Orissa High Court
Dipti Ranjan Patnaik & Another vs State Of Odisha (Vigilance) :::: ... on 27 November, 2020
Equivalent citations: AIRONLINE 2020 ORI 183
Author: D. Dash
Bench: D.Dash
HIGH COURT OF ORISSA : CUTTACK
CRLREV NO. 831 OF 2018
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In the matter of a revision under section 457 of the Code of
Criminal Procedure and from the order dated 28.07.2018 passed
by the learned Special Judge (Vigilance), Keonjhar in VGR Case
No. 59 of 2009 (T.R. Case No. 80 of 2011).
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Dipti Ranjan Patnaik & Another :::: Petitioners.
-::: VERSUS :::-
State of Odisha (Vigilance) :::: Opposite Party.
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Advocate(s) who appeared in this case by Video Conferencing mode:
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For Petitioners :::: M/s. Sarada Prasanna
Sarangi, P.K. Dash,
S. Mohanty, P.K. Dash,
S. Mohanty, Advocates.
For Opp. Party :::: Mr. Sangram Das,
Addl. Standing Counsel,
Vigilance Department.
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PRESENT:
THE HONOURABLE SHRI JUSTICE D.DASH
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Date of Judgment ::: 27.11.2020
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D.Dash,J. The petitioners by filing this revision have assailed an
order dated 28.07.2018 passed by the learned Special Judge
(Vigilance), Keonjhar in VGR Case No. 59 of 2009 (T.R. Case
No. 80 of 2011). By the said order, the petition filed by the
// 2 //
petitioners who have been arraigned as accused persons
therein for their discharge has been rejected. Thus, the legality
and propriety of the said order whereby and whereunder, the
court below has presumed the existence of a prima facie case
against these petitioners for commission of offence under
section 13(2) read with section 13(1)(d) of the Prevention of
Corruption Act, 1988 (for short, "the P.C. Act") and under
section 420/379/120-B of the Indian Penal Code, 1860 (in
short "the IPC") as well as section 21 of the Mines and Minerals
(Development & Regulation) Act, 1957 (hereinafter, called as
"MMDR Act") has been called in question.
2. The factual exposition necessary for the purpose
are briefly stated as under:-
The petitioner no. 2 is the lessee of Unchabali Iron
and Manganese Mines situated in the revenue village
Unchabali in the District of Keonjhar, Odisha. The petitioner
no. 1 is the General Power of Attorney holder of petitioner no. 2
who as such had executed the mining lease-deed on
05.02.1999 which had been granted in favour of the petitioner
no. 2. The mining operation in the said mines commenced after
the mining plan was approved by the Indian Bureau of
Mines(IBM) as provided under section 5(2)(b) of the MMDR Act.
// 3 //
The petitioners are thereby duly authorized to mine the iron
ore and undertake the mining activities.
3. (a) On 24.09.2009, a joint physical inspection of the
said mines was made by a team led by the Vigilance
Authorities, consisting of Technical Experts such as Engineers,
and the Officials of Revenue as well as Mining Departments.
On 02.12.2009, a written information was lodged by the
Deputy Superintendent of Police, Vigilance Cell, Cuttack
pointing out there in certain illegalities / irregularities /
deviations / deficiencies. That being treated as First
Information Report (FIR) has led to the registration of Balasore
Vigilance P.S. Case No. 59 of 2009 and commencement of
investigation thereof.
(b) On completion of investigation, the Vigilance
Department submitted charge-sheet on 02.11.2010 placing the
petitioners and others for trial for commission of offence under
section 13(2) read with section 13(1)(d) of the PC Act, section
420/379/120-B of the IPC as well as section 21 of the
M.M.D.R. Act. The charge-sheet being filed in the Court of
learned Chief Judicial Magistrate, Balasore, the record was
transmitted to the learned Special Judge (Vigilance), Balasore
leading to registration of T.R. Case No. 44 of 2010. The learned
// 4 //
Special Judge (Vigilance), Balasore on receipt of the record and
upon perusal of the charge-sheet, took cognizance of above
offences by its order dated 06.12.2010. Subsequently, the said
case has been transferred to the Court of learned Special
Judge (Vigilance), Keonjhar when it was so established and
vested with the power to try such offences having the
jurisdiction over the area; where the above stated mines
situate.
4. The joint inspection had been conducted in view of
receipt of certain allegations regarding the carrying of illegal
mining activities in that mines, leased out in favour of
petitioner no. 2 who was acting through her power of attorney
holder-petitioner no. 1. It may be mentioned here that one
raising contractor had been duly engaged by the lessee for a
period of one year with the clause of renewal.
During inspection, physical verification of the stock
was made and the statements to that effect have been
prepared. Similarly, physical verification of the pits and the
measurement of the volume excavated from the pits said to
have been dug, the statement as to the total volume excavated
with the map showing the pits have been recorded.
// 5 //
5. The accusations, as per the prosecution version
constituting the factum of commission of the offences by them
are as under:-
(a) that the total production of iron ore of
different grades comes to 29,18,431.00 MT till
24.09.2009 i.e. the date of joint physical
verification against dispatch of 24,31,225.130
MT. Thus, there should be closing stock (Book
Balance) of 4,87,205.870 MT as on
24.09.2009;
(b) that the Dy. Director of Mines, Joda from
04.07.2005 to 10.08.2009 has allowed
dispatch of the excess iron ore in connivance
with the Senior Inspector of Mines working as
such from 23.06.2006 to 03.07.2009 and the
other Senior Inspector, Mines from since
06.07.2009 to 24.09.2009;
(c) these officials visited the mining site from
time to time, and certified the dispatch of the
iron ore despite the fact that huge quantity of
iron ore have been brought from outside of
the mining lease area;
(d) on 24.09.2009, the day of joint verification,
the physical stock of iron ore were found to be
1,82,637.695 MT against the closing balance
of 4,87,205.870 MT as on 24.09.2009; thus, a
shortage of 3,04,568.170 MT of iron ore as on
24.09.2009, costing Rs.6000/- per MT, which
has been clandestinely disposed off by the
// 6 //
petitioners without disclosing about the same
in any official records;
(d) the amount royalty and Sales Tax against the
above quantity of iron ore having not come to
the State exchequer; the petitioners have thus
cheated the State;
(e) that up to the date of joint physical
verification, the total dispatch was of
Rs.24,31,225.130 MT as against the total
production of iron ore from the excavated pit
around 8,49,589.560 MT as confirmed by the
expert opinion which shows that the
petitioners in connivance with the public
servant and the raising contractor have
shown dispatch of the excess quantity of
15,81,635.57 MT (24,31,225.130 MT -
8,49,589,560 MT) which have not been
excavated from the mining leasehold are and
the same quantity has been unlawfully
procured amounting to theft;
Further, that the petitioners have
fabricated records in the sale of the iron ore
for which the Asst. Commissioner of
Commercial Taxes (Vigilance) has assessed
payment of huge sum of sales Tax remaining
unpaid.
