Unknown vs State Of Odisha (Vigilance) ...... ... on 5 March, 2021

[Cites 54, Cited by 0]

Orissa High Court

Unknown vs State Of Odisha (Vigilance) ...... ... on 5 March, 2021

ORISSA HIGH COURT, CUTTACK
CRLMC NO.2114 OF 2017
In the matter of an application under Section 482 of the Code of
Criminal Procedure challenging the Charge-sheet No.42 dated
22.11.2010, filed by Balasore Vigilance P.S. in VGR Case No.59 of
2009, corresponding to T.R. No.44 of 2010, registered in the Court
of the Special Judge (Vigilance), Balasore and subsequently
transferred and registered as T.R. No.80 of 2011 and pending
before the Special Judge (Vigilance), Keonjhar as well as the order
of cognizance dated 06.12.2010 passed by the learned Special
Judge (Vigilance), Balasore.
--------

Balasubramanian Prabhakaran .......Petitioner

-Versus-
State of Odisha (Vigilance) ...... Opp.party

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Advocate(s) who appeared in this case by Video Conferencing mode:
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For Petitioner - M/s. Sarada Prasanna Sarangi,
P.K. Dash, S. Mohanty, T.K.
Pattnaik, Advocates.

For Opp.party - Mr. P.K. Pani,
Sr. Standing Counsel (Vig.)

PRESENT:-
THE HON'BLE SHRI JUSTICE SATRUGHANA PUJAHARI
---------------------------------------------------------------------------------
Date of judgment:- 05.03.2021

S. PUJAHARI, J. Present is an application filed under Section

482 of Cr.P.C. seeking quashment of the charge-sheet filed

and the order of cognizance passed under Section 13(2) read

with Section 13(1)(d) of the Prevention of Corruption Act and
2

Sections 420, 379, 120-B of I.P.C. and Section 21 of the

MMDR Act, 1957 in T.R. No.80 of 2011 in the court of the

learned Special Judge (Vigilance), Keonjhar corresponding to

VGR Case No.59 of 2009 registered by Balasore Vigilance

Police Station, and also for quashment of further proceeding

of the said case as against the present petitioner arraigned

as a co-accused therein.

2. Heard the learned counsel appearing for the

petitioner and Mr. P.K. Pani, the learned Sr. Standing

counsel appearing for the Vigilance Department.

3. Perused the F.I.R., charge-sheet and other available

papers on record as well as the impugned order of

cognizance passed by the learned Special Judge (Vigilance),

Balasore. It may be mentioned here that the case upon

transfer is now pending for trial in the court of the learned

Special Judge (Vigilance), Keonjhar.

4. Facts leading to the submission of charge-sheet and

the consequential proceeding in the case referred to above,

may be briefly stated as follows:-

(a) Smt. Indrani Patnaik arraigned as a co-accused in

the case vide her application dated 08.05.1998 had
3

applied for mining lease for extraction of iron and

manganese ore over an area of 106.1127 hectors of

land at village- Unchabali in the district of Keonjhar.

Although the area of land so applied for by her

included some forest land, by suppressing the said

fact and ignoring some other omissions in the

application, Sri Jagdish Prasad Agrawal, the then

Joint Secretary, Steel and Mines Department,

Government of Odisha recommended for grant of

mining lease for twenty years in favour of Smt.

Indrani Patnaik. It is further alleged that although

upon such recommendation, the State Government

approved grant of lease for twenty years, Sri Jagdish

Prasad Agrawal by way of manipulation of the

documents sent the recommendation letter to the

Government of India showing the approved lease

period to be of thirty years instead of twenty years.

After receipt of approval from the Government of

India, Sri Jagdish Prasad Agrawal communicated

the same to Smt. Indrani Patnaik and issued

proceeding in that connection without taking
4

approval from the higher authorities concerned.

Subsequently, when an area of 103.432 hectors of

land out of the lease area was found to be forest

land, recommendation was submitted to the

Government of India for diversion of forest land, and

surface right permission was given to the

leaseholder - Smt. Indrani Patnaik over an area of

37.9338 hectors including 35.270 hectors of forest

land, and accordingly, possession was delivered to

the leaseholder - Smt. Indrani Patnaik on

07.05.2008.

(b) Sri Dipti Ranjan Patnaik, the Power of Attorney

holder of the lessee - Smt. Indrani Patnaik issued

work order dated 24.02.2008 to the present

petitioner who was the Managing Director of the

Private Company, namely, M/s. Triveni Earth

Movers Pvt. Limited to extract / raise iron ore, sub-

grade and other materials from Unchabali Iron and

Manganese Mine of Smt. Indrani Patnaik, to

transport the said mining materials to designate
5

stockyards, for processing the Run Off Materials

(ROM) into finished products etc.

was conducted at the aforesaid Mines of Smt.

Indrani Patnaik on 24.09.2009 which allegedly

revealed that the physical stock of Iron Ore was

182637.695 MT as against the closing stock / book

balance of 487205.870 MT leaving a shortage of

304568.170 MT of Iron Ore, cost of which was

assessed to be Rs.1827409020.00 @ Rs.6000/- per

MT, and the said quantity of Iron ore having been

disposed of in a clandestine manner without any

disclosure on record, there was evasion of sales tax

and royalty to the tune of Rs.81319701.39. During

the said joint verification, it was further found that

the lessee in connivance with the raising contractor

and some public servants despatched excess

quantity of 1581635.57 MT of Iron Ore which had

been unlawfully procured causing loss of

Rs.9489813426.00 to the Government. It is further

alleged that the lessee has also not paid sales tax of
6

Rs.525799215.00 which has been assessed by the

Assistant Commissioner of Commercial Tax

(Vigilance) on account of fabrication of record of sale

of Iron ore.

(d) Pursuant to the F.I.R. lodged basing upon the joint

physical verification of the Mines of Smt. Indrani

Patnaik, investigation was taken up for the

allegations, inter-alia, that the mining leaseholder -

Smt. Indrani Patnaik in connivance with her

husband - Power of Attorney holder - Sri Dipti

Ranjan Patnaik and Raising Contractor of which the

petitioner is the Managing Director and also the co-

accused - public servants derived monetary

advantage to the tune of Rs.10096932336.00 at the

cost of the State Exchequer, by taking undue favour

from the co-accused - public servants, who acted as

such by abusing their official position. On

completion of investigation, the Vigilance police

ultimately submitted charge-sheet No.42 dated

22.11.2010 under Sections 120-B, 420, 379 IPC and

Section 13(2) read with Section 13(1)(d) of the
7

Prevention of Corruption Act, 1988 and Section

21(1) of the Mines and Minerals (Development and

Regulation) Act, 1957 (for short the "MMDR Act")

against the accused persons including the present

petitioner. It may be mentioned here that the raising

contractor company, namely, M/s. Triveni Earth

Movers Private Limited who figured as an accused in

the F.I.R., has not been charge-sheeted and the

present petitioner being the Managing Director of the

said Company has been arraigned as a co-accused

in the charge-sheet. Cognizance has been taken of

the aforesaid offences by the learned Special Judge

(Vigilance), Balasore vide order dated 06.12.2010 in

T.R. Case No.44 of 2010, and upon transfer, the

case being re-numbered as T.R. No.80 of 2011 is

now pending in the court of the learned Special

Judge (Vigilance), Keonjhar.

