Orissa High Court

Court Of The Special Judge ... vs State Of Odisha (Vigilance) ... on 23 September, 2022

           IN THE HIGH COURT OF ORISSA, CUTTACK

                        CRLMC NO.2272 OF 2021
     In the matter of an application under Section 482 of the Code of
     Criminal Procedure challenging the Charge-sheet No.04 dated
     30.03.2012, filed by Balasore Vigilance P.S. in VGR Case No.23 of
     2011, corresponding to T.R. No.16 of 2012, registered in the
     Court of the Special Judge (Vigilance), Keonjhar as well as the
     order of cognizance dated 21.11.2012 passed by the learned
     Special Judge (Vigilance), Keonjhar.
                                     -----------------

Md. Mofazzalur Rahman & another. .......Petitioners

-Versus-

State of Odisha (Vigilance) ...... Opp.party

-------------------------------------------------------------------------------------------- Advocate(s) who appeared in this case through Hybrid mode:

---------------------------------------------------------------------------------------------

For Petitioners - M/s. Pranaya Kumar Dash, V. Mohapatra, G. Khanna, S. Mohanty, Advocates.

            For Opp.party              -    Mr. Srimanta Das,
                                            Sr. Standing Counsel (Vig.)


                 PRESENT:-

THE HON'BLE SHRI JUSTICE SATRUGHANA PUJAHARI

---------------------------------------------------------------------------------

Date of judgment:-23.09.2022

S. PUJAHARI, J. This is an application filed by the

petitioners under Section 482 of the Code of Criminal

Procedure (for short the "Cr.P.C.") seeking for quashing

of the Charge-sheet dated 30.03.2012 filed in Balasore

// 2 //

Vigilance P.S. Case No.55 of 2009 (VGR Case No.23 of

2011), corresponding to T.R. No.16 of 2012 in the court

of the learned Special Judge (Vigilance), Keonjhar, the

order dated 21.11.2012 passed by the said learned Court

taking cognizance of the offences under Sections 13(2)

read with Section 13(1)(d) of the Prevention of Corruption

Act, 1988 (for short the "P.C. Act") and under Sections

201, 420, 379, 120-B of IPC, Section 21 of the MMDR

Act, 1957 and Section 2 of the Forest (Conservation) Act,

1980 against the petitioners and co-accused persons,

and the consequential proceedings.

2. Heard the learned counsel for the petitioners

and Mr. Srimanta Das, the learned Sr. Standing counsel

appearing for the Vigilance Department.

3. The F.I.R. in this case appears to have been

lodged by the Deputy Superintendent of Police, Vigilance

Cell, Unit Office, Bhubaneswar on the basis of Vigilance

enquiry conducted by the Vigilance Team on 10.11.2009

and 11.11.2009 in respect of Balada Block Iron Ore

Mines of M/s. Serajuddin & Co. over an area of 829.27

acres / 335.594 Hect. at village-Balada under Barbil

// 3 //

Tahasil, District- Keonjhar, on the allegation of illegal

mining activities of the said company. Pursuant to the

said report, a case was registered by the Superintendent

of Police, Vigilance, Balasore Division, Balasore, and on

completion of investigation, charge-sheet was laid for the

offences indicated above against fourteen accused

persons including the present petitioners, who are the

Partners of the aforesaid firm, namely, M/s. Serajuddin

& Co., i.e., the mining lease holder in respect of Balada

Iron Ore Mines. On the basis of the charge-sheet so

submitted, the learned Special Judge (Vigilance),

Keonjhar has taken cognizance of those offences and

issued process to the petitioners and the co-accused

persons. Hence, the present application.

