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REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 348-356 OF 2018

(Arising Out of SLP (Crl.) Diary No. 2398 of 2018)

THE STATE OF KARNATAKA & ORS          … APPELLANT(S)

VERSUS

M/S VEDANTA LIMITED (FORMERLY  KNOWN AS SESA STERLITE LIMITED) & ORS … RESPONDENT(S)

J U D G M E N T

ASHOK BHUSHAN, J.

Delay condoned. Leave granted.  

2. This appeal has been filed against the impugned

judgment  and  order  of  Karnataka  High  Court  dated

04.07.2017 in Writ Petition No. 18941/2016 and Writ

Petition  Nos.  19328-19335/2016(GM-MM-S).  High  Court

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vide its judgment dated 04.07.2017 has allowed the

Writ Petitions directing for release of the iron ore

in favour of writ petitioners (respondent herein).  

3. The  brief  facts  necessary  to  be  noted  for

deciding this appeal are:  

A First Information Report No. 17/2009-10 dated

15.03.2010 was registered for illegal storage of iron

ore by violating Sections 2(7)(b)(iv), 62, 80 of the

Karnataka Forest Act, 1963 and Rules 143, 162 of the

Karnataka  Forests  Rules,  1969.  Judicial  Magistrate

First Class, Ankola permitted for further inquiry by

including  Section  24(e)  of  Karnataka  Forest  Act,

1963. On 20.03.2010 about 5 Lakhs Metric Tonnes of

illegally stocked iron ore has been seized on “as-is-

where-is-basis” and seizure report has been submitted

to the Judicial Magistrate First Class, Ankola who

permitted to retain the same until further orders.  

4. Another  case  registered  was  CBI  Crime  No.  RC

17(A)/2012.  Chargesheets  were  filed  after

investigation in Special C.C. No. 268/2013, Special

C.C. No. 11/2014, Special C.C. No. 14/2014, Special

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C.C. No. 15/2014, Special C.C. No. 36/2014, Special

C.C. No. 37/2014, Special C.C. No. 38/2014, Special

C.C. No. 53/2014, Special C.C. No. 54/2014. The State

filed an application under Section 451/457 Cr.P.C. in

the aforesaid cases before the XXXII Additional City

Civil and Sessions Judge and Special Judge for CBI

Cases,  Bangalore  (CCH-34),  seeking  permission  to

dispose  off  56  heaps  of  iron  ore  lying  at  the

Belekeri  Port  approximately  weighing  2,72,713.347

Metric Tonnes by e-tender.  

5. Notices were published in the newspapers inviting

the filing of application for the interim disposal of

seized 56 heaps of iron ore at Belekeri Port by Dy.

Conservator  of  Forests,  Karwar  on  29.03.2015.  The

XXXII Additional City Civil and Sessions Judge and

Special Judge for CBI Cases, Bangalore (CCH-34) after

considering  the  application  passed  an  order  on

08.05.2015  allowing  the  application  under  Section

451/457  Cr.P.C.  permitting  the  applicant/State  to

dispose off the seized iron ore through e-tender on

certain  terms  and  conditions  as  enumerated  in  the

order.  

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6. Against Order passed on 08.05.2015, Writ Petition

No.  18941/2016  and  Writ  Petition  Nos.  19328-

19335/2016(GM-MM-S) were filed by the respondents in

the High Court of Karnataka at Bangalore. In the Writ

Petition following prayers were made:

“ PRAYER

Wherefore,  for  the  reasons  and circumstances stated to hereinabove, it is most humbly prayed that this Hon’ble Court may be pleased to:

(i) Issue a Writ of Certiorari or any other  appropriate  Writ  or  Order  or direction setting aside the Order dated 08.05.2015  passed  by  the  Court  XXXII Additional City Civil & Sessions Judge & Special Judge for CBI Cases in Bangalore (CCH 34) in Spl. C.C. Nos. 268/2013, 11, 14, 15, 36, 37, 38, 53 & 54 of 2014 vide Annexure – A & all further consequential proceedings thereto, only in so far as the  petitioner  is  concerned,  in  the interest of justice and equity.   (ii) Issue a Writ of Mandamus or any other  appropriate  Writ  or  Order  or Direction, directing the 2nd,3rd, 4th & 5th