6. The petitioners before the trial court in filing the
petition raised several issues explaining the allegations on the
// 7 //
factual aspects as attributed to them relating to commission of
offences as well as the legal issues in support of their prayer
for discharge. Those being culled out from the averments of the
said petition are stated as under:-
(I) that on the date of joint verification nor on the
date of lodging of the F.I.R. which has
triggered the investigation as the allegations
made therein revealed commission of
cognizable offences, the Vigilance Authorities
were not empowered either by the Central
Government or the State Government to
investigate in relation to any offence under
the MMDR Act and that having been made
only on 27.01.2010 by a notification of the
State Government, the F.I.R. as well as the
charge-sheet submitted against the
petitioners on completion of investigation
stand vitiated;
(II) that the joint inspection having been made on
24.09.2009 and the F.I.R. based on the facts
said to have been ascertained during the joint
inspection when has been filed on
02.12.2009, and as by the time the Vigilance
Authorities were not empowered under the
provisions of the MMDR Act to conduct any
investigation with regard to Mining Lease, the
final outcome that is the charge-sheet cannot
form the foundation for the trial of the
// 8 //
petitioners for the offences as indicated
therein;
(III) that the figures as to the production of the
minerals in the Mines for the period as also
the quantity of the minerals dispatched find
well reflected in the record of the Deputy
Director, Mines as can be seen from the
information received under the Right to
Informations Act which are public documents;
the allegations as to clandestine sale of iron
ore by the petitioners avoiding the payment of
royalty and sales tax falls flat;
that, on simple evaluation of the
documents from the records maintained in
the office of the concerned Deputy Director,
Mines; further allegation that the petitioners
had indulged in illegal mining activities in
violation of the terms and conditions of the
Mining Lease agreement and in contravention
of the provision of section 4 of the MMDR Act
is not per se acceptable nor those give rise to
strong suspicion in the direction of and in
support of the said allegations.
(IV) that based on the F.I.R. and charge-sheet,
upon which the court has taken cognizance of
the offences and issued process to the
petitioners, the Department of Steel and
Mines, Government of Odisha demanded a
sum of Rs. 11,31,72,22,470.00 under notice
// 9 //
dated 25.11.2010. The said demand was
based on the same sets of allegations /
accusations/ assertions as made in the F.I.R.
and charge-sheet. A revision as provided
under the MMDR Act read with the Rules
made thereunder being filed in questioning
the said demand as well as the consequential
actions as stated therein as to determination
of the mining lease and forfeiture of the
security deposit in the event of non-payment
of the said amount to make good or remedy
the breach of conditions within sixty days of
receipt of notice; said revision i.e. R.A. No.
22(22)/2010 / RC-1 has been allowed and the
demand as well as the above consequential
actions in case of failure has been quashed.
And that order of Revisional Authority having
been challenged by the State by filing a writ
application numbered as W.P.(C) NO. 10219
of 2012; the order of the Revisional Authority
has been upheld by a judgment passed on
08.08.2016. In view of the fact that these
developments have taken place subsequent to
the submission of the charge-sheet, the court
cannot ignore those from being taken into
consideration in their proper perspective so as
to judge their legal impact in deciding the
question of framing the charge for the trial to
commence.
// 10 //
(V) In addition to the above, the petitioners have
gone to deny each of the factual aspect
pointed out by the prosecution in great detail
in asserting that actually none of the offences
of which cognizance has been taken is made
out against them for being charged in the case
to face the trial.
7. The prosecution has filed the objection to the above
petition in opposing the move for discharge of the petitioners,
stating the followings:-
(i) that the Officers above the rank of Inspector
of Police, Vigilance Department having been
empowered to enquire/ investigate into the
allegations of corruption made by the public
servants and other coming within the ambit of
the P.C. Act and as during investigation as
such criminal misconduct has been found
out, when the charge-sheet has been filed
against the public servants, the petitioners
and the raising contractor, there is no such
illegality or irregularity and therefore all said
actins right from lodging of F.I.R. till
submission of charge sheet are legally valid;
(ii) that the records of the concerned Deputy
Director of Mines as well as the raising
contractor showing production and dispatch
of the quantity of minerals during the period
have been duly taken into account in course
of investigation;
// 11 //
(iii) that during the joint physical inspection and
verification on 24.09.2009, the physical stock
of the minerals were taken as against the
closing balance as on 24.09.2009. It is
however stated that the documents obtained
from the office of the Deputy Director of Mines
in shape of the informations being sought for
under the RTI Act require proof during the
trial and now the case has to proceed on the
basis of the informations provided in the
charge-sheet and the supporting documents
annexed thereto;
(iv) on the contention of the petitioners on the
averments taken at paragraph-9 of the
decision as to disposal of the revision by the
Revisional Authority under the MMDR Act in
their favour quashing the demand and
consequential action upon failure based on
same sets of factual settings as indicated in
that joint inspection report and the final
charge-sheet as also its confirmation by the
Hon'ble High Court in the move by the State
in questioning the said order of the Revisional
Authority, nothing is stated in the objection in
saying that such orders have either no factual
or legal impact in the criminal trial.
Rather, all those factual aspects said to
have been found out or ascertained during
joint inspection and as noted in the report as
// 12 //
also in course of investigation based on which
charge-sheet has been filed are again
narrated.
It is then stated that the materials
collected during joint inspection as also
subsequent thereto during investigation make
out a case for commission of offences
indicting the petitioners for facing the trial as
to commission of said offences instead of
being discharged.
8. The trial court in its order dated 26.07.2018 which
has been impugned in this revision having noted the
submissions of the learned counsel for the petitioners as well
as the Special Public Prosecutor, first of all has gone to narrate
the facts as stated in the charge-sheet. It has thereafter
discussed the principle of law as to what are the considerations
for framing the charges. In doing so, the learned court below
has noted few decisions of the Apex Court and quoted the
relevant portions from those judgments rendered under the
subject. Having proceeded in the exercise to the above extent,
further coming to examine the materials on record keeping in
view the rival submissions and in the backdrop of the settled
principle of law, the followings have been said:-
// 13 //
"From the joint inspection report, it prima facie reveals
that there was excess quantity of dispatch than the
production of iron ore from excavated pit and the
permission granted for dispatch. Though Indrani
Pattanaik has executed a General Power of Attorney in
favour of Dipti Ranjan Pattnaik but she was issuing
different letters to different authority in connection
with her mining lease. As per the principle decided by
the Hon'ble Apex Court in the above cited decisions, a
charge can be framed if on the basis of the material on
record, the court forms an opinion that the accused
might have committed the offence. The accused
persons may have a good case to agitate but this is not
the stage where the same should be analyzed. The
proof which is to be applied finally before finding the
accused guilty or otherwise is not exactly to be applied
at the stage. If there is material that the allegation is
not groundless so the charge can be framed.
Section 21 of MMDR Act provides no cognizance
can be taken if the complaint has not been filed by the
competent authority. The Govt. of Orissa issued the
gazette notification on 14.01.2010 authorizing the
officers above the rank of Inspector of police posted
under Directorate Vigilance Orissa to conduct
investigation, inquiry or can take legal action under
MMDR Act. In this case cog. was taken on 6.12.2010
and prior to that there was government notification
authorizing the officers above the rank of Inspector of
vigilance department to conduct the investigation
under MMDR Act. In this case F.I.R. has been filed by
Dy. Superintendent of Police, Vigilance Cell, Cuttack
and charge sheet has been submitted by Dy.
Superintendent of Police, Vigilance Cell Unit,
Bhubaneswar. So, on no illegality has been committed
// 14 //
by taking cognizance in this case u/s.21 of MMDR
Act.
In view of the above facts and circumstance and
the principles decided by the Hon'ble Apex Court, the
petition filed by the accused persons being devoid of
any merit stands rejected. "
9. Learned Counsel for the petitioners in course of
hearing advanced his submissions in reiterating the points
raised before the trial court for discharge of the petitioners in
their petition and further highlighted those with reference to
the relevant documents.
He submitted that the allegations as to clandestine
mining by the petitioners and dispatch of minerals without
extracting those from within the mines area but outside when
run contrary to the records maintained in the office of
concerned Deputy Director, Mines and as royalty has been
fully paid and all the dispatch of minerals are backed by
required transit permits; the allegations made by the
prosecution are wholly baseless and fall flat; thus prima facie
not acceptable to be taken cognizance of or even enough to
raise strong suspicion in that respect.