5. The learned counsel appearing for the petitioner

while urging for quashment of the proceeding before the

Court below qua the petitioner, has raised various points and

his contentions, in sum and substance, are as follows:-
8

(i) The very inception of the case or registration of F.I.R.

by the Vigilance Police preceded by the joint

verification of the Mines of Smt. Indrani Patnaik is

beyond jurisdiction and illegal inasmuch as by the

date 24.09.2009 when the joint physical verification

was conducted by the Vigilance Team or the date

02.12.2009 when the F.I.R. was registered at

Vigilance Police Station, Balasore Division, the

Vigilance Police / Authorities had no power to

conduct any detection, search or seizure in any mine

which power was vested to them only on 27.01.2010

vide the State Government Notification No.IV(A)SM-

101/209-307/SM. The inspection / investigation

carried out by Vigilance police without any

authorization under Section 24 of the MMDR Act

being illegal cannot be relied on. In this context, the

learned counsel for the petitioner placed reliance on

a decision of the Apex Court in the case of CBI vrs.

State of Rajasthan, reported in (1996) 9 SCC 735.

(ii) The charge-sheet submitted being entirely based

upon the inspection done on 24.09.2009, i.e., before
9

registration of the F.I.R., and no investigation having

been conducted after registration of the F.I.R., the

charge-sheet is contrary to the provisions under

Chapter-XII of the Cr.P.C., and hence is liable to be

quashed. Reliance is placed on a decision of the

Apex Court in the case Lalita Kumari vrs.

Government of Uttar Pradesh, reported in (2014) 2

SCC 1.

(iii) The procedure laid down under Section 22 of the

MMDR Act having not been followed in this case and

no complaint having been filed, and filing of charge-

sheet / Final Form by Vigilance Police in terms of

Section 173 of Cr.P.C. being forbidden under Section

22 of the MMDR Act, the order of cognizance of

offence under Section 21 of the MMDR Act is liable

to be quashed. Reliance is placed on the decisions of

the Apex Court as well as this Court in the cases of

Jeewan Kumar Raut vrs. CBI, reported in (2009) 7

SCC 526 and Surendra Kumar Agarwal vrs. State

of Orissa, reported in 2009 (2) OLR 407.
10

(iv) The Raising Contractor - M/s. Thriveni Earthmovers

Pvt. Ltd. or the present petitioner has nothing to do

with the sale of minerals inasmuch as the limited

job assigned to the Raising Contractor being to

extract the minerals on the basis of the work order

given by the mining leaseholder with due adherence

to the applicable Rules and the prescriptions under

the statutory clearance, the said Raising Contractor

or the present petitioner has incurred no penal

liability for the alleged overt acts.

(v) The Indian Bureau of Mines, a Statutory Regulatory

Authority in respect of major minerals had inspected

the Mines of Smt. Indrani Patnaik on 08.12.2008 in

exercise of power under the provisions of Minerals

Conservation and Development Rules, 1988, and in

its report had certified that for the period from May,

2008 to November, 2008 the Mines owner had

excavated 784950 MT of Iron Ore from the Mines,

and the said Bureau again inspected the Mines in

question on 09.12.2009 and certified that for the

period from 01.04.2008 to November, 2009 the total
11

production of Iron Ore from the Pits of Mine was

30,86,776 MT. Thus, by no stretch of imagination it

can be said that from the excavated pits at the

Mines of Indrani Patnaik alone 849589.560 MT of

Iron Ore could have been produced. The inspection

report of the said Bureau which is well equipped and

qualified to measure the quantity will have

precedence over the report of the Vigilance.

(vi) The calculation / assessment of the excavated

mineral / production made by the Vigilance is

thoroughly misconceived and erroneous which may

be owing to their application / consideration of

incorrect conversion factor and recovery factor of

Iron Ore. While as per the mining plan approved by

Indian Bureau of Mines, the conversion factor for

the mining leasehold area of Smt. Indrani Patnaik is

3.5 tonnes/m3 which is meant for processed ore

used to assess the quantity of processed ore stacked

in stockyard for the purpose of mining transit

permit, but not to measure the quantity of Run Off

Mines (ROM) extracted from a given pit. Similarly,
12

while the Indian Bureau of Mines has certified the

recovery factor to be upto 70% for the mining

leasehold area of Smt. Indrani Patnaik, the

Investigating Agency in the present case has

erroneously applied 35% as the recovery factor.

(vii) The Central Empowered Committee appointed by the

Hon'ble Supreme Court of India after conducting an

independent survey, enquiry and investigation has

concluded in its report dated 16.10.2014 that for the

period from May, 2008 to March, 2009 the

production in the Mines of Smt. Indrani Patnaik was

to the tune of 1434956 MT and hence the allegation

of the Investigating Agency in this case that the

production was 842589.560 MT only has no force.

(viii) The prosecution having even failed to suggest the

place or location outside the leasehold area of Smt.

Indrani Patnaik wherefrom the alleged excess

quantity of mineral was extracted, the allegation of

theft without identifying the source of theft is not

sustainable.
13

(ix) The Revisional Authority constituted under Section

30 of the MMDR Act having set-aside the demand

order issued by the State Government calling upon

the leaseholder - Smt. Indrani Patnaik to pay

Rs.1132 Crore as recovery under Section 21(5) of the

MMDR Act pursuant to the charge-sheet filed by the

Vigilance Police in this case, and the said order

having been upheld by this Court vide the order

dated 08.08.2016 in W.P.(C) No.10129 of 2012, and

the said order in effect having already exonerated

the leaseholder - Smt. Indrani Patnaik from the very

same allegations as made in the present charge-

sheet, the petitioner, who is only the Managing

Director of the Raising company engaged by the

leaseholder, cannot be subjected to the same

allegations. Reliance in this regard is placed by the

learned counsel for the petitioner on a decision of

the Apex Court in the case of Radheshyam

Kejriwal vrs. State of West Bengal, reported in

(2011) 3 SCC 581.
14

6. Repudiating the contentions raised on behalf of the

petitioner, Mr. Pani, the learned Sr. Standing counsel

appearing for the Vigilance Department, submitted, inter-

alia, that the Vigilance police in exercise of power under the

Prevention of Corruption Act, 1988 as well as under Section

151 of Cr.P.C. conducted the investigation, and by the time

the charge-sheet was filed, the Vigilance Department had

already been authorized by the Steel and Mines Department,

Government of Odisha Notification dated 27.01.2010 to

exercise the power under the MMDR Act, 1957, and hence

the authority of the Investigating Agency to submit the

charge-sheet under Section 21 of the MMDR Act besides for

other offences cannot be questioned. Relying on the case of

State of NCT Delhi vrs. Sanjay, reported in (2014) 59 OCR

522, the learned Sr. Standing counsel for the Vigilance

Departmnet further submitted that Section 21 of the MMDR

Act is not a bar for taking action by police for theft of

minerals. It is further submitted by him that during the joint

physical verification conducted at the Mines in question, on

taking into consideration different factors, such as,

Geological condition, presence of other rock segments,
15

nature of Iron mineralization, structural behavior, other

portion etc., the recovery percentage of Iron Ore was

ascertained to be 30% to 40% whereas in the approved

mining plan, the recovery percentage shown to be 70% was

confined to the Iron Ore Horizon only dehors the various field

conditions indicated above. Similarly, the conversion factor

was determined by the Inspection Team basing on the

volumes of the Iron Ore approved by the then Deputy

Director of Mines and confirmed by the Director of Geology,

Odisha regarding recovery percentage of excavation of Iron

Ore.