4. The petitioners have sought for quashing of the

Charge-sheet, the impugned order of cognizance and the

consequential proceeding on the grounds, inter-alia, that

the very inception of the prosecution is unauthorized,

inasmuch the Vigilance Police had no authority to

conduct the joint enquiry or verification prior to issuance

of the Notification No.IV(A)SM-101/209-307/SM dated

// 4 //

27.01.2010 which devolved limited power on police for

the purpose of detection, seizure and search into the

alleged Mining activities. Admittedly, the F.I.R. in the

present case has been drawn on the basis of a Vigilance

enquiry report said to have been conducted on

10.11.2009 and 11.11.2009, i.e., prior to issuance of the

aforesaid Notification. It is the further contention of the

petitioners that the charge-sheet as submitted against

them is also bereft of any factual or legal basis, and that

the learned trial Court has passed the impugned order of

cognizance without application of judicial mind. The

allegation wise counter submissions made by the

petitioners vide their application at hand may be broadly

outlined as under:-

(i) It is alleged by the prosecution that the Mining

leaseholder had disproportionately despatched

a quantity of 4,283.723 MT of Iron Ore from

4.290 ha. of forest area without any forest

clearance and the cost of the same comes to

Rs.21,41,862.00 @ Rs.500/- per ton

approximately. It is further alleged that there

// 5 //

was illegal excavation and despatch of a

quantity of 80,262 MT of Iron Ore to the tune

of Rs.10,43,40,600/- by the Lessee-company

from the DLC forest land without forest

clearance. It is also alleged by the prosecution

that the Lessee-company had developed

quarries in between virgin land in Block-D and

Block-E and also developed benches in Block-D

within the virgin of DLC Forest and Plot Nos.1

and 2 of village- Nayagarh, and thereby illegally

produced Iron Ore of 55,429.669 MT by

excavating 92,903.048 cubic meter in the DLC

virgin forest without forest clearance, and the

cost of the same amounts to Rs.7,02,20,963/-.

As against these allegations, it is the

submission of the petitioners that pursuant to

the order dated 21.04.2014 of the Apex Court

in W.P.(C) No.114 of 2014, the State

Government had submitted a list of 51 Iron Ore

and Manganese Leases which had reportedly

carried out mining operations in violation of

// 6 //

the Forest (Conservation) Act, 1980, and that

the Lessee - M/s. Serajuddin & Co. was not

shown in the said list as a violator, and hence

the allegation brought vide the present charge-

sheet against the Lessee-company regarding

violation of any of the provisions of the Forest

(Conservation) Act, 1980 is wholly unwarranted

and erroneous. It is further submitted by the

petitioners that the Mining lease that was

granted to the Lessee on 15.11.1960 was

subsequently renewed from time to time and it

was only on 06.01.1998 some portions of the

Mining leases in the State of Odisha including

that of the present Lessee-company were

identified as DLC Forest pursuant to the order

dated 12.12.1996 passed by the Apex Court in

W.P.(C) No.202 of 1995. It is pointed out by the

petitioners that nothing has been indicated in

the present charge-sheet showing any specific

period during which the Lessee-company

allegedly carried out Mining operation in any

// 7 //

DLC Forest area of the leasehold area. It is

further contended by the petitioners that even

if it is assumed for sake of argument that there

was any violation of the aforesaid Act by the

Lessee-company, the prosecution brought for

any such violation is not maintainable,

inasmuch as no complaint has been filed by

the Authorized persons in view of the

provisions of the said Act, much less after

issuing the requisite show-cause notice to the

alleged violators. The petitioners have

submitted a list of 51 violators of Forest

(Conservation) Act, 1980, which was submitted

by the State Government to the Central

Empowered Committee, as Annexure-6 of the

application.

(ii) It is alleged by the prosecution that during the

Vigilance enquiry, it was found that there was

discrepancy of 51,043.17 MT of size Iron ore

and 1,06,996 MT of Iron Ore Fines between the

physical balance and the book balance, leading

// 8 //

to the conclusion that the aforesaid quantities

of the produce were sold clandestinely without

any payment of royalty and sales tax and that,

thereby the State Exchequer incurred loss of

Rs.86,50,015/-. In this context, it is submitted

by the petitioners that as per the statutory

returns filed by the Lessee-company, the

closing balance for the seized Iron Ore and Iron

Ore Fines were 4,47,154.6 MT and 11,09,256

MT respectively as opposed to balance of

4,50,534.04 MT of sized iron ore and

11,88,879.29 MT of Iron Ore Fines as alleged

in the charge-sheet. It is pleaded by the

petitioners that even assuming the physical

balance as alleged by the prosecution to be

correct, the variation in stock comes to 0.4%

only which is miniscule in nature considering

the huge amount of stock handled by the

Lessee over the period of around fifteen years.

