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Thursday, March 8, 2018

corporate law = Iron Ore - criminal case was registered for illegal storage of iron ore by violating sec.2[7][b][iv]. 62. 80 of Karnataka forest Act - Seizes - Iron Ore in another case The XXXII Additional City Civil and Sessions Judge and Special Judge for CBI Cases, Bangalore (CCH-34) after considering the application passed an order on 08.05.2015 allowing the application under Section 451/457 Cr.P.C. permitting the applicant/State to dispose off the seized iron ore through e-tender on certain terms and conditions as enumerated in the order. -writ to High court against the order - High court committed wrong - Apex court held that seizure of the iron ore was not in case Crime No. 2/2014 in which final report has been accepted on 15.12.2015 rather seizure of the iron ore was in different proceeding in which proceeding Order dated 08.05.2015 was passed. When release of iron ore on an application filed by the State under Section 451/457 Cr.P.C. was in different proceeding, there was no effect or consequence of acceptance of the final report vide Order dated 15.12.2015 in case Crime No. 2/2014 and the High Court committed error in allowing the Writ Petition on the strength of the final report accepted on 15.12.2015. - order and judgment of the High Court is wholly unsustainable and is hereby set aside. We, however, observe that it shall be open for the respondent to file an appropriate application before the XXXII Additional City Civil and Sessions Judge and Special Judge for CBI Cases, Bangalore (CCH-34), for release of seized iron ore by establishing its existence and its ownership right over the same, which may be considered by Jurisdictional Criminal Court in accordance with law.

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REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 348-356 OF 2018
(Arising Out of SLP (Crl.) Diary No. 2398 of 2018)
THE STATE OF KARNATAKA & ORS … APPELLANT(S)
VERSUS
M/S VEDANTA LIMITED (FORMERLY
KNOWN AS SESA STERLITE LIMITED) & ORS … RESPONDENT(S)
J U D G M E N T
ASHOK BHUSHAN, J.
Delay condoned. Leave granted.
2. This appeal has been filed against the impugned
judgment and order of Karnataka High Court dated
04.07.2017 in Writ Petition No. 18941/2016 and Writ
Petition Nos. 19328-19335/2016(GM-MM-S). High Court
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vide its judgment dated 04.07.2017 has allowed the
Writ Petitions directing for release of the iron ore
in favour of writ petitioners (respondent herein).
3. The brief facts necessary to be noted for
deciding this appeal are:
A First Information Report No. 17/2009-10 dated
15.03.2010 was registered for illegal storage of iron
ore by violating Sections 2(7)(b)(iv), 62, 80 of the
Karnataka Forest Act, 1963 and Rules 143, 162 of the
Karnataka Forests Rules, 1969. Judicial Magistrate
First Class, Ankola permitted for further inquiry by
including Section 24(e) of Karnataka Forest Act,
1963. On 20.03.2010 about 5 Lakhs Metric Tonnes of
illegally stocked iron ore has been seized on “as-iswhere-is-basis”
and seizure report has been submitted
to the Judicial Magistrate First Class, Ankola who
permitted to retain the same until further orders.
4. Another case registered was CBI Crime No. RC
17(A)/2012. Chargesheets were filed after
investigation in Special C.C. No. 268/2013, Special
C.C. No. 11/2014, Special C.C. No. 14/2014, Special
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C.C. No. 15/2014, Special C.C. No. 36/2014, Special
C.C. No. 37/2014, Special C.C. No. 38/2014, Special
C.C. No. 53/2014, Special C.C. No. 54/2014. The State
filed an application under Section 451/457 Cr.P.C. in
the aforesaid cases before the XXXII Additional City
Civil and Sessions Judge and Special Judge for CBI
Cases, Bangalore (CCH-34), seeking permission to
dispose off 56 heaps of iron ore lying at the
Belekeri Port approximately weighing 2,72,713.347
Metric Tonnes by e-tender.
