Karnataka High Court
M/S K.N.S.Overseas Pvt Ltd vs The State on 19 November, 2020
Equivalent citations: AIRONLINE 2020 KAR 2270
Author: John Michael Cunha
Bench: John Michael Cunha
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 19TH DAY OF NOVEMBER, 2020
BEFORE
THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA
CRIMINAL PETITION No.7425/2016
BETWEEN:
1. M/s. K.N.S. Overseas Pvt. Ltd.,
Director - Sri. K.N. Surendra,
S/o. Sri. Nagu,
Aged about 40 years,
No.1788/C, 9th Cross,
5th Main Road, R.P.C. Layout,
Vijayanagar,
Bengaluru - 560 040.
2. Sri. K.N. Surendra,
S/o. Sri. Nagu,
Aged about 40 years,
Managing Director,
M/s. K.N.S. Overseas Pvt. Ltd.,
No.1788/C, 9th Cross,
5th Main Road, R.P.C. Layout,
Vijayanagar,
Ramangara - 560 040. ...Petitioners
(By Sri. Murthy D. Naik, Advocate)
AND:
The State,
Represented by
Superintendent of Police,
S.I.T.,
Karnataka Lokayukta,
2
Bellary Road,
Ganganagar,
Bengaluru - 560 032. ...Respondent
(By Sri. Venkatesh S. Arbatti, Spl.PP &
Sri. B.S. Prasad, Spl.PP)
This Criminal Petition is filed under Section 482 of
Cr.P.C., praying to quash the proceedings initiated in
Spl.C.C.No.596/2015 on the file of the XXIII Addl. City Civil
and S.J., and Spl. Judge for P.C. Act, Bengaluru City, for
offences punishable under Sections 420, 409 r/w 120B of
IPC and under Sections 21, 23 read with 4(1), 4(1A) of
MMDR Act and Rule 165 r/w 144 of the Karnataka Forest
Rules, 1969, which is arising out of Cr.No.22/2014 of SIT,
Lokayukta, Bengaluru.
This Criminal petition having been heard and reserved
for orders on 20.10.2020 and coming on for pronouncement
of order, through video conference, this day, the court
made the following:
ORDER
This petition is arising out of Crime No.22/2014 (Spl.C.C.596/2015). Petitioners are shown as accused Nos.1 and 2 and they are sought to be prosecuted for the offences punishable under Sections 409, 420 r/w 120B of IPC and Sections 21, 23 r/w 4(1), 4(1A) of the Mines and Minerals (Development and Regulation) Act, 1957 (for short 3 'M.M.D.R. Act') and Rules 165 and 144 of the Karnataka Forest Rules, 1969.
2. The material allegations leveled against the petitioners in the charge sheet are that petitioner No.2 - Sri.K.N.Surendra being the Managing Director of petitioner No.1 - M/s. K.N.S. Overseas Pvt. Ltd. purchased 25,111 MT Iron ore from accused No.6 without a valid permit from the Mines Department and from the Forest Department and exported the same and thereby caused loss of Rs.3,83,03,720/- to the State Exchequer and thereby committed the above offences.
3. The main limb of argument of the learned counsel for petitioners is that even going by the allegations made in the charge sheet, petitioners are mere traders. The allegations made against them go to show that they had purchased and exported the iron ore. Petitioners are not required to obtain any license or permit either from the Mines Department or from the Forest Department. As per Section 9 of the M.M.D.R. Act, liability to pay royalty is on 4 the holder of the mining lease. Referring to Sub-Section (2) of Section 9 of the M.M.D.R. Act, the learned counsel for the petitioners pointed out that as per the said provisions:
"(2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any 1 [mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-
lessee] from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral."
On this point, learned counsel has relied on the following decisions:
1) (2014) 6 SCC 590, GOA FOUNDATION VS. UNION OF INDIA AND OTHERS and
2) AIR 2008 All. 75, VIRENDRA GIRI vs. STATE OF UP & Others.
Further, placing reliance on the decision of the Hon'ble Supreme Court in GOA FOUNDATION case (supra), with reference to paragraphs 33 and 34 thereof, it is argued that under "Section 4 of the M.M.D.R. Act, a person who holds a mining lease granted under the MMDR Act and the Rules made thereunder is entitled to carry on mining operations in accordance with the terms of the lease in the leased area 5 and may carry on all other activities connected with mining within the leased area."