Respondents  to  consider  the representation  dated  04.02.2016, 08.02.2016 & 24.02.2016 submitted by the petitioner  vide Annexure  –‘P’,’P1’  & ‘P2’ and permit the petitioner to remove and  transport  the  entire  quantity  of

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approximately  34.544  Metric  Tonnes  of iron ore from Belekere Port premises to the Pig Iron Plant of the petitioner at Amona in State of Goa by endorsing the Mineral  Dispatch  Permits  &  Forest Transit  Passes  &  without  insisting  on any further payment of Royalty, in the interest of justice and equity.

(iii) Issue such other appropriate Writ or  Order  or  Direction  as  deemed  fit under the facts and circumstances of the case,  in  the  interest  of  justice  and equity.”

7. The  State  filed  an  objection  in  the  Writ

Petitions  opposing  the  prayers  made  in  the  Writ

Petitions. The High Court vide its judgment and order

dated  04.07.2017  allowed  the  Writ  Petitions.  The

State aggrieved by the judgment of the High Court has

come up in this appeal.

8. We have heard Shri B.P.S. Patil learned Senior

Advocate  for  the  appellant  and  Shri  Dhruv  Mehta,

Advocate for the respondent.  

9. Learned counsel for the appellant in support of

the  appeal  contends  that  the  High  court  committed

error in allowing the Writ Petitions and directing

release  of  the  iron  ore  in  favour  of  the  writ

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petitioner. It is contended that the basis of the

judgment  of  the  High  Court  is  the  final  report

accepted  by  learned  CBI  Judge  vide Order  dated

15.12.2015  which  has  nothing  to  do  with  the

proceeding in which, an Order was passed by Special

Judge CBI on 08.05.2015. It is contended that the

High  Court  on  wrong  premise  has  allowed  the  Writ

Petitions.  It is submitted that the writ petitioners

themselves have filed an application in the Special

C.C. Nos. 268/2013, 11, 14, 15, 36, 37, 38, 53 & 54

of  2014  under  Section  451/457  Cr.P.C.  dated

08.03.2016,  praying  for  directing  the  release  in

favour  of  the  applicant  company  herein  entire

quantity of about 34544 Metric Tonnes of iron ore,

belonging  to  the  applicant  company  seized  on

20.03.2010,  which  application  was  subsequently,

withdrawn.  

10. Learned Senior Counsel for the appellant submits

that Crime No. 2/2014 dated 11.07.2014 in which final

report was submitted and accepted by XXXII Additional

City Civil and Sessions Judge and Special Judge for

Prevention of Corruption Act at Bangalore City was a

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case  which  was  registered  by  Special  Investigation

Team  of  Karnataka  Lokayukta,  was  altogether  a

different  case,  unconcerned  with  proceeding  under

which  an  application  under  Section  451/457  Cr.P.C.

has been allowed.  

11. Learned  Counsel  appearing  for  the  respondent

refuting the submission of the Senior Counsel for the

appellant  contends  that  the  investigations  were

carried out by the CBI in pursuance of the directions

passed  by  this  Court  in  Writ  Petition  (C)  No.

562/2009 and under the orders of this Court Special

Investigation  Team,  Karnataka  Lokayukta,  Bangalore

carried on investigations and registered a case with

Karnataka Lokayukta SIT Police Station, being Crime

No.  2/2014  in  which  proceeding  after  thorough

investigation,  a  final  report  dated  08.10.2015  was

submitted by SIT, which was accepted by the Court on

15.12.2015.  No  offence  having  been  found  proved

against  the  respondent,  High  Court  has  rightly

directed for release of iron ore seized in favour of

the  respondent.  Respondent’s  claim  for  release  of

iron ore is confined to the quantity of about 34544

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Metric Tonnes of iron ore belonging to the respondent

company that has been seized on 20.03.2010 and lying

at the plot allotted to applicant-company by Shree

Mallikarjun Shipping Pvt. Ltd in Belekeri Port Area.

He  submitted  that  the  claim  of  above  iron  ore  is

different from that seized and pending in case No.

189/2010.

12. We have considered the submissions of the learned

counsel for the parties and have perused the record.  

13. High Court in the impugned judgment has based its

decision of allowing the Writ Petition and directing

the  release  of  the  iron  ore  in  favour  of  the

respondent on the final report being accepted by the

learned  CBI  Judge  by  Order  dated  15.12.2015.  High

court has further noticed that this Court directed on

07.09.2012  to  CBI  to  investigate  into  illegally

stocked iron ore in pursuance of which direction, SIT

was  constituted  and  final  report  was  submitted.

Paragraphs  10  and  15  of  the  judgment  of  the  High

court are the entire consideration of the High Court

for  allowing  the  Writ  Petition.  It  is  useful  to

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extract the Paragraphs 8 to 15 of the judgment which

is to the following effect:  

“8. Accordingly,  a  Special Investigation Team (SIT, for short) was appointed by the State. They submitted a final report, which is in favour of the writ  petitioner.  The  final  report  has been accepted by the learned CBI Judge by an order dated December 15, 2015.  

9. Mr.  K.  N.  Phanindra,  learned advocate, seeks a direction for release of  the  materials  in  favour  of  his client.

10. Mr.  V.  G.  Bhanuprakash,  learned additional government advocate, submits that  a  case  of  theft  is  pending  and, therefore,  the  seized  materials  could not  be  released  in  favour  of  the petitioner.  

11. In the wake of the final report being submitted by the SIT, we do not find any impediment to release the iron ore  in  favour  of  the  petitioner.  An inventory  has  to  be  prepared  and, thereafter,  the  iron  ore  shall  be released  in  favour  of  the  writ petitioner,  immediately.   The  entire process must be completed by four weeks.

12. The writ petitions are, therefore, allowed.

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13. Mr.  Phanindra,  at  this  stage, expresses  an  apprehension  that  the authorities may claim royalty.

14. When the material is in the port area, it is presumed that royalty has, already, been paid, otherwise transport permit  would  not  have  been  granted. Therefore,  his  apprehension  is unfounded.

15. We make no order as to costs.  

Sd/- CHIEF JUSTICE

Sd/-                                  JUDGE”

14. The investigation which was carried out by SIT

was registered as Crime No. 2/2014. The respondent in

his  compilation  has  filed  a  notice  issued  under

Section 91 Cr.P.C. to the Managing Director/Director

of  M/s  SESA  Goa  Limited,  presently,  M/s  Vedanta

Limited (respondent). Notice dated 21.08.2014 refers

to the Order of this Court and registration of Crime

No. and it is useful to extract the opening paragraph

of  the  notice  issued  to  the  respondent  dated

21.08.2014:

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“    KARNATAKA LOKAYUKTA Special Investigation Team

No. SP2/CR/02/2014/SIT/KLA/03 DATE:  21.08.2014

POLICE NOTICE  (U/S 91 Cr.P.C.)

Special  Investigation  Team,  Karnataka, Lokayukta,  Bangalore,  is  investigating the cases of illegal mining of Iron ore in Karnataka State on the orders of the Hon’ble Supreme Court (Writ Application No.  562/2009  IA  189  dated  16.09.2013) and that of the Govt. of Karnataka. In this regard a case is registered against your company in KLA SIT Police Station Cr.  No.  02/2014  u/s  379,  420  r/w 120(b)IPC & 13(2), r/w 13(1)(d) PC Act & 21, 23 r/w 4(1)(a) MMRD Act 1957.  

In this connection, you are requested to direct  a  competent  official  conversant with the activities/transactions of your company  (M/s.  Mineral  Enterprises Limited No. 49,3rd Floor Khanija Bhavana, Race Course Road,) to appear before the undersigned at 10.30 hrs on 30.8.2014 at the  office  of  Special  Investigation Team,  ATIC  Building,  University  of Veterinary  Science,  Hebbal,  Bangalore along  with  the  following  original documents/data.  The  said  official  may also  carry  soft  copy  of  the data/tables/charts of the information as mentioned below.

.............. ”

15.  It  was  in  the  aforesaid  proceeding  that  final

report was submitted on

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08.10.2015. The respondent has filed a copy of the

order  sheet  of  XXXII  Additional  City  Civil  and

Sessions Judge and Special Judge for Prevention of

Corruption Act at Bangalore City in Crime No. 2/2014

where filing of the final report is noticed and Court

also  directed  for  issue  notice  to  the  complainant

returnable by 15.12.2015. On 15.12.2015, the Court in

Crime No. 2/2014 passed the following order:  

“Complainant  by  name  Sri  Manjunatha Annigeri,  Superintendent  of  police attached  Special  Investigation  Team, Karnataka  Lokayuktha,  Bengaluru  is present  and  submits  that  he  has  gone through the records which disclosed that no  case  is  made  out  against  all  the accused  at  the  conclusion  of investigation. He submits that he has no objection to accept the ‘B’ report.

I have gone through the records. It is  seen  that  according  to  the Investigating  Officer,  there  is  no convincing  evidence  to  arrive  at conclusion that allegations against all the accused are made out. After having gone through the ‘B’ report I find that there are no grounds to proceed further against all the accused and accordingly ‘B’ report is accepted.

(V. G. BOPAIAH)                        XXIII ACC and Spl. Judge,

Bangalore City.”

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16. From the above, it is clear that the final Report

which was accepted on 15.12.2015, was final report in

case Crime No. 2/2014 which was registered after the

investigation by SIT in pursuance of order of this

Court passed in Writ Petition No. 562 of 2009 and in

the  above  case,  no  offence  was  found  against  the

respondent.  

17. The  Order  dated  08.05.2015  was  passed  allowing

the application under Section 451/457 Cr.P.C. of the

State in Special C.C. No. 268/2013 and C.C. No. 11,

14, 15, 36, 37, 38, 53 & 54 of 2014 which is mentioned

in the operative portion of the order itself.  It is

useful to extract the operative portion of the Order

dated 08.05.2015 which is to the following effect:

“ ORDER

The  Application  filed  by  the  State Government U/ss. 451/457 of Cr.P.C., are allowed permitting the Applicant/State to dispose off the seized iron ore through e-tender  with  the  following  terms  and conditions:

1.The  auction  of  the  property  shall  be through e-tender under the supervision of  the  ‘Monitoring  committee’

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constituted  by  the  Hon’ble  Supreme Court.

2.The e-tender auction shall be conducted by  involving  the  CBI  Authorities  and under  intimation  to  the  Lokayukta Department.

3.The e-tender auction shall be conducted only after measurement of the quality and quantity of each of the 56 iron ore heaps  separately  through  mines  and Geology Department.

4.The e-auction shall be conducted after taking samples of each of the 56 iron ore  heaps  separately  for  which Panchanama shall be drawn.

5.The  e-auction  process  is  over  the disposal off the iron ore be covered by videography.

6.The auction amount shall be deposited immediately with the Court in Spl. CC. No. 268/2013 and a copy of the document for having deposited the amount be kept in connected cases.  

7.The DMG shall keep records of the exact quantity of iron ore transported by the successful bidder of the property.

The Original of the Order be kept in Spl. CC. No. 268/13 and a copy thereof be kept  in  Spl.  CC.  Nos.  11/14,  14/14, 15/14,  36/14,  37/14,  38/14,  53/14  & 54/14.

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(Directed  to  the  Judgment  Writer, transcribed  by  the  corrected  and  then signed and pronounced by me in the open court on this 8th day of May 2015),

Sd/-08/05 (Pradeep S. Balikal) XXXII  Addl.  City Civil  and  Sessions Judge and Spl. Judge for  CBI  Cases, Bangalore”  

18.     From the above, it is clear that Order dated

08.05.2015 was passed in different proceedings which

proceedings  commenced  by  registration  of  FIR  dated

15.03.2010, Ankola Police Station Crime No. 189/2010.

After  investigation  by  CID/CBI  chargesheets  were

filed, which were the cases as referred above. Iron

ore which was directed to be released by Order dated

08.05.2015 was iron ore seized on 20.03.2010.  In the

additional documents filed by the appellant, IA filed

on  behalf  of  the  respondent  under  Section  451/457

Cr.P.C. dated 08.03.2016 has been brought on record.

It  is  useful  to  extract  the  prayer  made  in  the

application  of  the  respondent,  which  is  to  the

following effect:

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“ PRAYER

Wherefore, it is prayed that this Hon’ble Court  be  pleased  to  allow  the  above application  and  direct  the  release  in favour of the applicant company herein, of about 34,544 MT of Iron Ore belonging to the applicant company that has been seized on 20.03.2010 and is lying at the plot  allotted  to  applicant  company  by Shree  Mallikarjun  Shipping  Private Limited  in  Belekeri  Port  area,  in  the interest of justice & equity.

Place: Bangalore Date 08.03.2016

Applicant [Anand Prakash Dubey,      Advocate for Applicant Head-Finance,        (K.N. Phanindra)” Iron Ore Karnataka]

 19. It is, thus, clear that seizure of the iron ore was

not in case Crime No. 2/2014 in which final report has

been accepted on 15.12.2015 rather seizure of the iron

ore  was  in  different  proceeding  in  which  proceeding

Order dated 08.05.2015 was passed. When release of iron

ore on an application filed by the State under Section

451/457 Cr.P.C. was in different proceeding, there was

no  effect  or  consequence  of  acceptance  of  the  final

report  vide Order dated 15.12.2015 in case Crime No.

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2/2014 and the High Court committed error in allowing

the Writ Petition on the strength of the final report

accepted on 15.12.2015. We have already extracted the

entire consideration of the High Court while allowing

the  Writ  Petition  from  paragraphs  8  to  15  of  the

judgment.  High Court while allowing the Writ Petition

had only relied on acceptance of the final report by CBI

Judge dated 15.12.2015 which as has been noted above,

was not relevant with regard to Order dated 08.05.2015

passed by the trial court.  

20. Learned Senior Counsel for the appellant has also

brought on record subsequent judgment of the High Court

where High Court in Writ Petition filed against the same

Order dated 08.05.2015 by another writ petitioner has

disposed off the Writ Petition granting liberty to that

Writ  Petitioner  to  approach  Jurisdictional  Criminal

Court for release of the seized iron ore by establishing

its existence and ownership rights. Reference has been

made  to  the  Order  of  the  Karnataka  High  Court  dated

20.11.2017 in Writ Petition Nos. 29527-29531 of 2017 and

Writ Petition Nos. 29881-29884 of 2017 filed as Annexure

P-11.

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21. In result of foregoing discussion, we are of the

view that order and judgment of the High Court is wholly

unsustainable  and  is  hereby  set  aside.  We,  however,

observe that it shall be open for the respondent to file

an appropriate application before the XXXII Additional

City Civil and Sessions Judge and Special Judge for CBI

Cases, Bangalore (CCH-34), for release of seized iron

ore  by  establishing  its  existence  and  its  ownership

right  over  the  same,  which  may  be  considered  by

Jurisdictional  Criminal Court  in accordance  with law.

The Criminal Appeal is allowed.  

..........................J.

( A.K. SIKRI )

..........................J.

NEW DELHI,     ( ASHOK BHUSHAN ) March 6, 2018.