5. Notices were published in the newspapers inviting
the filing of application for the interim disposal of
seized 56 heaps of iron ore at Belekeri Port by Dy.
Conservator of Forests, Karwar on 29.03.2015. The
XXXII Additional City Civil and Sessions Judge and
Special Judge for CBI Cases, Bangalore (CCH-34) after
considering the application passed an order on
08.05.2015 allowing the application under Section
451/457 Cr.P.C. permitting the applicant/State to
dispose off the seized iron ore through e-tender on
certain terms and conditions as enumerated in the
order. 
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6. Against Order passed on 08.05.2015, Writ Petition
No. 18941/2016 and Writ Petition Nos. 19328-
19335/2016(GM-MM-S) were filed by the respondents in
the High Court of Karnataka at Bangalore. In the Writ
Petition following prayers were made:
“ PRAYER
Wherefore, for the reasons and
circumstances stated to hereinabove, it
is most humbly prayed that this Hon’ble
Court may be pleased to:
(i) Issue a Writ of Certiorari or any
other appropriate Writ or Order or
direction setting aside the Order dated
08.05.2015 passed by the Court XXXII
Additional City Civil & Sessions Judge &
Special Judge for CBI Cases in Bangalore
(CCH 34) in Spl. C.C. Nos. 268/2013, 11,
14, 15, 36, 37, 38, 53 & 54 of 2014 vide
Annexure – A & all further consequential
proceedings thereto, only in so far as
the petitioner is concerned, in the
interest of justice and equity.
(ii) Issue a Writ of Mandamus or any
other appropriate Writ or Order or
Direction, directing the 2nd,3rd, 4th & 5th
Respondents to consider the
representation dated 04.02.2016,
08.02.2016 & 24.02.2016 submitted by the
petitioner vide Annexure –‘P’,’P1’ &
‘P2’ and permit the petitioner to remove
and transport the entire quantity of
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approximately 34.544 Metric Tonnes of
iron ore from Belekere Port premises to
the Pig Iron Plant of the petitioner at
Amona in State of Goa by endorsing the
Mineral Dispatch Permits & Forest
Transit Passes & without insisting on
any further payment of Royalty, in the
interest of justice and equity.
(iii) Issue such other appropriate Writ
or Order or Direction as deemed fit
under the facts and circumstances of the
case, in the interest of justice and
equity.”
7. The State filed an objection in the Writ
Petitions opposing the prayers made in the Writ
Petitions. The High Court vide its judgment and order
dated 04.07.2017 allowed the Writ Petitions. The
State aggrieved by the judgment of the High Court has
come up in this appeal.
8. We have heard Shri B.P.S. Patil learned Senior
Advocate for the appellant and Shri Dhruv Mehta,
Advocate for the respondent.
9. Learned counsel for the appellant in support of
the appeal contends that the High court committed
error in allowing the Writ Petitions and directing
release of the iron ore in favour of the writ
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petitioner. It is contended that the basis of the
judgment of the High Court is the final report
accepted by learned CBI Judge vide Order dated
15.12.2015 which has nothing to do with the
proceeding in which, an Order was passed by Special
Judge CBI on 08.05.2015. It is contended that the
High Court on wrong premise has allowed the Writ
Petitions. It is submitted that the writ petitioners
themselves have filed an application in the Special
C.C. Nos. 268/2013, 11, 14, 15, 36, 37, 38, 53 & 54
of 2014 under Section 451/457 Cr.P.C. dated
08.03.2016, praying for directing the release in
favour of the applicant company herein entire
quantity of about 34544 Metric Tonnes of iron ore,
belonging to the applicant company seized on
20.03.2010, which application was subsequently,
withdrawn.
10. Learned Senior Counsel for the appellant submits
that Crime No. 2/2014 dated 11.07.2014 in which final
report was submitted and accepted by XXXII Additional
City Civil and Sessions Judge and Special Judge for
Prevention of Corruption Act at Bangalore City was a
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case which was registered by Special Investigation
Team of Karnataka Lokayukta, was altogether a
different case, unconcerned with proceeding under
which an application under Section 451/457 Cr.P.C.
has been allowed.
