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.

1

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

2

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

3

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. 

4

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

5

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

6

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

7

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

8

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

9

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.

10

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:

11

“ 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

12

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.”

13

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’

14

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.

15

(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:

16

“ 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.

17

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.

18

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.