He further submitted that the prosecution has
simply made wild allegations attributing illegal mining
activities by the petitioners not only in their mines but also in
// 15 //
the periphery without even indicating any such place or places
when admittedly by the time of joint inspection, the mining
operation in that mines had stretched over years. In this
connection inviting the attention of this Court to the
observation of the learned trial court that accused having a
good case to agitate is a matter to be examined and considered
in the trial but not at the stage of framing charge, he urged
that having said so, the learned court below ought to have
allowed the prayer for discharge of the petitioners as with such
stated basic facts, it would be sheer abuse of process to place
the petitioners for trial.
He then with vehemence submitted that here in the
case on the same sets of allegations touching the factual
aspects as are said to have been found out during joint
inspection which form the basis of the F.I.R. and further
investigation as have been finally so asserted in the charge-
sheet; there was a proceeding in the Department of Steel and
Mines in the Government of Odisha wherein the petitioner no.2
was asked to pay a sum of Rs. 11,31,72,22,470.00 within a
period of 60 (sixty) days or else to suffer from fatal legal
consequences. In that matter, as provided in law, the petitioner
no.2 having carried a revision; that has been decided on merit
// 16 //
and the proceeding stood quashed by order dated 16.01.2012
under Annexurer-31. He submitted that the State being
aggrieved by the said order had questioned its legality and
sustainability both on fact and law by carrying the matter in a
writ application to the Hon'ble High Court vide W.P.(C) No.
10219 of 2012; wherein the order of the Revisional Authority in
every respect has been upheld under judgment dated
08.08.2016 as at Annexure-32. He submitted that said order of
the Revisional Authority as confirmed by the Hon'ble High
Court has attained finality being not further challenged. He
therefore, submitted that when that very proceeding before the
Government in the Department of Steel and Mines, based upon
all those accusations made in the charge-sheet has been
quashed exonerating the petitioners from being visited with
any penal consequences concerning the operation of the mines
in question, no charge can be framed for trial of the offences
indicting the petitioners to have been so committed by them,
on those very same sets of allegations culled out and inferred
from what have been said to have been noticed during joint
inspection and the records prepared in the subsequent
investigation made thereto. According to him, the criminal trial
under the circumstance is abuse of process as the charges
// 17 //
have now to be said to be groundless. He contended that on
this ground alone the impugned order of the learned Special
Judge unsustainable. He placed reliance upon the decision of
the Hon'ble Apex Court in case of Radheshyam Kejriwal Vrs.
State of West Bengal and Another; (2011) 3 SCC 581 in support
of said limb of his contention. Thus he contended that besides
the grounds urged as above even on this lone ground, the
impugned order rejecting the application of the petitioners for
their discharge in the case and holding that prima facie case is
made out for framing charge for the offences as above noted
could not be sustained in the eye of law.
10. Learned Addl. Standing Counsel, Vigilance citing
recent decision of the Hon'ble Apex Court in case of M.E.
Shivalinga Murty Vrs. CBI, Bengalore & Sevreal Others; (2020) 2
SCC 768 as well as few others first of all placed the scope of
consideration and the matters required to be looked into at the
time of framing the charge. He submitted that in the obtained
facts and circumstances, no case for discharge of the
petitioners is made out. He, therefore, submitted that the trial
court has rightly passed the order as the grounds raised or the
case projected by the petitioners for their discharge are not
// 18 //
permissible to be considered at that stage, although the same
would stand for their due consideration in the trial.
He submitted that the finding in the revision by the
Revisional Authority under the MMDR Act as also in the writ
do not either operate as estoppel or resjudicata in a
prosecution like the present at hand. He further contended
that those are also not binding upon the criminal court, where
the petitioners are facing the trial and according to him, those
are not relevant. It was his submission that said proceeding
and the criminal trial going on are two distinct proceedings
and here the criminal trial has to end with the decision on the
basis of evidence as would be piloted therein. According to him,
when those two parallel proceedings can run simultaneously,
culmination of the departmental proceeding for violation of
terms and conditions of the mining lease and breach of
obligation, duty and responsibility inviting consequential penal
action of imposition of fine, determination of mining lease etc.
has no such factual or legal bearing/impact on the criminal
trial which would proceed for its logical conclusion based on
the evidence as would be let in. According to him, the ratio of
the decision in case of Radheshyam Kejriwal (supra) does not
come to the aid of the petitioners in the matter of their
// 19 //
discharge as claimed. With the above, it was submitted that it
does not warrant or justify in the eye of law to interfere with
the said order. Thus, he contended that the revision being
devoid of merit is liable to be dismissed.
The learned Counsels having filed respective written
notes on their submissions, those have been taken on record
and carefully perused.
11. On the above rival submissions, taking into
account, the view expressed by the learned Counsel for the
petitioners that his last limb of contention, if finds favour with
and accepted, the other limbs would no more be required to be
further dwelt at length; it is felt apposite to first take up said
exercise of consideration of last limb of the contentions raised
by the learned Counsel for the petitioners which corresponds
to the ground raised before the trial court as indicated in the
foregoing paragraph -6(iv) as to judge the impact of the
decision of the Revisional Authority in the matter, which has
been upheld by the Hon'ble High Court on being challenged, on
the framing of charges against the petitioners in the criminal
trial on hand and its progress.
12. This Court is in the seisin of the revision filed by
the petitioners in questioning the sustainability of an order
// 20 //
passed by the trial court, refusing thereby to discharge the
petitioners in putting an end to the criminal trial in so far as
they are concerned. At this juncture, before proceeding to dwell
upon the contention as stated in the foregoing paragraph-11, it
would be apt to take note of the settled principles of law in the
matter of consideration of the application filed by the accused
persons seeking their discharge in the criminal case.
The principles of law are too well settled that while
answering the question of framing the charges, a duty is cast
upon the Court to consider the record of the case and
documents submitted therein. In that exercise, if the decision
is to discharge the accused under section 227 of the Code of
Criminal Procedure (in short, 'the Code'), the Court is called
upon to give a definite opinion for said discharge. Meaning
thereby, that if the Court considers that there is no sufficient
ground for proceeding against the accused, it shall discharge
the accused after recording the reasons for doing so. The
language of section 227 of the Code makes it clear that the
Court cannot proceed merely on presumption and therefore,
the word 'considers' finds place therein.
The next parameter is that if after considering the
record of the case and the documents submitted there with
// 21 //
and hearing in that behalf, the Court exercises the power to
frame charges against the accused under section 228 of the
Code, said view is tentative. Meaning thereby, that if the Court
is of the opinion that there is ground for even presuming that
the accused has committed an offence, he shall frame the
charge in writing.
It has been held in case of State of Bihar Vrs.
Ramesh Singh; AIR 1977 SC 2018 that at this initial stage,
truth, veracity and effect of the evidence which the prosecutor
proposes to adduce are not to be meticulously judged upon
their critical analysis. It is not obligatory at the stage to
consider in any detail and weigh in a sensitive balance whether
the facts if proved would be incompatible with the innocence of
the accused or not.
13. In case of Amit Kapoor Vrs. Ramesh Chander; (2012)
9 SCC 460, it has been held that at the stage of framing the
charges, the court is not concerned with the proof, when upon
careful perusal of the materials placed, there arises strong
suspicion in the mind of the Court that the accused has
committed the offence, which if put to trial could prove him
guilty, the Court would be justified in proceeding with the trial
by framing the charge. Here however the rule of caution comes
// 22 //
into play that mere suspicion is not enough and the suspicion
founded upon the materials on record must be of strength
persuading the court to form a prima facie opinion justifying
the trial as those when proved may lead to a result in favour of
the prosecution.
14. The crystallized judicial view is that at the stage of
framing charge, the Court has to prima facie consider whether
there is sufficient ground for proceeding against the accused
and the Court for the purpose is not required to appreciate the
evidence to conclude whether the materials produced are
sufficient or not for convicting the accused. Ref.:- State of M.P.
Vrs. Mohanlal Soni; (2000) 6 SCC 338.
