Karnataka High Court
Shri Prem Chand Grag vs Central Bureau Of Investigation on 26 August, 2014
1 Crl.RP 362/14
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 26TH DAY OF AUGUST, 2014
BEFORE
THE HON'BLE MR. JUSTICE A.S. PACHHAPURE
CRIMINAL REVISION PETITION No.362 OF 2014
BETWEEN:
SHRI PREM CHAND GRAG
AGED ABOUT 50 YEARS
S/O SHRI HARNARAIN AGGARWAL
MANAGING DIRECTOR
M/S SHRI LAL MAHAL LIMITED
B-16, BHAGAWAN DAS NAGAR
NEW DELHI - 110 026.
... PETITIONER
(BY SRI: DIL JIT SINGH AHLUWALIA, ADV FOR
SRI: S RAJENDRA, ADV)
AND:
CENTRAL BUREAU OF INVESTIGATION
ANTI CORRUPTION BUREAU
BANGALORE
NO.36, BELLARY ROAD
GANGANAGAR, BANGALORE 560 032.
REPRESENTED BY THE ADDL SP
CBI: BS & FC: BANGALORE.
... RESPONDENT
(BY SRI: C H JADHAV, ADV FOR CBI)
2 Crl.RP 362/14
THIS CRL.R.P. IS FILED UNDER SECTION 397 R/W
401 CR.P.C PRAYING TO CALL FOR AND EXAMINE THE
RECORD OF PROCEEDING BEFORE THE LEARNED SPECIAL
CBI JUDGE, BANGALORE IN SPL.C.C.NO.54/2014, UNDER
SECTION 397 R/W 401 CR.PC. FOR THE PURPOSE OF
SATISFYING ITSELF AS TO CORRECTNESS, LEGALITY AND
PROPRIETY OF IMPUGNED ORDER DATED 11.02.2014
WHEREIN TAKING COGNIZANCE AND ISSUING PROCESS
AGAINST THE PETITIONER UNDER SECTION 120-B R/W 409
AND 420 IPC AND SECTION 13(2) R/W SECTION 13(1)(C)
AND (D) OF PC ACT, 1988.
THIS CRL.R.P. HAVING BEEN HEARD AND RESERVED
FOR ORDERS, THIS DAY THE COURT PRONOUNCED THE
FOLLOWING:
DATE OF RESERVING THE ORDER : 04.08.2014
DATE OF PRONOUNCEMENT OF ORDER: 26.08.2014
O R D E R
The petition is directed against the order dated 11.02.2014 taking cognizance and issuing process against the petitioner for the offence punishable under Section 120B read with Sections 409 and 420 IPC and Section 13(2) read with Section 13(1)(C) and (D) of the Prevention of Corruption Act, 1988.
2. The facts reveal that Section Forester, Ankola visited Belekeri Port on 15.03.2010 and 3 Crl.RP 362/14 found huge quantity of iron ore stacked inside the port. He drawn the panchanama regarding the proceedings of his visit and registered the forest offence in Cr.No.17/2009-10 for the offence punishable under Sections 2(7) (b) (iv), 62 and 80 of Karnataka Forest Act, 1863 and the Rules there under as no valid permit for transportation of the iron ore stored therein was found. The FIR was submitted to the JMFC Court.
On 20.03.2010, the Range Forest Officer, Ankola visited the port and seized the iron ore approximately 5 lakhs metric ton worth Rs.150 crores. It was entrusted to the possession of accused No.1, the Port Conservator on as-is-where- is basis for safe custody. Again, the Range Forest Officer visited the said port on 26.03.2010 and 29.03.2010 and marked 24 heaps of iron ore and drawn the panchanamas. Amongst the aforesaid seized iron ore, one heap containing 24441 metric ton of iron ore belonging to M/s Shri Lal Mahal 4 Crl.RP 362/14 Ltd. (accused No.2) was marked by the forest department officials as heap No.23 on 29.03.2010.
This investigation was taken up by CID. When the investigation was pending with CID, Bangalore, the matter was taken up before the Apex Court by the NGO and the Apex Court asked the Central Empowered Committee to look into these issues and to submit the recommendation. It is on the basis of report submitted by CEC that the Apex Court directed the CBI which held the investigation aforesaid in pursuance of the direction of Apex Court by registering the FIR and on completion of the investigation submitted the report under Section 173 Cr.P.C. against the petitioner and other accused.
