Karnataka High Court
Sri Shivaram Mahabaleshwar Hebbar vs The State Of Karnataka on 20 December, 2023
Author: M. Nagaprasanna
Bench: M. Nagaprasanna
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
CRIMINAL PETITION No.5674 OF 2022
BETWEEN:
1. SRI SHIVARAM MAHABALESHWAR HEBBAR
S/O MAHABALESHWAR HEBBAR
AGED ABOUT 64 YEARS
WHOLE TIME DIRECTOR
M/S. DREAMS LOGISTICS INDIA PVT. LTD.,
REGISTERED OFFICE AT
DREAMS CHAMBER
NEAR BUS STAND
YELLAPURA - 581 359
UTTARA KANNADA DISTRICT.
ALSO AT:
FORMER DIRECTOR,
M/S. DREAMS LOGISTICS INDIA PVT. LTD.,
ARBAIL POST
YELLAPURA TALUK
UTTARA KANNADA DISTRICT
PIN - 581 337.
2. SRI SHIVARAM MAHABALESHWAR HEBBAR
S/O MAHABALESHWAR HEBBAR
AGED ABOUT 64 YEARS
WHOLE TIME DIRECTOR
M/S. PRINTEX EXPORTS INDIA PVT. LTD.,
REGISTERED OFFICE AT NO.A - 804
MANTRI GREENS
2
NO.1, SAMPIGE ROAD
MALLESHWARAM
BENGALURU - 560 003.
ALSO AT:
FORMER DIRECTOR,
M/S. PRINTEX EXPORTS INDIA PVT. LTD.,
ARBAIL POST, YELLAPURA TALUK
UTTARA KANNADA DISTRICT
PIN - 581 337.
... PETITIONERS
(BY SRI MURTHY D.NAIK, SENIOR ADVOCATE A/W.,
SRI PAVANA CHANDRA SHETTY, ADVOCATE)
AND:
THE STATE OF KARNATAKA
REPRESENTED BY ECONOMIC
OFFENCES WING, CID
BENGLAURU.
REPRESENTED BY
STATE PUBLIC PROSECUTOR
HIGH COURT BUILDING,
HIGH COURT OF KARNATAKA
BENGALURU - 560 001.
... RESPONDENT
(BY SRI KIRAN S.JAVALI, SPP A/W.,
SRI MAHESH SHETTY, HCGP)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO QUASH THE PROCEEDINGS IN
SPL.C.C.NO.908/2022 ON THE FILE OF THE LXXXI ADDL.CITY CIVIL
AND SESSIONS JUDGE AND SPL.JUDGE TO DEAL WITH THE
CRIMINAL CASES RELATED TO MPs/MLAs IN THE STATE OF
KARNATAKA, BENGALURU CITY QUA THE PETITIONER / ACCUSED
3
NOs.4(b) AND 5(b) FOR THE OFFENCE P/U/S 119, 120B, 409, 379,
465, 468, 471 R/W 34 OF IPC AND SEC.13(1)(c) AND 13(1)(d) R/W
13(2) OF P.C ACT AND SEC.4(1-A) R/W 21(1) OF THE MINES AND
MINERALS (DEVELOPMENT AND REGULATION) ACT VIDE
ANNEXURE-A AND ETC.,
THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON, COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER
The petitioners who are accused Nos.4(b) and 5(b) are
knocking at the doors of this Court calling in question proceedings
in Special C.C.No. 908 of 2022 which arises out of crime No.154 of
2010, pending before the LXXXI Additional City Civil and Sessions
Judge and Special Judge to deal with Criminal cases related to
MPs/MLAs in the State of Karnataka, Bangalore City for offences
punishable under Sections 119, 120B, 409, 379, 465, 468 and 471
r/w Section 34 of the IPC, Section 13(1)(c) and 13(1)(d) r/w
Section 13(2) of the Prevention of Corruption Act, 1988 (hereinafter
referred to as 'the Act' for short) and Section 4(1-A) r/w Section
21(1) of the Mines and Minerals (Development and Regulation) Act,
1957 (for short 'the Mines Act').