Based on these observations, the learned counsel for petitioners would submit since the petitioners were not holding any mining lease, they are not liable to pay royalty and therefore, charges leveled against the petitioners being illegal amount to abuse of process of Court.
4. Secondly, it is contended that the order taking cognizance of the alleged offences is also defective. It does not disclose application of mind by the learned Special Judge. It is a bald order, which does not specify the offences for which the alleged cognizance has been taken. On this point, learned counsel has relied on the law laid down by the Hon'ble Supreme Court in the case of SUNIL BHARTI MITTAL Vs. CBI reported in (2015) 4 SCC 609; the Constitution Bench decision in the case of SARAH MATHEW Vs. INSTITUTE OF CARDIO VASCULAR DISEASES reported in (2014) 2 SCC 62; the decision in the case of SANJAYSINH RAMRAO CHAVAN Vs. 6 DATTATRAY GULABRAO PHALKE & OTHERS reported in (2015) 3 SCC 123 and the decision in the case of MEHMOOD UL REHMAN Vs. KHAZIR MOHAMMAD TUNDA & OTHERS reported in (2015) 12 SCC 420. It is contended that the order taking cognizance being illegal, the subsequent proceedings initiated against the petitioners are liable to be quashed.
5. The third contention urged by the learned counsel for petitioners is that the registration of FIR for the offences under the Mines and Minerals (Development and Regulation) Act, 1957 (for short 'M.M.D.R. Act') and the charge sheet filed for the alleged offences, is illegal in view of the bar contained under Section 22 of the M.M.D.R. Act. In support of this submission, learned counsel has placed reliance on the decision of the Hon'ble Supreme Court in the case of STATE (NCT OF DELHI) Vs. SANJAY reported in (2014) 9 SCC 772.
6. Lastly, it is contended that the charge sheet filed by the respondent does not disclose the basic 7 ingredients constituting offences alleged against the petitioners and in the said circumstances, proceedings initiated against the petitioners being illegal and an abuse of process of Court, the proceedings are liable to be quashed.
7. Meeting these arguments, the learned Spl.P.P. appearing for respondent at the outset would submit that the petitioners are sought to be prosecuted for the offences under Sections 4(1A) of the M.M.D.R. Act. The allegations made in the complaint squarely fall within the ambit of Section 4(1A) of the M.M.D.R. Act. There are clear allegations that the petitioners has admitted that they are traders and were involved in the purchase and exportation of the iron ore. Under the said circumstances, the allegations made against the petitioners clearly fall within the ambit of Section 4(1A) of the M.M.D.R. Act. As such, there no illegality in the proceedings initiated against the petitioners.
8. Regarding defect in the cognizance order as highlighted by the learned counsel for petitioners is concerned, the learned Spl.P.P would submit that the order 8 passed by the learned Special Judge taking cognizance of the alleged offences meets the legal requirements of the law laid down by the Hon'ble Apex Court as well as this Court in umpteen number of cases. There is a conceptual difference between the cognizance taken in the case arising out of a private complaint under Section 200 of Cr.P.C. and cognizance taken on the police report filed under Section 173 of Cr.P.C. In the instant case, the learned Special Judge having taken cognizance on the basis of the police report/final report as well as in terms of the written complaint filed by the authorized officer in terms of Section 22 of the M.M.D.R. Act, no fault could be found with the order taking cognizance by the learned Special Judge. For the same reason, the learned Spl.P.P would submit that the decisions relied on by the learned counsel for petitioners on this aspect, are not applicable to the facts of the case. The learned Special Judge had proceeded to take cognizance on the basis of the private complaint lodged in respect of the case. Further, the learned Spl.P.P pointed out that in the case of Sunil Bharti Mittal appellant namely accused who 9 was sought to be prosecuted was not an accused in the charge sheet or in the FIR.
9. Under the said circumstances, the Hon'ble Supreme Court has held that while taking cognizance, the learned Special Judge was required to apply his mind as to the offences made out against the appellant therein, whereas in the instant case, charge sheet having disclosed involvement of the petitioners and the offences specified therein having been prima-facie made out, there is no illegality whatsoever in the order of taking cognizance by the learned Special Judge.