15. In the recent case in M.E. Shivalinga Murthy Vrs.
Central Bureau of Investigation, Bengaluru; (2020) 2 SCC 768,
cited by the learned Additional Standing Counsel, Vigilance,
the Hon'ble Apex Court referring to the earlier decisions
including the one in case of P. Vijayan Vrs. State of Kerala and
Another; (2012) 2 SCC 398 have discerned the following
principles:-
(i) if two views are possible and one of them gives
rise to suspicion only as distinguished from
grave suspicion, the trial Judge would be
empowered to discharge the accused;
// 23 //
(ii) the Trial Judge is not a mere Post Office to
frame the charge at the instance off the
prosecution;
(iii) the Judge has merely to sift the evidence in
order to find out whether or not there is
sufficient ground for proceeding. Evidence
would consist of the statements recorded by
the Police or the documents produced before
the Court;
(iv) if the evidence, which the Prosecutor proposes
to adduce to prove the guilt of the accused,
even if fully accepted before it is challenged in
cross-examination or rebutted by the defence
evidence, if any, cannot show that the accused
committed offence, then, there will be no
sufficient ground for proceeding with the trial;
(v) it is open to the accused to explain away the
materials giving rise to the grave suspicion;
(vi) the court has to consider the board
probabilities, the total effect of the evidence
and the documents produced before the court,
any basic infirmities appearing in the case and
so on. This, however, would not entitle the
court to make a roving inquiry into the pros
and cons;
(vii) at the time of framing of the charges, the
probative value of the material on record
cannot be gone into, and the material brought
// 24 //
on record by the prosecution, has to be
accepted as true;
(viii) there must exist some materials for
entertaining the strong suspicion which can
form the basis for drawing up a charge and
refusing to discharge the accused.
The defence version not based upon the deriving no
support from the materials or documents placed by the
prosecution is not to be looked into at the stage when the
accused seeks discharge. The 'record of the case' used in
section 227 of the Code is to be understood as the documents
and articles, if any produced by the prosecution.
16. In the backdrop of the above, it becomes necessary
to address the last limb of the contentions of the learned
counsel for the petitioners with reference to the documents
placed on record being gone through. It may be stated that
said documents are not disputed. The petitioners having filed
the certified copy of the order of the Revisional Authority in
connection with the proceeding pursuant to the very same joint
inspection and verification report before the trial court in
support of that point raised for their discharge, the prosecution
had nothing to dispute as to factum of passing of said order.
Next, the order passed by the Hon'ble High Court on the move
// 25 //
of the State Government in assailing that order of the
Revisional Authority had also been referred to in the
application for discharge filed by the petitioners before the trial
court. These orders are public documents and as such can
always be looked into in their proper perspective as to their
impact or bearing if any over this case in accordance with law,
keeping in view the fact that the proceedings initiated by the
State Government and the criminal case owe their origin to
that very physical inspection and verification of the mines as
made on 24.09.2009, with all those same features as to stock,
excavation etc. as noted therein having no such variance.
17. The petitioner no.2, the lessee of the mines in
question had been served with a notice indicating the above
illegalities and irregularities committed in course of operation
of the mines in violation of the conditions of the mining lease
as provided under Rule 27 of the Mineral and Concession
Rules, 1960 (hereinafter, for short, 'the M.C. Rules') and other
provisions of the MMDR Act. Based upon the same, the
demand of Rs.11,31,72,22,470.00 under section 21(5) of the
MMDR Act was made with further mention that unless the
same would be paid within 60 days from the date of notice, the
mining lease would stand determined with forfeiture of security
// 26 //
deposit. This demand basically was raised towards the cost of
24,31,225.130 MT of iron ore stated to have been dispatched
clandestinely not from mining leasehold area but by their
collection from outside.
18. It has been the fist limb of allegation therein that as
ascertained in the joint inspection by a team of Technical
Officers, Engineers, Surveyor, Geologist, Revenue, Forest and
Mining Officials on 24.09.2009, the closing stock (book
balance) should have been 487205.870 MT (29,18431.00 MT-
24,31,225.130MT) as on 24.09. 2009, the date of joint
inspection; whereas physical verification of the stock showed
the availability of 182637.695 MT; giving a shortage of
304568.175 MT of iron ore. So, it was said that the aforesaid
quantity of iron ore has been clandestinely sold avoiding the
payment of royalty and sale-tax.
With the aforesaid, it was the next limb of allegation
that at the relevant time of joint inspection, the quantity of
production from May, 2008 to September, 2009 as shown was
2918431.00 MT. of iron ore; whereas the measurement of the
volume of excavated pits showed the total production of iron
ore was 849589.560 MT. So, it was said that having shown the
production of 2068841.44 MT (2918431.00 MT-849589.560
// 27 //
MT), without those being actually excavated from the mining
leasehold area; the same has been raised without lawful
authority from the area outside the leasehold, though not so
specifically pointed out. Thus, it was stated that these
petitioners had indulged in illegal mining activities in violation
of the terms and conditions of the mining lease agreement and
in contravention of the provisions of section 4(1) of the MMDR
Act.
It was further stated that on physical verification,
the stock being found to be 182637.695 MT; the quantity said
to have been dispatched as shown came to 2431225.130 MT.
Hence, there had been clandestine dispatch of 304568.175 MT
of iron ore; cost of which stand @ Rs. 6000 per MT. and as
such recoverable under sub-section 5 of section 21 of the
MMDR Act.
19. Being aggrieved and dissatisfied with the aforesaid
action of the State Government in the Department of Steel &
Mines, the petitioner no. 2 preferred a Revision vide Revision
Application filed No. 22(22)/2010-RC-1 as provided under
section 30 of the MMDR Act read with Rule 55 of the MC
Rules, 1960 before the Revisional Authority. The Revision has
// 28 //
been allowed and said proceeding against the petitioners has
been quashed.
20. The above order passed by the Revisional Authority,
was assailed by the State before this Court in W.P.(C) No.
10219 of 2012. After hearing, by judgment dated 08.08.2016,
the Hon'ble Division Bench of this Court has found the Writ
Application sans merit and accordingly, refused to interfere
with the order of Revisional Authority which had been
impugned therein. The Writ Application filed by the State has
thus been dismissed.
It is stated at the Bar, that the State has not
questioned the said judgment of the Hon'ble Division Bench of
this Court by further carrying the matter to the Hon'ble Apex
Court. The judgment dated 08.08.2016 passed by the Hon'ble
Division Bench of this Court in W.P.(C) No. 10219 of 2012
confirming the order of the Revisional Authority has thus
attained its finality, in so far as demand of
Rs.11,31,72,22,470.00 towards cost of 24,31,225.130 MT of
iron ore which was raised and demanded being based on the
one and same joint inspection and verification as aforestated.
The consequential action of the cancellation of mining lease
and forfeiture security deposit in the event of non-payment of
// 29 //
above demand has thus been nullified; the petitioners have
been continuing to operate the said mines as its lawful lessee
since then.
21. The Revisional Authority in its order no.25/2012
dated 16.01.2012 while allowing the said revisional application
no.22(22)/2010-RC/1 has from the very beginning taken note
of the fact that said proceeding owes its origin to the F.I.R.
lodged on 02.09.2010, whereby and whereunder charge-sheet
has been prepared on 22.11.2010 after completion of the
investigation by the Vigilance Authority and that said F.I.R.
was pursuant to the joint inspection and verification of the
mines in question of which the petitioner no.2 is the lessee and
the petitioner no.1 is the power of attorney holder.
