Orissa High Court
Pankaj Kumar vs State Of Odisha And Others ......... ... on 28 January, 2020
Equivalent citations: AIRONLINE 2020 ORI 44
Author: B.R.Sarangi
Bench: B.R.Sarangi
ORISSA HIGH COURT: CUTTACK
CRLMP No. 417 of 2016
In the matter of an application under Articles 226 & 227 of the
Constitution of India.
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Pankaj Kumar ......... Petitioner
-versus-
State of Odisha and others ......... Opp. Parties
For Petitioner : M/s. S.P. Sarangi,
P.P. Mohanty and P.K. Dash,
Advocates.
For Opp.Parties : Mr. B. Senapati,
Addl. Government Advocate
PRESENT:
THE HONOURABLE DR. JUSTICE B.R.SARANGI
Date of hearing: 22.01.2020 :: Date of judgment : 28.01.2020
Dr. B.R.Sarangi, J. By means of this application, the
petitioner, who was appointed as Mines Manager for
operation of the mines under Sections 17 and 18 of the
Mines Act, 1952, has approached this Court to quash the
order dated 04.12.2014 passed by the learned J.M.F.C.,
Barbil in 2(b) CC No.20 of 2014 under Annexure-10 taking
cognizance of the offence under Section 27 (3) (b) and (c)
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of the Orissa Forest Act, 1972 and also to quash the
proceeding initiated against him.
2. The prosecution story as revealed from the FIR
is that the original mining lease was granted for a period of
30 years over an area of 1437.719 hectors w.e.f.
17.01.1933 to 16.01.1963 and the said lease deed was
executed on 17.01.1933 and registered for the area such
as, Joda West, Khondbond and Katamati in faovur of the
then Maharaja, Keonjhar. The first renewal of Joda West
mining lease was granted for the period from 17.01.1963 to
16.01.1983 for a period of 20 years. Similarly, the second
renewal was granted for a period of 20 years w.e.f.
17.01.1983 to 16.01.2003 and the said lease deed was
executed on 27.10.1984. Before expiry of the aforesaid 20
years period, the Joda West Iron Ore & Manganese Mine of
M/s Tata Steel Limited submitted necessary application on
07.12.2001 for third renewal of mining lease, but the said
application was not disposed of within the prescribed period.
Therefore, the lease period was extended by virtue of Rule
24-A (6) of Mineral Concession Rules, 1960 until such time
the State Government decides the renewal application.
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2.1 On 21.04.2014, the apex court in the case of
Goa Foundation v. Union of India, (2014) 6 SCC 590,
held that the provisions for deemed extension of a mining
lease under Rule 24-A (6) of the Mineral Concession Rules,
1960 cannot apply to a renewal under Section 8(3) of the
MMDR Act, 1957, i.e., for second and subsequent renewals.
Following the case of Goa Foundation mentioned supra,
the apex Court in W.P. (C) No. 114 of 2014 passed order on
16.05.2014 holding that unless "Express Orders" are issued
under Section 8(3) of the MMDR Act, 1957, mining shall
remain suspended in cases of second and subsequent
renewals. As such, the Government of Odisha was directed
to dispose of all the renewal applications within six months,
i.e., by 16.11.2014. In pursuance thereof, on 17.05.2014,
the company received letter from the Deputy Director of
Mines, Joda Circle directing it to stop mining operations in
its Joda West and Manganese Mine, in view of the order of
the apex Court dated 16.05.2014 passed in W.P.(C) No.114
of 2014 directing suspension of mining operations in all
leases under the second and subsequent renewal stage,
which were operating on the basis of Rule-24 A(6). On
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31.05.2014, the State Government issued fresh express
orders under Section 8(3) of the MMDR Act in respect of
Joda West Iron Ore & Manganese Mines. Accordingly, the
company was allowed to resume the mining operation w.e.f.
01.06.2014.