It is further pleaded that variation in stock

even if calculated on the basis of the physical

// 9 //

balance as alleged in the charge-sheet, would

amount to around 0.5% of the entire stock

handled from 1996 onwards by the Lessee

which is also a miniscule figure compared to

the huge amount of Ore handled by the Lessee.

The allegation is also found fault with by the

petitioners on the ground that the procedure of

measurement of stock, i.e., Chain or Tape

measurement as adopted in this case is

susceptible to an error of a substantial nature,

and therefore, the allegation regarding

pecuniary advantage is baseless. The

petitioners have also made a reference to the

policy decision taken in the Review meeting

dated 31.05.2011 held by the Minister, Steel &

Mines and Industries, Government of Odisha

for adopting an uniformed procedure across

the State for ensuring correct verification of the

facts regarding stock measurement. It was

decided in the said meeting that Geometrical

stacking be followed and the necessary

// 10 //

anomalies, such as, compaction factor, void,

density etc. be taken into consideration while

carrying out the stock measurement. It is

submitted that in the present case, the

aforesaid directions have not been followed, for

which the discrepancy shown by the

prosecution between physical balance and

book balance cannot be accepted to be correct.

The petitioners have produced a copy of the

Minutes of the aforesaid Review meeting at

Annexure-7 of the application.

(iii) The prosecution has further alleged that the

Lessee-company carried out production in

excess of the estimated production as provided

under the approved IBM plan and thereby

committed theft by illegal selling the excess

produce. As against this allegation, the

petitioners submit that the limits mentioned in

the Mining plan are always considered to be

the tentative annual production targets for a

five years period, rather than the maximum

// 11 //

production which can be carried out by the

Lessee. In this context, the petitioners invite a

reference to the Manual published by the

Indian Bureau of Mines (IBM) on Appraisal of

Mining plan in 2014 which states that the

limits mentioned in the Mining plan are only

tentative in nature. The relevant extracts of the

said Manual have been submitted by the

petitioners at Annexure-8 of the application.

The petitioners have also referred to the report

dated 16.10.2014 submitted by the Central

Empowered Committee before the Apex Court

in W.P.(C) No.114 of 2014 wherein it has been

specifically stated that the total production

target provided in the Mining plan should be

taken as a criteria for determining the

performance of the Lessee rather than the

annual production targets within five year

periods. The relevant extract from the said

report has been submitted by the petitioners at

Annexure-9 of the application. It is further

// 12 //

contended by the petitioners that as per the

judgment dated 02.08.2017 passed by the

Apex Court in the matter of Common Cause

vrs. Union of India and others, in W.P.(C)

No.114 of 2014, no culpability can be

attributed to the Lessee for having committed

any offence under the MMDR Act, 1957 or the

Indian Penal Code for any production in excess

of the approved quantity under the Mining

plan, inasmuch as for any such indulgence,

the concerned Lessee becomes liable to pay

compensation under Section 21 of the MMDR

Act, 1957, equal to the price of the Ore already

sold by such Lessee. According to the

petitioners, liability to pay compensation

cannot be equated with penal liability.