2. Heard Sri Murthy D. Naik, learned senior counsel appearing
for the petitioners and Sri Kiran S. Javali, learned State Public
Prosecutor for the respondent.
3. The facts, in brief, adumbrated are as follows:-
The petitioners are full time Directors of M/s Dream Logistics
India Private Limited and M/s Printex Exports India Private Limited.
A complaint comes to be registered alleging illegal stocking of iron
ore in Baitkol Port Area to the tune of 50,000/- metric tons
approximately valued at `15/- crores. The complaint becomes a
crime in Crime No.154 of 2010. On the same facts various offences
are also registered by the Forest Department for illegal mining.
While registering the crime, 11 in number, the petitioners were not
arrayed as accused at the outset. After registration of crime in
Crime No.154 of 2010 in which the petitioners were not arrayed as
accused, on 11-10-2010 the petitioner resigned from the post of
Director from accused Nos. 4 and 5 Companies with effect from said
date i.e., 11-10-2010 and Form No.32 of the Companies Act was
also notified by the Companies qua such resignation. After
investigation is concluded a charge sheet is filed before the
concerned Court in Crime No.154 of 2010. An application then
comes to be filed by the prosecution seeking further investigation
as obtaining under sub-section 8 of Section 173 of the Cr.P.C.
Investigation gets concluded and a supplementary charge sheet is
filed before the concerned Court on 05-03-2013. It is here, the
petitioners are arrayed as accused Nos. 4(b) and 5(b) along with
other accused. The Special Judge takes cognizance of the offence
and issues summons to the petitioners as they were arrayed as
accused, as observed hereinabove.
4. This is called in question by the petitioners and other
accused in Criminal Petition No.101105 of 2014 and connected
cases. This Court in terms of its order dated 20-02-2015 allowed
the petitions on one solitary ground that the order taking
cognizance did not reflect application of mind by the concerned
Court and remitted the matter back to the hands of the Special
Judge to reconsider it from the stage of taking of cognizance
bearing in mind the observation made in the course of the order.
The impugned cognizance comes about after seven years i.e., on
20-04-2022 again taking cognizance of the offences so alleged
against several accused including the petitioners as accused
Nos.4(b) and 5(b) and issuing summons to these petitioners, yet
again. Issuing of summons is what drives the petitioners to this
Court in the subject petition.
5. The learned senior counsel Sri Murthy D.Naik, appearing
for the petitioners would urge that though the petitioners are
named as Directors of M/s Dream Logistics India Private Limited
and M/s Printex Exports Indian Private Limited, they had no role to
play in the day-to-day affairs of the Companies particularly, the
subject export which has resulted in the impugned proceedings. The
Special Judge has issued summons to the petitioners on the sole
ground that the petitioners were signatories to a current account
opening form on 28-07-2006 in Kanara District Central Co-
operative Bank Limited, Sirsi. The petitioner/Shivaram
Mahabaleshwar Hebbar had then signed as Chairman of the
Company. The balance sheet is seen where it bears the signature of
the petitioner when he was holding the charge in the Company.
Barring this, it is submitted that there are no pointers towards the
illegality committed by the petitioners. It was a resolution of the
Board and decision is taken by the Board. He would contend that
there is no concept of vicarious liability in criminal law. The
Directors of the Company cannot be made vicariously liable for the
acts of the Company, unless they have a specific role to play in any
transaction. It is his submission that the Special Judge has erred in
his lengthy order of taking cognizance in issuing summons to these
petitioners without even indicating what is their role in the entire
episode of crime. He would seek to place reliance on the following
judgments of the Apex Court and they are (i) STATE OF ORISSA
v. DEBENDRA NATH PADHI1, (ii) SUNIL BHARTI MITTAL v.
CBI2, (iii) RAVINDRANATHA BAJPE v. MANGALORE SPECIAL
ECONOMIC ZONE Ltd.,3 and (iv) BIRLA CORPORATION
LIMITED v. ADVENTZ INVESTMENTS AND HOLDINGS
LIMITED4.