11. Learned Counsel appearing for the respondent
refuting the submission of the Senior Counsel for the
appellant contends that the investigations were
carried out by the CBI in pursuance of the directions
passed by this Court in Writ Petition (C) No.
562/2009 and under the orders of this Court Special
Investigation Team, Karnataka Lokayukta, Bangalore
carried on investigations and registered a case with
Karnataka Lokayukta SIT Police Station, being Crime
No. 2/2014 in which proceeding after thorough
investigation, a final report dated 08.10.2015 was
submitted by SIT, which was accepted by the Court on
15.12.2015. No offence having been found proved
against the respondent, High Court has rightly
directed for release of iron ore seized in favour of
the respondent. Respondent’s claim for release of
iron ore is confined to the quantity of about 34544
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Metric Tonnes of iron ore belonging to the respondent
company that has been seized on 20.03.2010 and lying
at the plot allotted to applicant-company by Shree
Mallikarjun Shipping Pvt. Ltd in Belekeri Port Area.
He submitted that the claim of above iron ore is
different from that seized and pending in case No.
189/2010.
12. We have considered the submissions of the learned
counsel for the parties and have perused the record.
13. High Court in the impugned judgment has based its
decision of allowing the Writ Petition and directing
the release of the iron ore in favour of the
respondent on the final report being accepted by the
learned CBI Judge by Order dated 15.12.2015. High
court has further noticed that this Court directed on
07.09.2012 to CBI to investigate into illegally
stocked iron ore in pursuance of which direction, SIT
was constituted and final report was submitted.
Paragraphs 10 and 15 of the judgment of the High
court are the entire consideration of the High Court
for allowing the Writ Petition. It is useful to
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extract the Paragraphs 8 to 15 of the judgment which
is to the following effect:
“8. Accordingly, a Special
Investigation Team (SIT, for short) was
appointed by the State. They submitted a
final report, which is in favour of the
writ petitioner. The final report has
been accepted by the learned CBI Judge
by an order dated December 15, 2015.
9. Mr. K. N. Phanindra, learned
advocate, seeks a direction for release
of the materials in favour of his
client.
10. Mr. V. G. Bhanuprakash, learned
additional government advocate, submits
that a case of theft is pending and,
therefore, the seized materials could
not be released in favour of the
petitioner.
11. In the wake of the final report
being submitted by the SIT, we do not
find any impediment to release the iron
ore in favour of the petitioner. An
inventory has to be prepared and,
thereafter, the iron ore shall be
released in favour of the writ
petitioner, immediately. The entire
process must be completed by four weeks.
12. The writ petitions are, therefore,
allowed.
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13. Mr. Phanindra, at this stage,
expresses an apprehension that the
authorities may claim royalty.
14. When the material is in the port
area, it is presumed that royalty has,
already, been paid, otherwise transport
permit would not have been granted.
Therefore, his apprehension is
unfounded.
15. We make no order as to costs.
Sd/-
CHIEF JUSTICE
Sd/-
 JUDGE”
14. The investigation which was carried out by SIT
was registered as Crime No. 2/2014. The respondent in
his compilation has filed a notice issued under
Section 91 Cr.P.C. to the Managing Director/Director
of M/s SESA Goa Limited, presently, M/s Vedanta
Limited (respondent). Notice dated 21.08.2014 refers
to the Order of this Court and registration of Crime
No. and it is useful to extract the opening paragraph
of the notice issued to the respondent dated
21.08.2014:
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“ KARNATAKA LOKAYUKTA
Special Investigation Team
No. SP2/CR/02/2014/SIT/KLA/03 DATE: 21.08.2014
POLICE NOTICE
 (U/S 91 Cr.P.C.)
