PRADEEP S. WODEYAR v. THE STATE OF KARNATAKA

#8. The Special Judge, it must be noted, took cognizance on the basis of a report submitted under Section 173 CrPC and not on the basis of a private complaint. Therefore, the case is squarely covered by the decision in Afroz Mohammed Hasanfatta. The Special Judge took note of the FIR, the witness statements, and connected documents before taking cognizance of the offence. In this backdrop, it would be far-fetched to fault the order of the Special Judge on the ground that it does not adduce detailed reasons for taking cognizance or that it does not indicate that an application of mind. In the facts of this case, therefore, the order taking cognizance is not erroneous. [Para 75][1047-E-G] ‘Authorised person’ and Section 22 of MMDR Act

#9. Section 22 of the MMDR Act stipulates that no Court shall take cognizance of any offence punishable under this Act or Rules, except upon a complaint made in writing by a person authorised on that behalf by the Central or the State Government. It has been contended by the appellant that before the Special Court (Sessions Court) took cognizance of the offence, no complaint was filed by the authorised person. [Para 76] [1047-G-H; 1048-A]

#10. The Government of Karnataka issued a notification on 29 May 2014 declaring that the Office of the Inspector General of Police, Special Investigation Team, Karnataka Lokayukta shall be a police station for the purpose of Section 2(s) and shall have jurisdiction throughout the State of Karnataka for offences related to the illegal mining of minerals. The FIR was filed by the SIT, Lokayukta pursuant to the Order of this Court dated 16 September 2013 and was signed by the Sub-inspector of Police, Karnataka Lokayukta. On a reading of the notification dated 29 May 2014, it is evident that the SIT has the jurisdiction throughout Karnataka in relation to mining offences. S.No. 13 of the PRADEEP S. WODEYAR v. THE STATE OF KARNATAKA 993 Notification dated 21 January 2014 authorizes the Sub- inspector of Police‘ within its jurisdiction for the purpose of Section 22 of the MMDR Act. Therefore, on a combined reading of both the notifications, it is clear as day light that the complaint filed by SIT and signed by the Sub-Inspector of Police has complied with Section 22 of the MMDR Act. [Para 80][1052-H; 1053-A-C] Vicarious liability and Section 23 of MMDR Act

#11. A-1 submitted that the charge-sheet does not ascribe any role to A-1 and hence the process initiated against him must be quashed. Section 23(1) of the MMDR Act stipulates that where the offence has been committed by a company, every person who at the time of the commission of the offence was in-charge of and responsible for the conduct of business shall be deemed to be guilty of the offence. The proviso stipulates that nothing contained in sub-section (1) shall render such a person liable to punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence of preventing the commission of the offence. [Para 82][1054-E-F]

#12. The test to determine if the Managing Director must be charged for the offence committed by the Company is to determine if the conditions in Section 23 of the MMDR Act have been fulfilled i.e., whether the individual was in-charge of and responsible for the affairs of the company during the commission of the offence. In view of the above decisions, the submissions which has been urged on behalf of the appellant cannot be acceded to. The determination of whether the conditions stipulated in Section 23 of the MMDR Act have been fulfilled is a matter of trial. Moreover, it is evident that the charge sheet, as a matter of fact, ascribes a role to A-1 and A-2 for the payment of transportation. Therefore, there is a prima facie case against A- 1, which is sufficient to arraign him as an accused at this stage. [Para 84][1056-C-E]