(iv) It is further alleged by the prosecution that the

Lessee-company evaded payment of sales tax to

the tune of Rs.13,06,50,441/- by submitting

fabricated statements on quality and value of

Iron Ore. As against this allegation, it is the

// 13 //

submission of the petitioners that the basis of

the assessment made by the Vigilance Team

leading to such allegation being faulty and

misconceived, such an allegation is not

sustainable in law. According to the

petitioners, the prosecution has placed reliance

on the market rate of the OMC as the actual

price, although the Lessee has sold as per the

prices shown in its sale register and paid sales

tax as applicable on such sale. The petitioners

have also placed reliance on the clearance

certificate issued by the Sales Tax Authorities

vide Annexure-10 to the application. According

to them, there was no default on the part of the

Lessee-company in the face of the said

Clearance Certificate and hence, the allegation

made on this count is baseless.

5. Besides the contentions as above, the

petitioners have also relied on certain subsequent events

to contend that the launching of the present prosecution

// 14 //

is not sustainable in law. It is averred by him that the

Multi-Disciplinary Committee constituted by the State

Government on 05.11.2016 comprising Director of

Mines, Odisha, Representatives of Director, Vigilance,

Representative of Principal Secretary, Forest &

Environment Department, Regional Controller of Mines,

Indian Bureau of Mines and Director of Geology re-

examined the Vigilance cases in relation to Mining leases

including the present case by holding several meetings

in the year 2017 and it has been observed, inter-alia, by

the said Committee that the allegations made by the

Vigilance vide the charge-sheet in the present case are

not correct. The petitioners further submit that in the

aftermath of the judgment dated 02.08.2017 of the Apex

Court in W.P.(C) No.114 of 2014, in the case of Common

Cause vrs. Union of India, the Special Investigation

Team (Black Money) observed that a fresh look may be

given by the Multi-Disciplinary Committee, and that the

Enforcement Directorate should be a part of the said

Committee, for taking a fresh decision. In the light of the

judgment of the Apex Court dated 02.08.2017 the

// 15 //

Vigilance cases in relation to Mining lease were re-visited

by the Committee and the said Committee vide its

subsequent report dated 06.12.2018 reiterated its views

given in the earlier report. The Committee has found the

allegations made by the Vigilance to be based on

misconception and incorrect facts and figures. It is

ultimately submitted by the petitioners that in view of

the reports of the aforesaid Multi-Disciplinary

Committee, nothing survives to be decided in the present

Vigilance case, and hence, the same should be quashed

to prevent further abuse of the process of the Court.

6. It is further submitted by the learned counsel

for the petitioners that, the procedures contemplated

under the MMDR Act having not been followed in the

present case, and the Vigilance Department being not

competent to launch the prosecution in terms of Section

22 of the MMDR Act, and no complaint as required by

the said Act having been made by the Authorized Officer,

the charge brought under the said Act is not sustainable

in law. It is his further submission that the Lessee-

company having already been exonerated from the

// 16 //

charge of violation of the provisions under the Forest

(Conservation) Act in the civil proceedings before the

Apex Court in W.P.(C) No.114 of 2014, no criminal

proceeding for violation of the said Act could have been

initiated. In this context, the petitioners have placed

reliance on a decision of the Apex Court in the case of

Radheshyam Kejriwal vrs. State of West Bengal,

reported in (2011) 3 SCC 581, wherein it has been held

that a person exonerated in civil adjudication should not

be proceeded against for the same wrong in a criminal

case, the underlying principle being the higher standard

of proof in criminal proceedings. The aforesaid view has

been reiterated by the Apex Court in the case of Ashoo

Surendranath Tewari vrs. CBI, reported in (2020) 9

SCC 636.

7. Referring a Three Judge Bench decision of the

Apex Court in the case of State of Orissa vrs.

Debendra Nath Padhi, reported in (2005) 1 SCC 568,

the learned counsel for the petitioners submitted that

the documents of unimpeachable character can be taken

into consideration by the High Court for quashing of a

// 17 //

criminal proceeding in exercise of power under Section

482 of Cr.P.C. The said principle has been reiterated in a

later decision of the Apex Court in the case of Rukmini

Narvekar vrs. Vijaya Satardekar, reported in (2008)

14 SCC 1. The principle settled by the said Authorities is

that although at the stage of framing of charge the

accused has no scope to produce any evidence before the

trial Court, in a proceeding taken therefrom under

Section 482 of Cr.P.C., the High Court is free to consider

material that may be produced on behalf of the accused

to arrive at a decision whether the charge as framed

could be maintained. Needless to mention that the said

principle can also be applied to a proceeding under

Section 482 of Cr.P.C. for quashing of the order of

cognizance and the consequential proceedings. The

learned counsel has also placed reliance on a decision of

the Apex Court in the case of Anita Malhotra vrs.