Special Investigation Team, Karnataka,
Lokayukta, Bangalore, is investigating
the cases of illegal mining of Iron ore
in Karnataka State on the orders of the
Hon’ble Supreme Court (Writ Application
No. 562/2009 IA 189 dated 16.09.2013)
and that of the Govt. of Karnataka. In
this regard a case is registered against
your company in KLA SIT Police Station
Cr. No. 02/2014 u/s 379, 420 r/w
120(b)IPC & 13(2), r/w 13(1)(d) PC Act &
21, 23 r/w 4(1)(a) MMRD Act 1957.
In this connection, you are requested to
direct a competent official conversant
with the activities/transactions of your
company (M/s. Mineral Enterprises
Limited No. 49,3rd Floor Khanija Bhavana,
Race Course Road,) to appear before the
undersigned at 10.30 hrs on 30.8.2014 at
the office of Special Investigation
Team, ATIC Building, University of
Veterinary Science, Hebbal, Bangalore
along with the following original
documents/data. The said official may
also carry soft copy of the
data/tables/charts of the information as
mentioned below.
 .............. ”
15. It was in the aforesaid proceeding that final
report was submitted on
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08.10.2015. The respondent has filed a copy of the
order sheet of XXXII Additional City Civil and
Sessions Judge and Special Judge for Prevention of
Corruption Act at Bangalore City in Crime No. 2/2014
where filing of the final report is noticed and Court
also directed for issue notice to the complainant
returnable by 15.12.2015. On 15.12.2015, the Court in
Crime No. 2/2014 passed the following order:
“Complainant by name Sri Manjunatha
Annigeri, Superintendent of police
attached Special Investigation Team,
Karnataka Lokayuktha, Bengaluru is
present and submits that he has gone
through the records which disclosed that
no case is made out against all the
accused at the conclusion of
investigation. He submits that he has no
objection to accept the ‘B’ report.
I have gone through the records. It
is seen that according to the
Investigating Officer, there is no
convincing evidence to arrive at
conclusion that allegations against all
the accused are made out. After having
gone through the ‘B’ report I find that
there are no grounds to proceed further
against all the accused and accordingly
‘B’ report is accepted.
(V. G. BOPAIAH)
 XXIII ACC and Spl. Judge,
Bangalore City.”
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16. From the above, it is clear that the final Report
which was accepted on 15.12.2015, was final report in
case Crime No. 2/2014 which was registered after the
investigation by SIT in pursuance of order of this
Court passed in Writ Petition No. 562 of 2009 and in
the above case, no offence was found against the
respondent.
17. The Order dated 08.05.2015 was passed allowing
the application under Section 451/457 Cr.P.C. of the
State in Special C.C. No. 268/2013 and C.C. No. 11,
14, 15, 36, 37, 38, 53 & 54 of 2014 which is mentioned
in the operative portion of the order itself. It is
useful to extract the operative portion of the Order
dated 08.05.2015 which is to the following effect:
 “ ORDER
The Application filed by the State
Government U/ss. 451/457 of Cr.P.C., are
allowed permitting the Applicant/State to
dispose off the seized iron ore through
e-tender with the following terms and
conditions:
1.The auction of the property shall be
through e-tender under the supervision
of the ‘Monitoring committee’
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constituted by the Hon’ble Supreme
Court.
2.The e-tender auction shall be conducted
by involving the CBI Authorities and
under intimation to the Lokayukta
Department.
3.The e-tender auction shall be conducted
only after measurement of the quality
and quantity of each of the 56 iron ore
heaps separately through mines and
Geology Department.
4.The e-auction shall be conducted after
taking samples of each of the 56 iron
ore heaps separately for which
Panchanama shall be drawn.
5.The e-auction process is over the
disposal off the iron ore be covered by
videography.
6.The auction amount shall be deposited
immediately with the Court in Spl. CC.
No. 268/2013 and a copy of the document
for having deposited the amount be kept
in connected cases.
7.The DMG shall keep records of the exact
quantity of iron ore transported by the
successful bidder of the property.
