and A8 orally sought for their discharge when the Court was set to hear on charge.

6. Learned trial Court vide considered order, which is impugned herein, discharged A2 (wife of A1) and A3- the respondent herein from charges, however rejected relief for A4 to A8, as such there was no such prayer from A1.

7. Sri P.Prasanna Kumar, learned Special Public Prosecutor for the revision petitioner/CBI strongly assailing the order of the Court below submits that accused Nos. 1 and 2 after taking over M/s.AMC carried out mining operations in other mines located in the forest area without any authority. Their own documents, i.e., 3D Laser Survey carried out by them in the leasehold area of M/s.AMC demonstrates that A1 and A2 did not carry out any mining operations in the leasehold area of ML 2434 of M/s AMC. While the percentage of iron ore in the sample drawn from the land held under the permit by M/s. AMC is 45 to 60%, the ore supplied by them to M/s.JSW Steel Limited was having 'Fe' content more than 62%. By their illegal activities the accused Nos. 1 and 2 amassed more than 160 crores of profit. This allegation is corroborated by the documentary evidence and the statement of witnesses. Accused No.3/respondent herein marked a letter to the office received from the previous partners of M/s.AMC regarding transferring the leasehold rights to the new partners/A1 and A2 for comments. The concerned case worker put up a note indicating the requirement of legal opinion in the matter. The said note was approved and recommended by the Additional Director and was placed before A3. But, A3 with a malafide intention made a false note in the file to the effect that he had discussed this matter with the Deputy Director (Legal) and directed the Deputy Director (Mines and Geology), Hospet, to issue Mineral Dispatch Permits (for short 'MDPs') to the new partners, i.e., A1 and A2. The above fact is corroborated by the documentary proof Exs.672 to 675 and statement of witnesses. The statement of Sri.Hucharaddi, Deputy Director (Legal), Department of Mines and Geology, would disclose that A3 had not discussed the matter with him. The statement of Sri.H.R.Srinivasa, IAS officer, the present Director, Mines and Geology would further demonstrate that said direction issued by A3 to issue permit in favour of A1 and A2 is against the provisions of MMDR Act and without the consent of the Government of Karnataka.

Placing reliance on the judgment of the Apex Court in the case of M/S. MALABAR FISHERIES CO., CALICUT vs COMMISSIONER OF INCOME TAX, KERALA [(1979) 4 SCC 766], learned Special Public Prosecutor would submit that M/s.AMC being a partnership firm is not a legal entity. The dispatch certificate issued in the name of the said partnership concern prior to A1 and A2 taking over the firm will not enure to the benefit of the firm after the change of partnership. Accused Nos. 1 and 2 ought to have followed Rule 37 of the Mineral Concession Rules, 1960 to get the lease transferred in their names before transporting the ore under the permits. Hence, the direction accorded by the respondent-A3 to the Deputy Director of Mines and Geology, Hospet, to issue MDP was illegal. The very fact that he misrepresented as if he had orally discussed the matter with the legal branch by itself would establish that there was meeting of minds between himself and accused Nos. 1 and 2 to shift the iron ore illegally procured. There is sufficient evidence on record by way of office noting and statement of CWs about his complicity in the offence under Section 120B of IPC.

Learned counsel continues to submit that the law regarding jurisdiction of the Criminal Court at the stage of framing the charge is well settled and well defined. Court has limited jurisdiction at that stage and is obliged only to see whether a prima facie case is made out from the material borne out of records. The evidence cannot be weighed to foresee whether the case ends in acquittal or conviction [Placing reliance on the judgments of the Apex Court in the cases of Hem Chand vs State of Jharkhand [(2008) 5 SCC 113; Sheoraj Singh Ahlawat and Others vs State of Uttar Pradesh and Another [(2013) 11 SCC 476; Sajjan Kumar vs CBI [(2010) 9 SCC 368]; Sanghi Brothers (Indore) Pvt. Ltd. Vs Sanjay Choudhary and Others [(2008) 10 SCC 681]; and State of Madhya Pradesh vs Gyanendra Singh Jadon [(2015) 13 SCC 8]].

But, the Court below on a sweeping observation has returned that from the statements of witnesses there is no material to show that A3 has committed criminal conspiracy to help A1 and A2 in directing his officials. The order discharging from the charges is grossly illegal and against the settled principles of law. The impugned order is liable to be set aside and the respondent is to be brought to trial.

8. While controverting the above submissions, Sri Siddhartha B Muchandi, learned counsel for the respondent, submits that by the very same common order impugned herein, A2 was also discharged of the charges. But, the CBI has not chosen to challenge said order. This is not the first time that the firm/lessee carrying out mining activity at Bellary District were constituted and re-constituted without following the procedure under Rule 37 of the Rules, except informing the Government regarding change of partners. In such circumstances, MDPs used to be issued by the concerned officers. The lease issued to M/s.AMC was of 1966 and from then onwards many a times there was change of partners and reconstitution of the firm, on each of such occasion without making application under Rule 37 of the Rules, the permit issued in favour of M/s.AMC is availed by incumbent partners. The reconstitution of the firm cannot be treated as transfer of lease. Had if the Investigating Officer recorded the statement of the Deputy Director (Legal) in the presence of A3, the truth would have come to light. The note made by A3 at Ex.D673 is true. In fact he had interacted with the Deputy Director (Legal) in respect of issuing mineral dispatch certificate to the newly reconstituted firm. But, the Investigating Officer has discarded important piece of evidence with a malafide intention to implicate A3. At the relevant point of time, A1 was the Minister of the Government and A2 was a housewife. The respondent being a District level officer had no occasion to come in contact with them. None of the witnesses have stated about the conspiracy between himself and A1 and A2. Even otherwise, a bonafide decision taken by the officials in due discharge of his official duty under the MMDR Act is protected by Section 27 of the said Act, which reads thus:

"27. Protection of action taken in good faith. - No suit, prosecution or other legal proceedings shall lie against any person for anything which is in good faith done or intended to be done under this Act."