Apparel Export Promotion Council, reported in (2012)

1 SCC 520, in which it was held that if on the face of a

document which is beyond any suspicion and placed on

record by the accused, it is discovered that the allegation

// 18 //

/ charge against the accused cannot stand, it is

incumbent on the High Court to look into those

documents which have the bearing on the matter, even

at the initial stage and grant relief to the accused, in

exercise of the jurisdiction under Section 482 of Cr.P.C.

8. The learned counsel also emphasized that

since the entire allegation by the prosecution has been

directed against the Lessee-company, i.e., M/s.

Serajuddin & Co., the petitioners, who are the partners

of the said company, could not have been charge-

sheeted in absence of any specific allegation against

them much less any evidence showing or suggesting

them to have acted independent of the will or interest of

the company. In support of his such contention, he has

placed reliance on the decisions of the Apex Court in the

cases of Sunil Bharti Mittal vrs. CBI, reported in

(2015) 4 SCC 609, Sharad Kumar Sanghi vrs.

Sangita Rane, reported in (2015) 61 OCR (SC) 551 and

Ravindranath Bajpe vrs. Mangalore Special

Economic Zone Ltd. and others, reported in AIR 2021

SC 4587 and some other authoritative pronouncements.

// 19 //

9. The learned counsel for the petitioners has also

placed reliance on a single Bench decision of this Court

rendered in a batch of cases vide CRLMP No.35 of 2022,

CRLMP No.36 of 2022 etc. (decided on 18.02.2022), to

submit that in similar fact situations, the prosecution

has been quashed in those cases.

10. Per contra, the learned Sr. Standing counsel

appearing for the Vigilance Department submits that

present being not a stage of the proceeding to make any

threadbare analysis of the materials placed by the

prosecution, and what all that is necessary being to find

out as to whether or not there are prima-facie materials

against the accused to be proceeded with for the offences

alleged, the contentions advanced by the petitioners do

not deserve to be looked into. According to him, there are

enough materials on record showing involvement of the

petitioners in criminal conspiracy and other offences as

indicated above, and that technical flaws, if any, in the

prosecution set up should not come in the way of doing

substantial justice. It is his further submission that the

contentions raised by the petitioners being in the nature

// 20 //

of their defence plea to be substantiated through

evidence at the stage of trial, this Court at the threshold

of the proceeding should not interfere with the impugned

order in exercise of its inherent jurisdiction.

11. With regard to the scope of exercise of inherent

power by the High Court to quash a criminal proceeding,

the Apex Court in the case of R.P. Kapur vrs. State of

Punjab, reported in AIR 1960 S.C. 866, held as under:-

"xxxxx It is well-established that the inherent jurisdiction of the High Court can be exercised to quash proceedings in a proper case either to prevent the abuse of the process of any court or otherwise to secure the ends of justice.

Ordinarily criminal proceedings instituted against an accused person must be tried under the provisions of the Code, and the High Court would be reluctant to interfere with the said proceedings at an interlocutory stage. It is not possible, desirable or expedient to lay down any inflexible rule which would govern the exercise of this inherent jurisdiction. However, we may indicate some categories of cases where the inherent jurisdiction can and should be exercised for quashing the proceedings. There may be cases where it may be possible for the High Court to take the view that the institution or continuance of criminal proceedings against