It is the further submission of the learned Sr.

Standing counsel appearing for the Vigilance Department

that the demand of royalty made by the State Government to

the lessee being a civil dispute in between them only having

no connection to the offences committed by the public

servants and private persons resulting in loss to the State

Exchequer, the petitioner-co-accused cannot seek any

advantage from the said dispute or any decision thereon, in

order to extricate himself from the dragnet of the present

prosecution in the face of prima-facie materials on record
16

regarding his active involvements in the offences. Relying on

a decision of the Apex Court in the case of Sonu Gupta vrs.

Deepak Gupta and others, reported in 2015 OCR (SC) 993

(Para-8), he further submits that at the stage of taking

cognizance or even at the stage of framing charge, sufficiency

of materials for the purpose of conviction is not the

requirement, and that if the materials placed before the

Court are capable of raising a strong suspicion against the

accused, the Court will be justified in rejecting a prayer of

the accused for quashment of the order of cognizance or

discharge.

7. As regards the scope of exercise of inherent power of

this Court to quash or interfere with the proceeding of a

case, the law propounded by the Apex Court in the case of

R.P. Kapur vrs. The State of Punjab, reported in 1960 AIR

862, may be referred to as follows:-

"xxxxx It is well-established that the inherent
jurisdiction of the High Court can be exercised to quash
proceedings in a proper case either to prevent the abuse
of the process of any court or otherwise to secure the
ends of justice. Ordinarily criminal proceedings
instituted against an accused person must be tried
under the provisions of the Code, and the High Court
17

would be reluctant to interfere with the said proceedings
at an interlocutory stage. It is not possible, desirable or
expedient to lay down any inflexible rule which would
govern the exercise of this inherent jurisdiction.
However, we may indicate some categories of cases
where the inherent jurisdiction can and should be
exercised for quashing the proceedings. There may be
cases where it may be possible for the High Court to
take the view that the institution or continuance of
criminal proceedings against an accused person may
amount to the abuse of the process of the court or that
the quashing of the impugned proceedings would secure
the ends of justice. If the criminal proceeding in
question is in respect of an offence alleged to have been
committed by an accused person and it manifestly
appears that there is a legal bar against the institution
or continuance of the said proceeding the High Court
would be justified in quashing the proceeding on that
ground. Absence of the requisite sanction may, for
instance, furnish cases under this category. Cases may
also arise where the allegations in the First Information
Report or the complaint, even if they are taken at their
face value and accepted in their entirety, do not
constitute the offence alleged; in such cases no question
of appreciating evidence arises; it is a matter merely of
looking at the complaint or the First Information Report
to decide whether the offence alleged is disclosed or not.
In such cases it would be legitimate for the High Court
to hold that it would be manifestly unjust to allow the
process of the criminal court to be issued against the
accused person. A third category of cases in which the
inherent jurisdiction of the High Court can be
successfully invoked may also arise. In cases falling
18

under this category the allegations made against the
accused person do constitute an offence alleged but
there is either no legal evidence adduced in support of
the case or evidence adduced clearly or manifestly fails
to prove the charge. In dealing with this class of cases it
is important to bear in mind the distinction between a
case where there is no legal evidence or where there is
evidence which is manifestly and clearly inconsistent
with the accusation made and cases where there is legal
evidence which on its appreciation may or may not
support the accusation in question. xxxxxxxx"

8. The F.I.R. registered on 02.12.2009 is apparently

based upon the report or finding of the Joint Verification

Team which visited the Mines in question on 24.09.2009. It

is the contention of the petitioner that since the State

Government Notification authorizing the Vigilance police to

conduct any detection, search or seizure in any Mines came

to being only on 27.01.2010, i.e., subsequent to the date of

the joint verification as well as the date of registration of the

F.I.R., all those actions of the Vigilance police were without

jurisdiction, and the very inception of the case is illegal. The

legality of the charge-sheet is also questioned by the

petitioner on the ground, inter-alia, that the case is shown to
19

have been made out solely on the basis of the aforesaid joint

physical verification of the Mines made on 24.09.2019 and

that during the course of investigation the Investigating

Officer / Team has not made any visit to the case mine. It

needs no mention that F.I.R. sets the criminal law into

motion, and before registration of F.I.R. the power of police to

investigate any offence does not reckon. In the context, a

reference may be made to Sections 156 and 157 of the Code

of Criminal Procedure. As per Section 156(2) of Cr.P.C., no

proceeding of investigation conducted by a police officer in

any case as mentioned in sub-section (1) shall at any stage

be called in question on the ground that the Police Officer

concerned was not empowered to investigate. A reading of

Section 154 of Cr.P.C. vis-à-vis Section 157 would show that

the power of police to investigate comes into play either when

the F.I.R. disclosing cognizable offence is lodged by

Informant under sub-section (1) of Section 154 or when from

the information received or otherwise in view of Section

157(2) of Cr.P.C. the Officer-in-charge of the Police Station

gets reason to suspect commission of cognizable offence.
20

9. In the case of Lalita Kumari (supra) the

Constitution Bench of the Apex Court held, inter-alia, that if

the information lodged with police discloses commission of a

cognizable offence, no preliminary inquiry is permissible in

such a situation, and registration of the F.I.R. is mandatory,

and that if an information received does not disclose

commission of any cognizable offence but indicates the

necessity for an inquiry, a preliminary inquiry may be

conducted for the limited purpose of ascertaining whether or

not a cognizable offence is disclosed, but not to verify the

veracity or otherwise of the information. In the given facts

and circumstances, the aforesaid authority of the Apex Court

hardly provides any assistance to the petitioner. The F.I.R. in

the present case opens with the statement "On the allegation

of corruption on illegal mining, theft and transportation of

Iron Ore from M/s. Indrani Patnaik Mines located at

Unchabahali at Joda in Keonjhar district, a Vigilance enquiry

was taken up". Thus, as it appears, with reference to some

allegation regarding the corruption etc., an inquiry / joint

verification was taken up by the Vigilance police which led to
21

lodging and registration of the F.I.R. purportedly in view of

Section 157 of Cr.P.C.