It is pertinent to state that the petitioner no.2 being
asked to pay the raised demand of Rs.11,31,72,22,470.00
under section 21(5) of the MMDR Act within sixty days, there
was stoppage of issuance of Transit Permits bringing the
dispatch of minerals from the mines and mining operation to a
halt. This had also been complained of by the petitioner no.2
before the Revisional Authority as being an action not
sanctioned under the law that even as per the demand before
expiration of the period provided therein for compliance and
// 30 //
before determination of the mining lease therefore for non-
compliance; the mining operations in the said mines have been
brought to a halt. The Revisional Authority has further noted
that the said proceeding had arisen after the joint inspection
and verification of the mines on 24.09.2009. Keeping in view
the irregularities/illegalities as also the deficiencies pointed out
in the said report which persuaded the Government in the
Department of Steel and Mines to raise the demand as
aforesaid so as to remedy the breach or to face determination
of the mining lease and forfeiture of security deposit, then the
Revisional Authority has proceeded to examine each of the
allegation/ accusation in the backdrop of the projected
materials in support of the same in judging whether those
merit acceptance and can be sustained.
22. On a careful reading of the said order of the
Revisional Authority, the following issues touching the facts
are found to have been dwelt upon:-
(i) on shortage of 304568.175 MT of iron ore as on
the date of joint inspection on 24.09.2009,
thereby Revisionist has evaded Rs.82,23,340.59
royalty and Rs.7,30,96,360.80 towards royalty
and sales tax respectively; and
// 31 //
(ii) the differential quantity of iron ore of
20,68,841.44 MT said to have been illegally
raised from some area outside the leasehold.
23. It has noted the contentions raised by the
petitioners which are the followings:-
"31.1 On (i) above Revisionist contends that as per the
month wise details received under RTI from Mining
Officer, Joda vide letter dt.23.12.10 shown at Annex-J
to RA, from May'08 to Sep.'10 their production comes
to 27,17,082 MT. and dispatches 24,81,022 MT.
According book balance as on 30.09.11 comes to
2,36,059.53 MT. These figures including closing
balance exactly tally with figures in their statutory
returns. There has been production of 60,051 MT and
dispatch of 38.826 MT during 24.09.10 to 30.09.10.
Revisionist further contends that during
verifying Physical Balance, the team ignored stock pile
of 24,700 MT of BD contaminated 10-80 mm ore
presumably because it was staked in non-operational
area but duly reflected in stock. The physical stock of
iron ore was found to be 1,82,637.695 MT only. If this
is added the Physical Balance would be 2,07,337.695
(rounded 2,07,338) against 1,82,637.695 MT.
Accordingly as per the Revisionist as on
24.09.11 production and dispatches will be as under:-
Production 26,57,031 (27,17,082-60,051)
Dispatches 24,42,196 (24,82,022-38,826)
Closing Balance 2,14,835 (26,57,031-24,42,196)
Physical Balance -2,07,338
Shortages 7,497 MT as against alleged/ found
3,04,568.175
// 32 //
Revisionist also contends that F.I.R. dated
01.12.2009 also mentions that on 24.09.09 visiting
Vigilance Team had found production 26,38,831 MT
(and not 29,18,431 MT as mentioned in the impugned
Proceedings). Thus alleges that in the impugned
Proceedings record of the Vigilance Department have
been tampered by inflating the production figures.
Revisionist also contends that IBM on inspection on
09.12.09 certified that production from leasehold area
from May' 2008 to Nov' 2009, had been 30,86,776 MT.
With backward computations Revisionist correct
production as on 24.09.2009 was 26,57,031 and not
29,18,431 MT.
Revisionist finally contends that these
shortages are miniscule as compared to the overall
scenario and the fact the stocks were tape measured,
which is a crude method, instead of taking help of
some instrument like using Total Station, Theodolite
etc and thus must be ignored. Besides above, the
following factors are equally relevant and influence the
degree of shortage between the actual book stock and
the physical stock on ground.
(a) Ground loss
(b) Handling loss
(c) Compaction factors of the iron ore stack
(d) Irregular Geometrical Shape of the Iron Ore
stack.
(e) Uneven ground level on which iron has been
stacked.
Thus there are no mentionable or cognizable shortage.
31.2. From scrutiny of Annex-J to the RA, I observe
that the this information provided under RTI Act is
issued from office of Deputy Director, Joda and both
// 33 //
the forwarding letter and the information are signed by
Mining Officer, Joda, Keonjhar on 23.12.10 with
official stamp. It gives month-wise production and
dispatch figures from May'08 (i.e. from start of
production) to Oct.'09. On comparing with the figures
given in the impugned Proceedings, I observe that the
figures for the months Feb., March, June and July
2009 do not tally. Whereas the same tally with the
figures in statutory returns, copies whereof filed at
Annex-F,G,H and I of the RA. The impugned
Proceedings state that these figures mentioned therein
were found from records of DDM, Joda. But these
departmental figures are different from the
departmental figures provided under RTI. How these
figures in impugned Proceedings were arrived at or
their genesis are not explained. Why the same are also
not as per FIR is also not explained. One of these two
sets of departmental figures have to be true and
authentic departmental figures. As information
received under RTI Act generally has to be true and
authentic and as State Govt. has not commented on
the origin and veracity of the departmental figures of
the impugned, thus allegations/findings of shortages
are not substantiated.
31.3. As discussed above information received under
RTI Act has to be true and authentic. Further as the
same has been received from the same source as
mentioned in the impugned Proceedings, I consider
that the figures mentioned in the impugned
Proceedings (para-2) are not authentic; the State
Govt.'s own Department contradicts the same.
Revisionist had also submitted detailed account of
discrepancies along with errors which Sate Govt.
appears to have committed in these figures during
// 34 //
months of Feb., March, June and July, 2009. She has
also given detailed comparison. From above, I observe
that there is no discrepancy in production and figures
in their records and statutory reports, IBM reports and
records of DDM, Joda given under RTI. These all tally
with each other. Thus the very basis of the impugned
Proceedings is wrong.
31.4. Further as discussed above, the origin or
genesis of figures given in the impugned Proceedings
has not been explained. Whether they are it is
computed on the basis of transit passes, or on the
basis of physical periodical departmental inspections
or on the basis of the very statutory returns filed by
Revisionist? In the absence of clarity and authenticity
of these figures, the very basis of impugned
proceedings is shaky.
31.5. Thus I hold that shortages 3,04,568.175 MT as
alleged/found in the impugned Proceedings are not
only unsubstantiated but also have been found to be
alleged in contradiction to state Govt.'s own records.
When the figures of three sources viz. Revisionist, IBM
and departmental tally with each other, allegations of
shortages based on these figures cannot sustain.
Revisionist's contention that in the impugned
Proceedings quantity transferred for
processing/crushing from the existing stock has been
accounted twice by the Department for Feb., Mar,
June, July and Sept. months of year 2009 and which
she has also explained with statutory returns (Annex.-
F to I). Thus she has successfully demonstrated and
explained where department has erred. It has added to
the merit in her contention. I thus hold shortages are
not as alleged but only are 7,497 MT which are too
// 35 //
miniscule in comparison to the overall production.
Even if stock pile of 24,700 MT of BD contaminated
10-80 mm ore is ignored the shortages would be
32196.445 MT which continues to be miniscule as
compared to the overall production/dispatch and
ignored due to non-accounting of factors mentioned at
para31.1 above. In the circumstances stated above, I
do not find any merit in the finding of State Govt. and
reject the same.
32.1. On findings at para 30(ii) above that Revisionist
has produced 29,18,431 MT of iron ore, whereas only
8,49,589.56 MT can be produced from the excavated
pits, as stated above there is no basis given in the
impugned Proceedings or in the reply. Nor any
document/ evidence in support has been given to the
Revisionist or filed before Revision Authority.
