Pradeep S. Wodeyar vs State of Karnataka

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(SC) 853

SUPREME COURT OF INDIA
(From the High Court of Karnataka at Bengaluru)
DHANANJAYA Y. CHANDRACHUD, VIKRAM NATH, B.V. NAGARATHNA, JJ.
Pradeep S. Wodeyar – Appellant
Versus
The State of Karnataka – Respondent
Criminal Appeal Nos. 1288, 1289, 1290 of 2021
Decided On : 29-11-2021

Advocates appeared:
For the Appellant(s) :Pravin H Parekh, S. Udaya Kumar Sagar, Bina Madhavan, L.M. Chidanandayya, Akanksha Mehra, M/s. Lawyer S Knit & Co, Prabhar Kumar Rai, Nitesh Bhandari, Shourajeet Chakravarthy, Vinit Kumar, Naveen Kumar, Siddhartha Dave, Siddharth Garg, Devanshi Singh, Himanshu Chaubey, Advocates
For the Respondent(s):Nikhil Goel, V.N. Raghupathy, Ashutosh Ghade, Vinay Mathew, Advocates

Headnote:
Indian Penal Code, 1860 – Sections 409, 420, 120B – Criminal Procedure Code, 1973 – Section 465, 209, 220, –Mines and Mineral (Development and Regulation) Act, 1957 – Sections 21,22, 23, 4(1), 4(1)(A) – Karnataka Forest Rules 1969 – Rule 165, 144 –Instruments Act 1881 – Section 141 – Criminal conspiracy – Quashing of Criminal proceedings – Criminal breach of trust by public servant – Cheating and dishonestly inducing delivery of property – Power of State Government to make rules for preventing illegal mining, transportation and storage of minerals – Whether A-1 was in-charge of and responsible for affairs of company during commission of alleged offence as required under proviso to Section 23(1) of MMDR Act is a matter for trial – Held, Special Court does not have, in absence of a specific provision to that effect, power to take cognizance of an offence under MMDR Act without the case being committed to it by Magistrate under Section 209 Cr.P.C – Order of Special Judge taking cognizance is therefore irregular – Objective of Section 465 is to prevent delay in commencement and completion of trial – Section 465 Cr.P.C. is applicable to interlocutory orders such as an order taking cognizance and summons order as well – Therefore, even if order taking cognizance is irregular, it would not vitiate proceedings in view of Section 465 Cr.P.C – Decision in (supra) was distinguished in Rattiram (supra) based on stage of trial – This differentiation based on stage of trial must be read with reference to Section 465(2) Cr.P.C. Section 465(2) does not indicate that it only covers challenges to pre-trial orders after conclusion of trial – Cardinal principle that guides Section 465(2) Cr.P.C. is that the challenge to an irregular order must be urged at earliest – While determining if there was a failure of justice, Courts ought to address it with reference to stage of challenge, seriousness of offence and the apparent intention to prolong proceedings, among others – Appeals dismissed.

Judgement Key Points

Based on the provided legal document, here are the key points:

Irregularity of Cognizance: The Special Court does not have the power to take cognizance of an offence under the Mines and Mineral (Development and Regulation) Act (MMDR Act) without the case being committed to it by a Magistrate under Section 209 of the Code of Criminal Procedure (Cr.P.C.), as there is no specific provision to the contrary in either the Cr.P.C. or the MMDR Act (!) (!) (!) (!) (!) (!) (!) (!) . Consequently, the order of the Special Judge taking cognizance on 30 December 2015 is irregular (!) (!) .
Applicability of Section 465 Cr.P.C.: Section 465 of the Cr.P.C. applies to interlocutory orders, including orders taking cognizance and summons orders, to prevent delay in the commencement and completion of the trial (!) (!) (!) (!) (!) . Therefore, even if the cognizance order is irregular, it does not vitiate the proceedings unless a "failure of justice" is proved (!) (!) (!) (!) (!) .
Failure of Justice Test: To determine if there has been a failure of justice under Section 465, courts must consider the stage of the challenge, the seriousness of the offence, and the intention to prolong proceedings. In this case, the challenge was raised two years after the cognizance order, and given the diminished role of the committing Magistrate under the 1973 Cr.P.C. compared to the 1898 Code, no failure of justice was demonstrated (!) (!) (!) (!) (!) (!) (!) (!) .
Cognizance of Offence vs. Offender: It is a settled principle that cognizance is taken of the offence and not the offender. A mere error in the form of the cognizance order (e.g., mentioning "accused" instead of "offence") does not vitiate the proceedings if the material facts of the offence were perused (!) (!) (!) (!) (!) (!) (!) (!) .
Joint Trial under IPC and MMDR Act: The Special Court has the power to take cognizance of offences under the IPC and conduct a joint trial with offences under the MMDR Act. Section 220 of the Cr.P.C. (Trial for more than one offence) applies to proceedings before the Special Court unless expressly or impliedly repealed, which is not the case here (!) (!) (!) (!) (!) (!) (!) (!) (!) .
Authorization for Complaint under Section 22 MMDR Act: Section 22 of the MMDR Act requires a complaint by an authorized person for taking cognizance of offences under the Act, but this bar does not apply to offences under the IPC. The notification dated 21 January 2014 authorized the Sub-Inspector of Police (including those in the SIT) to file complaints under Section 22, and the FIR was signed by a Sub-Inspector, thus complying with the Act (!) (!) (!) (!) (!) (!) (!) .
Vicarious Liability under Section 23 MMDR Act: The question of whether the Managing Director (A-1) was "in-charge of and responsible for the conduct of the business" at the time of the offence is a matter for trial. The position of a Managing Director creates a presumption of responsibility, but the proviso to Section 23 allows them to escape liability if they prove lack of knowledge or exercise of due diligence, which must be tested during the trial (!) (!) (!) (!) (!) (!) (!) .