Investigation by CBI revealed the following facts:
During the period from 21.03.2010 to 29.03.2010, accused No.2 brought 1519.84 metric 5 Crl.RP 362/14 ton of iron ore and between 29.03.2010 and end of the season i.e., 31.05.2010, accused No.2 further brought 9406.72 metric ton of iron ore to their plot in the lease hold land of accused No.5.
Thus, the additional total quantity brought between 21.03.2010 to 31.05.2010 was 10926.56 metric ton of iron ore.
It is relevant to mention here that accused No.3 is the Managing Director of accused No.2 company, whereas accused No.4 is the Director and accused No.6 is the Managing Director of accused No.5. It is alleged that the aforesaid accused entered into a criminal conspiracy amongst themselves and in furtherance of that conspiracy accused No.2 sold the iron ore including the seized iron ore from heap No.23 to accused No.5 who in turn sold and exported the seized iron ore to China by vessels.
During the investigation, it revealed that accused No.5 signed a purchase contract with 6 Crl.RP 362/14 accused No.2 dated 27.04.2010 for supply of 35000- 45000.00 metric ton of iron ore fines and in pursuance accused No.2 sold the whole quantity including the seized iron ore to accused No.5 and raised invoice dated 29.04.2010 for Rs.12,98,04,634.00 towards sale of the aforesaid iron ore and received the sale consideration of Rs.10 crores. It was credited to the account of accused No.2. Later the sold iron ore is said to have been exported at the end of season i.e., on 31.05.2010. There was a balance of 13909.11 metric ton of iron ore fines lying in the leasehold premises of accused No.5. It is said that there was a shortage of 10532 metric ton from the seized quantity of 24441 metric ton and that accused No.2 in collusion with accused No.5 and others illegally said to have sold the seized iron ore.
Accused No.2 is said to have authorized accused No.5 to file the writ petition in the High 7 Crl.RP 362/14 Court in WP No.15744/2010 to obtain a favourable order from the High Court to legalise the sale. The petitioner herein who is the Managing Director of accused No.2 authorized Sri.Pramod Seth, Shipping Executive to file the petition for release of seized iron ore from Belekeri Port. It is on the basis of said authorization that Sri.Pramod Seth is said to have filed WP 15744/2010 on 07.05.2010 for the release of 21000 metric ton of iron ore seized by the forest department at Belekeri Port. Before the order was passed by the High Court, it is alleged that the accused No.2-company had illegally sold the seized iron ore to accused No.5 and that accused No.3, the petitioner herein had the knowledge of seized iron ore and it is evident from the e-mail correspondence.
The learned Special Judge after perusal of the material placed on record in the charge sheet was of the opinion that there is a prima facie 8 Crl.RP 362/14 evidence against accused Nos.2 to 6 inclusive of the petitioner for the offences to be tried under Section 120B read with Sections 409 and 420 IPC and under Section 13(2) read with Section 13(1)(C) and (D) of PC Act. Under the impugned order, he has taken cognizance and issued process. Aggrieved by the order, the present revision petition has been filed.
3. I have heard Sri.Dil Jit Singh Ahluwalia, learned Counsel for the petitioner and also Sri.C H Jadhav, learned Counsel for CBI.
4. It is the contention of learned Counsel for the petitioner that the facts and evidence collected during the investigation does not disclose the ingredients of offences. He submits that the impugned order is arbitrary and mechanical and the valuable rights of petitioner have not been taken into consideration and prima facie, no offence is made out against him for which the cognizance is taken by the learned Trial 9 Crl.RP 362/14 Court. He submits that if the material placed on record in the investigation is taken into consideration except the fact that accused No.2 sold the seized iron ore to accused No.5 and that the petitioner had the knowledge of seizure, there is no other material to take cognizance of the aforesaid offences against the petitioner. He submits that the material placed on record is insufficient to take cognizance and there are no such facts which would constitute any of the offences aforesaid. He submits that the learned Trial Judge has not applied his mind and mechanically stated that perusal of the report reveals the facts which are sufficient to take the cognizance. Therefore, he submits that the impugned order has to be quashed.