32.2. Revisionist contends that this finding is again
based on no material evidence. This is also against the
following arrived at from the reports of IBM. Being
statutory and independent body its report is binding
on both the parties.
i) That IBM on inspection on 09.12.09
certified that production from leasehold
area from May' 2008 to Nov.' 2009 had been
30,86,776 MT. With backward
computations Revisionist's correct
production as on 24.09.2009 would be
26,57,031 and not 29,18,431 MT.
ii) That further IBM on inspection on
08.12.2008 (Annexure-M) certified that
production from leasehold area from May'
2008 i.e. within a period of seven months of
the start of production Revisionist's had
// 36 //
produced 7,84,950 MT. thus approximate
92% of this production has been produced
by Nov.' 2008 i.e. 10 months before the
visit.
iii) Revisionist contends that admittedly the
volume of pit excavated in the mining
leasehold area of the Revisionist is
12,19,798.370 Cubic Meters. As per the
mining plan duly approved by the IBM, the
Tonnage Conversation Factor (TCF) is 3.5
MT/Cu.M for the iron ore and the Ore
Incidence Factor (i.e. recovery percentage) is
70%. Against this that the State Govt. has
considered TCF 1.99 and recovery
percentage 35% which is wholly arbitrary,
mala fide and liable to be rejected being
contrary to the norms approved by the IBM.
This is also against the general TCF in the
area found in survey report of IBNM. The
IBM had surveyed the entire region of Joda
and Barbil has given report and it had
concluded after thorough scientific analysis
that general TCF in the mines located in the
subject areas is to be considered between
3.5 to 4.8 T/Cu.M (Annexure-L to RA).
Revisionist also contends that there is no
allegation/evidence of clandestinely dispatch of iron
ore. No area from where such ore has been alleged to
have been mined has been identified. Thus these
allegations / findings have no basis. It is merely
surmises and conjectures.
// 37 //
The above contentions have been addressed in
the revision as under:-
32.3. From scrutiny of impugned Proceedings, I
observe that this is a bald allegation / finding. Neither
any basis has been given nor has any reference point
been mentioned. It is required on the part of party
leveling allegations not only to substantiate the
allegations but also provide its basis and provide
evidence. All these are lacking in this case.
32.4. The allegation leveled is that Revisionist has
produced and dispatched roughly two and half times
what the excavated pit of Revisionist's mine can
produce. Revisionist states it is admitted by the visiting
team that volume of pit is 12,19,798.370 Cubic Meters
(12.2 lakh cum). As per allegations it can produce only
8,49,589.56 MT ore. Accordingly allegation is
Revisionist must have dug pit of volume 30 Lack cum
approx outside lease area. If average depth of 10 mtrs.
is assumed then the area of illegally mine pit(s) would
be 3 lakh sq. metrs. (30 hectares/75 acres) i.e. size of
1km by 300 mtrs. or so. Over and above there must
have also been constructed commensurate roads,
machinery sheds, labour colony, administrative shed
etc to dig, sort, dispatch, transport and sell.
32.5. Revisionist's mine has been in operation since
May' 2008 and the visit was made on 24.09.09 i.e.
within one and half years. As Revisionist's trend of
production / dispatch remains same from start of
mining operation. The allegation thus is that within this
period the Revisionist has done both legal and alleged
illegal mining. Impugned proceedings states that the
visiting team consisted of Technical Officers, Engineers,
Surveyors and Geologist, Revenue, Forest and Mining
// 38 //
Officials. But no investigation appears to have been
done either by Vigilance Directorate, or by the Steel &
Mines Department or Forest Department or by any of
other for almost one year to locate such a huge size pit
or above stated other paraphernalia, machineries and
trucks. If it exists, the same must not be far away from
existing lease area. Further admittedly area is stated to
be falling in forest. No case has been stated to have
booked for violation of Forest (Conservation) Act, 1980.
There is also no allegation of tampering of boundary
pillars. Not a single dispatch has been seized. No one
has also appears to have seen Revisionist doing alleged
illegal mining to such a huge scale.
32.6. Entire case of State Govt. is based only on the
above stated visit on 24.09.09 and the demand is made
upto this date. Impugned Proceedings is also silent
about production/dispatch and also demand for the
period subsequent to the visit. Whether the Revisionist
suddenly stopped illegal mining from outside lease area
after the visit or continued to do so. Impugned
Proceedings and State Govt.'s reply/ submissions are
silent on this issue. Trend and scale of production /
dispatch of Revisionist after this visit appears to
continue to be the same as it was before. Accordingly
pit size must have increased and roads widened over
the period. Alternatively another area taken for illegal
mining. From records it is not clear whether any effort
was made to catch the Revisionist red handed and to
effect seizures of trucks/stocks or machineries etc.
Whether there is any proposal also to raise demand for
period beyond 24.09.09. The impugned Proceedings
and State Govt.'s reply/ submissions are silent on this
aspect as well.
// 39 //
32.7. In its report dt. 09.12.09, IBM has made
observations that production has been rather lower
(than mining plan). This contracts the
allegation/findings of State Govt. it observes:
"Production is lower side than proposed due to lack of
forest clearance."
Revisionist contends that recovery of saleable
ore is 26,57,031 MT which amounts to 62% of recovery.
It is lower than the norm 70% fixed in the approved
mining plan. From scrutiny of report of IBM on the
recent general survey of the Iron Ore title 'IRON ORE A
MARKET SURVEY' issued on Oct.' 2007 (Annex-L to
RA). I observe that Revisionist mining production is as
per TCF and recovery percentage norms found in
general survey for the local region. It is also as per the
approved Mining Plan of the Revisionist.
In view of above and when an independent
statutory and specialized Agency IBM mandated by
MMDR Act in its routine annual inspections on two
occasions (08.12.2008 and 09.12.09) oblivious of these
developments has found Revisionist's production
figures tallying with both the statutory returns and with
the departments figurers obtained under RTI, I do not
see any reason why the same shall not be accepted
especially when the State Govt. has not adduced any
evidence/document in support of the
allegation/findings in the proceedings that the mine
cannot produce that much and Revisionist has illegally
mined from outside."
With all above discussion and reasons, the
Revisional Authority has ordered:-
// 40 //
"I set aside the impugned Proceeding dated
25.11.2010 of Government of Odisha. Revision succeeds
with consequential benefits."
24. Assailing this order of Revisional Authority in the
writ application i.e. W.P.(C) No. 10219 of 2012; the State
Government first contended that the Revisional Authority
ought not to have taken up the revision for hearing for its
disposal on merit as the revision was not maintainable.
Answering the point, the Hon'ble Division Bench of
this Court on that has categorically said that the revision filed
by the opposite party no.2 therein challenging the order under
communication on dated 25.11.2010 was maintainable under
section 30 of the MMDR Act.
25. Next going to address the contention of the State
that the Revisional Authority ought not to have entered into
the merits of the case and given its finding as to whether
opposite party no.2 therein was liable to make payment of the
amount determined by said order dated 25.11.2010 under
section 21(5) of the MMDR Act, but should have remanded the
matter to the State Government to give an opportunity to the
opposite party no.2 therein to show-cause and then pass final
order; the Hon'ble Division Bench of this Court has held that in
// 41 //
the facts and circumstances placed by the parties, the
Revisional Authority having decided the revision on merits,
cannot be faulted and there was nothing wrong on the part of the
Revisional Authority to decide the same on merit and thereafter
quash the proceeding after affording opportunity of hearing to the
parties.
26. Proceeding then to examine the correctness of the
findings of the Revisional Authority on the shortage of minerals,
the answer has been recorded that in the facts and
circumstances as projected the finding so recorded by the
Revisional Authority is perfectly justified and does not warrant
interference.
Having said so, the Hon'ble Division Bench of this
Court concurring with the findings of the Revisional Authority,
has finally dismissed the writ application on 08.08.2016. With
this final curtain has been drawn in that matter initiated by the
Government in the Department of Steel and Mines carrying no
any further action upon the petitioner no.2-Lessee has been
taken as to mining operation, dispatch of minerals etc which is
continuing all along.
27. In a number of judgments, the Hon'ble Apex Court
have held that the standard of proof in a departmental
proceeding, being based on preponderance of probability is
// 42 //
somewhat lower than the standard of proof in a criminal
proceeding which require proof of the case beyond reasonable
doubt.