JUDGMENT :

DHANANJAYA Y. CHANDRACHUD, J.

Contents
(A)	The Facts	3
(B)	The Submissions	13
(C)	The Analysis	17
(C.1)	The power to take cognizance	17
(C.2)	Special Courts power to take cognizance	19
(C.2.1)	Section 465 Cr.P.C. and interlocutory orders	30
(C 2.2)	Section 465 Cr.P.C. and failure of Justice	35
(C.3)	Cognizance of the offence and not the offender	41
(C.4)	Cognizance by the Special Court of offences under the IPC	47
(C.4.1)	Joint trial and express repeal	51
(C.4.2)	Joint trial and implied repeal	54
(C.5)	Cognizance order and non-application of mind	58
(C.6)	Authorised person and Section 22 of MMDR Act	67
(C.7)	Vicarious liability and Section 23 of MMDR Act	74
(D)	The Conclusion	78

(A) The Facts

1. A Single Judge of the High Court of Karnataka dismissed two petitions instituted by the appellants for quashing the criminal proceedings initiated against them in Special C.C. No. 599/2015 (arising out of Crime No. 21/2014) for offences punishable under the provisions of Sections 409 and 420 read with Section 120B IPC, Sections 21 and 23 read with Sections 4(1) and 4(1)(A) of the Mines and Mineral (Development and Regulation) Act 1957¹ [“MMDR Act”] and Rule 165 read with Rule 144 of the Karnataka Forest Rules 1969.

2. Pradeep S. Wodeyar, who is the Managing Director of a Company by the name of Canara Overseas Limited is arraigned as the first accused² [“A-1”] and is the appellant in the appeal arising out of SLP (Criminal) No. 138/2021. Lakshminarayan Gubba, who is a director of the said company has been arraigned as the second accused ³ [“A-2”] and is the appellant in the appeal arising out of SLP (Criminal) No. 1448/2021.

3. An overview of the criminal case needs to be noticed.

4. On 1 June 2009, Canara Overseas Limited, a Company dealing in exports and imports is alleged to have entered into an agreement with K. Ramappa, the third accused ⁴ [“A-3”], who is the owner of Mineral Miners and Traders, Bellary for the purpose of exporting iron ore. In pursuance of the agreement, the company purchased 31,650.65 metric tons (MTs) of iron ore from A-3, of which 20,000 metric tons were exported to China between the period of 1 January 2009 to 31 May 2010, while the remaining iron ore was sold to two other companies in India. These transactions are alleged to have been carried out through, or at Belekere Port in Karnataka. It has been alleged that the transportation and export of iron ore was carried out in the absence of permits from the Forest Department and the Department of Mines and Geology. The iron ore involved in the transactions is alleged to have been removed from the Mining Lease No. 921/2553, Kallahari Village, Bellary. The fourth Accused⁵ [“A-4”] is allegedly the mine owner while the fifth accused⁶ [“A-5”] is their agent. The iron ore is alleged to have been stocked in an unauthorized stockyard without bulk permits from the department of Mines and Geology and to have been transported without an authorized forest way pass. Acting in conspiracy, the accused are alleged to have caused a loss of Rs. 3,27,83,379/- to the state exchequer.

5. Persistent complaints were made on large-scale illegal mining and transportation of iron ore and illegal encroachment in forest areas for the purpose of illegal mining. Samaj Parivartna Samudaya filed a Petition⁷ [Writ Petition (Civil) No. 562/2009] under article 32 before this Court regarding illegal mining in the forest areas in Andhra Pradesh and Karnataka. The Central Empowered Committee⁸ [“CEC”] pursuant to an order of this Court dated 19 November 2010 submitted a report on 7 January, 2011 regarding six mining leases in the Bellary Reserve Forests, Ananthapur, Andhra Pradesh. This Court by an order dated 25 February 2011 directed the CEC to submit its report in

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2021 Supreme(SC) 853

SUPREME COURT OF INDIA(From the High Court of Karnataka at Bengaluru)DHANANJAYA Y. CHANDRACHUD, VIKRAM NATH, B.V. NAGARATHNA, JJ.Pradeep S. Wodeyar – AppellantVersusThe State of Karnataka – RespondentCriminal Appeal Nos. 1288, 1289, 1290 of 2021Decided On : 29-11-2021

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SUPREME COURT OF INDIA
(From the High Court of Karnataka at Bengaluru)
DHANANJAYA Y. CHANDRACHUD, VIKRAM NATH, B.V. NAGARATHNA, JJ.
Pradeep S. Wodeyar – Appellant
Versus
The State of Karnataka – Respondent
Criminal Appeal Nos. 1288, 1289, 1290 of 2021
Decided On : 29-11-2021