10. The F.I.R. was registered under Section 13(2)

read with Section 13(1)(d) of the Prevention of Corruption

Act, 1988 (for short the "P.C. Act") and Section 120-B of the

Indian Penal Code (for short "I.P.C.") and Section 21 of the

MMDR Act, and on completion of the investigation charge-

sheet was filed for the aforesaid offences and also for the

offences under Sections 420 and 379 of IPC against four

public servants along with the mining leaseholder, her power

of attorney holder and the present petitioner. To put in other

words, the F.I.R. was registered not only under Section 21 of

the MMDR Act but also for the offences under the P.C. Act

and offence of criminal conspiracy under Section 120-B of

IPC. In that view of the matter, it cannot be said that in

absence of the requisite authorization under Section 24 of

the MMDR Act as on the date of the F.I.R., the very

registration of the F.I.R. and the investigation taken up by

the Vigilance police was without jurisdiction or illegal. To

reiterate, the authorization under Section 24 of the MMDR

Act was notified on 27.01.2010, i.e., before submission of the
22

charge-sheet. It also cannot be held at this stage of the

proceeding that in course of investigation the Investigating

Officer did not visit the Mines or that the charge-sheet was

filed solely basing upon the findings of the Joint Verification

Team who admittedly had visited the mining site prior to the

date 27.01.2010. It is also premature now to opine that no

other incriminating material was collected by the

Investigating Officer in course of the investigation.

11. Relying on a decision of this Court in the case of

Surendra Kumar Agarwal (supra), the learned counsel for

the petitioner argued that in absence of any complaint as

provided under Section 22 of the MMDR Act and also for

non-compliance with the provision under Section 23A of the

said Act which provides for compounding of the offence, the

prosecution launched for the offence under Section 21 of the

said Act cannot be sustained in law. In this context, the

pronouncement of the Apex Court in the case of Sanjay

(supra) cited by the learned Sr. Standing counsel for the

Vigilance Department assumes more relevance. The principal

question which arose for consideration in a batch of appeals

before the Apex Court was whether the provisions contained
23

in Sections 21, 22 and other Sections of the MMDR Act, 1957

operate as a bar against prosecution of a person charged

with allegations constituting offence under Sections 379, 114

and other provisions of IPC. Their Lordships in the said case

held as follows:-

"66. Considering the principles of interpretation and
the wordings used in Section 22, in our considered
opinion, the provision is not a complete and absolute
bar for taking action by the police for illegal and
dishonestly committing theft of minerals including sand
from the river bed.
67. xxxx xxxxx
68. 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 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
24

sought to be prosecuted for contravention of Section 4 of
the Act and not for any act or omission which constitute
an offence under Indian Penal Code.
69. However, there may be situation where a person
without any lease or licence or any authority enters into
river and extracts sands, gravels and other minerals and
remove or transport those minerals in a clandestine
manner with an intent to remove dishonestly those
minerals from the possession of the State, is liable to be
punished for committing such offence under Section
378 and 379 of the Indian Penal Code.
Xxxxx xxxxxx xxxxxx
71. Hence, merely because initiation of proceeding for
commission of an offence under the MMDR Act on the
basis of complaint cannot and shall not debar the police
from taking action against persons for committing theft
of sand and minerals in the manner mentioned above by
exercising power under the Code of Criminal Procedure
and submit a report before the Magistrate for taking
cognizance against such person. In other words, in a
case where there is a theft of sand and gravels from the
Government land, the police can register a case,
investigate the same and submit a final report under
Section 173, Cr.P.C. before a Magistrate having
jurisdiction for the purpose of taking cognizance as
provided in Section 190(1)(d) of the Code of Criminal
Procedure.
72. xxxxx xxxxxx Hence, for the commission of
offence under Section 378 Cr.P.C., on receipt of the
police report, the Magistrate having jurisdiction can take
cognizance of the said offence without awaiting the
receipt of complaint that may be filed by the authorized
officer for taking cognizance in respect of violation of
25

various provisions of the MMDR Act. Consequently the
contrary view taken by the different High Courts cannot
be sustained in law and, therefore, overruled."

12. The question as to the power of police to investigate

a case involving allegation regarding contravention of Section

4 of the MMDR Act vis-à-vis Section 22 of the said Act again

came up for consideration before the Apex Court in the case

of Kanwar Pal Singh vrs. The State of Uttar Pradesh and

another, reported in (2020) 14 SCC 331. Referring, inter-

alia, to the case of Sanjay (supra) the Apex Court held as

follows:-

"6. This Court in Sanjay (supra) has cited several
decisions wherein the challenge to the prosecution on
the ground that there can be no multiplicity of offences
under different enactments was resolved and answered
by relying upon Section 26 of the General Clauses Act,
which we would like to reproduce for the sake of
convenience:

AIR 1955 SC 196 (1994) 3 SCC 440 "26. Provision as to
offences punishable under two or more
enactments.-- Where an act or omission constitutes an
offence under two or more enactments, then the offender
shall be liable to be prosecuted and punished under
either or any of those enactments, but shall not be liable
to be punished twice for the same offence." Section 26 of
the General Clauses Act permits prosecution for
26

'different offences' but bars prosecution and punishment
twice for the 'same offence' under two or more
enactments. The expression 'same offence' has been
interpreted by this Court in numerous decisions
viz., Maqbool Hussain v. State of Bombay8 with
reference to the provisions of the Sea Customs Act and
the Foreign Exchange Regulation Act, 1947; Om
Parkash Gupta v. State of U.P.9 and State of Madhya
Pradesh v. Veereshwar Rao Agnihotri10 with reference
to Section 409 of the IPC and Section 5(2) of the
Prevention of Corruption Act; T.S. Baliah v. ITO11 with
reference to Section 52 of the Income Tax Act, 1922
and Section 177 of the IPC; Collector of Customs v.
Vasantraj Bhagwanji Bhatia12, with reference to the
provisions of the Customs Act 1962 and the provisions
of the Gold (Control) Act, 1968; State of Bihar v. Murad
Ali Khan13 with reference to the provisions of Sections
447, 429 and 379 of the IPC and provisions of the
Wildlife AIR 1953 SC 325 AIR 1957 SC 458 AIR 1957 SC
592 AIR 1969 SC 701 (1988) 3 SCC 467 (1988) 4 SCC
655 (Protection) Act, 1972; Avtar Singh v. State of
Punjab14 with reference to Section 39 of the Electricity
Act, 1910 and the provisions of theft under the IPC;
and Institute of Chartered Accountants of India v. Vimal
Kumar Surana15 with reference to the provisions of
the Chartered Accountants Act, 1949 and offences
under Sections 419, 468, 471 and 472 of the IPC.
Elucidating on the provisions of Section 4 read with
Sections 21 and 22 of the Mines Regulation Act and the
offence under Section 379 of the IPC, it was observed in
Sanjay (supra):
27

"69. Considering the principles of interpretation and the
wordings used in Section 22, in our considered opinion,
the provision is not a complete and absolute bar for
taking action by the police for illegal and dishonestly
committing theft of minerals including sand from the
riverbed. The Court shall take judicial notice of the fact
that over the years rivers in India have been affected by
the alarming rate of unrestricted sand mining which is
damaging the ecosystem of the rivers and safety of
bridges. It also weakens riverbeds, fish breeding and
destroys the natural habitat of many organisms. If these
illegal activities are not stopped by the State and the
police authorities of the State, it will cause serious
repercussions as mentioned hereinabove. It will not only
change the river hydrology but also will deplete the
groundwater levels.
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 authorised under the Act shall exercise all the
powers including making a complaint before the
Jurisdictional Magistrate. It is also not in dispute that
the Magistrate shall in such cases take AIR 1965 SC
666 (2011) 1 SCC 534 cognizance on the basis of the
complaint filed before it by a duly authorised officer. In
case of breach and violation of Section 4 and other
provisions of the Act, the police officer cannot insist the
Magistrate for taking cognizance under the Act on the
basis of the record submitted by the police alleging
28

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 is sought
to be prosecuted for contravention of Section 4 of the Act
and not for any act or omission which constitutes an
offence under the Penal Code.