In P.S. Rajya Vrs. State of Bihar; (1996) 9 SCC1, the
petitioner therein had contended that the issue in the criminal
proceeding is identical to the departmental proceeding and
when the very issue could not be established in the
departmental proceeding, the department is not permitted to
pursue the same charge in the criminal proceeding. The
question posed before the Hon'ble Apex Court was:
"Whether the respondent is justified in pursuing
the prosecution against the appellant under section
5(2) read with section 5(1)(e) of the Prevention of
Corruption Act, 1947 notwithstanding the fact that
on an identical charge the appellant was exonerated
in the departmental proceedings in the light of a
report submitted by the Central Vigilance
Commission and concurred by the Union Public
Service Commission."
Going to answer the above question, the Hon'ble
Apex Court observed:-
"17. At the outset, we may point out that the
learned counsel for the respondent could not but
accept the position that the standard of proof
// 43 //
required to establish the guilt in the departmental
proceedings. He also accepted that in the present
case, the charge in the departmental proceeding is
one and the same. He did not dispute the findings
rendered in the departmental proceedings and the
ultimate result of it."
In the background, the Hon'ble Court held that:-
"23. Even though all these facts including the
Report of the Central Vigilance Commission were
brought to the notice of the High Court,
unfortunately, the High Court took a view that the
issues raised had to be gone into in the final
proceedings and the Report of the Central Vigilance
Commission, exonerating the appellant of the same
charge in departmental proceedings would not
conclude the criminal case against the appellant.
We have already held that for the reasons given, on
the peculiar facts of this case, the criminal
proceedings initiated against the appellant cannot
be pursued. Therefore, we do not agree with the
view taken by the High Court as stated above.
These are the reasons for our order dated 27-3-
1996 for allowing the appeal and quashing the
impugned criminal proceedings and giving
consequential reliefs."
28. In case of G.L. Didwania Vrs. ITO; 1995 Supp.(2)
SCC 724; the appellant therein was an assessee and had
shown his business income from firms in Delhi and Bombay.
// 44 //
There was another firm, M/s. Young India and Transport
Company wherein the minor children of the appellant and two
of his employees were partners. The firm was said to be not a
genuine one and the instrument of partnership was attacked
therein as invalid and inoperative. The appellant thus faced
proceeding under section 147 and 148 of the Income Tax Act
and his assessment was reopened and finally with his income,
the income of M/s. Young India and Transport Company was
added. The statement made by the appellant in the verification
to the return being then said to be false being known to the
appellant, prosecution was launched and the complaint by the
authorized authority was filed. Meanwhile, in the appeal before
the Income Tax Appellate Tribunal, the order of the Assessing
Officer was set aside holding that the premises upon which the
assessing authority has concluded that the business run in the
name of M/s. Young India and Transport Company belonged to
the assessee i.e. G.L. Didwania are erroneous and not
acceptable. This when attained finality, the appellant moved for
dropping the prosecution. The learned Magistrate rejected the
prayer saying that the prosecution has got a right to lead
evidence in support of the complaint and the court can come to
the conclusion whether or not criminal offence is made out. It
// 45 //
was further observed that the order of the Tribunal can be
taken only as evidence. The High Court having also dismissed
the application in limine, there was a move before the Hon'ble
Apex Court. The Hon'ble Apex Court then went to answer
whether the prosecution can be sustained in view of the order
passed by the Tribunal. It was held that:-
"4. ......... As noted above, the assessing authority
held that the appellant assessee made a false
statement in respect of income of M/s. Young India
and Transport Company and that finding has been
set aside by the Income Tax Appellate Tribunal. If
that is the position then we are unable to see as to
how the criminal proceedings can be sustained."
29. Factual settings of the case of Radheshyam
Kejriwal (supra) cited by the learned counsel for the petitioners
at this juncture need little elaboration. The Officers of the
Enforcement Directorate in exercise of the power under section
35 of the Foreign Exchange Regulation Act, 1973 (for short 'the
FERA') searched various premises in occupation of the
appellant besides other persons. The appellant was arrested
and then released on bail. On being asked to appear, he gave
his statements.
// 46 //
Based on the materials collected during search and
from the statement of the appellant, he was found to have
contravened the provisions of section 9(1)(f)(i) of the FERA as
also liable to pay penalty under section -50 of the FERA. The
Enforcement Directorate was of the further opinion that by
abetting as to contravention of the provisions of section 9(1)(f)(i)
and section 8(2) read with section 64(2) of the FERA, the
appellant has rendered himself liable for penalty under section
50 of the FERA. Accordingly, show-cause notice being issued,
adjudication proceeding under section 51 of the FERA was
initiated. The adjudication officer came to conclude that the
charges against the appellant were not sustainable.
Accordingly, the adjudication officer dropped the adjudicatory
proceeding. This order was not further challenged by the
Enforcement Directorate. However, on the same allegation
which was the subject matter of adjudication proceeding the
Directorate filed a complaint against the appellant for
prosecution under section 56 of the FERA in the court of law.
In the above state of the affair, the appellant filed
an application for dropping the criminal proceeding inter alia
contending that on the same allegation, the adjudication
proceedings having been dropped and he has been exonerated
// 47 //
therefrom, his continued prosecution is an abuse of process.
The trial court repelled the contention and rejected the petition
filed in that behalf. The High Court being approached also did
not countenance with the contention. It then observed as
under:-
"Therefore, the contention of Mr. Ghosh is unacceptable
that in the adjudication proceedings being held by the
Department concerned, the allegations against the petitioner
having not been found established the prosecution against
him before a court of law cannot have any legs to stand upon,
since the same departmental authority which held the enquiry
against him and found no materials for establishing his guilt
cannot be expected to lodge the prosecution on the self same
allegations against that person before a court and cannot be
expected to take a different stand on the self same materials
as available against him on the record."
The Hon'ble Apex Court having discussed the
relevant statutory provisions contained in FERA and upon
perusal of plethora of decisions of the Court held as follows:-
"26. We may observe that the standard of proof in a
criminal case is much higher than that of the adjudication
proceedings. The Enforcement Directorate has not been able
to prove its case in the adjudication proceedings and the
appellant has been exonerated on the same allegation. The
appellant is facing trial in the criminal case. Therefore, in our
opinion, the determination of facts in the adjudication
proceedings cannot be said to be irrelevant in the criminal
case. In B.N. Kashyap [AIR 1945 Lah 23] the Full Bench had
not considered the effect of a finding of fact in a civil case
// 48 //
over the criminal cases and that will be evident from the
following passage of the said judgment: (AIR p.27).
"..... I must, however, say that in answering the
question, I have only referred to civil cases where the
actions are in personam and not those where the
proceedings or actions are in rem. Whether a finding
of fact arrived at in such proceedings or actions would
be relevant in criminal cases, it is unnecessary for me
to decide in this case. When that question arises for
determination, the provisions of Section 41 of the
Evidence Act, will have to be carefully examined."
xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx
29. We do not have the slightest hesitation in accepting the
broad submission of Mr. Malhotra that the finding in an
adjudication proceeding is not binding in the proceeding for
criminal prosecution. A person held liable to pay penalty in
adjudication proceedings cannot necessarily be held guilty in
a criminal trial. Adjudication proceedings are decided on the
basis of preponderance of evidence of a little higher degree
whereas in a criminal case the entire burden to prove beyond
all reasonable doubt lies on the prosecution.
xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx
31. It is trite that the standard of proof required in criminal
proceedings is higher than that required before the
adjudicating authority and in case the accused is exonerated
before the adjudicating authority whether his prosecution on
the same set of facts can be allowed or not is the precise
question which falls for determination in this case."