2.2 Opposite party no.2-Divisional Forest Officer,
vide letter dated 26.07.2014 addressed to the Head
(Manganese Group of Mines) of M/s Tata Steel Limited,
issued show cause notice for violation of Section 27 and
Section 81(4) of Orissa Forest Act, 1972, as well as and
Section 2 of Forest (Conservation) Act, 1980. In compliance
of the same, reply was submitted before the DFO by the
company through Head (Manganese Group of Mines) on
01.08.2014. But, without taking the fact in proper
perspective, the Forest Range Officer, Champua lodged
written complaint on 13.11.2014 stating inter alia that
Hon'ble Justice M.B. Shah, Commission of Inquiry on illegal
mining in the State of Odisha has reported vide Annexure-
III (A) of the report submitted to Government of India, that
illegal production of ore has been taken up by the lessees in
their lease hold area over periods in absence of approval
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under Section 2 of Forest (Conservation) Act, 1980.
Production of ore in the mining lease in forest land in
absence of requisite forest clearance amounts to violation of
Section 2 of Forest (Conservation) Act, 1980. The Divisional
forest Officer, Keonjhar, vide letter dated 23.07.2014,
instructed to take immediate legal action under Orissa
Forest Act, 1972 for illegal production of ore from forest
land in absence of required approval under Section 2 of the
Forest Conservation Act, 1980 pursuant thereto, Forest
Range Officer, along with Forest In-charge, Joda, namely,
Bijaya Kumar Mohanta on 04.08.2014 made an inquiry and
convinced that illegal production of iron ore has been taken
up by the lessee without required forest clearance and,
therefore, FIR No.281616/2550 dated 04.08.2014 was
drawn for mining in forest without any authority, thereby
violating section 27(3)(b) and (c) of Orissa Forest Act,
1972, as amended during 2006, and registered OR Case
No.83 of 2014-15 and taken up investigation of the case as
per Rule 4 (2) of the Orissa Forest (Detection, Enquiry and
Disposal of Forest Offences) Rules, 1980. In the said report,
the illegal periods of mining operation were shown to be
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(1)17.01.1983 to 16.01.2003, (2) 17.01.2003 to
11.05.2004, (3) 12.05.2005 to 17.07.2005, (4) 18.01.2006
to 22.01.2006 and (5) 23.07.2006 to 10.08.2007.
Accordingly, prayer was made for issuance of non-bailable
warrant against the accused person for commission of
offence amounting to blatant violation of the law of the
land. Consequentially, 2(b) CC No.20 of 2014 was instituted
in the court of learned J.M.F.C., Barbil, who in turn, vide
order dated 04.12.2014, took cognizance of offence under
Section 27(3) (b) and (c) of the Orissa Forest Act, 1972 and
issued non-bailable warrant against the accused person
showing absconded. Hence this application.
3. Mr. S.P. Sarangi, learned counsel for the
petitioner argued with vehemence and contended that lease
has been granted in favour of Joda West Iron Ore and
Manganese Mine of M/s Tata Steel Limited in which the
petitioner joined as a Manager on 16.08.2013. The illegal
period of mining, as revealed from the prosecution report,
covers for the period from 17.01.1983 to 10.08.2007 during
which period the petitioner was not in employment. In the
FIR lodged wherein the name of the petitioner has been
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shown as accused and father's name of the petitioner has
been shown as "Joda West Manganese Mines of Tata Steel
Limited", which is evident at page-53 of the application, and
more particularly the company has not been made as a
party. Therefore, the proceeding against the officer, namely,
the present petitioner is not maintainable. It is contended
that if there was no vicarious liability, in that case, the
offence alleged against the petitioner cannot be attracted.
Therefore, taking cognizance against the present petitioner
by the learned JMFC on 04.12.2014 was an outcome of non-
application of mind, particularly when there was no
allegation against the petitioner. It is further contended that
as per the provisions contained under Section 27(3)(b) and
(c) "any person" violates, action should have been taken,
but as the company against whom the allegations have
been made having not been made party to the proceeding,
the proceeding so initiated against the petitioner cannot
sustain in the eye of law.
To substantiate his contention, learned counsel
for the petitioner has relied upon the judgments of the apex
Court as well as of this High Court in the cases of S.K.
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Alagh v. State of Uttar Pradesh, (2008) 5 SCC 662;
Sharad Kumar Sanghi v. Sangita Rane, (2015) 12 SCC
781; Odisha Mining Corporation Ltd. V. State of
Odisha, 2019 SCC Online Ori 293; and Hari Charan Gupta
v. State of Orisssa, WPCRL No.1215 of 2011 disposed of
on 31.01.2012.
