Srhi Mahendra Kumar Jain Vs State by Central Bureau of Investigation (Acb)

SHRI MAHENDRA KUMAR JAIN S/O LATE PUKRAJ JAIN AGED ABOUT 55 YEARS RESIDING AT H.NO 359, 100 BED HOSPITAL ROAD, 3^RD CROSS, MJ NAGAR, HOSPET, BELLARY DISTRICT – 583 201.

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…PETITIONER

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(BY SRI NAGENDRA NAIK R., ADVOCATE)

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AND:

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Digitally signed by PADMAVATHI B K Location: High Court of Karnataka

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STATE BY CENTRAL BUREAU OF INVESTIGATION (ACB) REPRESENTED BY SPECIAL PUBLIC PROSECUTOR, HIGH COURT OF KARNATAKA AT BENGALURU, BENGALURU – 560 001.

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…RESPONDENT

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(BY SRI PRASANNA KUMAR P., SPL.PP)

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THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, READ WITH SECTION 482 OF

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HC-KAR

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CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDINGS AGAINST THE PETITIONER / ACCUSED NO. 19 IN SPL.CC.NO. 06/2014 ON THE FILE OF HON’BLE COURT OF LXXXI ADDL. CITY CIVIL AND SESSIONS JUDGE, BENGALURU (CCH-82) (SPECIAL COURT EXCLUSIVELY TO DEAL WITH CRIMINAL CASES RELATED TO ELECTED MPs/ MLAs IN THE STATE OF KARNATAKA) AS PER ANNEXURE - A.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA

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ORAL ORDER

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The petitioner is before the Court seeking to quash the proceedings in Spl.C.C.No.6 of 2014 pending on the file of XLVI Additional City Civil and Sessions Judge, Bengaluru (Special Court exclusively to deal with criminal cases related to elected MPs/MLAs in the State of Karnataka).

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2. Heard the learned counsel Sri R. Nagendra Naik, appearing for petitioner and Sri P Prasanna Kumar, learned Special Public Prosecutor representing the respondent.

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HC-KAR

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3. The learned counsel for the petitioner Sri R. Nagendra Naik would submit that qua accused Nos.16 and 20, the coordinate benches of this Court have quashed the proceedings on the score that Company has not been made a party in the proceedings.

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4. In Crl.R.P.No.818 of 2017 disposed on 09-02-2018, the coordinate bench of this Court has held as follows:

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“…. ….

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3. It is seen from the record that petitioner/accused No.16 has filed an application for his discharge under Section 227 of Cr.P.C. Though the learned trial Judge has taken pains to write a detailed judgment while ordering to frame charges against accused No.16 but failed to look into the legal point involved in this case. There is no whisper with regard to said legal point raised by the learned counsel that without making the Company against which the allegations are made as party, no person on behalf of Company can be individually made as a party.

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4. It is seen from the additional charge sheet which is at page No.200 filed along with the objection statement filed by the CBI wherein it is narrated that M/s. Greentex Mining Industries Limited to which Sri.Ajay Kharabanda-Accused No.16 is the Managing Director, has entered into criminal conspiracy with other accused persons to transport the illegally excavated Iron Ore from different mines/plots of Bellary District during the period from 01.01.2009 to 31.05.2010; that the aforesaid accused had entered into a criminal conspiracy for illegal procurement and sale of iron ore and to transport the

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4 -

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HC-KAR

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same to Belekeri port by using fake permits by not paying Royalty and Forest Development Taxes to the Government and thereby caused wrongful loss to the government exchequer and to have corresponding wrongful gain for themselves. It is also stated that, during the course of investigation, it is disclosed that, accused No.16, Managing Director, M/s. Greentex Mining Industries Limited, in conspiracy with other accused persons, had supplied 11756.180 MT of iron ore to M/s. ILC Industries Limited-Accused No.15 during the period from 01.01.2009 to 31.05.2010. Out of the said quantity, 3934.75 MT of iron ore is illegal and without permits. Accused No.16 had procured the said illegal iron ore from Bellary District and transported to Belekeri port without permits and supplied to M/s. ILC Industries LimitedAccused No.15.

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5. Therefore all the above said allegations made against accused No.16 points out he has done all those acts for and on behalf of M/s. Greentex Mining Industries Limited which is a registered Company. Therefore, it is crystal clear that without making the Company as an accused, the Managing Director has been made as a party.

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6. In this context, it is worth to mention here a decision reported in (2015) 12 Supreme Court Cases 781 between Sharad Kumar Sanghi Vs. Sangita Rane wherein Apex Court has observed that that :

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“Though the allegations are against the Company, the Company has not been made as a party and, therefore, the allegations are restricted to the Managing Director. The allegations are vague and in fact, the same are principally leveled against the Company. There is no specific allegation against the Managing Director. When a Company has not been arrayed as a party, no proceeding can be initiated against it even where vicarious liability is fastened under certain statues. When a complainant intends to rope in a Managing Director or any officer of a Company, it is essential to make requisite allegation to constitute the vicarious liability”,

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for that, the Company has to be made as a party.

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HC-KAR

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7. Under the above said facts and circumstances and in view of the law laid down in the aforesaid decision, it is crystal clear that, without making the Company as an accused, accused No.16 (Managing Director) individually cannot be prosecuted. Under the above said circumstances, accused No.16 is necessarily to be discharged. However, it is made clear that it does not debar the respondent to take appropriate action at the right point of time against the Company as well as Managing Director, if law provides…”

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4.1. In Crl.P.No.3633 of 2018 disposed on 24-07-2018,

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the coordinate bench of this Court holds as follows:

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“…. ….

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6. It is seen from the records that petitioner/accused No.20 has filed an application for his discharge under Section 245 of Cr.P.C. Learned trial Judge while ordering to frame charges against accused No.20 has failed to look into the legal point involved in this case. Even though a contention was raised by the learned counsel that without making the Company a party no person on behalf of Company can be individually imputed with criminal liability, the trial Judge has not adverted his mind to this legal issue.

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7. Considering similar contention, this Court while dealing with the revision petition filed by one of the coaccused namely accused No.16, by placing reliance on the decision of the Hon’ble Supreme Court in Sharad Kumar Sanghi Vs. Sangita Rane (2015) 12 Supreme Court Cases 781 has held that the prosecution of the officers of the Company cannot be sustained without making the Company as the accused. In the above decision, the Hon’ble Supreme Court has observed as under:

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“11. In the case at hand as the complainant’s initial statement would reflect, the allegations are against the Company, the Company has not been made a party and,

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HC-KAR

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therefore, the allegations are restricted to the Managing Director. As we have noted earlier, allegations are vague and in fact, principally the allegations are against the Company. There is no specific allegation against the Managing Director. When a company has not been arrayed as a party, no proceedings can be initiated against it even where vicarious liability is fastened under certain statutes.”

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8. In view of the above proposition, the proceedings initiated against the petitioner cannot be sustained.”

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5. Since the petitioner is accused No.19, he is

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undoubtedly entitled to the same benefit that is granted by the co-ordinate benches. In that light, proceedings qua the petitioner, on the same reasons as quoted supra , requires to be obliterated.

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For the aforesaid reasons, the following:

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ORDER

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(i) Writ Petition is allowed .

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(ii) Proceedings in Spl.C.C.No.6 of 2014 pending on the file of XLVI Additional City Civil and Sessions Judge, Bengaluru (Special Court exclusively to deal with criminal cases related to elected

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