// 21 //

an accused person may amount to the abuse of the process of the court or that the quashing of the impugned proceedings would secure the ends of justice. If the criminal proceeding in question is in respect of an offence alleged to have been committed by an accused person and it manifestly appears that there is a legal bar against the institution or continuance of the said proceeding the High Court would be justified in quashing the proceeding on that ground. Absence of the requisite sanction may, for instance, furnish cases under this category. Cases may also arise where the allegations in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute the offence alleged; in such cases no question of appreciating evidence arises; it is a matter merely of looking at the complaint or the First Information Report to decide whether the offence alleged is disclosed or not. In such cases it would be legitimate for the High Court to hold that it would be manifestly unjust to allow the process of the criminal court to be issued against the accused person. A third category of cases in which the inherent jurisdiction of the High Court can be successfully invoked may also arise. In cases falling under this category the allegations made against the accused person do constitute an offence alleged but there is either no legal evidence adduced in

// 22 //

support of the case or evidence adduced clearly or manifestly fails to prove the charge. In dealing with this class of cases it is important to bear in mind the distinction between a case where there is no legal evidence or where there is evidence which is manifestly and clearly inconsistent with the accusation made and cases where there is legal evidence which on its appreciation may or may not support the accusation in question. xxxxxxxx"

12. Further, in the case of State of Haryana vrs.

Bhajan Lal, reported in 1992 Supp.(1) SCC 335 the

Apex Court also illustrated certain circumstances, under

which the High Court can exercise its power under

Section 482 of Cr.P.C. to quash a criminal proceeding at

the threshold, if continuance of the proceeding is found

to be tantamount to abuse of the process of the Court.

13. In the case at hand, the documents relied on

by the petitioners do not appear to have been disputed

by the Vigilance Department. It further appears from the

charge-sheet and other papers on record that the entire

allegation is directed against the Lessee-company, i.e.,

M/s. Serajuddin & Co.. There is hardly any allegation in

// 23 //

specific against the petitioners regarding their

involvement in any of the alleged offences, independent

of the will, intent or interest of the Lessee-company. The

allegation against the Lessee-company appears to be

essentially regarding alleged violation, illegalities etc. in

relation to Mining activities, attracting the provisions of

the MMDR Act. Needless to mention that no prosecution

for any offence under the said Act can be initiated except

on a complaint by the Authorized Officer in view of

Section 22 of the said Act. A complaint is also required

for launching a prosecution under the Forest

(Conservation) Act, 1980. Thus, statutory requirements

have not been followed in the present case.

14. In the case of Sunil Bharti Mittal (supra) the

Apex Court held as follows:-

"42. No doubt, a corporate entity is an artificial person which acts through its officers, directors, managing director, chairman etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so, when the criminal act is that of conspiracy.

// 24 //

However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so.

43. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision."

15. In the case of Sharad Kumar Sanghi (supra)

the Apex Court held as under:-

"9. The allegations which find place against the Managing Director in his personal capacity, as we notice, are absolutely vague. When a complainant intends to proceed against the Managing Director or any officer of a company, it is essential to make requisite allegation to constitute the vicarious liability. In Maksud Sajyad vs. State of Gujarat (2008) 5 SCC 668, it has been held, thus:

"where a jurisdiction is exercised on a complaint petition filed in terms of Section 156(3) or Section 200 of the Code of Criminal Procedure, the Magistrate is required to apply his mind. The Penal Code does not contain any

// 25 //

provision for attaching vicarious liability on the part of the Managing Director or the Directors of the Company when the accused is the Company. The learned Magistrate failed to pose unto himself the correct question viz. as to whether the complaint petition, even if given face value and taken to be correct in its entirety, would lead to the conclusion that the respondents herein (2008) 5 SCC 668 were personally liable for any offence. The Bank is a body corporate. Vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. Statutes indisputably must contain provision fixing such vicarious liabilities. Even for the said purpose, it is obligator on the part of the complainant to make requisite allegations which would attract the provisions constituting vicarious liability."