4. Per contra, Mr. B. Senapati, learned Addl.
Government Advocate contended that a prima facie case is
made out against the petitioner for commission of offence
under Section 27(3) (b) and (c) of the Forest Act, 1972.
Before taking cognizance, notice was issued to the
petitioner calling upon him to give reply and, as such, on
submission of such reply since a case under Section 27(3)
(b) and (c) of the Forest Act, 1972 was made out, to afford
further opportunity, another notice was issued to the
petitioner on 04.11.2014, to which the petitioner did not
reply, and thereby it can be safely presumed that the
petitioner is indulged in illegal mining which violates the
provisions contained under Section 27(3) (b) and (c) of the
Forest Act. Therefore, investigation was carried on and
complaint was lodged by the Forest Range Officer, which
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was treated as FIR and accordingly cognizance was taken by
the Magistrate on 04.12.2014. As such, investigation in the
matter has not yet been concluded and the same is still
continuing. Therefore, the Magistrate is well justified in
taking cognizance against the petitioner for violation of the
provisions contained under section 27(3) (b) and (c) of the
Forest Act. It is contended that whatever contention raised
by learned counsel for the petitioner, being subject matter
of trial, this Court should not interfere with the same at this
stage of cognizance and this Court should allow the court
below to proceed with the matter by vacating the interim
order passed on 11.05.2016.
5. This Court heard Mr. S.P. Sarangi, learned
counsel for the petitioner; and Mr. B. Senapati, learned Addl.
Government Advocate and perused the record. Pleadings
having been exchanged, with the consent of learned counsel
for the parties, this application is being disposed of finally at
the stage of admission.
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6. For just and proper adjudication of the case,
the relevant provisions contained in Section 27(3) are
quoted below:-
"27. Offences - (1) The person who-
xxx xxx xxx
(3) Any person sets fire to a reserved forest or
who in a reserved forest-
xxx xxx xxx
(b) quarries stone, burns lime or charcoal or
collects, subjects to manufacturing process or removes
any forest produce;
(c) clears or breaks up any land for cultivation or
for any other purpose, or cultivates or attempts to
cultivate any land in any manner or puts up any sheds or
other structure; or
xxx xxx xxx
shall be punishable with imprisonment for a term which
shall not be less than three years but may extend to
seven years and with fine which may extend to ten
thousand rupees."
7. On perusal of the aforesaid provisions, it is
made clear that any person who in a reserved forest
quarries stone or removes any forest produce, clears or
breaks up any land any other purpose, shall be punishable
with imprisonment for a term which shall not be less than
three years but may extend to seven years and with fine
which may extend to ten thousand rupees. Admittedly, the
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company, i.e., Joda West Iron Ore and Manganese of Tata
Steel Limited undertaken the mining operation in accordance
with the terms and condition of mining lease deed and
whatever mineral produced and dispatched from the
leasehold area was in accordance with the
permission/permit/orders issued by the competent
authority/courts and the company has also paid royalty,
taxes and other statutory dues in respect of the said
mineral. May be the company may come within the fold of
"any person" as provided under section 27 (3) (b) and (c) of
the Act itself, but the petitioner was appointed as Manager
on 16.08.2013 and he was not an officer during the period in
which allegations have been made for illegal mining, i.e.,
17.01.1983 to 10.08.2007, more particularly there was no
specific role attributed in the entire complaint against the
petitioner alleging contravention of any provisions of law. As
such, the complaint does not indicate any role played by the
petitioner in the alleged commission of offence either in his
individual capacity or any official capacity. But fact remains,
there was allegation of contravention by the company, i.e.
user agency. It is specifically contended that the company
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has extracted minerals without any forest clearance during
the periods from 17.01.1983 to 17.07.2005, 18.01.2006 to
22.01.2006, and 23.07.2006 to 10.08.2007 within Joda
West Iron Ore and Manganese of Tata Steel Limited for
which mining lease was granted to the company. The
company was engaged in the business of mining through
certain mining lease granted by the State Government of
Odisha and once such mining lease has been granted and
operation was undertaken in contravention thereof, as
alleged, may be against the company not against the
petitioner individually and more so the offence alleged to be
committed relates to the period from 1983 to 2007.
