1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 08TH DAY OF JANUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE M. NAGAPRASANNA CRIMINAL PETITION No.12794 OF 2024 C/W CRIMINAL PETITION No.8944 OF 2023 IN CRIMINAL PETITION No.12794 OF 2024 BETWEEN: 1 . M/S. KINETA GLOBAL LTD., REGISTERED AT PLOT NO.566 ROAD NO.31, JUBILEE HILLS HYDERABAD – 500 033 REPRESENTED BY ITS AUTHORIZED SIGNATORY MR. VALLABBHANENI BALASHOURI. 2 . Mr. VALLABBHANENI BALASHOURI S/O JOJAIAH NAIDU AGED ABOUT 55 YEARS RESIDING AT NO. 260 PRASHASANA NAGARA ROAD NO.72, JUBILEE HILLS HYDERABAD, AS WELL AS PLOT NO.51 AND 54 KINETA TOWERS, 4TH FLOOR VENKATESHWARA HILLS 3RD ROAD, BANJARA HILLS HYDERABAD – 500 034. 2 3 . MR. MANDAGIRI CHARAN S/O M.L.PRAKASH AGED ABOUT 48 YEARS RESIDING AT NO. 203 HALL MARK, HILL VIEWS AND JOURNALIST COLONY JUBILEE HILLS ROAD NO.72 HYDERABAD – 500 034. ... PETITIONERS (BY SRI DAMA SESHADRI NAIDU, SENIOR ADVOCATE A/W., SRI CHINTAN CHINNAPPA M., ADVOCATE) AND: 1 . STATE OF KARNATAKA REPRESENTED BY THE STATE PUBLIC PROSECUTOR KARNATAKA LOKAYUKTA BENGALURU – 560 001. 2 . M. PUTTA MAADAIAH S/O MADAIAH SUPERINTENDENT OF POLICE SPECIAL INVESTIGATION TEAM KARNATAKA LOKAYUKTA BENGALURU – 560 001. ... RESPONDENTS (BY SRI B.N.JAGADEESHA, ADDL. SPP FOR R1; SRI B.S.PRASAD, SPL. PP FOR R2) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE CRIMINAL PROCEEDINGS PENDING IN C.C.NO.30381/2024 (ANNEXURE-A) ON THE FILE OF HON’BLE 42nd ACJM, BENGALURU CITY, FOR THE OFFENCE P/U/S 21(1) OF MINES AND MINERALS (DEVELOPMENT AND REGULATION) ACT, 1957, AS AGAINST THESE PETITIONERS. 3 IN CRIMINAL PETITION No.8944 OF 2023 BETWEEN: 1 . M/S. KINETA GLOBAL LIMITED EARLIER KNOWN AS KINETA MINERALS AND METALS LTD., HAVING ITS REGISTERED OFFICE AT PLOT NO.566, ROAD NO.31, JUBILEE HILLS HYDERABAD – 500 033 REPRESENTED BY ITS AUTHORISED SIGNATORY MR. VALLABANENI BALASHOURI. 2 . MR. VALLABHANENI BALASHOURI S/O V.JOJAIAH NAIDU AGED ABOUT 54 YEARS RESIDING AT NO. 260 PRASHASANA NAGARA ROAD NO.72, JUBLIEE HILLS HYDERABAD AND PLOT NO.51 AND 54, KINETA TOWERS 4TH FLOOR, VENKATESHWARA HILLS 3RD ROAD, BANJARA HILLS HYDERABAD – 500 034. 3 . MR. MANDAGIRI CHARAN S/O LOURD PRAKASH AGED ABOUT 48 YEARS R/AT NO.203, HALL MARK HILL VIEWS AND JOURNALIST COLONY JUBILEE HILLS ROAD NO.72 IN FRONT OF SBI BANK HYDERABAD – 500 034. ... PETITIONERS (BY SRI DAMA SESHADRI NAIDU, SENIOR ADVOCATE A/W., SRI CHINTAN CHINNAPPA M., ADVOCATE) 4 AND: 1 . STATE OF KARNATAKA REPRESENTED BY STATE PUBLIC PROSECUTOR KARNATAKA LOKAYUKTA BENGALURU – 560 001 KARNATAKA. 2 . M.PUTTAMADAIAH, I.P.S., SUPERINTENDENT OF POLICE SPECIAL INVESTIGATION TEAM KARNATAKA LOKAYUKTA BENGALURU – 560 001 KARNATAKA. ... RESPONDENTS (BY SRI B.N.JAGADEESHA, ADDL. SPP FOR R1; SRI B.S.PRASAD, SPL. PP FOR R2) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.32618/2021 (ANNEXURE C) ON THE FILE OF THE HON’BLE XLII ACMM (SPL.COURT EXCLUSIVELY TO DEAL WITH CRIMINAL CASES RELATED TO MPs/MLAs TRIABLE BY THE MAGISTRATE IN THE STATE OF KARNATAKA) FOR THE OFFENCES P/U/S 379, 420, 465, 467, 468, 471 R/W SEC.120-B OF IPC AND SEC.7,13(2) R/W SEC.13(1)(d) OF PREVENTION OF CORRUPTION ACT 1988 AND SEC.21 AND 23 R/W SEC.4(1), 4(1)(a) OF MINES AND MINERALS (DEVELOPMENT AND REGULATION) ACT AS AGAINST THESE PETITIONER. THESE CRIMINAL PETITIONS HAVING BEEN HEARD AND RESERVED FOR ORDERS, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:- 5 CAV ORDER The proceedings impugned herein arise out of Crime No.2 of 2019 culminating in C.C.No.30381 of 2024 and C.C.No.32618 of 2021 pending before the 42nd Additional Chief Metropolitan Magistrate, Bengaluru for offences punishable under Sections 411, 420 and 120B of the IPC. 2. Facts, in brief, germane are as follows: - 2.1. The 1st petitioner is a Company registered under the provisions of the Companies Act, 1956 and petitioner No.2 is the Managing Director of the 1st petitioner/Company and is said to be Member of Parliament. Petitioner No.3 is also an office bearer in the 1st petitioner/Company taking care of commercial activity of the Company. Since 1st petitioner is the Company and other petitioners are its office bearers, for the sake of convenience all of them are referred to as ‘petitioner’ in this order, except when particular reference is made to particular petitioner. For the sake of CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA 6 convenience, the facts as obtaining in Criminal Petition No.8944 of 2023 would be narrated. 2.2. The petitioner/Company has leased out a stock yard of 3450 sq.mts. of one lakh metric tonnes capacity to store, in the new Mangalore Port at Panambur, Dakshina Kannada District. The Company is in the business of purchasing iron ore from various traders and mining contractors at the Port itself and exports them to various countries through different agencies from Mangalore Port. It is the averment in the petition that if any permit is to be obtained it is the duty of various traders, mining contractors and any other agencies who export the goods and not the petitioner. The petitioner’s liability is payment of licence fee for holding a plot at the Port. 2.3. When things stood thus, for the period between 01-04-2006 and 31-12-2010 the petitioner Company had exported 2,15,980 MTs of iron ore to China from Mangalore Port in eight different ships. The 1st respondent alleged that the petitioner/Company in collusion with Government officials exported 1,15,859 MTs of iron ore without approval, without making 7 statutory payment and thereby causing loss to the public exchequer. Based upon this allegation, a crime comes to be registered on 20-11-2019 in Crime No.2 of 2019 by the Special Investigation Team (‘SIT’). The SIT conducts investigation and files a charge sheet before the concerned Court and the concerned Court takes cognizance of the offence on 23-11-2021. Taking of cognizance and issuance of summons, has led the petitioner to this Court in the subject petition. 3. Heard Sri Dama Seshadri Naidu, learned senior counsel appearing for the petitioners, Sri B.N. Jagadeesha, learned Additional State Public Prosecutor appearing for respondent No.1 and Sri B.S.Prasad, learned Special Public Prosecutor appearing for respondent No.2. 4. The learned senior counsel Sri Dama Seshadri Naidu appearing for the petitioner would vehemently contend that the petitioner/Company bought stocks of iron ore only at the Port. There is nothing on record to show that the petitioner/Company has purchased at the source itself and transported iron ore without 8 permission. He would submit that the allegation is that the petitioner/Company while buying at the port has not verified as to where from iron ore came and whether that iron ore that was stocked in the port did carry all the approvals and permissions. The learned senior counsel submits that a customer who purchases the product will not go back to the source as to how it is purchased. Therefore, the allegation under Section 379 of the IPC for theft is consciously dropped. What remains against the petitioner is the offence under Section 411. The learned senior counsel submits that even for the offence under Section 411 of the IPC, there is not even an iota of material, in the light of transport mandate being in the name of Balaji Minerals and not for the petitioner/Company. The petitioner/Company has exported iron ore and not transported it. Therefore, the stockiest is different, transporter is different and the exporter is different. The petitioner is only an exporter. It is his submission that it is beyond one’s comprehension as to how an exporter should identify and verify the route from where iron ore came. It is trite law that one cannot go beyond the purchase order and try to investigate the backdrop of the emergence of the goods which is the subject matter of purchase/export. 9 5. Per contra, the learned counsel Sri B S Prasad, learned Special Public Prosecutor representing the SIT, constituted for the purpose of investigation into these mining activities, would vehemently contend that only invoice was shown by the petitioner. The mine owner is required to obtain licence and thereafter if the iron ore is to be transported, the trip permit is required. It is his submission that invoices are raised without any permit or trip sheet, as though iron ore is purchased in open market. Therefore, these matters require trial. The petitioner has purchased stolen material, as M/s Balaji Minerals and M/s Bharath Ore and Minerals are alleged to have indulged in thieving iron ore and the petitioner has purchased from them. He would submit that in all, it is a matter of trial for the petitioners to come out clean. He would take this Court through the additional charge sheet also so filed, contending that the petitioners have not been able to prove that they had any permit. He would in all seek dismissal of the petitions. 6. The learned senior counsel would join issue in contending that the petitioner/Company need not have transport permit as it has not transported iron ore. Truck transporting iron ore did not 10 belong to the petitioners. The petitioners have only exported iron ore. Purchase of iron ore was done at the Mangalore port and no purchase was done in Hospet. He would submit that the 2nd respondent admits that trucks transporting the material did not belong to the petitioner/Company. He would submit that proceedings must not be permitted to continue and if continued, it would become an abuse of the process of law. 7. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record. 8. The afore-narrated facts are a matter of record. The link in the chain of events are again a matter of record. The position of the petitioners is admitted that the 1st petitioner is an exporter and the other two petitioners are its office bearers. A complaint comes to be registered on 20-11-2019. The gist of the complaint as obtaining in Column No.9 of the FIR reads as follows: “As per source information during the period from 01.04.2006 to 31.12.2010, M/s Kineta Global Ltd., (formerly Kineta Mines and Minerals Ltd.), Jubilee Hills, Hyderabad, 11 exported 2,15,980 MT of iron ore to China in 8 Shipments from Mangalore Port. As per source information the officials of the company M/s Kineta Global Ltd., (formerly Kineta Mines & Minerals Ltd.) has conspired with Government officials, Mine owners, traders and others and had stolen the iron ore and transported it illegally to Mangalore port. The Company had exported and also sold the iron ore to different buyers. As per source information bribe amounts were paid to Government officials for transportation of illegal iron ore. It is revealed that during the period from 01-04-2006 to 31.12.2010, 1,15,859 MT of iron ore out of total exports were found to be not possessing valid permits issued by the concerned Department of Mines and Geology or without any permits thereby cheating the State Government and causing loss to the State Government and wrongful gain to themselves.” It is the allegation that iron ore is transported illegally to Mangalore Port by the mine owners and the petitioner/Company has exported iron ore to different buyers. 1,15,859 MTs of iron ore out of the total exports were found to be without valid permits issued by the concerned Department of Mines and Geology and therefore, there is loss to the public exchequer. The SIT so constituted to investigate files its final report/charge sheet. Against the three petitioners/accused 1, 2 and 3 what is found in Column No.17 of the charge sheet is as follows: “ಆೋ ಆೋ ಆೋ ಆೋ-1: ಈ ೋ ಾೋಪಣ ಪಯ ಅಂಕಣ 12ರ ನಮೂರುವ ಆೋ 1ೇ ಕಂಪಯು ಸದ! ಕಂಪಯ ವ"ವ#ಾ$ಪಕ ೇ%ಶಕಾದ ಆೋತ 2 ()ೕ ವಲಭೇ 12 ,ಾಲ-ೌ! ಎಂಬುವ!ಂದ ಪ)12ಸಲ3ದು4. ಈ ಕಂಪಯು ಆಕ)ಮ ಸಂ5ಾದೆಯ ದುರು ೆ4ೕಶಂದ ಈ ೋ ಾೋಪಣ ಪಯನ ಆೋ-3 ಮತು6 ಕ78ಣದ ಅ!ನ ವತ%ಕಾದ ಆೋ-4. ಆೋ-5, ಆೋ-6 ಮತು6 ಆೋ-7 ರವೊಂ9ೆ ಅಪಾ2ಕ ಒಳಸಂಚು ರೂ CªÀjAzÀ ¢£ÁAPÀ:20.07.2007 jAzÀ 27.07.2007gÀ CªÀ¢üAiÀÄ°è PÀ£ÁðlPÀ gÁdåzÀ §¼Áîj =>ೆ?ಂದ ಈ ೋ ಾೋಪಣ ಪಯ @ೊAೆ ಸರುವ ಾಖ>ೆ ಸಂCೆ"D-6 !ಂದ D-11 ರ ಪ)Eಾರ 5921.600 F.ಟH ಪ)Iಾಣದ ಕ78ಣದ ಅ!ನ ಪJDಯನುK ಮಂಗಳMರು ಬಂ!9ೆ #ಾNEೊಂDದು4, ಆ 5ೈP ಗQ ಮತು6 ಭೂRSಾನ ಇ>ಾCೆ Uೊಸ5ೇVೆ ರವರು ಾಖ>ೆ D-12 !ೕತ" 5000.000F.ಟH ಅ!ನ ಪ)IಾಣEೆW Iಾತ) ಪX%Y ೕDದು4, ಇನುKZದ 921.600 F.ಟH ಪ)Iಾಣದ ಕ78ಣದ ಅ!ನ ಪJD9ೆ [ಾವJ ೇ ಅ2ಕೃತ ಪರ]ಾನN ಇಲ ೆ ಕಳ^ತನದ ಸ_Aಾ6Nರುತ6 ೆ. ನಂತರ ಸದ! ಕಳ^ತನದ ಅರನುK ಆೋ 1ೇ ಕಂಪಯು ನವ ಮಂಗಳMರು ಬಂದ!ಂದ #ಾ`-6 ರವರ ಮುCೇನ (3ಂa 7b ಸಂCೆ".793/27.07.2007 !ೕAಾ" ಎಂ.R.Eೊಪc ಎಂಬ ಹಡNನ ಇತೆ ಆ!ನ ಪJDfಂ9ೆ ,ೆೆ ಾಂಕ:01.08.2007 ರಂದು gೕಾ ೇಶEೆW ರh6 IಾDದು4, R ೇ( IಾರುಕVೆ ,ೆ>ೆ ಪ)1 F.ಟH ಅ!ನ ಪ)IಾಣEೆW iಾಲc 91.50 ರಂAೆ 84326.400 iಾಲcಗಳj ಅಂದೆ ಪ)1 iಾಲc ಅಂನ kಾರ1ಯ ,ೆ>ೆ ರೂ5ಾ? 40.55 ರಂAೆ ಒಟು ರೂ5ಾ? 34,19,436/- ಗಳನುK ಆೋ-1 ರವರು ಅಕ)ಮ]ಾN ಗZ ಕಾ%ಟಕ ಾಜ" ಸEಾ%ರದ ,ೊಕWಸEೆW ರೂ 34,19,436/- ಗಳನುK ಆೋ-1 ರವರು ಅಕ)ಮ ನಷವJಂಟು IಾD ವಂgರುವJದು ಈ ಪ)ಕರಣದ ತCೆ?ಂದ Fೕ>ೊKೕಟEೆW #ಾ7ೕAಾNರುತ6 ೆ. ಆದ4!ಂದ ಆೋ-1ರ Rರುದn ಕಲಂ, 411, 420 ೆ/R 120(7)(2) !ೕAಾ" ಈ ೋ ಾೋಪಣ ಪತ). ಆೋ ಆೋ ಆೋ ಆೋ-2 : ಈ ೋ ಾೋಪಣ ಪಯ ಅಂಕಣ 12ರ ನಮೂರುವ ಆೋ 2 ()ೕ ವಲಭೇ ,ಾಲ-ೌ! ಇವರು ಕಂಪಗಳ (1ದು4ಪD) Eಾ? ೆ 2006ರ ಅD ೇ%ಶಕಾN ಸಂCೆ" DಐಎH0001606496 !ೕAಾ" ೋಂ ಾQ[ಾNದು4, ಾಂಕ06.04.2006 !ಂದ ಇಯ ವೆಗೂ ಆೋ-1ೇ ಕಂಪಯ ವ"ವ#ಾ$ಪಕ ೇ%ಶಕಾNದು4, ಸದ! ಕಂಪಯ ಎ>ಾ ಆಡZತ Uಾಗು ವ"ವಹರpೆಗಳ ಸಂಪqಣ% ಜ]ಾ,ಾ4!ಯನುK UೊಂರುವವಾN ಇವರು ಅಕ)ಮ ಸಂ5ಾದೆಯ ದುರು ೆ4ೕಶಂದ ಈ ೋ ಾೋಪಣ ಪಯ ಅಂಕಣ -12 ರ ನಮೂರುವ ಆೋ-3 ಮತು6 ಕ78ಣದ ಅ!ನ ವತ%ಕಾದ ಆೋ-4 !ಂದ ಆೋ-7 ರವೊಂ9ೆ ಅಪಾ2ಕ ಒಳಸಂಚು ರೂ ಅವ!ಂದ ಾಂಕ.20.07.2007 !ಂದ 27.07.2007ರ ಅವ2ಯ ಕಾ%ಟಕ ಾಜ"ದ ಬrಾ^! =>ೆ?ಂದ ಈ ೋ ಾೋಪಣ ಪಯ @ೊAೆ ಸರುವ ಾಖ>ೆ ಸಂCೆ". D-6 !ಂದ D-11 ರ ಪ)Eಾರ 5921.600 F.ಟH ಪ)Iಾಣದ ಕ78ಣದ ಅ!ನ ಪJDಯನುK ಮಂಗಳMರು ಬಂ!9ೆ #ಾNEೊರDದು4. ಬಂದ!ೊಳ9ೆ 13 -ೇಖ!ದು4, ಆ 5ೈP ಗQ ಮತು6 ಭೂRSಾನ ಇ>ಾSÉ Uೊಸ5ೇVೆ gÀªÀgÀÄ zÁR¯É r-12 !ೕತ" 5000.000F.ಟH ಅ!ನ ಪ)IಾಣEೆW Iಾತ) ¥À«Äðmï ¤ÃrzÀÄÝ E£ÀÄß½zÀ 921.600F.ಟH ಪ)Iಾಣದ ಕ78ಣದ ಅ!ನ ಪJD9ೆ [ಾವJ ೇ ಅ2ಕೃತ ಪರ]ಾನN ಇಲ ೆ ಕಳ^ತನದ ಸ_Aಾ6Nರುತ6 ೆ. ನಂತರ ಸದ! ಕಳ^ತನದ ಅರನುK ಆೋ 1ೇ ಕಂಪಯ Uೆಸ!ನ #ಾ`-6 ರವರ ಮುCೇನ (3ಂa 7b ಸಂCೆ".793/27.07.2007 !ೕAಾ" ಮಂಗಳMರು ಬಂದ!ನ JA.«.PÉÆ¥Àgï JA§ ºÀqÀV£À° EvÀgÉ C¢j£À ¥ÀÄrAiÉÆA¢UÉ ¨Égɹ ¢£ÁAPÀ: 01.08.2007 ರಂದು gೕಾ ೇಶEೆW ರh6 IಾDದು4, R ೇ( IಾರುಕVೆ ,ೆ>ೆ ಪ)1 F.ಟH ಅ!ನ ಪ)IಾಣEೆW iಾಲc 91.50 ರಂAೆ 84326.400 iಾಲcಗಳj ಅಂದೆ ಪ)1 iಾಲc ಅಂನ kಾರ1ಯ ,ೆ>ೆ ರೂ5ಾ? 40.55 ರಂAೆ ಒಟು ರೂ5ಾ? 34,19,436/- ಗಳನುK ಆೋ-1 ರವರು ಆಕ)ಮ]ಾN ಗZ ಕಾ%ಟಕ ಾtಯ ಸEಾ%ರದ ,ೊಕWಸEೆW ರೂ 34,19,436/- ಗಳನುK ಆೋ-1 ರವರು ಅಕ)ಮ ನಷವJಂಟು IಾD ವಂgರುವJದು ಈ ಪ)ಕರಣದ ತCೆ?ಂದ Fೕ>ೊKೕಟEೆW #ಾ7ೕAಾNರುತ6 ೆ. ಆದ4!ಂದ ಆೋ-2ರ Rರುದn ಕಲಂ 411, 420 ೆ/R 120(7)(2) !ೕAಾ" ಈ ೋ ಾೋಪಣ ಪತ). ಆೋ ಆೋ ಆೋ ಆೋ-3 : ಈ ೋ ಾೋಪಣ ಪಯ ಅಂಕಣ 12ರ ನಮೂರುವ ಆೋ 3 ()ೕ ಮಂದN! ಚರu ಇವರು ಆೋ-1ೇ ಕಂಪಯ ೇರು ಾರಾNದು4, ಇವರು ಅಕ)ಮ ಸಂ5ಾದೆಯ ದುರು ೆ4ೕಶಂದ ಈ ೋ ಾೋಪಣ ಪಯ ಅಂಕಣ-12 ರ ನಮೂರುವ ಆೋ-2 ಮತು6 ಕ78ಣದ ಅ!ನ ವತ%ಕಾದ ಆೋ-4 !ಂದ ಆೋ-7 ರವೊಂ9ೆ ಅಪಾ2ಕ ಒಳಸಂಚು ರೂ ಅವ!ಂದ ಾಂಕ 20.07.2007 !ಂದ 27.07.2007ರ ಅವ2ಯ ಕಾ%ಟಕ ಾಜ"ದ ಬrಾ^! =>ೆ?ಂದ ಈ ೋ ಾೋಪಣ ಪಯ @ೊAೆ ಸರುವ ಾಖ>ೆ ಸಂCೆ".D-6 !ಂದ D-11 ರ ಪ)Eಾರ 5921.600 F.ಟH ಪ)Iಾಣದ ಕ78ಣದ ಅ!ನ ಪJDಯನುK ಮಂಗಳMರು ಬಂ!9ೆ #ಾNEೊಂDದು4, ಬಂದ!ೊಳ9ೆ ಕಂಪಯ ೌಕರಾದ #ಾ`-10 ಮತು6 #ಾ`-11 ರವರ ಮುCೇನ -ೇಖ! ಆ 5ೈP ಗQ ಮತು6 ಭೂRSಾನ ಇ>ಾCೆ Uೊಸ5ೇVೆ ರವರು ಾಖ>ೆ D-12 !ೕತ" 5000.000F.ಟH ಅ!ನ ಪ)IಾಣEೆW Iಾತ) ಪX%Y ೕDದು4, ಇನುKZದ 921.600 F.ಟH ಪ)Iಾಣದ ಕ78ಣದ ಅ!ನ ಪJD9ೆ [ಾವJ ೇ ಅ2ಕೃತ ಪರ]ಾನN ಇಲ ೆ ಕಳ^ತನದ ಸ_Aಾ6Nರುತ6 ೆ. ನಂತರ ಇವರು ಆೋತ-2 ರ ಪ)12[ಾN 7ಂ7Eೊಂಡು ಸದ! ಕಳ^ತನದ ಅರನುK ಆೋ 1ೇ ಕಂಪಯ Uೆಸ!ನ #ಾ`-6 ರವರ ಮುCೇನ (3ಂa 7b ಸಂCೆ".793/27.07.2007 !ೕAಾ" ಮಂಗಳMರು ಬಂದ!ನ ಎಂ.R.Eೊಪc ಎಂಬ ಹಡNನ 921.600 F.ಟH ಪ)Iಾಣದ ಕ78ಣದ ಅ!ನ ಪJDಯನುK ಇತೆ ಅ!ನ ಪJDfಂ9ೆ ,ೆೆ ಾಂಕ:01.08.2007 ರಂದು gೕಾ ೇಶEೆW ರh6 IಾDದು4, ಈ ಸಂಪqಣ% ರh6 Eಾಯ%ವನುK ಇವರು ಆೋ-2 ರ ಪರ]ಾN ಬಂದ!ನ Fೕ>ಾ_ಚರpೆ IಾDರುAಾ6ೆ ಮತು6 ಅಪಾ2ಕ 14 ಒಳಸಂgನಂAೆ ರೂದ4 fೕಜೆಯನುK Eಾಯ%ಗತ9ೊZರುAಾ6ೆ. ಸದ! ಕಳ^ತನದ ಅರು R ೇ( IಾರುಕVೆ ,ೆ>ೆ ಪ)1 F.ಟH ಅ!ನ ಪ)IಾಣEೆW iಾಲc 91.50 ರಂAೆ 84326.400 iಾಲcಗಳj Iೌಲ"Rದು4, ಅಂದೆ ಪ)1 iಾಲc9ೆ ಅಂನ kಾರ1ಯ ,ೆ>ೆ ರೂ5ಾ? 40.55 ರಂAೆ ಒಟು ರೂ5ಾ? 34,19,436/- ಗಳನುK ಆೋ-1 ರವರು ಅಕ)ಮ]ಾN ಗZ ಕಾ%ಟಕ ಾಜ" ಸEಾ%ರದ ,ೊಕWಸEೆW ರೂ 34,19,436/- ಗಳನುK ಆೋ-1 ರವರು ಅಕ)ಮ ನಷವJಂಟು IಾD ವಂgರುವJದು ಈ ಪ)ಕರಣದ ತCೆ?ಂದ Fೕ>ೊKೕಟEೆW #ಾ7ೕAಾNರುತ6 ೆ. ಆದ4!ಂದ ಆೋ-3ರ Rರುದn ಕಲಂ 411, 420 ೆ/R 120 (7)(2) !ೕAಾ" ಈ ೋ ಾೋಪಣ ಪತ).” The charge against the petitioner/Company is that it has caused loss of ₹34,19,436=00 to the exchequer as accused No.1/Company had purchased iron ore under a shipping bill through witness No.6 without any permit. Accused Nos. 2 and 3 are alleged of similar acts as they are office bearers of the Company. It is the allegation that permit was obtained only for 5000 MTs and the remaining 921 MTs have been transported by thieving and without any permit. Later the stolen iron ore was mixed with other iron ore and exported to China on 01-08-2007 by the petitioner/Company from new Mangalore Port. 9. What is discernible in the charge sheet is that the petitioners are not transporters but they are exporters. Whether the charge is sustainable is necessary to be noticed. Statements of witnesses are recorded while drawing up the charge sheet. Those 15 statements are placed before the Court by way of memo along with several documents. Therefore, it is necessary to notice an office memorandum issued by the New Mangalore Port Trust on 14-11- 2007. It reads as follows: “Office of the Traffic Manager New Mangalore Port Trust Panambur, Dated: 14-11-2007 No.NMPT/TM/IOF/2007 OFFICE MEMORANDUM Sub: Procedure to be adopted for admittance of iron ore fines through Silver Jubilee Gate. ~~~~ In view to streamline the procedures of admittance of cargo ile, iron ore as-converged by the exporters, following documents may be scrutinized prior accept the cart chit and granting permission to enter into the Port. This procedure is evolved in order to comply with the instructions of the Statutory authorities. 1) Permission granted by the Dept. of Mines & Geology, Govt. of Karnataka/Govt. of Andra Pradesh by indicating Truck No. and date. 2) Permission from the Forest Dept., Govt. of Karnataka / Govt. of Andra Pradesh by indicating Truck No. and date. 3) Cart chit issued by the C&F Agents representing on behalf of the exporters allotted with plot in New Mangalore Port with reference to the above truck No. and date. On scrutiny of the above said documents by the officials of the Traffic Dept. posted at the Silver Jubilee gate, the cart chit has to be endorsed and recorded in 16 the Register and permission granted for entry. These procedures shall be scrupulously adhered to. Any vehicle / cargo which does no possess such documents may not be admitted into the Port. The above said instructions come into immediate effect. Sd/- 14/11/2007 TRAFFIC MANAGER.” (Emphasis added) In terms of the said office memorandum, the New Mangalore Port Trust notices that permission granted by the Mines and Geology Department of both Governments of Andhra and Karnataka should be by indicating the truck number and date along with two other conditions to be fulfilled. It is further indicated that on scrutiny of the above documents by the officials of traffic department posted at the Silver Jubilee Gate, the cart chit has to be endorsed and recorded in the register and permission to be granted for entry. Any vehicle/cargo which does not possess the aforesaid three documents will not be permitted to enter into the Port. A communication is issued to the petitioner/Company by the Estate Officer of the New Mangalore Port Trust. Two paragraphs of the said communication assume significance. They read as follows: “….. …… ….. 17 4. The licence issued is not transferable. 5. The licence is liable to be terminated at any time without assigning any reason. No claim whatsoever will be entertained by the Port Trust. … … … Entry of trucks will be regulated by the T.M and you will be allotted number of trucks to be brought inside the wharf by the T.M. Any additional trucks will be strictly prohibited and will not be allowed into the Port area.” (Emphasis added) What is discernible from what is quoted hereinabove is entry of trucks will be regulated by the Traffic Manager and the petitioner would be allotted number of trucks to be brought inside the wharf by the Traffic Manager. Any additional trucks will be strictly prohibited. Therefore, trucks inside the Port are regulated by the Traffic Manager. The purchase order is issued to M/s Balaji Minerals by the petitioner. The purchase order reads as follows: “To Balaji Minerals Srinivasa Nilaya, 28th Ward, 61/A, Chapparada Halli, Hospet-583 203. Kind Attn: Mr.B.Pavan Kumar PURCHASE ORDER This has reference to your letter dated 20th July, 2007 and we wish to place our purchase order as mentioned below: 18 1. Material Iron Ore Fines. 2. Grade Fe 63.50 Minimum (Below 63.50% rejection at loading point only) 3. Rate Rs.2,300/- MT (Rs. Two thousand three hundred only) FOR Managalore Port. 4. Payment After submission of the un loading weighment slips along with original bills and sampling report of the cargo. 5. Quantity Minimum Qty 2500M1-3000MT. The quantity should delivered at Mangalore port by 24th July 2007. The quantity delivered after 24th July will not treated as a part of this contract and payment will not made for the same. 6. Delivery At New Mangalore port, delivery should start immediately. 7. Purchase Against form H 8. Our Tin No 28559447782 Please confirm the above by return fax. FOR KINETA MINERALS AND METALS LIMITED Sd/- Authorised Signatory.” (Emphasis added) The purchase order indicates that the quantity should be delivered at the Mangalore Port and from Mangalore Port it was to be 19 exported. Purchase invoices are appended to the Memo of documents, all of which would clearly indicate that it was the responsibility of the transporter to comply with all the directions or check-list. 10. Now it is necessary to notice the statements recorded. On 27-08-2020 statement of one Arun Kumar, Assistant Traffic Manager is recorded. Insofar as it concerns the cargo related to the activity, the witness deposes as follows: “…. …. …. 6. During the period 2006-2010 the procedure in vogue was that a prospective iron ore exporter with a consignee on hand would approach the port through his C&F agent seeking allotment of storage area for aggregation of the Iron ore before the vessel arrives, his request is submitted to the Port authorities along with the following documents: 1. Mining lease certificate issued by the state government. 2. Buyer and seller agreement. 3. C&F appointment letter. 4. Agreement between the Mine owner & Trader v/s the applicant. 7. Accordingly a file is initiated at the commercial section of the Traffic dept through proper channel and after the in-principle approval of the competent authority, the Estate section of the Civil Engineering dept will thereafter issue the allotment order to the applicant subject to payment and other conditions, this is a custom bound area inside the Port (yard), 20 renewable on monthly basis, the correspondence file related to allotment of stock yard maintained at the traffic department is submitted herewith.” (Emphasis added) It is his statement that during 2006-2010 the procedure in vogue was that prospective iron ore exporter with a consignee on hand through his agent would approach seeking allotment of storage area. All the files were to be routed through the Traffic Department. Another statement recorded is of Superintendent of Customs, Mangalore, one Ashonik Kumar on 30-07-2021, who has deposed as follows: “After the ship is set sail the steamer agent/shipping agent will present the Export General Manifesto (EGM) as described in section 41 of Customs Act, 1962. With respect to the present case being investigated by the SIT Lokayuktha I state during during the period 01- 04-2006 to 31-12-2010 M/s Kineta Global Ltd. formerly known as M/s Kineta Minerals & Metals Ltd. registered as IEC No.0906002451 has exported 210110 MT of Iron Ore fines and 20000 MT of Iron Lumps a total 230110 MT of Iron Ore in 9 shipments from NMPT. The shipment wise document available at this office are certified and furnished to the investigating officer.” (Emphasis added) 21 He would depose that shipment-wise documents were available at the office and are certified and furnished to the Investigating Officer. Therefore, insofar as the petitioner is concerned, every document of shipment was at the hands of the Investigating Officer which would mean that all was well. 11. What are the copies furnished to the Investigating Officer are also found in the investigation papers. The copies of invoices as found in 1977-78, the trip sheet, the vehicle number and all other things were handed over to the petitioner and the petitioner in turn has handed over the same to the officials. A communication from VIR Exports to SIT assumes certain significance as it concerns the petitioner. It reads as follows: “To, Mr.G.V.Udhaya Bhaskar - DYSP Special Investigation Team, Karnataka Lokayukta Bengaluru Dear Sir, Further to my statement given to you on my visit to your office between 29.09.2021 and 01.10.2021 I would like to add the following; 22 M/s Maruthi Agencies/M/s Global Associates, represented by Mr.Santhosh Suvarna, agreed to supply iron ore and thereafter from 28.02.2007 onwards supplied cargo to M/s VIR Exports who in turn supplied same to M/s Kineta Minerals & Metals. Many a times we had made invoices to M/s Kineta Minerals & Metals before M/s Maruthi Agencies/Global Associates making their invoices to us as it was a running account. This we made so that we could get the payment immediately from M/s Kineta Minerals & Metals and pass it on to M/s Maruthi Agencies/Global Associates. Mr.Prashanth, who was the representative of M/s Kineta Minerals & Metals used to confirm M/s Kineta Minerals & Metals that the cargo is received in the yard, before they making payment to us. We were the Stevedoring and Clearing & Forwarding Agents to M/s Kineta Minerals & Metals. As a bonafide Stevedoring and Clearing & Forwarding agents our duty is first to dispatch the cargo/ship in the agreed timeline and to arrange for any cargo shortage to avoid additional costs/ demurrage and dead freight on behalf of my client. Therefore there would not be loss to my client or to the exchequer in terms of foreign exchange. Since Mr.Santhosh Suvarna and team were handling our yards, all permits were collected by him and were dispatched to our office. Permits for cargo supplied by M/s Maruthi Agencies/Global Associates and also permits for cargo supplied by other suppliers to M/s Kineta Minerals & Metals were all collected together and sent to our office on a regular basis. We would also like to state that total export made by M/s Kineta Minerals & Metals 2,31,680 MT from New Mangalore Port, out of which cargo supplied by M/s Maruthi Agencies/ Global Associates was 82,482 MT. Meanwhile after every shipment Mr. Prashanth, representative of M/s Kineta Minerals & Metals would 23 come to our office, collected permits and dispatched same to his head office. In the year 2016, M/s Kineta Minerals & Metals informed us that they were missing some permits and sent Mr.Prathap Reddy to check if any other permits were there with us, he had identified some and due to lack of time he had carried couple of bags of permits with him. We also want to state that it is common notion that any cargo brought inside the port would have passed the scrutiny of the government officials and therefore the goods are deemed to be legal. The cargo was allowed inside the port only after the CISF port officials and customs (dock officials) verified the documents and contents brought in the trucks/trailers. I wish to state that the above facts are true to the best of my knowledge. For VIR EXPORTS Sd/- Anil Preetam Desouza (Proprietor).” (Emphasis added) The said exporter indicated that the cargo brought inside the Port would have passed the scrutiny of the Government officials and, therefore, the goods are deemed to be legal. The cargo was allowed inside the Port only after the CISF port officials and customs (dock officials) verified the documents and contents brought in the trucks/trailers. Therefore, the iron ore went through all scrutiny of 24 Government officials. The Geologist by name one S. Prakash is examined on 5-08-2021. His statement which assumes certain significance reads as follows: “Further it is true that as per the request of M/s S.V.K. Minerals Lease No.2393, Ramagada was issued in favour of M/s S.B.Minerals Mines and issued permit No.2328 in favour of M/s Hindustan Ores and Chemicals on 23-06-2007. The permit was allowed only for 5000.000 metric tons of iron ore power to be transported to Mangalore. It is true that the SIT, Lokayukta required the trip sheet copies for investigation, but the transporters have not produced the trip sheets to our office.” The problem is now on the transporters who have not produced the trip sheet and not on the petitioners/exporters. 12. One S. Areef Ahmed, proprietor of M/s Hindustan Ores and Chemicals is examined. The deposition of the said person insofar as the petitioner is concerned is as follows: “Later in June 2007, Mr. Janardhana Reddy and Shri Asgar Khan purchased 5000 metric tons of iron ore power in the name of my company M/s Hindustan Ores and Chemicals and M/s S.V.K. Minerals, Bellary, Ramagada, who are the mining contractors and authorized miners. And in order to transport the said iron ore power through road transport to Mangalore port from M/s S.B. Minerals, Ramagada, they obtained permit No.2328 from the Mines Department, Hospete on 23-06-2007. After that, my brother-in-law Mr. Asgar Khan, sold 5921.600 metric tons of iron to M/s Kineta Minerals and Metals Limited under the said permit through 25 his company M/s Bharath Ores and Minerals, with TIN No.29190479912 and Mr. Bheemaraju Desu’s relative Mr. Pawan Kumar’s company, called M/s Balaji Minerals, with TIN No.29610732172. Now I am looking at the invoices in the file, which shows that the said iron ore was transported to Mangalore on 20-07-2007 in the vehicle bearing No.KA-25/A/9916 and the trip sheet No.Y2K4 2885782 and Forest Permit No.1518204. .. .. .. I have not received any money in respect of the above transactions. And I have not paid any money to M/s S.V.K. Minerals to purchase the goods. Mr. Asgar Khan has to clarify the above transactions. I state that the owners of the companies who have raised the above invoices are responsible for sale of iron ore to M/s Kineta Minerals and Metals. It is true that I allowed my relative Mr.Asgar Khan to use my company on his insistence. My bother-in-law Mr. Asgar Khan has done all these transactions. My father-in-law, Mr. Akthar Khan, who is a retired Government employee and who has a good reputation in the society and hence my brother-in-law made him as a partner of his company. My brother-in-law was handling all the transactions of M/s Bharath Ores and Minerals company and he forced my father-in-law to sign the bank related transactions like money transfers etc. Even my father-in-law is not involved in any transactions. Later, Mr. Asgar Khan, in order to manage the income tax of his company M/s Bharath Ores and Minerals he has also used my company M/s Hindustan Ores and Chemicals and caused unnecessary confusion and exploited me and my father-in- law.” (Emphasis added) This statement also would not pin the petitioner down. Several other statements are recorded. One Rajesh Kirubakaran, General Manager of M/s Independent Resources India Private Limited has 26 given his statement. It is his statement that on the oral instructions of Mr. Charan Mandagiri, on behalf of the Company he has signed the purchase contract and other documents as authorized signatory and submitted to NMPT and the Customs Office. Therefore, everything was in order. But, the allegations galore. Finally, insofar as export activities are concerned, what is found as material is as follows: “To manage the export activities of the company, maintenance of foreign ships, loading the goods, and submitting applications to Government offices, obtaining permissions etc., the company had appointed Provident Shipping Agency in Mangalore on behalf of the company. Between 2006 and 2010, on behalf of M/s Kineta Minerals and Metals, they have exported iron ore power and iron ore fines to China country. I am looking at the file obtained by the Investigating Officer from the port office. Exports made as per these 9 files, are the exports made by M/s Kineta Minerals and Metals Limited. The company has given an authorization letter in my name to sign any documents of the port and toll fee offices on behalf of the company. In this regard letters were written to the port officers and now I am seeing the said documents in the file. Similarly, the invoice packing list and the letters given in the port wherein I have signed on behalf of the company regarding the exports made in the year 2007, in the ships namely M.V. Pose, Oakland, M.V. Koper, M.V. Asian Glory and M.V. Vinashin Sky, and in 2008, M.V.Meghalo Hari and M.V. Kumano, and in the year 2009, M.V. Liyang Shan, and the documents are identified by me in the case file.” (Emphasis added) 27 Export made as per 9 files is made by the petitioner and all permissions have already been taken at all quarters. 13. The factual matrix, as narrated hereinabove, is largely undisputed. They are all a matter of record. A perusal of the charge sheet reveals that gravamen of the allegation against the petitioner is confined to the assertion that it has exported iron ore which allegedly did not possess valid permit at the stage of transportation. Significantly it is not the case of the prosecution that the petitioner itself was engaged in mining operations or in transportation of iron ore from the source to the Port. On the contrary, the material on record unequivocally establishes that the petitioner has functioned solely as exporter purchasing iron ore at the New Mangalore Port. The documentary evidence noticed hereinabove inclusive of witness statements collected during investigation discloses that the entry of cargo into the Port was subject to stringent regulatory scrutiny by multiple statutory authority including the officials of the Port Trust, Customs Department inter alia and also the Traffic Manager at the Port. The office memorandum issued by the New Mangalore Port Trust clearly spells out that no cargo could enter the Port precincts 28 without having prescribed documentation and verification. The statement of the Assistant Traffic Manager and the Superintendent of Customs further affirm that export activities were permitted only upon fulfillment of statutory requirements and submission of requisite documents. Therefore, the investigation or the charge does not demonstrate even prima facie that the petitioner had knowledge or reason to believe that iron ore that is purchased at the Port constituted any kind of irregularity or stolen property. The alleged lapses pertain to, at best, the deficiencies in transport permits, responsibility of which cannot be laid at the doors of the petitioner who neither holds vehicles nor undertake transportation. 14. In the teeth of aforesaid facts, it is necessary to notice whether Section 411 of the IPC, allegation against the petitioner, is met even to its semblance. Section 411 of the IPC reads as follows: “411. Dishonestly receiving stolen property.— Whoever dishonestly receives or retains any stolen property, knowing or having reason to believe the same to be stolen property, shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.” 29 Section 411 of the IPC postulates a clear mens rea, dishonest receipt or retention of stolen property with knowledge or reason to believe that the same is stolen. In the absence material indicating such knowledge or intent, any person cannot be prosecuted for the offence under Section 411 of the IPC. 15. It becomes apposite to refer to the judgments of the Apex Court interpreting Section 411 of the IPC. The Apex Court in the case of SHIV KUMAR v. STATE OF MADHYA PRADESH1 has held as follows: “22. In Trimbak v. State of M.P. [Trimbak v. State of M.P., (1953) 1 SCC 397: AIR 1954 SC 39], this Court discussed the essential ingredients for conviction under Section 411IPC. Mehr Chand Mahajan, J., in his erudite opinion rightly observed that in order to bring home the guilt under Section 411IPC, the prosecution must prove: (SCC p. 399, para 5) “5. … (1) that the stolen property was in the possession of the accused, (2) that some person other than the accused had possession of the property before the accused got possession of it, and (3) that the accused had knowledge that the property was stolen property.” 23. When we apply the legal proposition as propounded to the present circumstances, the inevitable 1 (2022) 9 SCC 676 30 conclusion is that the prosecution has failed to establish that the appellant had the knowledge that articles seized from his possession are stolen goods. This essential element was not established against the appellant to bring home the charge under Section 411IPC against him. … … … 25. In a case like this, where the fundamental evidence is not available and the law leans in appellant's favour, notwithstanding the concurrent finding, the Court has to exercise corrective jurisdiction as the circumstances justify. As such, taking a cue from Haryana State Industrial Development Corpn. v. Cork Mfg. Co. [Haryana State Industrial Development Corpn. v. Cork Mfg. Co., (2007) 8 SCC 120] , the exercise of extraordinary jurisdiction under Article 136 is found to be merited to do justice to the appellant who was held to be guilty, without the requisite evidence to establish his mens rea in the crime.” The said judgment is approved subsequently by the 3 Judge Bench in the case of HIRALAL BABULAL SONI v. STATE OF MAHARASHTRA2 wherein the Apex Court has held as follows: “…. …. …. 19. There being no appeal by the CBI challenging the acquittal of the Accused Nos. 1 and 2 by the High Court, our discussion would confine to the case against appellant/Accused No. 3 only. 20. The prosecution sought to prove the charges against the appellant/Accused No. 3 on the basis of evidence of PW-19- Praveen Champalal Jain (who was working with the firm Babulal Soni Bhutajilal Soni), PW-21- Bhavarlalji Jawaratrai Jain (owner and partner of M/s. CN), PW-22- Dhiraj Ganeshmal Jain (Manager of M/s. CN), PW-26- Prakash Kumar Devraj Jain (Manager of M/s. CN), PW-32- Ashok Kumar Bhavarlal Jain (owner of M/s. V.B. Jewellers) 2 2025 SCC OnLine SC 437 31 and PW-33-Chandramohan A. Shetty (Investigating Officer). To establish the identity of the gold bars, the prosecution examined PW-24 (Manish Srivastav), PW-25 (Sudhakar Tamhane), PW-27 (Dr. Piyush Bhansali), PW-29 (Bien Nanavati) and PW-31 (Vinod Kumar Niranjanlal Jain). 21. The Trial Court having noted that the charge against appellant/Accused No. 3 is mainly for receiving dishonestly stolen property, recorded a finding in Para 94 of the judgment that the prosecution admittedly, have not brought any evidence against appellant/Accused No. 3 in respect of the first part of the conspiracy i.e. receipt and coding, decoding of TTs. The evidence of the aforementioned witnesses on the charge of conspiracy revolves around Mukesh Shah @ Mayur Desai (absconding), who purchased the gold bars along with appellant/Accused No. 3. It is said that Mukesh Shah delivered the demand drafts to the appellant/Accused No. 3 and appellant/Accused No. 3 in turn delivered the said drafts to M/s. CN. The Trial Court mainly relied on Exhibit 119, a letter written by PW-26 (Prakash Jain) to the CBI on 02.01.2002 giving details of the markings of gold bars which were sold to M/s. Globe International. In this letter, endorsement was made to the appellant/Accused No. 3 basing which the Trial Court inferred that if appellant/Accused No. 3 was not at all connected with the gold bars why letter was endorsed to him. Interestingly, the Trial Court has noted that the witnesses belonging to the jewellery firm have in their evidence denied any link of appellant/Accused No. 3 with M/s. Globe International. Contrary to this, the Trial Court recorded a finding in para 103 that on the basis of this letter no inference can be drawn that the gold bars sold to M/s. Globe International were of the markings mentioned in the letter. 22. The Trial Court has also referred to the evidence of PW-32 (Ashok Kumar Jain) who was declared hostile. This witness gave a statement to the CBI about business relations between appellant/Accused No. 3 and M/s. CN. However, he did not support the prosecution and in cross-examination he stated that he was compelled by the CBI to make such statement. Another important witness is PW-26 (Prakash Jain). However, he too was declared hostile. The Trial Court recorded that the entire evidence of these three hostile 32 witnesses is conspicuously silent about the appellant/Accused No. 3 and proceeded to infer that they did not want to support the prosecution. Basing on the evidence of hostile witnesses, the Trial Court concluded the following: “108. Conversion of money into gold bars itself brings accused no. 3 near to the offence. If conversion would have been into land or savings certificates then that would have been a remote circumstance. Accused No. 3 is a jeweller and his family is in the same profession. In the evidence of PW-21 BhawarlalJawartaj and PW-26 Prakash Jain, they have stated that Mukesh Shah was a new party. Hence there is reasonable ground to believe that the dealings of gold bars through Nandlal Soni (Accused No. 3) was easily accessible and workable.” … … … 28. The circumstances considered by the courts below to sustain the appellant's conviction under Section 411 and 120B of the IPC can be summarised as follows: (i) CBI officials were resisted at the time of search and seizure in the appellant's jewellery shop; (ii) Letter issued by M/s. Chenaji Narsinghji to CBI (Exhibit-119) containing an endorsement in favour of the appellant; (iii) Gold purchased by utilizing demand drafts drawn on the account of M/s. Globe International was stolen property; (iv) The appellant have business relations with M/s. Chenaji Narsinghji and M/s. V.B. Jewellers; (v) The appellant failed to substantiate his defence set up in his accused statement while answering question no. 133. 133. (vi) The appellant having failed to substantiate his defence, clause (a) of Section 114 of the Evidence Act will have to be invoked; 33 (vii) The evidence of handing over of demand drafts by the appellant to M/s. Chenaji Narsinghji and M/s. V.B. Jewellers and taking delivery of gold bars (finding by the Trial Court). 29. It is settled law that however, strong a suspicion may be, it cannot take place of proof beyond reasonable doubt. This Court in “Kamal v. State (NCT of Delhi)” (supra) has held thus:— “18. It can thus be seen that this Court has held that the circumstances from which the conclusion of guilt is to be drawn should be fully established. It has been held that the circumstances concerned “must or should” and not “may be” established. It has been held that there is not only a grammatical but a legal distinction between “may be proved” and “must be or should be proved”. It has been held that the facts so established should be consistent only with the hypothesis of the guilt of the accused, that is to say, they should not be explainable on any other hypothesis of the guilt of the accused, that is to say, they should not be explainable on any other hypothesis except that the accused is guilty. It has been held that the circumstances should be of a conclusive nature and tendency and they should exclude every possible hypothesis except the one sought to be proved, and that there must be a chain of evidence so complete so as not to leave any reasonable ground for the conclusion consistent with the innocence of the accused and must show that in all human probability the act must have been done by the accused. 19. It is a settled principle of law that however strong a suspicion may be, it cannot take place of a proof beyond reasonablele doubt. In the light of these guiding principles, we will have to consider the present case.” 30. In the case at hand, the Trial Court has held in para 120 that whether the gold bars which were sold by M/s. CN to Mr. Mukesh Shah of M/s. Globe International are the same or not has not been proved beyond reasonable doubt. It is held by the Trial Court that the distance between may 34 and must is very vast and prosecution has to cover that distance to reach the destination of must, however, the prosecution in this case could not achieve that level of proof. With this finding of the Trial Court, it is surprising as to how the appellant can be convicted for committing offence under Sections 120B and 411 of the IPC. Once the courts below have found that the seized gold bars, (Article 2) are not the same gold bars, conviction under Sections 120B and 411 of the IPC cannot be sustained. 31. Similarly, the High Court impliedly held that witnesses connected with M/s CN have failed to identify the seized gold. However, in the opinion of the High Court, the same is not relevant because the appellant has failed to prove lawful acquisition of gold. We fail to understand, when the prosecution has failed to prove the identity of seized gold as being the same gold which were sold by M/s. CN to M/s. Globe International, how the appellant is liable to prove lawful acquisition of gold vis-à-vis the stolen gold. 32. In order to bring home the charge under Section 411 of the IPC, it is the duty of the prosecution to prove (i) that the stolen property was in the possession of the accused; (ii) that some persons other than the accused had possession of the property before the accused got possession of it and (iii) that the accused had knowledge that the property was stolen property (See:‘Trimbak v. State of M.P’, (1953) 1 SCC 397 : AIR 1954 SC 39). 33. In “Mohan Lal v. State of Maharashtra”6, this Court held that the prosecution has to prove that the accused was in possession of property which he had reason to believe that it was stolen property. 34. In “Shiv Kumar v. State of M.P.”7 this Court reiterated the essentials of the offence under Section 411 of the IPC: “9. Assailing the legality of the guilty verdict against the appellant, Mr Lav Kumar Agrawal, the learned counsel would submit that the essential ingredients of Section 411 IPC offence are not at all made out as the prosecution has failed to adduce any 35 evidence to show that the accused had knowledge that the seized articles were stolen from the looted truck. It is, therefore, argued that unless the knowledge of the accused on the nature of the articles sold by them is established, his conviction under Section 411 IPC cannot be sustained in law. 13. In this case, although recovery of items was made, the prosecution must further establish the essential ingredient of knowledge of the appellant that such goods are stolen property. Reliance solely upon the disclosure statement of accused Raju alias Rajendra and Sadhu alias Vijaybhan Singh will not otherwise be clinching, for the conviction under Section 411 IPC. 16. To establish that a person is dealing with stolen property, the “believe” factor of the person is of stellar import. For successful prosecution, it is not enough to prove that the accused was either negligent or that he had a cause to think that the property was stolen, or that he failed to make enough inquiries to comprehend the nature of the goods procured by him. The initial possession of the goods in question may not be illegal but retaining those with the knowledge that it was stolen property, makes it culpable. 17. …………Moreover, the appellant in usual course, sold utensils in his shop and nothing is unnatural about him possessing such household articles, as seized from him.” 35. When the pre-requisite evidence to bring home the charge under Section 411 of the IPC is considered in the present case, even if it is proved that the appellant was handed over the demand drafts by Mr. Mukesh Shah and gold bars were purchased by the appellant from M/s. CN and M/s. V.B. Jewellers, still it was necessary for the prosecution to prove that the appellant either had knowledge or reason to believe 36 that the demand drafts had been obtained through fraudulent process to make the gold bars as stolen property in the hands of the appellant or that the appellant was part of the conspiracy. Moreover, the appellant has not been charged and tried for the first part of the offence relating to criminal conspiracy vis-à- vis fraudulent TTs.” On a blend of the afore-quoted law laid down by the Apex Court what becomes unmistakably clear is that, for allegation of Section 411, even to bring home the guilt, it must be established that the accused knew that it was stolen property and after knowing must have indulged in stolen property. This allegation, at best, is to be answered by those transporters who have transported iron ore without permit or stored it in the Port without valid invoice or permit, as the case would be. 16. The role of the petitioner can be gathered through a flow chart. The flow chart is as follows: 37 In terms of the flow chart, M/s S.B. Minerals had procured iron ore of 5000 MTs without invoice; M/s Hindustan Ores and Chemicals had procured 5000 MTs of iron ore without invoice; M/s Bharath Ores and Minerals and M/s Balaji Minerals had procured 5921.600 MTs for which invoice is available from whom the petitioner/Company has purchased and exported it to China. Therefore, from the stage at which the petitioner/Company comes into the picture invoice was available. It cannot be presumed that the petitioner/Company had the knowledge or reason to believe that the first two transporters had transported iron ore validly or 38 not. In that light Section 411 of the IPC cannot be driven home against the petitioner/Company, as it is not even prima facie proved that petitioner/Company had knowledge of what it is exporting, as it is not expected of this exporter to go behind three transactions, investigate and hold that the transporters who placed iron ore in the Port did not have permits. As observed hereinabove, it is for those persons who have transported to answer the charge and not the petitioner. 17. The other offences alleged are the ones punishable under Sections 420 and 120B of the IPC. Section 420 of the IPC would spring only if an accused with a dishonest intention from the inception has indulged in deceiving the State, as State is the complainant in the case at hand. In the light of the aforesaid reasons rendered qua Section 411 of the IPC, it would become clear that ingredients of 415 that are necessary for an offence under Section 420 IPC are to be met are ostensibly absent in the case at hand. In that light, Section 420 of the IPC is also unsustainable. 39 18. What remains is Section 120B of IPC. Even for the said offence, there must be meeting of minds towards commission of an offence. Insofar as the petitioners are concerned, the copious material noticed hereinabove, nowhere indicates that the petitioners along with other accused have hatched a conspiracy to deceive revenue to the Government. They are in the third rung of the flow chart noted hereinabove, they are exporters. All the material that the petitioners have exported are drawn on appropriate invoices quoted hereinabove. Therefore, petitioners cannot be simply alleged of conspiracy under Section 120B, without there being any ingredient necessary to drive home the offence under Section 120B. Therefore, the said offence under Section 120B also is loosely laid against the petitioners. In this regard, it becomes apposite to refer to the judgment of the Apex Court in RAM SHARAN CHATURVEDI v. STATE OF M.P.3 The Apex Court holds as follows: “27. The principal ingredient of the offence of criminal conspiracy under Section 120-BIPC is an agreement to commit an offence. Such an agreement must be proved through direct or circumstantial evidence. The court has 3 (2022) 16 SCC 166 40 to necessarily ascertain whether there was an agreement between the appellant and A-1 and A-2. 28. In the decision of State of Kerala v. P. Sugathan [State of Kerala v. P. Sugathan, (2000) 8 SCC 203 : 2000 SCC (Cri) 1474] , this Court noted that an agreement forms the core of the offence of conspiracy, and it must surface in evidence through some physical manifestation : (SCC pp. 211-12, paras 12-13) “12. … As in all other criminal offences, the prosecution has to discharge its onus of proving the case against the accused beyond reasonable doubt. … A few bits here and a few bits there on which the prosecution relies cannot be held to be adequate for connecting the accused with the commission of the crime of criminal conspiracy. … 13. … The most important ingredient of the offence being the agreement between two or more persons to do an illegal act. In a case where criminal conspiracy is alleged, the court must inquire whether the two persons are independently pursuing the same end or they have come together to pursue the unlawful object. The former does not render them conspirators but the latter does. For the offence of conspiracy some kind of physical manifestation of agreement is required to be established. The express agreement need not be proved. The evidence as to the transmission of thoughts sharing the unlawful act is not sufficient.” (emphasis supplied) 29. The charge of conspiracy alleged by the prosecution against the appellant must evidence explicit acts or conduct on his part, manifesting conscious and apparent concurrence of a common design with A-1 and A-2. In State (NCT of Delhi) v. Navjot Sandhu [State (NCT of Delhi) v. Navjot Sandhu, (2005) 11 SCC 600 : 2005 SCC (Cri) 1715] , this Court held : (SCC p. 691, para 101) “101. One more principle which deserves notice is that the cumulative effect of the proved circumstances should be 41 taken into account in determining the guilt of the accused rather than adopting an isolated approach to each of the circumstances. Of course, each one of the circumstances should be proved beyond reasonable doubt. Lastly, in regard to the appreciation of evidence relating to the conspiracy, the Court must take care to see that the acts or conduct of the parties must be conscious and clear enough to infer their concurrence as to the common design and its execution.” (emphasis supplied) 30. In accepting the story of the prosecution, the trial court, as well as the High Court, proceeded on the basis of mere suspicion against the appellant, which is precisely what this Court in Tanviben Pankajkumar Divetia v. State of Gujarat [Tanviben Pankajkumar Divetia v. State of Gujarat, (1997) 7 SCC 156 : 1997 SCC (Cri) 1004] , had cautioned against : (SCC p. 185, para 45) “45. The principle for basing a conviction on the basis of circumstantial evidence has been indicated in a number of decisions of this Court and the law is well settled that each and every incriminating circumstance must be clearly established by reliable and clinching evidence and the circumstances so proved must form a chain of events from which the only irresistible conclusion about the guilt of the accused can be safely drawn and no other hypothesis against the guilt is possible. This Court has clearly sounded a note of caution that in a case depending largely upon circumstantial evidence, there is always a danger that conjecture or suspicion may take the place of legal proof. The Court must satisfy itself that various circumstances in the chain of events have been established clearly and such completed chain of events must be such as to rule out a reasonable likelihood of the innocence of the accused. It has also been indicated that when the important link goes, the chain 42 of circumstances gets snapped and the other circumstances cannot, in any manner, establish the guilt of the accused beyond all reasonable doubts. It has been held that the Court has to be watchful and avoid the danger of allowing the suspicion to take the place of legal proof for sometimes, unconsciously it may happen to be a short step between moral certainty and legal proof. It has been indicated by this Court that there is a long mental distance between “may be true” and “must be true” and the same divides conjectures from sure conclusions. (Jaharlal Das v. State of Orissa [Jaharlal Das v. State of Orissa, (1991) 3 SCC 27 : 1991 SCC (Cri) 527] )” (emphasis in original and supplied) 31. It is not necessary that there must be a clear, categorical and express agreement between the accused. However, an implied agreement must manifest upon relying on principles established in the cases of circumstantial evidence. Accordingly, in the majority opinion of Ram Narayan Popli v. CBI [Ram Narayan Popli v. CBI, (2003) 3 SCC 641 : 2003 SCC (Cri) 869] , this Court had held : (SCC p. 783, para 354) “354. … For the offence of conspiracy some kind of physical manifestation of agreement is required to be established. The express agreement need not be proved. The evidence as to the transmission of thoughts sharing the unlawful act is not sufficient.” 32. In view of the clear enunciation of law on the criminal conspiracy by this Court, we find that the prosecution has failed to produce any evidence whatsoever to satisfy the Court that there was a prior meeting of minds between the appellant and A-1 and A-2. There is no physical manifestation of such a concurrence extractable from surrounding circumstances, declarations, or the conduct of the appellant. The 43 evidence is shorn of even a passive acknowledgment of conspiracy of the appellant with the accused, let alone heralding a clear and conscientious participation of the appellant in the conspiracy. As noted above, this Court has cautioned against replacing mere suspicion with the legal requirement of proof of agreement. 33. For the reasons stated above we are of the opinion that the prosecution failed to establish the circumstances in which the appellant, being the custodian of only one set of the keys for the dual lock system functional in the Bank, could alone be made responsible for providing access to the strongroom and the safe in the Bank. We are also of the clear opinion that the prosecution failed to establish the existence of any agreement between the appellant, A-1 and A-2, which is quintessential for a charge under Section 120-BIPC. In the absence of such an agreement, even by inference through circumstantial evidence, the appellant is entitled to be acquitted of the charge of criminal conspiracy.” (Emphasis supplied) The Apex Court holds that there should be physical manifestation of concurrence between the accused, extractable from surrounding circumstance, declaration or the conduct of the accused. The Apex Court further holds that, if there is no offence of even passive acknowledgement of conspiracy with the accused, the proceedings must not be permitted to be continued for the said offence. If the facts obtaining in the case at hand are considered on the bedrock of the principles laid down by the Apex Court in the aforesaid 44 judgment, there is not even a conscientious participation of the petitioners in the alleged conspiracy. There is neither surrounding circumstance, declaration nor any conduct of the petitioners. The offence is shorn of even a passive acknowledgement of conspiracy. Therefore, the said offence also cannot be driven home, even to its prima facie sense. 19. The learned counsel appearing for the 2nd respondent has vehemently contended that this Court in exercise of its jurisdiction under Section 482 of the CrPC may not entertain the subject petition and obliterate the proceedings as investigation is over, charge sheet is filed and once charge sheet is filed, a petition under Section 482 of the Cr.P.C. would not become entertainable. In furtherance of the said submission, the learned counsel has placed reliance on two judgments of the Apex Court, one in the case of STATE (NCT OF DELHI) v. SANJAY– (2014) 9 SCC 772 and the other in the case of PRADEEP S. WODEYAR v. STATE OF KARNATAKA – (2021) 19 SCC 62. There could be no qualm about the principles laid down by the Apex Court in the aforesaid judgments. They pertain to the manner of taking of cognizance. 45 This Court is not considering the manner in which cognizance is taken, but the manner in which the investigation conducted and charge has been laid against the petitioner. Therefore, the said judgments relied on by the learned counsel for the 2nd respondent are not applicable to the facts of the case or applicable to the decision being rendered. 20. The only submission to be answered is, whether after filing of the charge sheet or even rejection of discharge application, the petition under Section 482 of the Cr.P.C. would be maintainable or otherwise. The issue need not detain this Court for long or delve deep into the matter. A Three Judge Bench of the Apex Court in the case of A.M. MOHAN v. STATE4 has held as follows: “… …. …. 21. Insofar as the contention of the respondents that since the charge-sheet has been filed, the present appeal is liable to be dismissed, is concerned, it will be relevant to refer to the following observations of this Court, in the case of Anand Kumar Mohatta and Another v. State (NCT of Delhi), Department of Home and Another((2019) 11 SCC 706 : 2018 INSC 1060 : “14. First, we would like to deal with the submission of the learned Senior Counsel for Respondent 2 that once the charge-sheet is filed, 4 SLP (Criminal) No.9598 of 2022 decided on 20-03-2024 46 petition for quashing of FIR is untenable. We do not see any merit in this submission, keeping in mind the position of this Court in Joseph Salvaraj A. v. State of Gujarat [Joseph Salvaraj A. v. State of Gujarat, (2011) 7 SCC 59: (2011) 3 SCC (Cri) 23]. In Joseph Salvaraj A. [Joseph Salvaraj A. v. State of Gujarat, (2011) 7 SCC 59: (2011) 3 SCC (Cri) 23], this Court while deciding the question whether the High Court could entertain the Section 482 petition for quashing of FIR, when the charge-sheet was filed by the police during the pendency of the Section 482 petition, observed: (SCC p. 63, para 16) “16. Thus, from the general conspectus of the various sections under which the appellant is being charged and is to be prosecuted would show that the same are not made out even prima facie from the complainant's FIR. Even if the charge sheet had been filed, the learned Single Judge [Joesph Saivaraj A. v. State of Gujarat, 2007 SCC OnLine Guj 365] could have still examined whether the offences alleged to have been committed by the appellant were prima facie made out from the complainant's FIR, charge sheet, documents, etc. or not.” 15. Even otherwise it must be remembered that the provision invoked by the accused before the High Court is Section 482 CrPC and that this Court is hearing an appeal from an order under Section 482 CrPC. Section 482 CrPC reads as follows: “482. Saving of inherent powers of the High Court. - Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any court or otherwise to secure the ends of justice.” 16. There is nothing in the words of this section which restricts the exercise of the power of the Court to prevent the abuse of process of court or miscarriage of justice only to the stage of the FIR. It is settled principle of law that the High Court can exercise jurisdiction under Section 482 CrPC even when the discharge application is pending with the trial court [G. Sagar Suri v. State of 47 U.P., (2000) 2 SCC 636, para 7: 2000 SCC (Cri) 513. Umesh Kumar v. State of A.P., (2013) 10 SCC 591, para 20: (2014) 1 SCC (Cri) 338: (2014) 2 SCC (L&S) 237]. Indeed, it would be a travesty to hold that proceedings initiated against a person can be interfered with at the stage of FIR but not if it has advanced and the allegations have materialised into a charge-sheet. On the contrary it could be said that the abuse of process caused by FIR stands aggravated if the FIR has taken the form of a charge-sheet after investigation. The power is undoubtedly conferred to prevent abuse of process of power of any court.” [emphasis supplied] 22. A similar view has been taken by this Court in the case of Haji Iqbal alias Bala through S.P.O.A. v. State of U.P. and Others (2023 SCC OnLine SC 946 : 2023 INSC 688).” The Apex Court holds that indeed it would be a travesty to hold that proceedings against the person can be interfered with at the stage of FIR, but not if it has advanced and allegations have materialised into a charge sheet. On the contrary, it could be said that the abuse of process caused by FIR stands aggravated if the FIR has taken the form of a charge sheet after investigation. 21. In Criminal Petition No.12794 of 2024 the fulcrum of allegations is the same. The only added circumstance is, the offence punishable under the Mines and Minerals (Development and Regulation) Act, 1957. In the light of the reasons rendered to 48 obliterate the proceedings in Criminal Petition No.8944 of 2023, the subject petition also deserves to succeed for the reason that it arises out of the same criminal case and fulcrum of allegations remain the same, except quoting different offence. 22. In the totality of the circumstance, the proceedings against the petitioner would amount to permitting prosecution on a conjecture, rather than evidence, as continuance of proceedings would not only constitute abuse of the process of law, but would result in miscarriage of justice. The power conferred under Section 482 of the Cr.P.C., which is undoubtedly to prevent abuse of the process, cannot be curtailed by the mere fact that charge sheet is filed or a discharge application is pending before the concerned Court. In that light I deem it appropriate to entertain the petitions, exercising jurisdiction under Section 482 of the Cr.P.C. and obliterate the proceedings against the petitioners. 49 23. For the aforesaid reasons, the following: O R D E R (i) Criminal Petitions are allowed. (ii) Proceedings in C.C.No.32618 of 2021 pending before the XLII Additional Chief Metropolitan Magistrate (Special Court exclusively to deal with Criminal cases relating to MPs/MLAs triable by the Magistrate in the State of Karnataka) Bangalore, as also the proceedings in C.C.No.30381 of 2024 pending before the XLII Additional Chief Judicial Magistrate stand quashed. (iii) It is made clear that the observations made in the course of the order are only for the purpose of consideration of the case of petitioners under Section 482 of Cr.P.C. and the same shall not bind or influence the proceedings against any other accused pending before any other fora. Pending applications if any, also stand disposed. Sd/- (M.NAGAPRASANNA) JUDGE bkp CT:SS