10. The same principle has been reiterated in S.K.

Alagh       v.    State     of     UP   (2008)       5     SCC       662,
Maharashtra           State         Electricity          Distribution

Company Ltd. v. Datar Switchgear Ltd. (2010) 10 SCC 479; and GHCL Employees Stock Opinion Trust v. India Infoline Ltd. (2013) 4 SCC 505.

13. When the company has not been arraigned as an accused, such an order could not have been passed. We have said so for the sake of completeness. In the ultimate analysis, we are of the

// 26 //

considered opinion that the High Court should have been well advised to quash the criminal proceedings initiated against the appellant and that having not been done, the order is sensitively vulnerable and accordingly we set aside the same and quash the criminal proceedings initiated by the respondent against the appellant."

16. In the case of Pradeep S. Wodeyar vrs. The

State of Karnataka, reported in 2021 S.C. 503 the

Apex Court held as under:-

"80 Vicarious liability and Section 23 of MMDR Act A-1 submitted that the charge-sheet does not ascribe any role to A-1 and hence the process initiated against him must be quashed. The appellants in support of their argument relied on Sunil Bharati Mittal (supra), Shiva Kumar Jatia v. NCT of Delhi60, Sunil Sethi v. State of Andhra Pradesh61 and Ravindranatha Bajpe v. Mangalore Special Economic Zone Ltd.62 In Sunil Bharati Mittal (supra), a three- judge Bench of this Court observed that the general rule is that criminal intent of a group of people who undertake business can be imputed to the Company but not the other way around. Only two exceptions were provided to this general rule: (i) when the individual has perpetuated the commission of offence and there is sufficient evidence on the active role of the individual; and (ii)

// 27 //

the statute expressly incorporates the principle of vicarious liability. Justice Sikri writing for a three- judge Bench observed:

43. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made an accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision."

17. In the case of Ravindranatha Bajpe (supra)

the Apex Court also held as follows:-

"27. As held by this Court in the case of India Infoline Limited (supra), in the order issuing summons, the learned Magistrate has to record his satisfaction about a prima facie case against the accused who are Managing Director, the Company Secretary and the Directors of the Company and the role played by them in their respective capacities which is sine qua non for initiating criminal proceedings against them. Looking to the averments and the allegations in the complaint, there are no specific allegations and/or averments with respect to role played by them in their capacity as Chairman, Managing Director, Executive Director, Deputy

// 28 //

General Manager and Planner & Executor. Merely because they are Chairman, Managing Director / Executive Director and/or Deputy General Manager and/or Planner/Supervisor of A1 & A6, without any specific role attributed and the role played by them in their capacity, they cannot be arrayed as an accused, more particularly they cannot be held vicariously liable for the offences committed by A1 & A6.

28. From the order passed by the learned Magistrate issuing the process against the respondents herein - accused nos.1 to 8, there does not appear that the learned Magistrate has recorded his satisfaction about a prima facie case against respondent nos.2 to 5 and 7 & 8. Merely because respondent Nos.2 to 5 and 7 & 8 are the Chairman / Managing Director / Executive Director / Deputy General Manager / Planner & Executor, automatically they cannot be held vicariously liable, unless, as observed hereinabove, there are specific allegations and averments against them with respect to their individual role. Under the circumstances, the High Court has rightly dismissed the revision applications and has rightly confirmed the order passed by the learned Sessions Court quashing and setting aside the order passed by the learned Magistrate issuing process against respondent nos.1 to 8 herein - original accused nos.1 to 8 for the offences punishable under Sections 427, 447, 506 and 120B read with Section 34 IPC."

// 29 //

18. In view of the well settled principle of law, as

apparent from the decisions quoted above, the

prosecution launched against the petitioners is found to

be legally not sustainable, although the petitioners are

admittedly Partners of the Lessee-company. Further, for

the discussion made hereinbefore, the offence of criminal

conspiracy and other offences as alleged, are found to be

not made out against the petitioners, especially when

there is no specific allegation in that regard against them

either as an individual or a partner of the Lessee-

company. Hence, this Court finds merit in the contention