Therefore, without giving any explanation for delay, the
allegation made against the petitioner cannot sustain, as the
delay defeats the present complaint particularly when there
was no provision in the Act or Rules itself stipulating any
vicarious liability on the company for the alleged violation by
the company.
8. In Sabitha Ramamurthy v. R.B.S.
Channabasavaradhya, (2006) 10 SCC 581, which is case
under negotiable Instruments Act, 1981, the factual matrix of
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the said case is that two complaint petitions were filed by the
respondent therein describing appellants therein as accused
6 and 8. In the said complaint petitions it was stated that the
company, which had been dealing with imparting of
computer education in rural areas, borrowed a sum of
Rs.2,25,000 from the respondent on an interest of 24% per
annum. Towards payment of the said loan the accused had
issued two cheques allegedly on behalf of the company on
23.06.2001 and 30.06.2001 for a sum of Rs.1,24,406/- each,
in favour of the respondent , which upon being presented
were dishonoured, as the company did not have sufficient
funds. The appellants were not the Directors of the said
company at the material time. It was submitted by the
complainant that the accused persons failed to clear the
liability. It was further submitted that the accused, being the
company, all the Directors were responsible for the clearance
of liability under Section 141 of the Negotiable Instruments
Act and that the acts and deeds of the accused persons were
punishable under Section 138 of the Negotiable Instruments
Act. Process were directed to be issued on the said statement
for alleged commission of an offence under Section 138 of
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the Negotiable Instruments Act. The appellants filed an
application under Section 482 Cr.P.C. praying for quashing of
the process issued against them in the said proceeding and
the High Court dismissed the said application. But, the apex
Court allowed the said appeal and, while allowing the appeal,
held as follows:-
"A bare perusal of the complaint petitions demonstrates
that the statutory requirements contained in Section 141
of the Negotiable Instruments Act had not been complied
with. It may be true that it is not necessary for the
complainant to specifically reproduce the wordings of the
section but what is required is a clear statement of fact
so as to enable the court to arrive at a prima facie
opinion that the accused are vicariously liable. Section
141 raises a legal fiction. By reason of the said provision,
a person although is not personally liable for commission
of such an offence would be vicariously liable therefor.
Such vicarious liability can be inferred so far as a
company registered or incorporated under the
Companies Act, 1956 is concerned only if the requisite
statements, which are required to be averred in the
complaint petition, are made so as to make the accused
therein vicariously liable for the offence committed by
the company. Before a person can be made vicariously
liable, strict compliance with the statutory requirements
would be insisted upon. Not only the averments made in
the complaint petitions do not meet the said statutory
requirements, the sworn statement of the witness made
by the son of the respondent herein does not contain any
statement that the appellants were in charge of the
business of the company. In a case where the court is
required to issue summons which would put the accused
to some sort of harassment, the court should insist upon
strict compliance with the statutory requirement."
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9. In S.K. Alagh mentioned supra, taking into
consideration the law laid down in Sabitha Ramamurthy
(supra), the apex Court in paragraph-19 held as follows:-
"19. As admittedly, drafts were drawn in the name
of the Company, even if the appellant was its
Managing Director, he cannot be said to have
committed an offence under Section 406 of the
Penal Code. If an when a statute contemplates
creation of such a legal fiction, it provides
specifically therefor. In absence of any provision
laid down under the statute, a Director of a
Company or an employee cannot be held to be
vicarious liable for any offence committed by the
Company itself." (Emphasis supplied)
10. In Keki Hormusji Gharda v. Mehervan Rustom
Irani, (2009) 6 SCC 475, the apex Court held as follows:-
"The Penal Code, 1960 save and except in some
matters does not contemplate any vicarious
liability on the part of a person. Commission of an
offence by raising a legal fiction or by creating a
vicarious liability in terms of the provisions of a
statute must be expressly stated. The Managing
Director or the Directors of the Company, thus,
cannot be said to have committed an offence only
because they are holders of offices. The learned
Additional Chief Metropolitan Magistrate, therefore,
in our opinion, was not correct in issuing summons
without taking into consideration this aspect of the
matter, the Managing Director and the Directors of
the Company should not have been summoned
only because some allegations were against the
company." (Emphasis supplied)
In Maksud Saiyed v. State of Gujarat, (2008) 5 SCC
669, the apex Court held as follows:-
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"The Bank is a body corporate. Vicarious liability of
the Managing Director and Director would arise
provided any provision exits in that behalf in the
statute. Statutes indisputably must contain
provision fixing such vicarious liabilities. Even for
the said purpose, it is obligatory on the part of the
complainant to make requisite allegations which
would attract the provisions constituting vicarious
liability."
