1. Joint venture for captive coal mining — Dispute over ownership and disposal of coal rejects — Prosecution under IPC and Prevention of Corruption Act. (Para 1 )
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2024 Supreme(SC) 686
SUPREME COURT OF INDIA
HIMA KOHLI, AHSANUDDIN AMANULLAH, JJ.
M/S. Karnataka Emta Coal Mines Limited And Another – Appellants
Versus
Central Bureau Of Investigation – Respondent
Criminal Appeal No. 1659-1660 of 2024
Decided On : 23-08-2024
Important Points
The court ruled that allegations of conspiracy and misappropriation based on an unapproved CAG report do not constitute sufficient grounds for criminal charges, emphasizing the civil nature of the dispute.
Subject
Criminal Law - Corruption
Act Referred
COAL MINES NATIONALISATION ACT: S.3(3)
COMPTROLLER AND AUDITOR-GENERALS DUTIES, POWERS AND CONDITIONS OF SERVICE ACT: S.10, S.13
CONSTITUTION OF INDIA: Art.136, Art.148, Art.149, Art.150, Art.151, Art.20(2), Art.226, Art.32
CRIMINAL PROCEDURE CODE: S.156(1), S.155(2), S.173, S.197, S.227, S.239, S.300, S.482
EVIDENCE ACT: S.40, S.41, S.42, S.43
INDIAN PENAL CODE: S.120(b), S.409, S.420
MINERAL CONCESSION RULES: R.22(5)
MINES AND MINERALS DEVELOPMENT AND REGULATION ACT: S.5(1)
PREVENTION OF CORRUPTION ACT: S.13(1)(c), S.19
RULES OF PROCEDURE AND CONDUCT OF BUSINESS: R.308
COMPTROLLER AND AUDITOR-GENERALS DUTIES, POWERS AND CONDITIONS OF SERVICE ACT: S.10, S.13
CONSTITUTION OF INDIA: Art.136, Art.148, Art.149, Art.150, Art.151, Art.20(2), Art.226, Art.32
CRIMINAL PROCEDURE CODE: S.156(1), S.155(2), S.173, S.197, S.227, S.239, S.300, S.482
EVIDENCE ACT: S.40, S.41, S.42, S.43
INDIAN PENAL CODE: S.120(b), S.409, S.420
MINERAL CONCESSION RULES: R.22(5)
MINES AND MINERALS DEVELOPMENT AND REGULATION ACT: S.5(1)
PREVENTION OF CORRUPTION ACT: S.13(1)(c), S.19
RULES OF PROCEDURE AND CONDUCT OF BUSINESS: R.308
Headnote
(A) Prevention of Corruption Act, 1988 - Sections 13(1)(d) and 120-B of IPC - Allegations of conspiracy and misappropriation of coal rejects - The court quashed the charges against the appellants, finding no evidence of criminal intent or liability based on the CAG report, which lacked parliamentary approval and was deemed insufficient for prosecution. The court emphasized that the matter was primarily a civil dispute regarding contractual obligations, not a criminal one. (Paras 21.1, 21.2, 21.3, 21.4)
(B) Jurisdiction of High Court - The court reiterated that findings in civil adjudication exonerating a party cannot be ignored in criminal proceedings based on the same facts. (Paras 21.1, 21.2)
(C) Audit Report - The court held that the CAG report could not serve as the sole basis for criminal liability, as it had not been tabled in Parliament and lacked finality. (Paras 9.1, 9.2)
(B) Jurisdiction of High Court - The court reiterated that findings in civil adjudication exonerating a party cannot be ignored in criminal proceedings based on the same facts. (Paras 21.1, 21.2)
(C) Audit Report - The court held that the CAG report could not serve as the sole basis for criminal liability, as it had not been tabled in Parliament and lacked finality. (Paras 9.1, 9.2)
Legal Category Hierarchy
- crime and sentencing
-
practice and procedure
-
criminal procedure
- discharge
- framing of charges (Para 1)
- quashing of proceedings
-
criminal procedure
-
administrative law
-
constitutional functionaries
- comptroller and auditor general
-
constitutional functionaries
-
constitutional law
- special leave petitions
-
civil law
-
contract law
- joint venture agreements
-
contract law
Advocates appeared:
For the Appellant(s) : Mr. Ranjit Kumar, Sr. Adv. Mr. Abhimanyu Bhandari, Sr. Adv. Ms. Rooh-e-hina Dua, AOR Mr. Ayush Aggarwal, Adv. Mr. Sangram S. Saron, Adv. Mr. Arav Pandit, Adv.
For the Respondent(s): Mr. R S Cheema, Sr.Adv. Ms. Tarunnum Cheema, Adv. Mr. Akshay Nagarajan, Adv. Mr. Akash Singh, Adv. Mr. Mukesh Kumar Maroria, AOR
For the Appellant(s) : Mr. Ranjit Kumar, Sr. Adv. Mr. Abhimanyu Bhandari, Sr. Adv. Ms. Rooh-e-hina Dua, AOR Mr. Ayush Aggarwal, Adv. Mr. Sangram S. Saron, Adv. Mr. Arav Pandit, Adv.