5. On the other hand, learned Counsel for the respondent supporting the order of Trial Court though initially questioned the maintainability, later he has given up the same and submits that 10 Crl.RP 362/14 there is no error or illegality in the impugned order.
6. It is not in dispute that the petitioner is the Managing Director of accused No.2 and that the iron ore which was stored by accused No.2 in Belekeri Port was seized on 20.03.2010 and the report to that effect has been produced by the petitioner at Document No.3. The seized iron ore was handed over to accused No.1, the Port Conservator of Belekeri Port on as-is- where-is basis for safe custody. It is also not in dispute that accused No.2 entered into a contract with accused No.5 for the sale of aforesaid iron ore and the copy of contract has been produced by the petitioner at Document No.5. This contract was entered into between them on 27.04.2010. The petitioner who is the Managing Director of accused No.2 was very much aware of the seizure and Document No.7 produced by the petitioner is the certified copy of Board 11 Crl.RP 362/14 Resolution passed at the meeting of Board of Directors signed by accused No.2 on 28.04.2010. The resolution reveals recital of the seizure of iron ore and authorizing Mr.Pramod Seth, the Shipping Executive of accused No.2 to file the writ petition or any other proceedings for getting the release of seized iron ore. This resolution was passed by the Board of Directors of accused No.2 on the next day of contract. Contract is for the sale of iron ore between accused No.2 and accused No.5. Proposal to fix the meeting of the Board of Directors must have been atleast two days earlier to the date of meeting fixed. This circumstance would indisputedly indicate that the petitioner was aware of the seizure earlier to the contract with accused No.5 for sale of iron ore in stock.
7. That apart during the investigation, there are e-mails correspondence between the aforesaid two companies relating to the seizure 12 Crl.RP 362/14 and from this material placed on record, it is clear that the petitioner was very much aware of the fact of seizure. The sale consideration of the iron ore was also received by accused No.2 and there is payment of sale consideration. The iron ore seized and sold by accused No.2 was later came to be exported.
8. So far as the petitioner is concerned, it is the offence under Section 120B read with Sections 409 and 420 IPC for which he has been prosecuted. As the petitioner was the then Managing Director of accused No.2 had the knowledge about the seizure and as there is a sale of seized iron ore by accused No.2 to accused No.5, despite the seizure prima facie it could be said that accused No.2 had no authority to take any benefit by the sale of iron ore seized.
9. Under the provisions of Sections 406 and 409 IPC, what is required to be seen is that if the person commits breach of trust having 13 Crl.RP 362/14 dominion over the property in the capacity of a public servant, he is liable for the offence under Section 409 IPC. Though it was accused No.2 who is the owner of the iron ore which was seized by the authorities, accused No.2 had no authority to sell it and having done so, prima facie is responsible for the offence of criminal breach of trust.
10. The seizure is made under the provisions of Chapter VII(D) of Cr.P.C, panchanama will be drawn at the place of seizure in the presence of attesting witnesses to the mahazar and therefore as the seizure is done publicly, at this stage, the petitioner cannot take up a contention that he was unaware of the seizure. Prima facie, the meeting fixed and the resolution which has been produced as referred to supra, would indicate that he had the knowledge of seizure. Accused No.2 which is a company knowing that this iron ore was seized, dishonestly entered into a contract of 14 Crl.RP 362/14 sale with accused No.5 to make wrongful gain by receiving sale consideration of the iron ore sold which was seized by authorities.
11. It is relevant to note that it is accused No.1, a public servant who was entrusted with the possession of iron ore after the seizure on as-is-where-is basis for safe custody and accused No.2 who had dominion over the said iron ore as it was at the place where it was stored, prima facie made a wrongful gain by selling it to accused No.5 and in turn filed the writ petition seeking the release of iron ore having sold it a day earlier to the resolution.
So passing of information regarding the seizure of sale between accused Nos.1, 2 and 5 regarding the seizure, sale etc., were within the knowledge of petitioner and for this reason that prima facie as there is material to proceed against him that he has been arraigned as an accused.