The Original of the Order be kept in
Spl. CC. No. 268/13 and a copy thereof be
kept in Spl. CC. Nos. 11/14, 14/14,
15/14, 36/14, 37/14, 38/14, 53/14 &
54/14.
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(Directed to the Judgment Writer,
transcribed by the corrected and then
signed and pronounced by me in the open
court on this 8th day of May 2015),
Sd/-08/05
(Pradeep S. Balikal)
XXXII Addl. City
Civil and Sessions
Judge and Spl. Judge
for CBI Cases,
Bangalore”
18. From the above, it is clear that Order dated
08.05.2015 was passed in different proceedings which
proceedings commenced by registration of FIR dated
15.03.2010, Ankola Police Station Crime No. 189/2010.
After investigation by CID/CBI chargesheets were
filed, which were the cases as referred above. Iron
ore which was directed to be released by Order dated
08.05.2015 was iron ore seized on 20.03.2010. In the
additional documents filed by the appellant, IA filed
on behalf of the respondent under Section 451/457
Cr.P.C. dated 08.03.2016 has been brought on record.
It is useful to extract the prayer made in the
application of the respondent, which is to the
following effect:
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“ PRAYER
Wherefore, it is prayed that this Hon’ble
Court be pleased to allow the above
application and direct the release in
favour of the applicant company herein,
of about 34,544 MT of Iron Ore belonging
to the applicant company that has been
seized on 20.03.2010 and is lying at the
plot allotted to applicant company by
Shree Mallikarjun Shipping Private
Limited in Belekeri Port area, in the
interest of justice & equity.
Place: Bangalore
Date 08.03.2016
Applicant
[Anand Prakash Dubey, Advocate for Applicant
Head-Finance, (K.N. Phanindra)”
Iron Ore Karnataka]
19. It is, thus, clear that seizure of the iron ore was
not in case Crime No. 2/2014 in which final report has
been accepted on 15.12.2015 rather seizure of the iron
ore was in different proceeding in which proceeding
Order dated 08.05.2015 was passed. When release of iron
ore on an application filed by the State under Section
451/457 Cr.P.C. was in different proceeding, there was
no effect or consequence of acceptance of the final
report vide Order dated 15.12.2015 in case Crime No.
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2/2014 and the High Court committed error in allowing
the Writ Petition on the strength of the final report
accepted on 15.12.2015. We have already extracted the
entire consideration of the High Court while allowing
the Writ Petition from paragraphs 8 to 15 of the
judgment. High Court while allowing the Writ Petition
had only relied on acceptance of the final report by CBI
Judge dated 15.12.2015 which as has been noted above,
was not relevant with regard to Order dated 08.05.2015
passed by the trial court.
20. Learned Senior Counsel for the appellant has also
brought on record subsequent judgment of the High Court
where High Court in Writ Petition filed against the same
Order dated 08.05.2015 by another writ petitioner has
disposed off the Writ Petition granting liberty to that
Writ Petitioner to approach Jurisdictional Criminal
Court for release of the seized iron ore by establishing
its existence and ownership rights. Reference has been
made to the Order of the Karnataka High Court dated
20.11.2017 in Writ Petition Nos. 29527-29531 of 2017 and
Writ Petition Nos. 29881-29884 of 2017 filed as Annexure
P-11.
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21. In result of foregoing discussion, we are of the
view that order and judgment of the High Court is wholly
unsustainable and is hereby set aside. We, however,
observe that it shall be open for the respondent to file
an appropriate application before the XXXII Additional
City Civil and Sessions Judge and Special Judge for CBI
Cases, Bangalore (CCH-34), for release of seized iron
ore by establishing its existence and its ownership
right over the same, which may be considered by
Jurisdictional Criminal Court in accordance with law.
The Criminal Appeal is allowed.
..........................J.
( A.K. SIKRI )
..........................J.
NEW DELHI, ( ASHOK BHUSHAN )
March 6, 2018.

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