Sri Muchandi continues his persuasive submission that the respondent had not given any preferential treatment to M/s.AMC company as borne out from the records. From the statement of witnesses it emanates that a lessee has to submit an application to Deputy Director of Mines and Geology and seek for issue of transport permit from the head of mining to the place of destination. The technical officer under the instruction of the Deputy Director will visit the spot and personally verify the physical stock of the ore dumped. On receipt of the stock certificate from the technical officer, the Deputy Director will approve the same. But, in the case on hand, the stock verification was issued without personal visit to the spot, at the behest of the Deputy Director, Mines and Geology. As per the direction of A6/Deputy Director of Mines and Geology, CW2/Second Division Assistant sitting at his office was made to report that procured bulk material of M/s AMC on 27 occasions is 6.23 lakhs metric tones of ore. He was directed by A6 to enclose the same for lab analysis report issued by M/s Quality Services Solution (GEC) dated 30.12.2009 and bulk permits were issued. CW126-the Assistant Conservator of Forests gave a false stock verification report to the name of M/s.AMC without stock verification of mines at the direction of A4-Deputy Conservator of Forests. A4 issued forest way permits, on the basis of the report, without collecting forest development tax, as required by the Government of Karnataka notification published during April 2008. The forester and forest guards were forced to sign empty forest passes in Form No.27 as could be gathered from the statement of these witnesses. A8-Range Forest Officer of Sandur after getting the blank permits signed by those forester and forest guards filled up the same to his convenience. Nowhere from the statements of the witnesses it shows the complicity of A3 in the alleged offence. He was never informed that the reconstitution of M/s.AMC amounts to transfer of the lease. No criminality can be attributed to his bonafide action. Even if two views are possible on the given material, the preference is in favour of innocence. Mere suspicion but not the grave suspicion is not sufficient to frame charge against the accused. The order of discharge is proper and correct in the light of the judgments of the Apex Court in (1) Dilawar Balu Kurane -vs- State of Maharashtra reported in (2002) 2 SCC 135 (2) P.Vijayan -vs- State of Kerala and Another reported in (2010) 2 SCC 398 and (3) Shoraj Singh Ahlawat and Ors. -vs- State of U.P. and Another reported in AIR 2013 SC 52. In that view of the matter, the revisional jurisdiction of this Court in the given circumstance is not attracted and the petition is liable to be rejected.

9. In the backdrop of the above rival submissions, the point that would arise for consideration is:

"Whether the discharge of the accused from the charge under Section 120B of IPC was justified?"

10. To punish an offence under Section 120B of IPC, the prosecution is required to prove the criminal conspiracy as defined under Section 120A of IPC. It is not necessary for the prosecution to prove that perpetuators expressly agreed to do or cause to be done an illegal act. The agreement may be proved by necessary implication (Mohamad Usman Mohammad Hussain Maniyar and Another -vs- The State of Maharashtra - AIR 1981 SC 1062). When two or more persons agree to do or cause to be done,- (1) an illegal act, or (2) an act which is not illegal by illegal means, such an agreement is designated as criminal conspiracy. It is unlikely that the perpetuators would hatch criminal conspiracy having a witness in their presence. Though at times direct evidence is possible, in majority of cases, the prosecution has to dwell upon the circumstantial evidence. As conspiracy is hatched in secrecy, direct evidence to prove conspiracy is rare. It is to be proved largely on the inference drawn from illegal act or omissions committed by the conspirators in pursuance of common design which has to be properly proved (Shivanarayan Laxminarayan Joshi and Others -vs- State of Maharashtra and others reported in AIR 1980 SCC 439).

11. In the case on hand, the incriminating evidence collected by the prosecution is that the respondent has recommended issue of MDPs in gross violation of the MMDR Act and Rules despite the fact that office noting was placed before him to the effect that the matter requires legal opinion. That apart, his reciprocation that he has already discussed the subject with the Legal Department, is negatived by the statement of CW-21 Sri.H.Hucharaddi. His contentions that many a times in the past M/s.AMC was reconstituted and the permit issued in the year 1960 continued to be availed by the new partners, he had really discussed the matter with CW-21 before directing the Deputy Conservator of Forests, Bellary to issue MDP etc., is a matter of defence which cannot be pressed in action at the threshold.

12. Applying the formulae of 'some/mere suspicion - grave suspicion' as enunciated in Dilawar Balu Kurane's case (supra) and Union of India -vs- Prafulla Kumar Samal and another reported in AIR 1979 SC 366, to the evidentiary material placed before the court against respondent, then also the needle tilts more towards grave suspicion. The subject matter involved in this case is the natural resource of the country and the alleged offence is said to have caused loss to the State exchequer substantially. The respondent is a responsible officer of the State. Consciously he passed the order in violation of the statutory provisions.

13. The learned Trial Judge in the order impugned has made an omnibus observation that his action does not fasten criminal liability on him and the statement of the witnesses does not show that he committed criminal conspiracy. Though there was no direct evidence, the learned Trial Judge has lost sight of incriminating material appearing in the circumstantial evidence placed by the prosecution. Limited power vested with the Trial Court to sift and weigh the evidence is transgressed by the learned Trial Judge in the impugned order, hence requires intervention in this revision jurisdiction.

The Revision Petition is allowed. The order dated 8th October 2015 passed in Spl.C.C.No.116/2012 by the XLVI Addl.City Civil and Sessions Judge and Special Judge for CBI Cases at Bangalore City, is hereby set aside.

Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //