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TMI Blog2012 (3) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... er Sections 7.8.9 and 13(1)(d) r/w Section 13(2) of the Prevention of Corruption Act, 1988 at Annexure-A-1; (iii) to quash the Order of Sanction dated 2.8.2011 for initiating criminal proceedings against the petitioner at Annexure-B on the file of Governor of Karnataka; (iv) to quash the relevant portion of the Report at Chapter 22 of Lokayukta dated 27.7.2011 at Annexure-C and (v) to grant such other relief or reliefs as this Court may deem fit in the circumstances of the case. It is pleaded that Commerce and Industries Department in Government of Karnataka, by its Notification bearing No. CI-164 MMM 2006 dated 22.7.2006 (Annexure-D) in exercise of the powers conferred under section 3 of the Commission of Inquiry Act, 1952, appointed Mr. Justice U L Bhat (former CJ of Gauhati and Madhya pradesh High courts) to be the Commission to inquire into the allegations relating to illegal ruining in the State of Karnataka, commencing from 1.1.2000 till date and submit an interim report within two months and final report within six months to the Government. As per Notification bearing No. CI 164 MMM 2006 Dated 26.10.2006, the Commission was granted four more months time to submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the Lokayukta. 3. The background and terms of reference to the Commission under Section 3 of the Commissions of Inquiry Act. 1952 and the reference of 'actions' to the Lokayukta under section 7(2A) of the KL Act are one and the same, except clause (g). The background for reference/action is as under: (i) The spurt in the international prices of steel and iron ore during last 3-4 years has made the mining and export of high quality iron ore from the mining in Bellary, Tumkur and Chitradurga Districts very lucrative. With the average cost of production of iron ore at around ₹ 150 per ton, and the royalties to be paid to the Government being abysmally low at ₹ 16.25 per ton for different grades there have been serious systemic distortions due to the high profit margins. This has led to allegations of large scale corruption and complaints of profiteering through illegal mining with the complicity of the authorities in all levels of Government. (ii) The Government in its orders vide notification No. CI 16 MMM 2003 and No. CI 33 MMM 1994 both Dated: 15.032003. de-reserved for private, mining an area of 11620 square km in the State, meant for State exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmercial affairs of the company. To fix responsibility and initiate suitable action, both, civil and/criminal as may be appropriate, against all persons found responsible, including private contracting parties. (c) To fix responsibility and initiate suitable action against all public servants including ministers whether in office or otherwise state, its instrumentalities or State owned Companies/Corporations or other bodies and authorities, either in collusion with private parties or otherwise for various acts of omission and commission leading to various illegalities, irregularities, events and executive decisions set out in clause (i) to (viii) and also pertaining to issues such as: (1) The process and timing of disposal of applications, both in case of notified areas and free areas, for grant of Mining Lease, Reconnaissance Permits and Prospecting Licenses; (2) the irregularities reported in issue of permits by both Forest and Mines departments: (3) the irregularities reported in transportation of minerals such as overloading, the issue of informal token systems , transportation without permits etc: (4) the entire range of the various aspects of illegal mining ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from 1.1.2006 to 19.7.2010. 5. It is pleaded in para-5 of the Writ Petition that Lokayukta submitted a report noticing certain irregularities committed by the former Chief Minister-Sri Dharam Singh and Smt. Jija Hari Singh, who was the then Managing Director of Mysore Minerals Limited in relation to the business by Mysore Minerals Limited, but the report in so far as Sri Dharam Singh, was not accepted by His Excellency Governor of Karnataka. But, in the case of the petitioner, no opportunity was given to him before his indictment and he came to know the same through certain Television channels reporting that the Lokayukta had indicted the petitioner in his report alleging that the petitioner's children, who are the Trustees of M/s. Prerana Education Trust have received donation of 35,00,00,000 on 17.3.2010 and a sum of ₹ 5,00,00,000 on 18.3.2010 from the mining company- M/s. JSW Steel Ltd., and that his children and son in law have received ₹ 20 crore as sale consideration, for one acre of land from M/S South West Mining Ltd. Lokayukta in his Press Conference said that the report had been leaked and the reports were true. Thus, the petitioner was held guilty ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vi) that His Excellency the Governor of Karnataka also erred in not giving him an opportunity of hearing. before the acceptance of report of the Lokayukta and granting an order of sanction to initiate criminal proceedings against him; (vii) that on account of acceptance of the unilateral report of the Lokayukta, the petitioner's image is tarnished; (viii) that Dr. U V Singh's report indicates that there is no reference of whatsoever regarding involvement of the petitioner in respect of any of the transactions referred to therein; (ix) that Dr. U V Singh has recorded in his report that his observations are not conclusive on the ground that certain clarifications are required; (x) that there are glaring contradictions in the report submitted by Dr. U V Singh; (xi) that the documents annexed to the report of Dr. U V Singh themselves show that the petitioner at no point of time either directly or remotely has shown any favour to South West Mining Limited: (xii) that it is unfortunate that the Lokayukta has not even referred to any of the documents before recommending initiation of criminal proceedings against the petitioner; (xiii) that the action of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion filed by M/s. V S Lad Sons. With reference to the letters of the Central Government, the above-said Companies themselves replied to the Ministry of Mines, Government of India, clarifying that the Special Leave Petition was pending before the Supreme Court and that there was no stay order granted by the Court; (xviii) that the three Companies viz., M/s. South West Mining Company. M/s. JSW Steels Limited and M/s. Vijayanagar Minerals Pvt. Ltd., addressed letters dated 31.3.2010. 5.3.2010 and 31.3.2010, respectively, to the Director of Mines and Geology, stating that there was no stay order granted by the Supreme Court. The Director of Mines and Geology, on clarification sought by the Ministry of Mines, Government of India, addressed three letters on 17.8.2010, 18.3.2010 and 29.4.2010 and brought about legal status of the Special Leave Petition, but the petitioner was implicated for no fault of his own: (xix) that the Lokayukta has adopted pick and choose method while considering the documents, which leads one to conclude that the same was done only to indict the petitioner in the report; (xx) that the registration of the First Information Report by the Lokayukta Police ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e both the investigation and acceptance of the report are violative of Sections 9.12 and 13 of K L. Act; (xxix) that the petitioner made a representation dated 1.8.2011 to the Lokayukta seeking reconsideration of the report and give him an opportunity to substantiate his claim, but the same was not considered; (xxx) that the Lokayukta has not followed the procedure as provided in sub Sections (3) and (4) of section 9 of the KL Act: (xxxi) that Lokayukta, in its report, has relied upon the judgment of a Single Judge reported in ILR 1990 KAR 796 in the case of Dr. K Chowdappa Vs. State of Karnataka, to hold that in a reference under Section 7(2A) there is no necessity to give an opportunity as contemplated under Section 9(3) of the KL Act, ignoring the decision otherwise rendered in N Gundappa Vs. State (reported in ILR 1990 KAR 223), which was affirmed by Division Bench of this Court (reported in ILR 1990 KAR 4188).The above said decision was followed in another case in W P No. 33151/2001 (Arjundas Vs. State). Thus compliance of Section 9(3) of the KL Act, is mandatory even in the case of investigation of the action on a reference made under section 7(2A) of the KL Act: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not the same as the cause of action and the relief claimed in the first suit, the second suit cannot be considered to have been brought in respect of the same subject matter as the first suit (relied on AIR 1970 SC 987 (Vallabh Das Vs. Dr. Madanlal and Others); (xxxix) that withdrawal or abandonment of a petition under Articles 226/227 without permission to file fresh petition there under would bar such a fresh petition in the High Court involving some subject matter (relied on (1987) 1 SCC 5 (Sarguja Transport Service Vs. State of Transport Appellate Tribunal, M P Gwalior, and Others); (xl) 1903 (1) SCC 124 (Board of Trustees of The Port of Bombay Vs. Dilipkumar Raghavendranath Nadkarni and Others) on the point where employer appoints legally trained personnel for presenting and prosecuting the case in the enquiry when delinquent officer was arrested by another officer, who was not shown to be legally trained person, the enquiry would be one sided, enquiry weighed against the Officer and would result in violation of one of the essential principles of natural justice, namely, that a person against whom enquiry is held must, be afforded a reasonable opportunity to defend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est laid down in section 482 itself. The three circumstances under which inherent circumstances may be exercised are: (a) to give effect to an order under the Cr.P.C. (b) to prevent abuse of the process of the court; and (c) to otherwise secure ends of justice. High court, in the exercise of its writ jurisdiction under Art. 226 can interfere with the investigation only in the (sic)st of the rare case where as case of abuse of power of investigation and noncompliance with the provisions under Chapter XII of Cr.P.C. is clearly made out. But even in such cases, High court cannot direct the police as to how the investigation is to be conducted, but can always insist for the observance of the process as provided for in Cr.P.C. (xlvi) ILR 1994 KAR 3595 (S Ranganarasaiah Vs. State of Karnataka) on the point that under Section 9(3)(a) of the K L Act, a copy of the complaint shall be forwarded to the public servant and the competent authority concerned, after making preliminary enquiry under sub-Section (3). An Opportunity to offer his comments on such complaint shall be afforded to the public servant under Clause (b) of sub-Section (3). The said provision is mandatory. The opportunity t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made out and after careful consideration of the report. Sanction Order was issued and case has been registered in Crime No. 36/2011 for the offence under Sections 7, 8, 9, 13(1)(d) r/w 12(2) of Prevention of Corruption Act, 1988, and investigation taken is up and there is no merit in the Writ Petition. 10. Respondent No. 4/the Principal Secretary to Governor of Karnataka, has filed statement of objections contending that the petition is not maintainable as it is barred by the principles of res judicata in view of dismissal order dated 29.8.2011 made in W P No. 29430/2011; as the authorities have registered FIR and the proceedings are governed by the Code of Criminal Procedure, the present Writ Petition is not maintainable. Without prejudice to the above grounds urged, it is stated that the Lokayukta investigated the reference made by the Government and therefore the process of affording an opportunity to the petitioner to offer his comments contemplated under Sub-Section (3) of Section 9 of the K L Act is not applicable to the proceedings Initiated pursuant to the reference made by the State Government under Section 7(2A) of the KL Art. It is pleaded that Lokayukta submitted his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oint that to sustain the complaint of the violation of principles of natural justice one must establish that he was prejudiced for non observance of the principles of natural justice; (v) AIR 1996 SC 186 (Superintendent of Police Vs. Deepak Chowdhary and Others) on the point that the question of giving opportunity to the charged Officer before granting sanction does not arise since it is not a quasi judicial function. Grant of sanction is an administrative function. What is required is that the investigating officer should place all the necessary material before the sanctioning authority who should apply his mind to the material and accord sanction. Therefore, the question of giving opportunity of hearing to the accused before granting sanction under Section 6 of the Prevention of Corruption Act, 1947 does not arise; (vi) AIR 2004 SC 86 (Assistant Commissioner, Assessment-II, Bangalore and Others Vs. M/S. Velliappa Textiles Ltd. and Others) on the point that an order of sanction, by itself, does not have the effect of a conviction or imposing a penalty causing any injury of any kind on the accused. The accused will get full opportunity to defend him in the trial and the trial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nataka Lokayukta, Bangalore, the petition under Art. 226 and 227 of the Constitution of India is not maintainable as the remedy lies under section 482 of Cr.P.C 15. We have perused the file relating to W P No. 29430/2011 (GM-KLA). When the Petition was listed for orders on 29.8.2011, Sri Ravi B Naik, learned Senior Counsel appearing for the petitioner, submitted that the Petition may be dismissed as withdrawn. In view of the submission made by the learned Senior Counsel, the Division Bench dismissed the Writ Petition as withdrawn, but added a rider unconditionally . In this regard Sri Ashok Haranahalli, learned Senior. Counsel, submits that as on 29.8.2011 the Writ Petition became infructuous, as the Governor granted an order of Sanction for prosecution and on 22.8.2011 respondent No. 3/Superintendent of Police, Sub Division, Lokayukta, registered a case in Crime No. 86/2011 for the offences under the P C Act and issued FIR. Since the petitioner had to challenge registering the case in Crime No. 36/2011, the Writ Petition was withdrawn, but the Division Bench of this Court erred in adding a rider unconditionally . 16. It is pertinent to mention that when the aggrieved perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs under Section 482 of Cr.P.C. can be exercised by the High Court, either to prevent the abuse of process of any court or otherwise to secure the ends of justice. (ii) (2008)3 SCC 542 (Divine Retreat Centre Vs. State of Kerala and Others) on the point the jurisdiction under Section 482 of Cr. P C., is not an unlimited arbitrary jurisdiction: Power under Section 482 of Cr. P C has to be exercised sparingly, carefully and with caution only where such exercise is justified by the test laid down in Section 482 itself. The three circumstances under which inherent jurisdiction may be exercised are: (a) to give effect to an order under the Cr. P C; (b) to prevent abuse of the process of the Court; and (c) to otherwise secure ends of justice. High Court, in exercise of its writ jurisdiction under Article 226 can interfere with the investigation only in the rarest of the rare case where as case of abuse of power of investigation and non-compliance with the provisions under Chapter XII of Cr. P C is clearly made out. 19. Reputation of a man is a very precious thing; the man cherishes most in his life. It is a natural of absolute right of a man. In fact, the whole exercise which a man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to constitute the institution of Lokayukta for the purpose of improving the standards of public administration, by looking into complaints against administrative actions, including cases of corruption, favoritism and official indiscipline in administration machinery and all other allied matters . The President of India gave his assent to the Bill on 16th day of January, 1985. The Act came into force on 15.1.1986 abolishing the Vigilance Commission. According to Section 2(5) of the K L Act, corruption includes anything made punishable under Chapter IX of the Indian Penal Code, 1860 or under the Prevention of Corruption Act, 1947. Sections 161 to 171 of 1 P C deal with the offences by public servant. Sections 161 to 165-A of IPC were omitted by the P C Act, 1947. It was done with an intention to make the anti-corruption laws more effective by widening their coverage and by strengthening the provisions. The P C Act, 1947 and the Criminal Amendment Act, 1951 were repealed under Section 30 under the P C Act. 1988. Corruption is deep rooted in the society. Even to get a Birth Certificate/Death Certificate, one has to oil the palm. In spite of the Indian Penal Code and Prevention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 7 of the KL Act Lokayukta may investigate any action which is taken by or with the general or special approval of the authorities. As per sub section 2A of section 7, notwithstanding contained in sub-sections. (1) and (2), the Lokayukta may investigate any action taken by or with the general or specific approval of a public servant, if it is referred to him by the State Government. Sub-section (1) of section 2 defines the term 'Action as an administrative action taken by way of decision, recommendation or finding or in any other manner and includes willful failure or omission to act and all other expressions relating to such action shall be construed accordingly. Section 8 of the KL Act says the matters not subject to investigation Section 9 of the KL Act is relating to complaints and investigations by the Lokayukta. Since the petitioner has urged that even in cases referred under section 7(2A) of KL Act the Lokayukta should have complied with clause (a) and (b) of sub section 3 of section 9, it is useful to excerpt the same for immediate purpose. It reads as under: (3) Where the Lokayukta or an upa-lokayukta proposes, after making such preliminary Inquiry as he dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offences, but he was mum. Suspicion cannot be a ground to tarnish the image and reputation of a person who is holding a constitutional post. Courts shall decide on the materials produced by the police or party: whereas the commission has to collect materials by inquisitorial method by investigation; if necessary, to inquire into truth or otherwise of the facts available. The commission of Inquiry Act is perhaps unique in the world where the commission takes the role of investigator, prosecutor, defender and judge of facts, with due safeguards of the rights of the involved parties as in a juridical proceeding, though it is not. 28. Lokayukta being a quasi-judicial authority, his decisions should be reasoned. The writ of certiorari will be to set aside the decisions made in violation of the principles of natural justice. When important rights of parties of far-reaching consequence are adjudicated in a summary fashion, without giving a personal hearing where proposals and counter proposals are required to be examined, otherwise it would be directly destructive of judicial propriety and fair-play. The catena of decisions cited by the learned counsel of the petitioner on the point o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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