15 Crl.RP 362/14
12. Though the learned Counsel for petitioner cited many decisions on the question regarding maintainability, as the learned Counsel for respondent did not attack the revision on that ground, I do not think it necessary to refer to the decisions produced by the learned Counsel for petitioner. Furthermore, the learned Counsel for petitioner has placed reliance on the decisions of Apex Court on the following decisions:
1. Abhinandan Jha v. Dinesh Mishra (AIR 1968 SC 117)
2. Stephen v. Chandra Mohan (MANU/KE/0067/1987)
3. Ramabatar Agarwalla v. State (MANU/OR/0123/1982)
4. Shiv Raj Singh v. State of Rajasthan (MANU/RH/0157/1992)
5. Ganga Sah v. State of Bihar (MANU/BH/0162/1981)
6. Kishun Singh v. State of Bihar ((1993) 2 SCC 16) 7 Bijaya Das v. State of Orissa (MANU/OR/0310/2003)
8. Nilu @ Pratap Kumar Mohapatra (MANU/OR/0009/2004) 16 Crl.RP 362/14
9. Ghulam Mohd. Kabir Mohd. V. State of Maharashtra (MANU/MH/0002/2008)
10. Anil Madhok v. Prem Maini (MANU/MH/1629/1998)
11. Pepsi Foods v. special Judicial Magistrate ((1998) 5 SCC 749)
12. Abdul Rauf Khan v. Dr. Majid Hussain (MANU/MP/0405/1989)
13. Smt. Nagawwa v. Veeranna Shivalingappa ((1976) 3 SCC 736)
14. A K Jain v. State of Sikkim (MANU/SI/0003/1991)
15. Ujjal Maitra v. Kanchan Maitra (MANU/OR/0193/1997)
13. I have perused the judgments referred to supra and the principle laid down in the aforesaid decisions are that the Judge has to form an opinion on the facts set out in the final report to state the offence and then has to take cognizance. It is necessary that under Section 190 Cr.P.C. to take cognizance, learned Magistrate has to find out as to whether there are facts which constitute the offence and then has to take cognizance and issue process. The Magistrate has 17 Crl.RP 362/14 to bear in mind that the judicial process should not be an instrument of oppression or needless harassment. He has to exercise his power judiciously and take all relevant facts and circumstances into consideration before issuing process and that this authority of the Magistrate should not be used as means to wreck personal vengeance. The Magistrate has to apply his mind to the allegations in the complaint, report and in case if he finds there is no sufficient ground to justify the accused being put on trial, he may refuse to take cognizance also. What requires for the Magistrate to do is that there should not be an abuse of process of Court. If the Magistrate has not exercised, scrutinized the material placed on record by applying his mind and if he takes the cognizance of offence, the High Court can exercise the powers vested with it to quash the proceedings.
18 Crl.RP 362/14
14. Amongst the aforesaid decisions, in Smt.Nagawwa Vs Veeranna Shivalingappa Konjalgi ((1976) 3 SCC 736), the Apex Court has narrated the ground on which the proceedings can be quashed by the High Court. So if in the revision petition, the High Court is convinced that the complaint does not disclose the essential ingredients of an offence, that the complaint allegations are patently absurd and inherently improbable and that issuing process is capricious and arbitrary or that suffers from fundamental legal defects, such as, want of sanction, or absence of a complaint by legally competent authority and the like, the High Court can even quash the proceedings in its revisional powers.
15. In none of the decisions referred to supra, it is held that the Magistrate has to elaborately disclose the material placed on record in the impugned order, assign reasons for taking cognizance. What is needed is that the Magistrate 19 Crl.RP 362/14 must apply his mind to the facts and find out as to whether there is evidence on record to constitute the offence alleged and that there is sufficient material to proceed against the accused for the said offence, and then can take cognizance and issue process.
16. The scrutiny of material placed on record in the chargesheet which is made available by the learned Counsel for petitioner, there is ample material on record to show that the iron ore which was stored in Belekeri Port was seized; it was sold by accused No.2 after its seizure to accused No.5; petitioner had the knowledge of seizure, knowing fully well that he sold the iron ore; accused No.2 has made a wrongful gain by sale of iron ore. It is abundantly clear by the conduct of parties that there was conspiracy to sell it to make a wrongful gain. It is on the basis of aforesaid material placed on record, that the learned Judge has taken cognizance of the 20 Crl.RP 362/14 offence. I do not find any justifiable grounds to interfere with the impugned order.
Consequently, the revision fails and it is accordingly dismissed.
IA.I/2014 for stay does not survive for consideration, hence, it is disposed of.
Sd/-
JUDGE *bgn/-