10. The third contention raised by the learned counsel for petitioners regarding offences alleged against the petitioners under the provisions of the M.M.D.R. Act is concerned, the learned Special Public Prosecutor has referred to the notification dated 21.01.2014 issued by the Government of Karnataka enclosed to the Statement of Objections filed on behalf of the respondent and would submit that under the said notification, the police officer 10 above the rank of the Sub-Inspector of Police are constituted as authorized officers for the purpose of Section 22 of the M.M.D.R. Act. In the instant case, FIR is registered by the Superintendent of Police and investigation has been conducted by the Inspector of Police. These officers are duly authorized under the above notification, to investigate and to lay the charge sheet including for the offences under the M.M.D.R. Act and therefore, there is no bar contemplated to investigate under Section 22 of the M.M.D.R. Act. Therefore, the charge sheet laid before the Court does not suffer from any illegality and as pointed out by the learned counsel for petitioners that there is bar to investigate under Section 22 of the M.M.D.R. Act, is also not applicable. Further, the learned Special Public Prosecutor pointed out that to obviate any legal issues, the formal complaint as required under Section 22 of the M.M.D.R. Act was also filed before the learned Special Judge and as such, there is substantial compliance of the requirements of the M.M.D.R. Act.
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11. Lastly, with regard to the facts constituting ingredients of the offences alleged against the petitioners is concerned, the learned Spl.P.P submitted that the allegations made in the complaint, charge sheet as well as the documents filed in support thereof clearly disclose the ingredients of the offences alleged against the petitioners, as such, there is no illegality whatsoever in the proceedings initiated against the petitioners and thus, sought for dismissal of the petition.
12. Considered the submissions and perused the records.
13. Coming to the order of taking cognizance passed by the learned Magistrate is concerned, the said order reads as under:-
"Perused the final report. Cognizance is taken against accused no.1 to 7. Register the case against the accused no.1 to 7. Register the case and issue summons to accused no.1 to 7 returnable by 12-01-2016."12
14. As rightly submitted by the learned counsel appearing for the petitioners/accused that this order does not specify the offences in respect of which cognizance has been taken by the Special Court. It is also not forthcoming in this order as to whether cognizance has been taken in respect of the offences under IPC or under the provisions of MMDR Act of Forest Rules. Nonetheless, it is submitted at the Bar that the summons issued to the accused contained the details of the offences for which the summons was issued. Records also indicate that on appearing before the learned Special Judge, the petitioner No.2 moved for bail based on the offences mentioned in the summons. Therefore, it is clear that right from the inception, the petitioner No.2 was aware of the offences for which summons was issued to him. It is in this background, the objection raised by the petitioners/accused questioning the correctness and legality of the order of cognizance and the consequent summoning order issued by the Special Court requires to be considered.
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15. What is taking cognizance is not defined in the Criminal Procedure Code. But, it is now well settled that any Magistrate who takes cognizance of an offence must apply his mind to the facts of the case for the purpose of proceedings in a particular way. In R.R.CHARI vs. STATE OF UTTAR PRADESH, AIR(38) 1951 SC 207, the Hon'ble Supreme Court relying on the dicta on GOPAL MARWARI AND OTHERS vs. EMPEROR, AIR (30) 1943 Pat. 245, has observed that, "the word 'cognizance' was used in the Code to indicate the point when the Magistrate or a Judge first takes judicial notice of an offence. It is a different thing from the initiation of proceedings". Section 209 of the Code also provides for taking cognizance of the offence by the Magistrate while committing the case to the Sessions Court for trial but, the cognizance taken by the Magistrate under Section 209 is quite different from the cognizance taken by the Magistrate under Section 190(1)(a) of the Code or the cognizance taken by the Sessions Court before commencing the trial after committal. In the instant case, undisputedly, the learned Special Judge has proceeded to take cognizance 14 of the alleged offences after the submission of the final report by SIT.
16. The reading of the cognizance orders passed by the learned Special Judge clearly indicate that on perusal of the charge sheet submitted by the SIT learned Special Judge has taken cognizance of the alleged offences purportedly under Section 190(1)(a) of the Code and has proceeded to issue summons to the petitioners/accused, as such, there cannot be any difficulty in holding that by considering the facts of the case as borne on the final report, the learned Special Judge has taken cognizance of IPC offences as well as the offences under the provisions of Forest Rules and MMDR Act.