71. However, there may be a situation where a person
without any lease or licence or any authority enters into
river and extracts sand, gravel and other minerals and
remove or transport those minerals in a clandestine
manner with an intent to remove dishonestly those
minerals from the possession of the State, is liable to be
punished for committing such offence under Sections
378 and 379 of the Penal Code.

72. From a close reading of the provisions of the MMDR
Act and the offence defined under Section 378 IPC, it is
manifest that the ingredients constituting the offence
are different. The contravention of terms and conditions
of mining lease or doing mining activity in violation
of Section 4 of the Act is an offence punishable
under Section 21 of the MMDR Act, whereas dishonestly
removing sand, gravel and other minerals from the river,
which is the property of the State, out of the State's
possession without the consent, constitute an offence of
theft. Hence, merely because initiation of proceeding for
commission of an offence under the MMDR Act on the
basis of complaint cannot and shall not debar the police
from taking action against persons for committing theft
of sand and minerals in the manner mentioned above by
exercising power under the Code of Criminal Procedure
29

and submit a report before the Magistrate for taking
cognizance against such persons. In other words, in a
case where there is a theft of sand and gravel from the
government land, the police can register a case,
investigate the same and submit a final report
under Section 173 CrPC before a Magistrate having
jurisdiction for the purpose of taking cognizance as
provided in Section 190(1)(d) of the Code of Criminal
Procedure." (emphasis supplied)

11. We would again advert to the decision in Sanjay
(supra) which had overruled the decision of the Calcutta
High Court in Seema Sarkar v. State17 wherein the High
Court held the proceedings to be invalid and illegal as
the Magistrate had taken cognizance on the basis of a
charge-sheet submitted by the police under Section
21(2) of the Mines Regulation Act and Section 379 of the
IPC, observing that the cognizance was one that cannot
be split or divided. The High Court had further observed
that as the complaint was not made in terms of Section
22 of the Mines Regulation Act, the cognizance was bad
and contrary to law. We have already noted the decision
of the Delhi High Court which had directed that the FIR
should not be treated as registered under Section 379 of
the IPC but only under Section 21 of the Mines
Regulation Act. These decisions of the Calcutta High
Court and the Delhi High Court were reversed and set
aside by this Court in Sanjay (supra) after referring
to Section 26 of the General Clauses Act and the
meaning of the expression 'same offence', to observe that
the offence under Section 21 read with Section 4 of the
Mines Regulation Act and Section 379 of the IPC are
different and distinct. The aforesaid reasoning compels
30

us to reject the contention of the appellant that the
action as impugned in the FIR (1995) 1 Cal LT 95 is a
mere violation of Section 4 which is an offence
cognizable only under Section 21 of the Mines
Regulation Act and not under any other law. There is no
bar on the Court from taking cognizance of the offence
under Section 379 of the IPC. We would also observe
that the violation of Section 4 being a cognizable offence,
the police could have always investigated the same,
there being no bar under the Mines Regulation Act,
unlike Section 13(3)(iv) of the TOHO Act.

12. In view of the aforesaid discussion, we would uphold
the order of the High Court refusing to set aside the
prosecution and cognizance of the offence taken by the
learned Magistrate under Section 379 of the IPC
and Sections 3 and 4 of the Prevention of Damage to
Public Property Act. We would, however, clarify that
prosecution and cognizance under Section 21 read with
Section 4 of the Mines Regulation Act will not be valid
and justified in the absence of the authorisation.
Further, our observations in deciding and answering the
legal issue before us should not be treated as findings
on the factual allegations made in the complaint. The
trial court would independently apply its mind to the
factual allegations and decide the charge in accordance
with law. In light of the aforesaid observations, the
appeal is partly allowed, as we have upheld the
prosecution and cognizance of the offence under Section
379 of the IPC and Sections 3 and 4 of the Prevention of
Damage to Public Property Act. There would be no order
as to costs."
31

13. The law thus is settled that it shall not be

illegitimate on the part of the police to investigate a case

involving offence under Section 21 of the MMDR Act, but

when it comes to the question of taking cognizance, no Court

shall take cognizance of such offence unless and until a

complaint in writing is made by the person authorized to do

so in view of Section 22 of the MMDR Act. In the present

case, admittedly, no complaint as enjoined under Section 22

of the MMDR Act having been filed, the order of cognizance of

the offence under Section 21 of the said Act is held to be

illegal. Next remains, the offence under I.P.C. of which

cognizance has been taken by the learned Court below, qua

the present petitioner.

14. Admittedly, in the F.I.R. the petitioner was not

named either in his personal capacity or in the capacity as

the Managing Director of the Raising Contractor Company -

M/s. Thriveni Earthmovers Pvt. Ltd. for the alleged offences.

The allegation made in the F.I.R. in so far as the same is

directed against the Contractor-company is extracted here

below;
32

"xxxx In violation of the provision, terms and
conditions the mining lease holder has engaged a
raising contractor namely M/s. Triveni Earth Movers
Pvt. Ltd. who has been carrying on the mining
operation in toto."
"xxxxx Thus there is gross discrepancies in the
quantity of production despatched closing stock in the
records of the Dy. Director, Mines, Joda, the Raising
Contractor and the IBM, which indicates that the
mining lease holder has been carrying on illegal
mining operation in connivance with the mining and
forest officials."
"xxxxxx Hence, all the aforementioned officials as well
as Managing Partners of M/s. Indrani Patnaik Mines
and M/s. Triveni Earth Movers Pvt. Ltd. are liable for
criminal misconduct U/s.13(2) r/w 13(1)(d) of P.C. Act,
1988 / 120-B IPC and 21 M.M.D.R. Act. The criminal
liability of other officials in showing favour will be
found out during further course of investigation. I,
therefore, request that a criminal case there under
may kindly be registered against the aforementioned
officials and the private firm and its representatives for
detailed investigation."

15. A bare reading of the F.I.R. which was the immediate

follow-up of the joint physical verification would show that

the Raising Contractor Company was indicted in the F.I.R.

for the reason of its being engaged by the lessee in carrying

on the alleged illegal mining operation in connivance with

some mining and forest officials, and on such allegation the
33

F.I.R. was apparently registered against the Raising

Contractor along with others. In the charge-sheet, however, it

was not the Raising Contractor Company but the petitioner

in his capacity as the Managing Director of the said

Company was made a co-accused. It is the contention of the

petitioner that he being the Managing Director of the

Company, not involved in the day to day contractual

extraction work, no penal liability can be vicariously

attracted to him in absence of any specific provision in the

statute for fixing the criminal liability vicariously on the

Directors of a Company. The learned counsel for the

petitioner in support of this contention has placed reliance

on a decision of the Apex Court in the case of Sunil Bharti

Mittal vrs. Central Bureau of Investigation, reported in

(2015) 4 SCC 609. In the said case, a Three Judge Bench of

the Apex Court referring to various judgments including

some foreign judgments, held, inter-alia, as follows:-

"(ii) Principle of "alter ego", as applied
37. The moot question is whether the aforesaid
proposition, to proceed against the appellants is backed
by law? In order to find the answer, let us scan through
the case law that was cited during the arguments.
34

38. First case which needs to be discussed is Iridium
India. Before we discuss the facts of this case, it would
be relevant to point out that the question as to whether
a company could be prosecuted for an offence which
requires mens rea had been earlier referred to in a
Constitution Bench of five Judges in Standard Chartered
Bank v. Directorate of Enforcement. The Constitution
Bench had held that a company can be prosecuted and
convicted for an offence which requires a minimum
sentence of imprisonment. In para 8 of the judgment,
the Constitution Bench clarified that the Bench is not
expressing any opinion on the question whether a
corporation could be attributed with requisite mens rea
to prove the guilt. Para 8 reads as under:
"8......... It is only in a case requiring mens
rea, a question arises whether a
corporation could be attributed with
requisite mens rea to prove the guilt. But
as we are not concerned with this question
in these proceedings, we do not express
any opinion on that issue."
39. In Iridium India, the aforesaid question fell
directly for consideration, namely, whether a company
could be prosecuted for an offence which requires mens
rea and discussed this aspect at length, taking note of
the law that prevails in America and England on this
issue. For our benefit, we will reproduce paras 59-64
herein:
"59. The courts in England have emphatically
rejected the notion that a body corporate could not
commit a criminal offence which was an outcome of an
act of will needing a particular state of mind. The
aforesaid notion has been rejected by adopting the
35

doctrine of attribution and imputation. In other words,
the criminal intent of the 'alter ego' of the
company/body corporate i.e. the person or group of
persons that guide the business of the company, would
be imputed to the corporation.
60. It may be appropriate at this stage to
notice the observations made by MacNaghten, J. in
Director of Public Prosecutions v. Kent and Sussex
Contractors Ltd.:
A body corporate is a "person" to whom, amongst
the various attributes it may have, there should be
imputed the attribute of a mind capable of knowing and
forming an intention - indeed it is much too late in the day
to suggest the contrary. It can only know or form an
intention through its human agents, but circumstances
may be such that the knowledge of the agent must be
imputed to the body corporate. Counsel for the
respondents says that, although a body corporate may be
capable of having an intention, it is not capable of having a
criminal intention. In this particular case the intention was
the intention to deceive. If, as in this case, the responsible
agent of a body corporate puts forward a document
knowing it to be false and intending that it should deceive,
I apprehend, according to the authorities that Viscount
Caldecote, L.C.J., has cited, his knowledge and intention
must be imputed to the body corporate.
61. The principle has been reiterated by Lord
Denning in Bolton (H.L.) (Engg.) Co. Ltd. v. T.J. Graham &
Sons Ltd. in the following words:
A company may in many ways be likened to a human
body. They have a brain and a nerve centre which controls
what they do. They also have hands which hold the tools
and act in accordance with directions from the centre.
36

Some of the people in the company are mere servants and
agents who are nothing more than hands to do the work
and cannot be said to represent the mind or will. Others
are Directors and managers who represent the directing
mind and will of the company, and control what they do.
The state of mind of these managers is the state of mind of
the company and is treated by the law as such. So you will
find that in cases where the law requires personal fault as
a condition of liability in tort, the fault of the manager will
be the personal fault of the company. That is made clear in
Lord Haldane's speech in Lennard's Carrying Co. Ltd. v.
Asiatic Petroleum Co. Ltd. (AC at pp.713 & 714). So also in
the criminal law, in cases where the law requires a guilty
mind as a condition of a criminal offence, the guilty mind
of the Directors or the managers will render the company
themselves guilty.
62. The aforesaid principle has been firmly
established in England since the decision of the House of
Lords in Tesco Supermarkets Ltd. v. Nattrass. In stating the
principle of corporate liability for criminal offences, Lord
Reid made the following statement of law:
'I must start by considering the nature of the personality
which by a fiction the law attributes to a corporation. A
living person has a mind which can have knowledge or
intention or be negligent and he has hands to carry out his
intentions. A corporation has none of these: it must act
through living persons, though not always one or the same
person. Then the person who acts is not speaking or acting
for the company. He is acting as the company and his
mind which directs his acts is the mind of the company.
There is no question of the company being vicariously
liable. He is not acting as a servant, representative, agent
or delegate. He is an embodiment of the company or, one
37

could say, he hears and speaks through the person of the
company, within his appropriate sphere, and his mind is
the mind of the company. If it is a guilty mind then that
guilt is the guilt of the company. It must be a question of
law whether, once the facts have been ascertained, a
person in doing particular things is to be regarded as the
company or merely as the company's servant or agent. In
that case any liability of the company can only be a
statutory or vicarious liability.'
63. From the above it becomes evident that a
corporation is virtually in the same position as any
individual and may be convicted of common law as well as
statutory offences including those requiring mens rea. The
criminal liability of a corporation would arise when an
offence is committed in relation to the business of the
corporation by a person or body of persons in control of its
affairs. In such circumstances, it would be necessary to
ascertain that the degree and control of the person or body
of persons is so intense that a corporation may be said to
think and act through the person or the body of persons.
The position of law on this issue in Canada is almost the
same. Mens rea is attributed to corporations on the
principle of 'alter ego' of the company.
64. So far as India is concerned, the legal position
has been clearly stated by the Constitution Bench
judgment of this Court in Standard Chartered Bank v.
Directorate of Enforcement. On a detailed consideration of
the entire body of case laws in this country as well as other
jurisdictions, it has been observed as follows:
'6. There is no dispute that a company is liable to be
prosecuted and punished for criminal offences. Although
there are earlier authorities to the effect that corporations
cannot commit a crime, the generally accepted modern rule
38

is that except for such crimes as a corporation is held
incapable of committing by reason of the fact that they
involve personal malicious intent, a corporation may be
subject to indictment or other criminal process, although
the criminal act is committed through its agents.'"
40. It is abundantly clear from the above that the
principle which is laid down is to the effect that the
criminal intent of the "alter ego" of the company, that is the
personal group of persons that guide the business of the
company, would be imputed to the company/corporation.
The legal proposition that is laid down in the aforesaid
judgment in Iridium India case is that if the person or
group of persons who control the affairs of the company
commit an offence with a criminal intent, their criminality
can be imputed to the company as well as they are "alter
ego" of the company.
41. In the present case, however, this principle is
applied in an exactly reverse scenario. Here, company is
the accused person and the learned Special Magistrate has
observed in the impugned order that since the appellants
represent the directing mind and will of each company,
their state of mind is the state of mind of the company and,
therefore, on this premise, acts of the company are
attributed and imputed to the appellants. It is difficult to
accept it as the correct principle of law. As demonstrated
hereinafter, this proposition would run contrary to the
principle of vicarious liability detailing the circumstances
under which a Director of a company can be held liable.

(iii) Circumstances when Director/person in charge of
the affairs of the company can also be prosecuted, when the
company is an accused person
39

42. No doubt, a corporate entity is an artificial person
which acts through its officers, Directors, Managing
Director, Chairman, etc. If such a company commits an
offence involving mens rea, it would normally be the intent
and action of that individual who would act on behalf of
the company. It would be more so, when the criminal act is
that of conspiracy. However, at the same time, it is the
cardinal principle of criminal jurisprudence that there is
no vicarious liability unless the statute specifically
provides so.
43. Thus, an individual who has perpetrated the
commission of an offence on behalf of a company can be
made an accused, along with the company, if there is
sufficient evidence of his active role coupled with criminal
intent. Second situation in which he can be implicated is
in those cases where the statutory regime itself attracts the
doctrine of vicarious liability, by specifically incorporating
such a provision.
44. When the company is the offender, vicarious
liability of the Directors cannot be imputed automatically,
in the absence of any statutory provision to this effect. One
such example is Section 141 of the Negotiable Instruments
Act, 1881. In Aneeta Hada, the Court noted that if a group
of persons that guide the business of the company have
the criminal intent, that would be imputed to the body
corporate and it is in this backdrop, Section 141 of the
Negotiable Instruments Act has to be understood. Such a
position is, therefore, because of statutory intendment
making it a deeming fiction. Here also, the principle of
"alter ego", was applied only in one direction, namely,
where a group of persons that guide the business had
criminal intent, that is to be imputed to the body corporate
and not the vice versa. Otherwise, there has to be a specific
40

act attributed to the Director or any other person allegedly
in control and management of the company, to the effect
that such a person was responsible for the acts committed
by or on behalf of the company."

16. The learned counsel for the petitioner has also

placed reliance on a decision of the Apex Court in the case of

Shiv Kumar Jatia vrs. State of NCR of Delhi, (2019) 76

OCR (SC) 271. Paragraphs-29 and 30 of the said decision

may be quoted here below:-

"29. By applying the ratio laid down by this Court in the
case of Sunil Bharti Mittal (supra) it is clear that an
individual either as a Director or a Managing Director or
Chairman of the company can be made an accused, along
with the company, only if there is sufficient material to
prove his active role coupled with the criminal intent.
Further the criminal intent alleged must have direct nexus
with the accused. Further in the case of Maksud Saiyed v.
State of Gujarat & Ors. (supra) this Court has examined
the vicarious liability of Directors for the charges levelled
against the Company. In the aforesaid judgment this
Court has held that, the Penal Code does not contain any
provision for attaching vicarious liability on the part of the
Managing Director or the Directors of the Company, when
the accused is a Company. It is held that vicarious
liability of the Managing Director and Director would arise
provided any provision exists in that behalf in the Statute.
It is further held that Statutes indisputably must provide
fixing such vicarious liability. It is also held that, even for
41

the said purpose, it is obligatory on the part of the
complainant to make requisite allegations which would
attract the provisions constituting vicarious liability.
30. In the judgment of this Court in the case of Sharad
Kumar Sanghi v. Sangita Rane (Supra) while examining the
allegations made against the Managing Director of a
Company, in which, company was not made a party, this
Court has held that when the allegations made against
the Managing Director are vague in nature, same can be
the ground for quashing the proceedings under Section
482 of Cr.P.C. In the case on hand principally the
allegations are made against the first accused-company
which runs Hotel Hyatt Regency. At the same time, the
Managing Director of such company who is accused No.2
is a party by making vague allegations that he was
attending all the meetings of the company and various
decisions were being taken under his signatures. Applying
the ratio laid down in the aforesaid cases, it is clear that
principally the allegations are made only against the
company and other staff members who are incharge of day
to day affairs of the company. In absence of specific
allegations against the Managing Director of the company
and having regard to nature of allegations made which are
vague in nature, we are of the view that it is a fit case for
quashing the proceedings, so far as the Managing Director
is concerned."

17. The learned Sr. Standing counsel appearing for the

Vigilance Department, however, sought to distinguish the

aforesaid cases from the present one, with his rival
42

contention that while the ratio of the cited cases is that no

individual can be made accused along with the Company

unless there is sufficient evidence for his active role in the

business coupled with the criminal intent, in the present

case, the Managing Director of the Company has been made

accused without the Company being arraigned as an

accused. According to him, the petitioner in the present case

acted against the Company's will and interest and the

omission and commission as alleged being his personal

unauthorized wrongful act, the same cannot be attributed to

the Company so as to make the company vicariously liable.

He has relied upon a decision of Bombay High Court (Nagpur

Bench) in the case of State of Maharashtra vrs. Syndicate

Transport Co. (P) Ltd. and others, reported in AIR 1964

Bombay 195. In the said case vide paragraph-17 it was held

as follows:-

"17. In my view, therefore, "the scope within which
criminal proceedings can be brought against institutions
which has been become so prominent a feature of
everyday affairs" ought to toe widened so as to make
corporate bodies indictable for offences flowing from the
acts or omissions of their human agents. Ordinarily, a
corporate body like a company acts through its
43

managing director or board of directors or authorized
agents or servants and the criminal act or omission of
an agent including his state of mind, intention,
knowledge or belief ought to be treated as the act or
omission including the state of mind, intention,
knowledge or belief of the company. I do not mean or
intend to suggest that in every case where an agent of a
limited company acting in its business commits a crime,
the company is automatically to be held criminally
responsible. As adumbrated, a company canot be
indictable for offences like bigamy, perjury, rape etc.
which can only be committed by a human individual or
for offences punishable with imprisonment or corporal
punishment. Barring these exceptions, a corporate body
ought to be indictable for criminal acts or omissions of
its directors or authorized agents or servants, whether
they involve mens rea or not, provided they have acted
or have purported to act under authority of the
corporate body or in pursuance of the aims or objects of
the corporate body. The question whether a corporate
body should or should not be liable for criminal action
resulting from the acts of some individual must depend
on the nature of the offence disclosed by the allegations
in the complaint or in the charge-sheet, the relative
position of the officer or agent vis-à-vis the corporate
body and the other relevant facts and circumstances
which could show that the corporate body, as such,
meant or intended to commit that act. Each case will
have necessarily to depend on its own facts which will
have to be considered by the Magistrate or Judge before
deciding whether to proceed against a corporate body or
not."
44

18. The learned Sr. Standing counsel for the Vigilance

Department has further cited the case of State of Karnatak

vrs. J. Jaylalitha, reported in (2017) 67 OCR (SC) 796, to

submit that when the corporate character is employed for the

purpose of committing illegality or for defrauding others, the

Court ought to ignore the corporate character and scan the

reality behind the corporate veil so as to enable it to pass

appropriate orders to do justice between the parties.

19. The law on the question of liability of company and

its official has been lucidly propounded by the Apex Court in

the cases of Sunil Bharti Mittal (supra) and Shiv Kumar

Jatia (supra). The criminal intention of the Company's

Directors or officials can be attributed to the company to

make it liable therefor, and as has been held in the afore

quoted decisions of the Apex Court an individual who has

perpetrated commission of an offence on behalf of the

company can be made accused along with the company, but

the said vicarious liability cannot be imputed to him

automatically. To make him liable vicariously there must be

statutory provision to that effect. No presumption can be

drawn against the person occupying the position of a
45

Chairman or Managing Director only on the basis of his

position as such. Mens rea is attributed to the company on

the basis of the alter-ego of the company whereas vicarious

penal liability can be imputed to the Directors or officials of

the company by virtue of a statutory provision to that effect

and on taking into consideration the materials on record

showing their active role in the business of the company

coupled with criminal intent.

20. Reverting to the case at hand, a perusal of the F.I.R.,

charge-sheet and other papers as produced by the

prosecution on record so far, would reveal that M/s. Thriveni

Earthmovers Pvt. Ltd. was engaged by the lessee as the

Raising Contractor in the Mine. There is nothing to show that

either the present petitioner dehors his position in the said

company was engaged by the lessee or he rendered any

service to the lessee in his personal or individual capacity.

There is also no material on record to make out a prima-facie

case that the petitioner acted against the company's will or

interest much less for his personal gain. Needless to mention

that there is no provision in the I.P.C. to impute vicarious

liability to the Directors or officials of the company for the
46

alleged omissions or commissions committed by the

company. It is true, as per the deeming provision under

Section 23 of the MMDR Act, every person responsible to the

Company for the conduct of the business of the company is

liable to be proceeded against for the offence allegedly

committed by the company. But, in the present case, as

already held, there has been no legal or valid order of

cognizance of any offence under Section 22 of the MMDR Act

against the petitioner, and the accusations against him are

confined to I.P.C. alone.

21. The learned counsel for the petitioner has cited a

decision of this Court in the case of Odisha Mining

Corporation Ltd. vrs. State of Odisha and others,

reported in 2019 SCC OnLine Ori 293 and also on CRLMP

No.417 of 2016 (Pankaj Kumar vrs. State of Odisha and

others), disposed of by this Court on 28.01.2020. Both

these cases being distinguishable from the present one on

fact and law are found not relevant to be deliberated upon.

22. This Court is also conscious of the submission

advanced by the learned Sr. Standing counsel for the

Vigilance Department that since depending upon the
47

evidence to be adduced during trial, Section 319 of the Code

of Criminal Procedure can be taken resort to as against the

Raising Contractor-company, at present the petitioner-

Managing Director can not take a plea that he is not liable to

be indicted for the reason of the company being not charge-

sheeted. This contention of the learned Sr. Standing counsel

is not acceptable for the basic reason that this Court can not

go by any hypothetical notion. Whether or not Section 319 of

the Code can be pressed into service in course of the future

proceeding of the case is not a question of present. What all

that is necessary at present is to pronounce upon:- whether

the prosecution in its present form and substance is liable to

be quashed qua the petitioner. Redundant to mention that, if

at the appropriate stage of the proceeding such an

eventuality arises, the trial Court would decide the question

of applicability of Section 319 Cr.P.C. in right perspective

without being influenced by any observation made herein,

and also keeping in view the law propounded by the Apex

Court as referred to.

23. The next contention of the petitioner is that the

proceeding is liable to be quashed inasmuch as the very
48

allegation brought against the mining lease holder regarding

extraction of excess quantity of ore or availing of wrongful

pecuniary advantage has been improbabalized by the report

of the Central Empowered Committee appointed by the Apex

Court. He has also cited the decision of our Court in W.P.(C)

No.10219 of 2012, vide which the order of the Revisional

Authority under Section 30 of the MMDR Act setting aside

the demand notice issued by the State Government against

the lessee has been confirmed. As it appears, the basis of the

demand notice issued by the State Government under

Section 21(5) of the MMDR Act was the finding of the Joint

Verification Team, and the very same report of Joint

Verification Team has laid the foundation of the present

prosecution. Needless to mention that since the Raising

Contractor worked under the mining lease holder as her

agent, the decision of this Court in the aforesaid writ petition

in favour of the principal also enures to the Agent-company.

24. Add to the above, the learned counsel for the

petitioner cited before this Bench the judgment dated

27.11.2020 passed by a Single Bench of this Court in

CRLREV No.831 of 2018, when the matter was again taken
49

up for further hearing on 23.12.2020 upon being mentioned.

The said CRLREV was filed by the Lessee and her power of

attorney holder who have been arraigned as co-accused in

the very same prosecution in the Court below, challenging

the order by which their petition for discharge had been

rejected by the Court below. The said CRLREV having

already been allowed by this Court discharging the Lessee

from the prosecution, it is now submitted by the learned

counsel for the present petitioner that in view of the said

decision, nothing survives in favour of the prosecution to

proceed against the present petitioner who has been made a

co-accused only because he happened to be the Managing

Director of the Company which had been given a raising

contract by the Lessee. As it appears, the learned single

Bench in the afore-cited case, on taking note of the order of

the Revisional Authority constituted under Section 30 of the

MMDR Act and the judgment rendered by a Division Bench

of this Court in W.P.(C) No.10219 of 2012 referred to

hereinbefore, and also relying on a recent pronouncement of

the Apex Court in the case of Ashoo Surendranath Tewari

vrs. Deputy Superintendent of Police, EOW, CBI and
50

another, reported in 2020 SCC OnLine SC 739, held that

the allegations leveled by the prosecution for trial of the

mining leaseholder are not acceptable, and accordingly, the

Lessee has been discharged from the prosecution. There

being nothing before me to deny that the Division Bench

order in W.P.(C) No.10219 of 2012 and the Single Bench

judgment dated 27.11.2020 in CRLREV No.831 of 2018

passed by this Court have attained finality, the contention of

the learned Sr. Standing counsel for the Vigilance

Department that the order passed in the aforesaid W.P.(C)

being confined to the question of the revenue which was of

civil nature having no bearing on the prosecution of the

petitioner, holds no more good. Hence, the petitioner cannot

be held liable to be proceeded against for the offences

alleged.

25. In the facts and circumstances narrated above

and for the discussion made with reference to the provisions

and propositions of law, it would be manifestly unjust to

allow continuance of the proceeding against the petitioner.

Consequently, the impugned order of cognizance qua the
51

petitioner calls for interference by this Court in exercise of

power under Section 482 of Cr.P.C.

26. In the result, this CRLMC is allowed, and the charge-

sheet filed and the order of cognizance passed under Section

13(2) read with Section 13(1)(d) of the Prevention of

Corruption Act and Sections 420, 379, 120-B of I.P.C. and

Section 21 of the MMDR Act, 1957 in T.R. No.80 of 2011 in

the court of the learned Special Judge (Vigilance), Keonjhar

corresponding to VGR Case No.59 of 2009 qua the petitioner

are hereby quashed.

Urgent certified copy be granted on proper

application.

.........................
S. PUJAHARI, J.

Orissa High Court, Cuttack. The 5th day of March, 2021/MRS 52

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