Karnataka High Court
Mr Vasudev Srivatsa vs State Of Karnataka By on 12 November, 2020
Equivalent citations: AIRONLINE 2020 KAR 2233
Author: John Michael Cunha
Bench: John Michael Cunha
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY NOVEMBER, 2020
BEFORE
THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA
WRIT PETITION No.35596 OF 2018 (GM-RES)
BETWEEN:
Mr. Vasudev Srivatsa
Son of Narasimhamurthy,
Aged about 42 years,
No.13, Behind Lingaraju Compound,
Near Siddhi Vinayaka Temple,
Konanakunte,
Bengaluru 560 062.
...Petitioner
(By Sri. Anand Muttalli, Advocate)
AND:
State of Karnataka by
Special Investigation Team
Karnataka Lokayuktha,
Bengaluru 560 001.
...Respondent
(By Sri.B.S.Prasad, Spl.PP and
Sri.Venkatesh S.Arabatti, Spl.PP)
***
This Writ Petition is filed under Articles 226 and 227 of
Constitution of India r/w Section 482 of Cr.PC praying to
quash the proceedings in Annexure-B Spl.CC.No.91/2017 on
the file of the Hon'ble XXIII Additional City Civil and Sessions
Court, Special Judge for Prevention of Corruption Cases,
Bengaluru City, insofar as the petitioner is concerned.
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This Writ Petition having been heard and reserved for
orders on 22.10.2020 and coming on for pronouncement of
order, through video conference, this day, the Court made the
following:
ORDER
Heard Sri.Anand Muttalli, learned counsel for petitioner and Sri. B.S. Prasad, learned Special Public Prosecutor for the respondent.
2. The petitioner is shown as accused No.3 in Crime No.3/2015 (Special C.C.No.91/2017). He has sought to quash the proceedings in Spl.CC.No.91/2017 (Annexure-B) on the file of the Hon'ble XXIII Additional City Civil and Sessions Court, Special Judge for Prevention of Corruption Cases, Bengaluru City, insofar as the petitioner is concerned.
3. The grievance of the petitioner is that, he has been prosecuted for the alleged offences in his capacity as a partner of the firm by name 'Nivya Traders'. The firm is not made an accused. The prosecution has not produced any material to show that at the relevant time, the petitioner was in-charge of the affairs of the firm or anyway involved in the 3 transaction in question. The allegations made in the complaint disclose that the alleged transaction was entered into by the firm and the material produced along with the charge sheet also disclose that the payment was received by the firm and therefore, without there being prima facie material to show the involvement of the petitioner in the alleged transaction and that he was in-charge of the affairs of the firm, the prosecution of the petitioner is illegal and amounts to abuse of the process of the court.
4. In support of his submissions, learned counsel has placed reliance on the following judgments.
(i)Sunil Bharti Mittal Vs. Central Bureau of Investigation [(2015) 4 Supreme Court Cases 609];
(ii) Standard Chartered Bank and others Vs. Directorate of Enforcement and others [(2005) 4 Supreme Court Cases 530];
(iii) Sri. Rajesh Adani and another Vs. Assistant Labour Commissioner and another [ILR 2010 Kar.3287]; &
(iv) Aneeta Hada Vs. Godfather Travels and Tours Pvt.Ltd. [(2012) 5 Supreme Court Cases 661]
5. Refuting the above submissions, learned Special Public Prosecutor Sri.B.S. Prasad for respondent has drawn my attention to the relevant material in the charge sheet and 4 would submit that the petitioner was a joint account holder to the credit of which, payment has been made and therefore the contention of the petitioner that he was only a nominal partner and was not aware of the transaction in question, cannot be accepted at this juncture.
6. Further, referring to Section 23 (2) of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as "MMDR Act" for short), learned Special Public Prosecutor would submit that the defence set up by the petitioner that the alleged offence has been committed without his consent and connivance is required to be substantiated only during trial and the same cannot be made a ground for quashing the proceedings or to set aside the impugned order as contended.
7. Considered the rival submissions and perused the records.
8. The material allegation leveled in the charge sheet insofar as the petitioner is concerned is that the petitioner herein and accused No.2 being the partners of M/s. Nivya Traders purchased 371.43 metric tons of iron ore from M/s. 5 Manjunatheshwara Minerals and sold the same to M/s. Pragrassim Mines and Minerals without a valid permit and without payment of royalty and thereby caused loss to the exchequer to a tune of Rs.36,41,378/-.
9. As could be seen from the above, petitioner has been implicated in the alleged offences in his individual capacity and not as alter ego of the company. There are no allegations in the entire charge sheet that the alleged offences were committed by M/s. Nivya Traders. The question of making the firm or the company an accused would arise only when such company commits an offence involving mens rea, it would normally be the intent and action of the individual who would act on behalf of the company. Only then, 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. This is the law laid down in SUNIL BHARTI MITTAL vs. CENTRAL BUREAU OF INVESTIGATION, (2015)4 SCC 609 (paras 40, 42 and 43), which is extracted herebelow:-
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"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 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.
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 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 7 vicarious liability, by specifically incorporating such a provision."
10. In the instant case, the allegations are directed only against the petitioner. The evidence gathered by the Investigating Officer also disclose that the proceeds of the crime were credited to the joint account of the petitioner and not of the firm. The role played by the petitioner has been narrated. It is not the case of the respondent that the alleged acts were committed by the petitioner for and on behalf of the company. He is not prosecuted in his capacity as the partner of the firm because he was a partner. Therefore, the contention of the petitioner that the prosecution launched against him is bad for non-prosecution of the firm or the company does not hold water.
11. Even with regard to the cognizance, it is noticed that the learned Special Judge has taken cognizance of the alleged offences based on the complaint filed by the authorized officer under Section 200 of Cr.PC and on consideration of the material produced in support of these allegations. As such, I do not find any error or illegality in the impugned order or in the proceedings initiated against the 8 petitioner warranting interference under Section 482 of Cr.PC. Consequently, the petition being devoid of merits is liable to be dismissed and accordingly is dismissed.
In view of dismissal of main petitions, all pending I.As, if any, are also dismissed.
Sd/-
JUDGE BMV*