#13. The findings of the Court are summarised as below: (i) The Special Court does not have, in the absence of a specific provision to that effect, the power to take cognizance of an offence under the MMDR Act without the case being A B C D E F G H 994 SUPREME COURT REPORTS [2021] 11 S.C.R. committed to it by the Magistrate under Section 209 CrPC. The order of the Special Judge dated 30 December 2015 taking cognizance is therefore irregular; (ii) The objective of Section 465 is to prevent the delay in the commencement and completion of trial. Section 465 CrPC is applicable to interlocutory orders such as an order taking cognizance and summons order as well. Therefore, even if the order taking cognizance is irregular, it would not vitiate the proceedings in view of Section 465 CrPC; (iii) The decision in Gangula Ashok was distinguished in Rattiram based on the stage of trial. This differentiation based on the stage of trial must be read with reference to Section 465(2) CrPC. Section 465(2) does not indicate that it only covers challenges to pre-trial orders after the conclusion of the trial. The cardinal principle that guides Section 465(2) CrPC is that the challenge to an irregular order must be urged at the earliest. While determining if there was a failure of justice, the Courts ought to address it with reference to the stage of challenge, the seriousness of the offence and the apparent intention to prolong proceedings, among others; In the instant case, the cognizance order was challenged by the appellant two years after cognizance was taken. No reason was given to explain the inordinate delay. Moreover, in view of the diminished role of the committal court under Section 209 of the Code of 1973 as compared to the role of the committal court under the erstwhile Code of 1898, the gradation of irregularity in a cognizance order made in Sections 460 and 461 and the seriousness of the offence, no failure of justice has been demonstrated; (iv) It is a settled principle of law that cognizance is taken of the offence and not the offender. However, the cognizance order indicates that the Special Judge has perused all the relevant material relating to the case before cognizance was taken. The change in the form of the order would not alter its effect. Therefore, no failure of justice under Section 465 CrPC is proved. This irregularity would thus not vitiate the proceedings in view of Section 465 CrPC; (v) The Special Court has the power to take cognizance of offences under MMDR Act and conduct a joint trial with other offences if permissible under Section 220 CrPC. There is no express provision in the MMDR Act which indicates that Section 220 CrPC does not apply to proceedings under the MMDR Act; (vi) Section 30B of the MMDR Act does A B C D E F G H PRADEEP S. WODEYAR v. THE STATE OF KARNATAKA 995 not impliedly repeal Section 220 CrPC. Both the provisions can be read harmoniously and such an interpretation furthers justice and prevents hardship since it prevents a multiplicity of proceedings; (vii) Since cognizance was taken by the Special Judge based on a police report and not a private complaint, it is not obligatory for the Special Judge to issue a fully reasoned order if it otherwise appears that the Special Judge has applied his mind to the material; (viii) A combined reading of the notifications dated 29 May 2014 and 21 January 2014 indicate that the Sub-Inspector of Lokayukta is an authorized person for the purpose of Section 22 of the MMDR Act. The FIR that was filed to overcome the bar under Section 22 has been signed by the Sub-Inspector of Lokayukta Police and the information was given by the SIT. Therefore, the respondent has complied with Section 22 CrPC; and (ix) The question of whether A-1 was in-charge of and responsible for the affairs of the company during the commission of the alleged offence as required under the proviso to Section 23(1) of the MMDR Act is a matter for trial. There appears to be a prima facie case against A-1, which is sufficient to arraign him as an accused at this stage. [Para 85][1056-F-H; 1057-A-H; 1058-A-E] Dharam Pal v. State of Haryana, a Constitution Bench (2014) 3 SCC 306 : [2013] 13 SCR 1052 – followed. Rattiram v. State of Madhya Pradesh (2012) 4 SCC 516 : [2012] 3 SCR 496; Kishun Singh v. State of Bihar (1993) 2 SCC 16 : [1993] 1 SCR 31; Municipal Council, Palai v. T.J Joseph AIR 1963 SC 1561 : [1964] SCR 87; Harshad Mehta v. State of Maharashtra (2010) 8 SCC 257; Pepsi Foods Ltd. v. Special Judicial Magistrate (1998) 5 SCC 749 : [1997] 5 Suppl. SCR 12; State (NCT of Delhi) v. Sanjay (2014) 9 SCC 772 : [2014] 9 SCR 1063; SMS Pharmaceuticals v. Neeta Bhalla (2005) 8 SCC 89 : [2005] 3 Suppl. SCR 371; Mainuddin Abdul Sattar Shaikh v. Vijay D Salvi (2015) 9 SCC 622 : [2015] 6 SCR 1033 – relied on.