16. It is trite law that while taking cognizance and issuing summons in respect of IPC offences, based on the report under Section 173 of the Code, law does not require the Magistrate to pass elaborate order recording reasons for issuance of summons; though the order must reflect that he has considered the final report and satisfied himself that 15 there is sufficient ground for proceeding against the accused named in the final report.
17. In BHUSHAN KUMAR vs. STATE OF (NCT OF DELHI), (2012) 5 SCC 424, the Hon'ble Supreme Court has reiterated the requirement of application of mind in the process of taking cognizance and following the decision in CHIEF ENFORCEMENT OFFICER vs. VIDEOCON INTERNATIONAL LIMITED, (2008) 2 SCC 497, has held that in the process thus issued, the Magistrate need not explicitly state the reasons. Paragraphs 12 and 13 of the decision in CHIEF ENFORCEMENT OFFICER, read as under:-
"12. A "summons" is a process issued by a court calling upon a person to appear before a Magistrate. It is used for the purpose of notifying an individual of his legal obligation to appear before the Magistrate as a response to violation of law. In other words, the summons will announce to the person to whom it is directed that a legal proceeding has been started against that person and the date and time on which the person must appear in court. A person who is summoned is legally bound to appear before the court on the given date and time. Wilful disobedience is liable to be punished under Section 174 IPC. It is a ground for contempt of court.16
13. Section 204 of the Code does not mandate the Magistrate to explicitly state the reasons for issuance of summons. It clearly states that if in the opinion of a Magistrate taking cognizance of an offence, there is sufficient ground for proceeding, then the summons may be issued. This section mandates the Magistrate to form an opinion as to whether there exists a sufficient ground for summons to be issued but it is nowhere mentioned in the section that the explicit narration of the same is mandatory, meaning thereby that it is not a prerequisite for deciding the validity of the summons issued."
18. In the backdrop of the above principle, if the order of cognizance and the summons issued by the learned Magistrate in the instant case is analyzed, it is clear from the above order that on consideration of the final report submitted by SIT, the learned Special Judge has taken cognizance of the alleged offences and has issued summons to the petitioners. Therefore, there can be no difficulty in upholding the validity of the cognizance taken by the learned Special Judge and the summons issued to the petitioners insofar as the IPC and Forest offences are concerned.
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19. However, in respect of the offences under the provisions of MMDR Act are concerned, Section 22 of the Act creates a restriction on the courts in taking cognizance of the offences under the Act. The Section reads as under:
"22. Cognizance of offences.― No court shall take cognizance of any offence punishable under this Act or any rules made thereunder except upon complaint in writing made by a person authorised in this behalf by the Central Government or the State Government."
20. Learned counsel for the petitioners/accused has placed heavy reliance on the decision of the Hon'ble Apex Court in the case of STATE (NCT OF DELHI) vs. SANJAY, (2014) 9 SCC 772, in paragraph 70, wherein it is held as under:
" 70. There cannot be any dispute with regard to restrictions imposed under the MMDR Act and remedy provided therein. In any case, where there is a mining activity by any person in contravention of the provisions of Section 4 and other sections of the Act, the officer empowered and authorized under the Act shall exercise all 18 the powers including making a complaint before the jurisdictional magistrate. It is also not in dispute that the Magistrate shall in such cases take cognizance on the basis of the complaint filed before it by a duly authorized officer. In case of breach and violation of Section 4 and other provisions of the Act, the police officer cannot insist Magistrate for taking cognizance under the Act on the basis of the record submitted by the police alleging contravention of the said Act. In other words, the prohibition contained in Section 22 of the Act against prosecution of a person except on a complaint made by the officer is attracted only when such person sought to be prosecuted for contravention of Section 4 of the Act and not for any act or omission which constitute an offence under the Penal Code."