6. Per-contra, learned State Public Prosecutor would
vehemently refute the submissions to contend that whether the
(2005) 1 SCC 568
(2015) 4 SCC 609
2021 SCC OnLine SC 806
(2019) 16 SCC 610
petitioners are involved in the day-to-day affairs of the Company or
they had any role to play is only a matter of evidence, as
admittedly there are documents collected by the prosecution which
bears the role of the petitioners in the alleged episode of crime. He
would submit that the order of the Special Judge taking cognizance
does not suffer from any material irregularity, as the order bear
complete application of mind. It is his submission that repeatedly
the petitioners are bringing in this very ground to seek quashment
of proceedings. In the year 2015 it was this very ground that led to
quashing of proceedings and later the same ground is urged. He
would seek dismissal of the petition and the trial be permitted to
continue and taken to its logical conclusion.
7. I have given my anxious consideration to the submissions
made by the respective learned counsel and have perused the
material on record.
8. The afore-narrated facts are not in dispute as they are a
matter of record. The entry of the petitioners as accused happened
in the supplementary charge sheet filed by the Police in Crime
No.154 of 2010 registered initially for offences punishable under
Sections 409 and 379 of the IPC, but now for the afore-quoted
offences. Insofar as the offences relating to the Act, the petitioners
are not alleged of the same. The offences against the petitioners
are restricted to offences under the IPC and the Mines Act. Suffice it
to begin with the allegations against the petitioners in the
supplementary charge sheet so filed by the Police. The role of the
petitioners in the supplementary charge sheet as obtaining in
Column No.7 is as follows:
".... .... ....
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dªÁ¨ÁÝgÀgÁVgÀÄvÁÛgÉ."
The allegations against the petitioners are as afore-quoted. Based
upon the said supplementary charge sheet, a criminal case is
registered in Special C.C.No.15 of 2014, cognizance is taken and
summons are issued to the petitioners. This becomes the subject
matter of several petitions before this Court in Criminal Petition
No.101057 of 2014 and connected cases. These cases come to be
disposed of by an order dated 20-02-2015 on several grounds and
answering them this Court observes as follows:
".... .... ....
15. In the absence of any documentary proof, act of one
amounts to act of all. The Partnership Firm may issue or defend
in its name for civil liability in Civil Court. But, when it comes to
the question of criminal liability, all the partners are necessarily
to be held vicariously liable to the alleged offence in respect of
the company registered under the Companies Act. In the
absence of any rules or regulation governing the company under
which a person can be held responsible for all the acts done on
behalf of the company, it is inevitable to prosecute all its
Directors and Managing Directors. Hence, there is no merit in
the case of the petitioners and the circumstances do not warrant
invoking the extra ordinary jurisdiction of this Court under
Sections, 482 of Cr.P.C. The Special Judge before whom the
charge sheet is filed is the District and Sessions Judge and any
order passed by him is amenable to the revisional jurisdiction,
and shall be challenged before this Court under revision. The
order of taking cognizance though not challenged by way of a
revision, is how challenged under the premise of Section 482 of
Cr.P.C., which is not permissible. The order dated 18/6/2014
passed by the learned District Judge which is vexed in these
petitions reads as under:-
"The entire records in CC No.283/2011 relating to
Cr.No.154/2010 of Karwar Town Police station are
received from PRL. Civil Judge and C.J.M. Karwar as per
his letter No.582/2014 dated 14/5/2014 criminal case is
registered against the accused persons and the
companies for the offences punishable under Sections
13(1) and (d) r/w Section 13(2) of PC Act 1988.
The accused persons are on bail.
Documents as per list are produced and verified
cognizance is taken in respect of alleged offences Resister
as a special case.
Issue Summons to all the accused and the companies
and call on 31/7/2014"
16. It is the submission at the bar, that firstly charge
sheet was filed before the C.J.M. Karwar. Thereafter, further
investigation was conducted under Section 173(8) of Cr.P.C. and
since additional offence under the Prevention of Corruption Act
was invoked against accused No.1, the charge sheet was
submitted before the CJM were transferred to the Special Court.
On a reading of the order of 18/6/2014 it is not possible to infer
that the Special Judge before taking cognizance applied his mind
to the materials available in the charge sheet and was convinced
about availability incriminating materials against the accused in
respect of alleged offence quoted in the charge sheet.
17. A bald recording to the effect that cognizance is taken
in respect of the alleged offence will not suffice to infer that he
had gone through the material available before him and came to
the conclusion that prima facia case was available from the
charge sheet papers to register the special case. That vitiates
the order of taking cognizance. In that view of the matter,
consequential proceeding has no validity and illegal barring. Of
course, the order of the learned Special Judge in taking
cognizance against the petitioners was not challenged within
stipulated period under revision. Still when the illegality
committed at the threshold is brought to the notice of this
Court, the petitioners cannot be non-suited by showing their
way to trial Court. It is in the interest of justice that the order
dated 18/6/2014 needs to be quashed and the matter shall be
remitted back to the concerned Court for doing needful in
accordance with the established procedure. At the time of taking
cognizance, it is for the learned Magistrate to apply his mind in
accordance with the observation made by the Apex Court in the
above quoted judgements and pass suitable orders.
18. Accordingly, the petitions are allowed. The order of
the Special Judge in Special Case No.15/14 in respect of Crime
No.154/2010 of Karwar Police Station, taking cognizance and
issuing summons to the petitioners herein so also the co-
accused is quashed. The matter is remitted to the Special Court
to proceed from the stage of taking cognizance in the light of
the observation made above.
19. The petitioners are given liberty if so necessities to
move for discharge before the trial Court under Section 327 of
Cr.P.C. All the contentions are left open."
This Court allows the petition, quashes the order of taking
cognizance in Special C.C.No.15 of 2014 and the act of issuing
summons to the petitioners therein. One of the petitions was filed
by these petitioners. The matter was remanded back to the Special
Court to proceed from the stage of taking cognizance in the light of
the observations made in the course of the order. The observations
of this Court was that in the absence of documentary proof a
partnership firm may issue or defend the allegations in its name for
civil liability in a civil Court. But, when it comes to the criminal
liability, all the partners are necessarily to be held vicariously liable
only if there is evidence against them. In the absence of any Rules
and Regulations governing the Company under which a person can
be held responsible for all the acts done on behalf of the Company,
it is inevitable to prosecute all its Directors and the Managing
Director. The order taking cognizance was noticed as perfunctory
and the Court holds that a bald recording of cognizance cannot
meet the tenets of law. Therefore, it quashes the order of taking
cognizance and remits the matter back to the concerned Court. The
concerned Court did not pass orders immediately. The matter went
on for 7 long years and after 7 long years, the impugned order
comes to be passed. The impugned order is of taking cognizance
and issuing of summons. The issues framed by the concerned Court
in the impugned order would read as follows:
"8. Hence, the following points arise for my
determination:-
1) Whether there is a prima facie case to take
cognizance of the offences alleged against the accused?
2) Whether this Court is required to issue process to
all the accused against whom the I.O. has filed charge
sheet?
3) What order?"
The role of the petitioners in the order is found at paragraphs 25
onwards. They read as follows:
".... .... ....
25. Accused No.4 is M/s. Dream Logistics Co. Ltd. Now it
is for this Court to go through the documents and find out who
were all involved in the business of the Company. The I.O. has
produced Pre-Shipment invoice which bears the signature
of Rajendra V.Naik i.e, accused No.4(e). The police have
produced the copy of application submitted under Sec.451 R/W
457 of CrPC for release of iron ore stock. Said application was
signed by accused No.4(a) i.e., Vivek S. Hebbar on behalf of the
Company. The police have produced the extract of the Minutes
of the Meeting of the Board of Directors of M/s. Dream Logistics
Co. Ltd., dated 21.9.2009. In this resolution, the Board of
Directors have authorized Rajendra V. Naik, Manager (Exports)
of the Company to act on behalf of the Company, to appear
before any firm, before any Court in India, Central Government
or State Government Department, record statements, file any
legal case in any Court, represent the Company in any legal
matter in connection with the business of the Company. The
police have produced one letter given by Assistant General
Manager, State Bank of India, Parwaz Plaza, dated 4.7.2011. In
this letter, he has furnished the bank details of M/s. Dream
Logistics Co., Private Limited. The point No.4 says that the
prime signatory and authorized signatory to operate/withdraw
the amount from the balances in the said account are 1) Vivek
S. Hebbar 2) Prakash Hegde. It is further stated that as per the
Board Resolution of the Company, provided to us, (any one
signatory is authorized to withdraw the amount from the date of
opening of account). Another letter dated 05.02.2013 issued by
AGM, SBI, Hospete, stated that the authorized signatories for
the above cash credit account No.30261674683 are a) Vivek S.
Hebbar b) S. Prakash Hegde, operated by severally or jointly as
the case may be.
26. In another letter dated 15.02.2013, the AGM, State
Bank of India, stated that Vivek Hebbar, Managing Director and
Prakash Hegde are authorized persons of the Company. In
another letter dated 27.06.2011 issued by Axis Bank Ltd.,
Hospete Branch, it is stated that the authorized person to sign
and withdraw the amount in connection with the current account
bearing No.618010200000222 is any one of the below
mentioned Directors to sign singly a) Vivek Shivaram Hebbar b)
Shivaram Mahabaleshwar Hebbar c) Prakash G. Hegde.
27. In another letter dated 28.6.2011 issued by the
Kanara District Central Co-Operative Bank Ltd., Sirşi (U.K.),
Yellapura Branch, it is stated that the current account No.186
was opened on 28.07.2006 and Shivaram Mahabaleshwar
Hebbar, Chairman and Vivek S. Hebbar, Managing Director of
the Company is individually authorised to operate the account.
Vivek Shivaram Hebbar, Managing Director is authorised to sign
the documents pertaining to open the account.
28. In another letter dated 29.06.2011 issued by State
Bank of India, Yellapur, it is stated that the current account No.
10782654302 is in the name M/s. Dream Logistics Co. Pvt. Ltd.,
and Shivaram Mahabaleshwar Hebbar is Chairman and Vivek S.
Hebbar is Managing Director of the Company. Shivaram M.
Hebbar, Chairman and Vivek S. Hebbar, Managing Director of
the Company are authorised to operate the current account
Individually. On going through all these records, it is clear that
the accused No.4(a) Vivek S. Hebbar, accused No.4(b)
Shivaram Mahabaleshwar Hebbar, accused No.4(c) Prakash
Gopalakrishna Hegde and accused No.4(e) Rajendra V. Naik
have actively participated in the business of the Company and
they were operating the bank accounts of Axis Bank, State Bank
of India and that of Kanara District Central Co-Operative Bank
Ltd., Sirsi (U.K.), Yellapura Branch and therefore, case has to be
registered against them and process has to be issued against
accused No.4, accused No.4(a), 4(b), 4(c) and 4(e).
29. Accused No.5 is M/s. Printex Exports India Pvt Ltd.
Police have produced Pre-Shipment invoice issued by Rajendra
V. Naik on behalf of Printex Exports India Pvt. Ltd. The police
have produced the extract of the Minutes of the meeting of the
Board of Directors of M/s. Printex Exports India Pvt., Ltd., dated
22.09.2009. As per the resolution of the Board of Directors,
Rajendra V. Naik, Manager (Exports) are authorised to act on
behalf of the Company and to look after the export operations of
the Company at Karwar Port and sign all necessary export
documents, promissory notes, guarantees, undertakings, forms,
deeds, indemnity, affidavits, applications, etc.
30. The police have produced another letter issued by
Printex Exports India Pvt Ltd., containing the list of Directors as
Vivek S. Hebbar, Shivaram Mahabaleshwar Hebbar and
authorised person as Rajendra V.Naik, Manager (Export). The
police have produced one Balance Sheet as on 31.03.2010
which is signed by accused No.5(a) Vivek S. Hebbar and
accused No.5(b) Shivaram Mahabaleshwar Hebbar on behalf of
Mis. "Printex Exports India Pvt., ltd. On perusal of all these
documents, it is clear that accused No.5(a) Sri Vivek S. lebbar,
accused Shivaram Mahabaleshwar Hebbar, accused
No.5(d) Rajendra V.Naik have actively participated in the
business of the Company. Therefore, this Court has to register
case against them and issue process against accused No.5,
accused No.5(a), accused No.5(b) and accused No.5(d)."
After going through the documents that the Investigating Officer
had produced including pre-shipment invoice which bears the
signature of accused No. 4(e) and the said application is signed by
accused No.4(a), Managing Director of the Company. Minutes of the
meeting held by the Board of Directors of M/s Dream Logistics
Company Limited are also looked into and more importantly the
Investigating Officer has produced a letter given by the Assistant
General Manager of State Bank of India furnishing Bank details of
M/s Dream Logistics Private Limited and the authorized signatories
were permitted to withdraw the amount of balance in its account.
The account was that of the petitioners. Not stopping at that, the
Court also considers the role of the petitioners being involved in the
day-to-day affairs of the Company as they were operating the
accounts. It is upon this, the concerned Court arrives at a
conclusion that these are matters which have to be thrashed out in
a trial. Prima facie, the role of each one of the accused is taken
complete note of and against each one of the accused what are the
offences are also taken note of.
9. On accepting the submissions of the learned senior counsel
if this is now dubbed to be an order which suffers from non-
application of mind, this Court would be exercising a jurisdiction
under Section 482 of the Cr.P.C., which the Apex Court has time
and again directed that it should be cautiously exercised. On such
cautious exercise, this Court does not find any merit in the
submission of the learned senior counsel for the petitioners to
contend that the order of taking cognizance does not bear any
application of mind. The order runs into 44 pages. Though it is not
the pages that matters, it is the content and the content is clear
that against every one of the accused the concerned Court has
looked into and on prima facie analysis taken cognizance of the
offence.
10. To consider the submission of the learned counsel for the
petitioners that the order of taking cognizance still bears non-
application of mind, it is germane to notice what was the earlier
order of taking cognizance which comes to be quashed by this
Court. The said order is a part of what is extracted supra. The order
was that the entire records were perused, cognizance is taken, case
is registered and summons are issued. This is what the order that
was called in question in the aforesaid order passed by this Court.
It is for that reason this Court observed that a bald recording to the
effect that cognizance is taken would not suffice to infer that the
Court has gone through the materials available before it and had
come to the conclusion that prima facie case was available from the
charge sheet papers to register the said case. The present order
does not suffer from any such non-application of mind.
11. The concerned Court has gone into the entire charge
sheet material and has observed about the role of each of the
accused, taken cognizance and issued summons. The particular role
of the petitioners is prima facie found in the order of taking
cognizance. Therefore, it becomes a matter of further proceedings
for the petitioners to come out clean. The judgment relied upon by
the learned senior counsel for the petitioners in the case of
RAVINDRANATHA BAJPE (supra) would not come to his aid as
that was a case where the order of taking cognizance did not bear
any application of mind. It was a one line order. Therefore, the
said judgment does not become applicable to the fact situation.
Same goes with the judgment in the case of SUNIL BHARTI
MITTAL and BIRLA CORPORATION LIMITED (supra). The role
of the petitioners is prima facie analysed by the concerned Court. In
fact, all the judgments that the learned senior counsel now relied
upon are all considered by the concerned Court while taking
cognizance and issuing summons. There is no merit that would
warrant any interference at this juncture in these proceedings.
However, liberty is to be reserved to the petitioners to knock at the
appropriate forum in the event they were having some more
armory in their arsenal to seek their discharge from the array of
accused. The finding rendered herein would only be for the purpose
of consideration of their case under Section 482 of the Cr.P.C.,
which would not be binding before any fora.
12. For the aforesaid observations, finding no merit in the
petition, the petition stands rejected.
Pending application if any, also stands disposed, as a
consequence.
Sd/-
JUDGE
bkp
CT:SS
