Dismissed

Sri Rohan S Kounte v. State by Deputy Superintendent of Police

Karnataka HC21 Feb 2024CRL.P/6/2024

Case brief

AI extract

What is this about?

A director sought discharge in a Lokayukta mining case contending no grave suspicion against him personally, vicarious liability inapplicable, Section 22 MMDR Act bar, and invalid charge sheet by SIT. Court upheld trial court's refusal to discharge, holding individuals perpetrating offences through companies are liable, and dismissed the petition.

What did the court decide?

Petition dismissed; trial court directed to consider petitioner's exemption-from-appearance application leniently, subject to participation when trial begins.

Sri Rohan S Kounte Vs State by Deputy… — Mining and Natural Resources | Karnataka HC (2024)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21^ST DAY OF FEBRUARY, 2024

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BEFORE

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THE HON'BLE MR JUSTICE KRISHNA S DIXIT

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CRIMINAL PETITION NO. 06 OF 2024(482)

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BETWEEN:

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SRI ROHAN S KOUNTE, AGED 49 YEARS, NO A/6, SKYLOCK APARTMENTS, PANAJI, GOA 403 001.

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ADDRESS IN THE CHARGE SHEET DIRECTOR, NAIVEDYA LOGISTICS NO A/6 SKYLOCK APARTMENTS PANAJI, GOA – 403 001.

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…PETITIONER

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(BY SRI.KIRAN S JAVALI SR.COUNSEL FOR SRI. VINOD KUMAR M, ADVOCATES)

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AND:

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STATE BY DEPUTY SUPERINTENDENT OF POLICE, SPECIAL INVESTIGATION TEAM, KARNATAKA LOKAYUKTA, M S BUILDING, BANGALORE – 560 001

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…RESPONDENT

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(BY SRI.VEKATESH S ARABATTI, ADVOCATE)

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THIS CRL.P FILED U/S 482 CR.PC BY THE ADVOCATE FOR THE PETITIONER PRAYING THAT THIS HONOURABLE COURT MAY BE PLEASED TO SET ASIDE THE ORDER DATED:28.11.2023 PASSED IN SPL.C.C.NO.488/2016 PENDING BEFORE THE LXXXI ADDL.CITY CIVIL AND SESSIONS JUDGE BENGALURU (SPL.COURT EXCLUSIVELY TO DEAL WITH CRIMINAL CASES RELATED TO ELECTED FORMER AND SITTING MPS/MLAS IN THE STATED OF KARNAKATA) AND CONSEQUENTLY DISCHARGE THE PETITIONER/ACCUSED NO.8 FOR THE OFFENCE P/U/S 409,420 R/W 120B OF IPC AND SEC.21 AND 23 R/W 4(1) 4(1A) OF MMDR ACT AND RULE 144

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AND 165 OF KARNATAKA FOREST ACT (PRODUCED AT ANNEXURE-A) AND ETC.,

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THIS PETITION HAVING BEEN HEARD AND RESERVED FOR ORDER, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

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ORDER

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Petitioner being 8^th accused in Spl.C.C.No.488/2016,

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is invoking inherent jurisdiction of this court for assailing the order dated 28.11.2023 whereby, the learned LXXXI Addl. City Civil and Sessions Judge, Bengaluru (CCH-82), has rejected his application filed u/s 239 of the Code of Criminal Procedure, 1973 and thereby, declined to discharge him.

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Learned Sr. Advocate appearing for the Petitioner succinctly urged for the quashment of impugned order on the following grounds:

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(a) A perusal of entire charge sheet ‘ does not make out any case of grave suspicion indicating the role played by the petitioner ‘ nor ‘ there exists any sufficient material to frame charge… ’

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(b) Merely because the Petitioner happened to be a director of the 6^th accused-Company, in the absence of any material to show that he was in-charge of its day to day affairs, there cannot be prosecution of such a person,

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more particularly when accused No.7 being the working director, was running affairs of the company.

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(c) There is a specific bar enacted in section 22 of the Mines and Minerals (Development and Regulation) Act, 1957 and only a Designated Authority alone can initiate proceedings of the kind, and none else. This aspect has not been adverted to by the learned Trial Judge.

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(d) The Special Investigation Team i.e., SIT not being the police station, its investigating officer does not qualify to be an ‘officer in charge of a police station’ as defined under section 2(o) and as mentioned in section 166 of Cr.P.C. vide a Coordinate Bench decision in Crl.R.P.250/2022 and that the charge sheet filed by him could not have been taken cognizance of.

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Learned Special Counsel appearing for the respondent-Police oppose the Petition making submission in justification of the impugned order and the reasons on which it has been constructed. He draws attention of the court to certain observations made by a Coordinate Bench

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of this Court in the earlier round of litigation i.e., Crl.P.No.2536/2017, disposed off on 24.11.2020. He contended that the reasoning of the learned Trial Judge accords with these observations. He further contended that the persons who are responsible for the affairs of the

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company and individuals who have perpetrated the commission of offence on behalf of a company can be proceeded against. He also repelled the contention that the official who has lodged the Final Report is not a person in charge of a police station. The Court below having considered all aspects of the matter has formed an opinion as to there being a cogent case to proceed against the accused including the petitioner herein, has declined to discharge him and that such a decision should not be readily interfered with by this court. So contending he seeks dismissal of the petition.