(underlining supplied)
21. What emerges from the above decision is that based on the final report filed under Section 173 of the Code, the Special Court cannot take cognizance of the offences under the provisions of the MMDR Act. Apparently, to get over this restriction, the respondent appears to have 19 filed a complaint in the proceedings before the Special court in terms of Section 22 of the MMDR Act. The learned Special Public Prosecutor for the respondent has made available copy of the complaint filed by the authorized officer before the learned Special Judge which contain the very same allegations as found in the charge sheet submitted by SIT. This complaint therefore could be taken as due compliance of the statutory requirement prescribed in Section 22 of the MMDR Act. But the question still remains to be considered is, whether by mere filing the complaint, can it be said that the Special Court has taken cognizance of the offence based on the said complaint as mandated in Section 22 of the MMDR Act?
22. Though it is vehemently argued by the learned counsel for the petitioners/accused that such exercise has not been done by the Special Court as the impugned order of cognizance does not reflect that the learned Special Judge has looked into the averments made in the complaint yet, what is significant to be noted is that the allegations 20 made in this complaint as well as the facts constituting the offences alleged against the petitioners/accused in the final report filed by the SIT are one and the same. Under the said circumstance, if the learned Special Judge has looked into the allegations made in the final report filed by the SIT and on satisfying himself that these allegations prima facie disclose the commission of offences by the petitioner/accused under IPC as well as under the MMDR Act, it could possibly be held that the learned Special Judge has taken cognizance of the offences in terms of Section 22 of MMDR Act.
23. In drawing the above conclusion, I am fortified by the observations of the Hon'ble Supreme Court in the case of FAKHRUDDIN AHMAD vs. STATE OF UTTARANCHAL AND ANOTHER, (2008) 17 SCC 157, wherein it is observed that "whether Magistrate has or has not taken cognizance of offence will depend upon circumstances of the particular case, including mode in which case is sought to be instituted and the nature of preliminary action". No doubt, even in 21 the said case it is held that "before a Magistrate can be said to have taken cognizance of an offence, it is imperative that he must have taken notice of accusations and applied his mind to allegations made in complaint or in police report or information received from a source other than a police report, as the case may be, and material filed therewith. It is only when the Magistrate applies his mind and is satisfied that allegations, if proved, would constitute an offence and decides to initiate proceedings against the alleged offenders, that it can be positively stated that he has taken cognizance of the offence."
24. Similar view is taken in MEHMOOD UL REHMAN vs. KHAZIR MOHAMMAD TUNDA AND OTHERS, (2015) 12 SCC 420, wherein it is held that "though no formal or speaking or reasoned orders are required at the stage of Ss.190/204 CrPC, there must be sufficient indication in the order that the Magistrate is satisfied that: (i) the facts alleged in the complaint constitute an offence, and (ii) these facts when considered along with the statements recorded 22 under S.200 CrPC and the result of inquiry or report of investigation under S.202 CrPC, if any, prima facie make the accused answerable before the criminal court."
25. As the impugned order and the records of the proceedings disclose that the learned Special Judge has considered the material placed before him namely, the charge sheet which contain identical allegations as found in the complaint filed by the authorized officer under Section 22 of the Act, I hold the cognizance taken by the learned Special Judge and the summons issued by him in respect of MMDR offences is in accordance with Section 22 of MMDR Act.
25. Viewed from another angle, on filing a complaint either under Section 200 Cr.P.C. or under Section 22 of MMDR Act, the course open for the Court/Magistrate was either to take cognizance based on the facts alleged in the complaint or to refer the complaint for investigation under Section 156(3) of Cr.P.C. or to postpone the process and hold an enquiry in terms of Section 202 of Cr.P.C. In the 23 instant case, detailed investigation into the alleged offences having already been undertaken by SIT pursuant to the directions of the Hon'ble Supreme Court and necessary evidence having been collected in respect of the alleged offences, the Special Court could not have ordered a parallel investigation nor could it have rejected the final report. It is not the case of the petitioners that the report submitted by the SIT is without authority of law. Even otherwise, investigating of the offences is within the domain of the police and the power of the police officer to investigate into cognizable offence is not ordinarily impinged by any fetters. There is no provision under the MMDR Act that the appropriate authority alone shall investigate any complaint of breach of any of the provisions of the MMDR Act. As observed by the Hon'ble Supreme Court in KANWAR PAL SINGH vs. THE STATE OF UTTAR PRADESH (Crl.Appeal No.1920/2019, arising out of SLP (Crl.) No.10707/2019, dated December, 18, 2019), "the violation of Section 4 being cognizable offence, the police could always investigated the same, there being no bar under the MMDR 24 Act". Therefore, it follows that when the police have the power to investigate the contraventions of Section 4 of the Act, they have also the power to submit the final report. Therefore, no illegality could be attached to the final report and the evidence collected by the police officers in proof of the offences investigated by them under the Act. This report, therefore, cannot be excluded from consideration while taking cognizance of the offence under the Act, provided a complaint as required under Section 22 is filed by the authorized officer. If the argument of the learned counsel for the petitioner is accepted, despite there being a report on investigation, the Court has to either order for fresh investigation or hold an enquiry under Section 202 of Cr.P.C., which would tantamount to nullifying the investigation ordered by the Hon'ble Supreme Court and the Government of Karnataka, which in the circumstances of the case cannot be permitted. It is a cardinal principle of law that every law is designed to further the ends of justice and shall not be frustrated on mere technicalities. When the law authorizes the police/SIT to investigate the offences 25 including the offences under the MMDR Act, the said report cannot be excluded from consideration at the stage of cognizance or issuance of summons to the accused subject to the compliance of the requirements of Section 22 of the Act.
27. In the light of these principles and for the reasons discussed above, and especially keeping in mind the peculiarities of the present case and the special circumstances arising on account of the investigation report submitted by SIT, in my view, the course adopted by the learned Special Judge in considering the final report for issuing process to the petitioners cannot be faulted with. Likewise, as held in the above decisions, non recording the reasons by the Special Court while issuing summons to the petitioners also cannot be a reason to set aside the orders of cognizance and the summons issued to the petitioners. In the circumstances of the case, even if there is an error or omission on the part of the learned Special Judge, it is not something so vital as to cut at the root of jurisdiction so as 26 to render the impugned order illegal or without jurisdiction so as to quash the entire proceedings as sought for by the petitioner. Since the petitioner No.2 was notified of the offences at the earliest point of time before his appearance, there is substantial compliance of the "outward forms of the law" as held by the Constitution Bench of the Apex Court in WILLIE (WILLIAM) SLANEY vs. STATE OF MADHYA PRADESH, AIR 1956 SC 116.
28. As a result, I hold that the impugned order of cognizance and the consequent order of summons issued by the learned Special Judge do not suffer from any error or illegality vitiating the proceedings pending against the petitioners.
29. Regarding the contention urged by learned counsel for petitioners that the petitioners being the traders they were not involved in the purchase or sale of the iron ore and therefore they were not required to obtain prior permit or to pay royalty to the concerned Department is concerned, suffice it to note that the allegations made 27 against the petitioners squarely attract Section 4(1A) of the M.M.D.R. Act. The section reads as under:
"4(1A) No person shall transport or store or cause to be transported or stored any mineral otherwise than in accordance with the provisions of this Act and the Rules made thereunder."
As there are clear allegations that the petitioners were instrumental in purchase/storage/transportation of the iron ore, in my view, even the said contention does not merit acceptance.
30. The allegations made in the complaint which is duly supported by the materials collected by SIT during investigation, undoubtedly make out the ingredients of the offences under Sections 409, 420 r/w 120(B) of IPC and Sections 21, 23 r/w 4(1) and 4(1A) of MMDR Act, 1957 and Rule 165 r/w 144 of Karnataka Forest Rules, 1969. In the course of the arguments, the learned Special Public Prosecutor has referred to the relevant documents which prima facie disclose the involvement of the petitioners in the 28 alleged offences. Under the said circumstances, the criminal action having been rightly initiated against the petitioners, I do not find any justifiable ground to interfere in the impugned proceedings. Accordingly, rejecting the contentions urged by the learned counsel for the petitioners, the petition is dismissed.
In view of dismissal of main petition, all pending I.As are also dismissed.
At this juncture the learned counsel for the petitioners seeks leave of the court to reserve the right of the petitioners to urge appropriate contentions before the trial court at the stage of hearing before charge.
Such a right is available to the petitioners under law and the same is not taken away by this order. The Trial Court shall hear the petitioners and consider the grounds raised at the stage of hearing before charge and shall proceed in the matter as per law.
Sd/-
JUDGE SV