30. Then referring to various judgments cited therein
and the factual settings under which those have been
rendered, the Hon'ble Apex Court have culled out the ratio of
// 49 //
those decisions in paragraph 38 which are reproduced herein
below:-
"38. The ratio which can be culled out from these decisions
can broadly be stated as follows:
(i) Adjudication proceedings and criminal
prosecution can be launched simultaneously;
(ii) Decision in adjudication proceedings is not
necessary before initiating criminal prosecution;
(iii) Adjudication proceedings and criminal
proceedings are independent in nature to each
other;
(iv) The finding against the person facing prosecution
in the adjudication proceedings is not binding on
the proceeding for criminal prosecution;
(v) Adjudication proceedings by the Enforcement
Directorate is not prosecution by a competent
court of law to attract the provisions of Article
20(2) of the Constitution or Section 300 of the
Code of Criminal Procedure;
(vi) The finding in the adjudication proceedings in
favour of the person facing trial for identical
violation will depend upon the nature of finding.
If the exoneration in adjudication proceedings is
on technical ground and not on merit,
prosecution may continue; and
(vii) In case of exoneration, however, on merits where
the allegation is found to be not sustainable at
all and the person held innocent, criminal
prosecution on the same set of facts and
circumstances cannot be allowed to continue,
the underlying principle being the higher
standard of proof in criminal cases."
Then the final conclusion was:-
// 50 //
"39.In our opinion, therefore, the yardstick would be to judge
as to whether the allegation in the adjudication proceedings
as well as the proceeding for prosecution is identical and the
exoneration of the person concerned shall be an abuse of the
process of the court."
31. In the light of above, applying the ratio of the
decision of Radheshyam Kejriwal (supra), in the facts and
circumstances of the case of Ashoo Surendranath Tewari Vrs.
The Deputy Superintendent of Police, EOW, CBI & Another in
Criminal Appeal No. 575 of 2020 (Arising out of SLP (CRL) No.
5422 of 2015), the Hon'ble Apex Court have recently rendered
its judgment on 08.09.2020.
In that case, the FIR was regarding one MSME
Receivable Finance Scheme operated by the Small Industries
Development Bank of India (SIDBI). Some vendors complaining
of delay in getting their payments, SIDBI, in consultation with
TATA Motors Limited, advised the vendors of TATA Motors
Limited to furnish RTGS details for remittance of funds. It was
found that for making payments in RTGS for various
purchases made by the TATA Motors Ltd. from one Ranflex
India Pvt. Ltd. (Vendor), 12 payments amounting to
Rs.1,64,17,551/- were made through RTGS by SIDBI in the
vendor's account with Federal Bank, Thriupporur. Ultimately,
SIDBI was informed by the vendor that it has an account with
// 51 //
Central Bank, Bangalore and not with Federal Bank,
Thriupporur. On account of such diversion of funds as per the
FIR, a number of persons came to be arraigned as accused
persons in the case. The appellant therein who was accused
no.9 with others had been charge-sheeted on 26.07.2011. It
had been alleged that the appellant had received the e-mail on
25.05.2009 containing the RTGS details for the account with
Federal Bank, Thripporur, which he then forwarded to
accused-Muthukumar who is said to be the kingpin involved in
the crime and apparently, based on Muthukumar's approval,
the appellant then signed various cheques which were
forwarded to other accounts. No sanction being obtained under
the Prevention of Corruption act in so far as the appellant was
concerned, the learned Special Judge decided not to proceed
against the appellant for trial of said offence(s) under the P.C.
Act. Next holding that there was no need for sanction under
section 197 of the Code; finding in the facts of the case that a
prima facie case for the offences under IPC was made out
against the appellant therein, the learned Special Judge
refused to discharge the appellant from said offences.
The High Court found itself in agreement with the
learned Special Judge that there was no need for sanction
// 52 //
under section 197 Cr.P.C. The High Court then considered an
order of Central Vigilance Commission (CVC) dated 22.12.2011
which had gone into the facts of the case in great detail and
concurred with the Competent Authority that on merits no
sanction ought to be accorded and no offence under the IPC
was in fact made out. The report of the CVC which had been
strenuously pressed into service for the purpose of discharge,
the High Court brushed aside the same stating in the context:-
"25. The Central Vigilance Commission could not have
come to the aforementioned conclusion unless there was
evidence to do so. This submission of the learned counsel is
unfounded. The CVC had specifically observed that Shri
Karade has benefited from Shri Muthukumar. The CVC
ought not to have observed that they are the victims of
conspiracy specially when the CVC has observed that
Muthukumar had entered into conspiracy with "various other
people". The petitioners would fall into the category of
various other people and therefore they ought to be tried for
the offence punishable under the Indian Penal Code specially
for the offence punishable under Section 420 of IPC."
The Hon'ble Apex Court going through the report of
the CVC have concluded that if the High Court had bothered to
apply the parameter set out at para 38 (vii) of the decision in
case of Radheshyam Kejriwal (supra) on a proper reading of
the CVC report on the same facts, the appellant should have
been exonerated. Having said so, the Hon'ble Apex Court
// 53 //
applying the parameter set out at para 38 (vii) of the decision
in case of Radheshyam Kejriwal (supra) as also other decisions
have finally ordered for discharge of the appellant therein in
the criminal trial involving same set of facts.
32. Keeping in view the aforestated principles, and
discussions already made above in detail, let us advert to the
case on hand as to its broad features. Here the proceedings
initiated by the Government in the Department of Steel &
Mines, against the petitioner no.2, the lessee of the mines in
question for the illegalities/ irregularities/ breach /
deficiencies /deviations as pointed out by the members of the
team who had made the joint inspection and verification of the
concerned mines and indicated in the FIR as well as the
charge-sheet giving rise to the present criminal trial have been
quashed. The State Government since 08.08.2016 has
accepted the said order of quashment of the proceedings for
realization of heavy penalty from the petitioners and
cancellation of the mining lease after having failed in the
attempt by filing the writ application before this Hon'ble Court
in getting the order of quashment of those proceedings passed
by the Revisional Authority annulled. The Hon'ble Division
Bench of this Court not only have found the order of the
// 54 //
Revisional Authority to be on merit but also to be well in order.
Accordingly, it has been held that the same does not warrant
or justify interference. The Revisional Authority having made
detail discussion of all the available materials, upon their
critical analysis and keeping in view the rival contentions
advanced before it, has held that all those very factual aspects
as alleged/ projected in the charge-sheet for trial of the
petitioners which form the foundations of the proceedings
under challenge are not acceptable. The Hon'ble Division
Bench of this Court has concurred with those categorical
findings as to shortage of minerals as on the date of inspection
of the mines and the sustainability of the allegations relating to
lifting of minerals outside the leasehold area, dispatch and sale
by the petitioners. Fact remains that they have been
continuing to operate the mines, dispatch and sale under due
authority. Thus the present case is not the one where it could
be said that the order of the Revisional Authority in quashing
the proceedings on the same set of facts, which form the
foundations of this criminal case is based on technical grounds
or by giving benefit of doubt wherein the merits have not been
touched upon and examined and that only on such above
// 55 //
stated grounds, the Hon'ble Division Bench of this Court have
refused to interfere in the writ filed by the State.
Applying thus the aforestated principles as set forth
in the judgments referred to with the facts therein and for all
the above discussions of the factual settings of the case in
hand with the circumstances; this Court is of the considered
view that the order dated 28.07.2018 which has been
impugned in this revision cannot be sustained.
Accordingly, the order dated 28.07.2018 passed by the
learned Special Judge, Vigilance, Keonjhar in V.G.R. Case No.
59 of 2009 (T.R. Case No. 80 of 2011) is hereby set aside and it
is directed that these petitioners be discharged from the said
case.
33. The revision is disposed of accordingly.
......................
D. Dash, J.
Orissa High Court: Cuttack Dated the 27th November, 2020/Narayan