For the Respondent(s): Mr. R S Cheema, Sr.Adv. Ms. Tarunnum Cheema, Adv. Mr. Akshay Nagarajan, Adv. Mr. Akash Singh, Adv. Mr. Mukesh Kumar Maroria, AOR
Table of Contents
JUDGMENT :
HIMA KOHLI, J.
INDEX
| S. No. | Details | Paras No. |
| 1. | A. PREFACE | 1-2 |
| 2. | B. FACTUAL BACKDROP | 3-3.10.5 |
| 3. | 3.1 Joint Venture Agreement | 3.1.1 – 3.1.4 |
| 4. | 3.2 Correspondence | 3.2.1 – 3.2.3 |
| 5. | 3.3 Fuel Supply Agreement | 3.3.1-3.3.3 |
| 6. | 3.4 Memorandum of Understanding | 3.4.1 – 3.4.2 |
| 7. | 3.5 Washability Report of the Central Institute of Mining and Fuel Research, Nagpur | 3.5.1 |
| 8. | 3.6 Revised Mining Plan | 3.6.1 – 3.6.2 |
| 9. | 3.7 Information submitted by KECML to the Coal Controller | 3.7.1 – 3.7.2 |
| 10. | 3.8 Audit Objection raised by the CAG | 3.8.1 – 3.8.3 |
| 11. | 3.9 Preliminary Enquiry registered by respondent – CBI | 3.9.1 – 3.9.2 |
| 12. | 3.10 Litigation between KPCL and KECML | 3.10.1 -3.10.6 |
| 13. | C. SUBMISSIONS | |
| 14. | 4. Arguments by Counsel for the Appellants | 4.1 – 4.17 |
| 15. | 5. Arguments by Counsel for the respondent – CBI | 5.1 – 5.15 |
| 16. | 6. Rejoinder Arguments by Counsel for the appellants | 6.1 – 6.4 |
| 17. | D DISCUSSION AND ANALYSIS | 7.1-7.3 |
| 18. | Did CBI Primarily Rely on the Audity Repot of the CAG? | 8.1-8.3 |
| 19. | Could the Audit Report of the CAG fasten any liability on KECML? | 9.1-9.5 |
| 20. | Import of the Judgment dated 24th March, 2016 of the Karnataka High Court | 10.1-10.3 |
| 21. | Sanctity of an Audit Report in Law | 11.1-11.5 |
| 22. | Denial of Sanctions by the Sanctioning Authorities and the effect on the Appellants | 12.1-12.5 |
| 23. | Effect of the absence of any strategy in the Mining plan to dispose off the coal rejects | 13.1-13.2 |
| 24. | Was KECML required to account for the coal rejects? | 14.1-14.3 |
| 25. | Can KECML be blamed for not setting up the coal washery at the pithead? | 15.1-15.4 |
| 26. | Did the coal rejects have any useful calorific value making it a saleable commodity? | 16.1 |
| 27. | Persuasive Value of the Aryan Energy Case | 17.1-17.2 |
| 28. | Inherent Jurisdiction of the High Court under Section 482, Cr.P.C | 18.1-18.7 |
| 29. | Extraordinary powers of the Supreme Court under Article 136 of the Constitution of India | 19.1-19.9 |
| 30. | Application of mind at the stage of Section 277, CrPC | 20.1-20.4 |
| 31. | E - CONCLUSION | 21.1-21.4 |
CITATIONS
| S. No. | Title | Citation |
| 1 | ‘CBI vs. S.M. Jaamdar & Others’ | |
| 2 | M.L. Sharma v. The Principal Secretary and Others | |
| 3 | Girish Kumar Suneja v. CBI | |
| 4 | KPCL v. Aryan Energy Private Limited1 and Others | COMAP No. 12, 13, 14 and 15 and 2020 decided on 22nd July, 2021 |
| 5 | Centre for Public Interest Litigation v. Union of India | |
| 6 | Arun Kumar Aggarwal v. Union of India | |
| 7 | Pathan Mohammed Suleman Rehmat khan v. State of Gujarat | |
| 8 | Radheshyam Kejriwal v. State of West Bengal and Another | |
| 9 | Ashoo Surendranath Tewari v. Deputy Superintendent of Police, EOW, CBI and Another | |
| 10 | J Sekar alias Sekar Reddy v. Directorate of Enforcement | |
| 11 | Prem Raj v. Poonamma Menon & Another | 2024 SCC OnLine SC 483 |
| 12 | Neeraj Dutta v State (NCT of Delhi) | |
| 13 | B. Jayaraj v State of Andhra Pradesh | |
| 14 | P. Satyanarayana Murthy v District Inspector of Police, State of Andhra Pradesh and Another | |
| 15 | K. Shanthamma v State of Telangana | |
| 16 | State through Central Bureau of Investigation v Dr Anup Kumar Srivastava | |
| 17 | Soundarajan v State Rep. by t | |