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4. Having heard the learned counsel for the parties

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and having perused the Petition papers, this court declines indulgence in the matter broadly agreeing with the reasoning of learned Trial Judge, for the following reasons:

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(a) A company is a jurisitic person formed for the purpose of trading with limited liability, is the law since the

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days of . SOLOMON vs. SOLOMON & CO, [1897] AC 22.

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A legal entity like a company which does not have blood, bone & flesh cannot act on its own and therefore it acts

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through others such as its Directors/office bearers. It has long been settled position of law that a natural person can do all that is not prohibited by law whereas a juristic person like the Company can do only that which is provided by law, expressly or by necessary implication. A Division Bench of Calcutta High Court in SATIBHUSHAN MUKHERJEE Vs. CORPORATION OF CALCUTTA, AIR

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(36) 1949 CAL 20 at para 10 has observed as under:

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“10….. There is a fundamental distinction between the capacity of a natural person and of an artificial person which has been created by Statute or Charter. To a natural person whatever is not expressly forbidden by the law is permitted by the law. He has the capacity to do everything save and except those forbidden by law. In the case of an artificial person-e.g., a corporation, which can be created either by charter or by statute the rule applicable to a natural person is reversed. Whatever is not permitted expressly or by necessary implication by the constituting instrument is prohibited not by any express or implied prohibition of the legislature but by the doctrine of ultra vires. This fundamental principle has been laid down in many cases……;”

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If such others have perpetrated the commission of offence

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in the name of a company, they are liable to be brought to book. Their case becomes worse if they are implicated in

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the alleged offences in their individual capacity and not as the alter ego of the company. This reasoning has largely animated the impugned order, whereby the learned Trial Judge declined the request for discharge.

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(b) The contention of petitioner that the doctrine of vicarious liability cannot be invoked where the offence is committed by the company, is bit difficult to agree with. The very same contention having been urged in the earlier round of litigation came to be rejected in Crl.Petition No.2536/2017 disposed off on 24.11.2020. The same read as under:

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“23. The next contention urged by learned counsel for the petitioners that the allegations leveled in the charge sheet are directed only against the Firm and therefore the prosecution of the petitioners is not tenable in the eye of law, is also liable to be dismissed. A reading of the charge sheet and the allegations made in the complaint clearly disclose that the petitioners are sought to be prosecuted not only as the Directors of the involved Firms, but also in their personal capacity”.

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The same is the law declared by the Apex Court in SUNIL

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BHARTI MITTAL vs. CENTRAL BUREAU OF

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INVESTIGATION, (2015) 4 SCC 609 wherein it is observed as under:

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“43. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent….”

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(c) The contention of the petitioner that the Charge Sheet does not make out any case of grave suspicion qua the petitioner, does not merit acceptance. The learned Trial Judge having considered the final report filed u/s.173(2) of the Code along with the documents accompanying the same has formed a cogent opinion as to there being a case to proceed against the petitioner and therefore has declined to discharge him. At that stage, the Trial Court need not have a mini trial; it has to take the allegations in the charge sheet along with the material, with their face value and form an opinion as to there being grounds to proceed against the accused. A perusal of the impugned order reflects this normative process.

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(d) The next contention that the bar u/s.22 of the 1957 Act comes to the rescue of the petitioner, again is liable to be rejected inasmuch as prima facie the S.I.T. has been authorized to investigate into the matter and it having investigated the same, has filed the final report.

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The Apex Court in PRADEEP S. WODEYAR vs. STATE OF KARNATAKA, (2021) 19 SCC 62 , at paras 95.1 & 95.2

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has observed as under:

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“95.1. The ingredients constituting an offence under the MMDR Act and the ingredients of the offences under IPC are distinct. 95.2. For the commission of an offence under IPC, on receipt of a police report, the Magistrate having jurisdiction can take cognizance without awaiting a complaint by the authorized officer. A complaint is required in terms of Section 22 only for taking cognizance in respect of a violation of the provisions of the MMDR Act”.

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Further, rejection of an application for discharge is one thing, and framing of charges is another. Arguably, the case is still at the stage of former.

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(e) The last contention that the S.I.T. is not the police station and its Investigating Officer is not an officer-incharge of a police station as defined u/s.2(o) of the Code, also does not merit acceptance in view of law declared by

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a Co-ordinate Bench of this Court in Crl.Revision Petition No.250/2022 between N.NARASIMHA MURTHY vs. STATE OF KARNATAKA, disposed off on 26.05.2023. Even otherwise, the contention of the kind does not go to root of the matter and the arguable infirmity being a mere

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irregularity, does not vitiate the proceedings. In any event, that cannot be a ground for granting discharge to the accused.

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All the above being said, learned counsel Sri. Vinod Kumar appearing for the Petitioner is justified in submitting that regard being had to totality of the circumstances of the case, the request of the Accused for exemption from appearance needs to be favoured subject to the condition that he shall participate in the proceedings when the trial begins.

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In the above circumstances, this petition being devoid of merits is liable to be and accordingly dismissed. Whatever observations herein above made being confined to the disposal of this petition, shall not cast their shadow

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or light on the proceedings of the court below.

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The court below shall consider the exemption application of the Petitioner-accused a bit leniently, as

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