Taking into consideration the law laid down in Keki Hormusji
Gharda and Maksud Saiyed mentioned supra, this Court in
Hari Charan Gupta (supra) held as follows:
"In the Orissa Forest Act, there is no provision of
fixing vicarious liability. So the petitioner cannot be
vicariously liable for the offence under Section 27
(3) (a) and (c) of the Orissa Forest Act".
By holding so, this Court allowed the WPCRL and quashed the
criminal proceeding initiated against the petitioner therein in
2 (c) CC No.11 of 2011 pending in the court of learned JMFC,
Barbil.
11. Applying the above principles and law laid
down by the apex Court, as well as of this High Court to the
present case, since there is allegation against the company
and, as such, not against the petitioner, in absence of any
express provisions creating vicarious liability, no prosecution
could have been lodged against the petitioner particularly
when the vicarious liability of an offence has not been
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provided in the Forest offence. In absence of allegations of
conspiracy in the case, which is simply futile to proceed with
the criminal proceeding against the petitioner on a principle of
vicarious liability when the concept does not exist in the
Orissa Forest Act and more particularly the period for which
the offence alleged to have been committed, the petitioner
was not in employment.
12. In Aneeta Hada v. Godfather Travels and
Tours Private Limited, (2012) 5 SCC 661, while considering
the provisions contained in Negotiable Instruments Act with
regard to criminal liability for dishonor of cheque drawn by
company, the apex Court held that extent of deeming fiction
in Section 141 is mandatory requirement of impleading
company as one of the accused. Therefore, prosecution
against, without arraigning company as accused, not
maintainable.
13. In Sharad Kumar Sanghi (supra), the apex
Court held that initiation of criminal proceedings against the
Managing Director or any officer of company, the pre-
requisite was that, where company had not been arrayed as a
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party to the complaint, criminal proceedings initiated against
the Managing Director were not maintainable and more so
where there was no specific allegation against him and even
the allegations made were of vague nature. Further, the apex
Court taking into consideration the law laid down in Aneeta
Hada (supra) in paragraph-11 held as follows:-
"11. In the case at hand as the complainant's
initial statement would reflect, the allegations are
against the company, the company has not been
made a party and, therefore, the allegations are
restricted to the Managing Director. As we have
noted earlier, allegations are vague and in fact,
principally the allegations against the company.
There is no specific allegation against the
managing Director. When a company has not been
arrayed as a party, no proceeding can be initiated
against it even where vicarious liability is fastened
under certain statutes." (Emphasis supplied)
Similar view has also been taken by this Court in Odisha
Mining Corporation Ltd. mentioned supra.
14. In view of such position, it appears that the
complaint lodged against the petitioner does not disclose any
offence against him. Therefore, in view of the law laid down
by the apex court in the case of State of Haryana v. Bhajan
Lal, 1992 Supp (1) SCC 335 that a prosecution which is
based on complaint and does not disclose any offence or is
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absurd or prohibited by legal bar or mala fide, is bound to be
quashed and set aside.
15. In view of the law discussed above, this Court is of
the considered opinion that the criminal proceeding so
initiated against the petitioner in 2(b) CC No.20 of 2014
pending in the court of learned J.M.F.C., Barbil is liable to be
quashed and the same is hereby quashed. Consequentially,
the order dated 04.12.2014 passed by the learned J.M.F.C.,
Barbil taking cognizance of the offence under Section 27 (3)
(b) and (c) of the Orissa Forest Act, 1972 is also quashed.
16. The CRLMP is accordingly allowed. No order to
costs.
.............................
Dr.B.R.Sarangi, J.
Orissa High Court, Cuttack The 28th January, 2020/Ashok/GDS