2016 (3) TMI 1289 - HC - Indian Laws

Court quashes proceedings due to lack of evidence for personal liability in criminal case

The court quashed the proceedings against the petitioner/A3 in CC No. 24 of 2013, citing lack of evidence to sustain the cognizance taken by the Special ... Offences punishable u/s 120-B r.w. 420, 409, 477-A IPC and Section 13(1)(C & D) of the Prevention of Corruption Act, 1988 - Whether the petitioner/A3-Srinivasan, being the Vice-Chairman and Managing Director of M/s. India Cements Limited (A7), be made personally liable for any acts of India Cements Limited with vicarious liability for the offences punishable under Sections 120-B read with 420 IPC and Section 12 of the Prevention of Corruption Act, by virtue of any statutory liability or legal fiction? - Held that:- When there is nothing to show judicial application of mind to the material on record in taking cognizance of the offences under Sections 420 & 120B IPC & Section 12 of the PC Act, so far as the petitioner/A3-Sri N. Srinivasan concerned, the cognizance taken by the special judge for CBI cases requires to be quashed for no basis to sustain the cognizance order from the material on record from what is elaborately discussed supra on facts and law. Thus, the proceedings so far as petitioner/A3 concerned are liable to be quashed for above material on its face when can be held not sufficient to accuse in the police final report or to take cognizance by the learned Special Judge there from against the petitioner/A3 personally, to say no prima facie material to make him liable to face the ordeal of trial or even to frame charge against him from the prosecution material placed reliance with the police final report that is the criterion for the charge to be framed as per the settled expression of the Apex Court more particularly from the three Judge bench expression in State of Orissa v. Debendranath Padhi, (2005) 1 SCC 568, though so far as the quash petition concerned, the accused is also entitled to bring any additional material in asking the Court to receive to consider and the Court can receive to consider as held by referring to Debendranath Padhi's case (2004 (11) TMI 564 - SUPREME COURT), also in the subsequent expressions and in particular in Rukmini Narvekar v. Vijaya Satardekar [2008 (10) TMI 668 - SUPREME COURT]. Accordingly the points 1-3 are answered. In the result the petition is allowed and the proceedings from the cognizance of the offences under Sections 420 and 120B IPC and Section 12 of the PC Act, taken by the Principal Special Judge for C.B.I. Cases, Red Hills, Nampally, Hyderabad so far as the petitioner/A3-Sri N. Srinivasan concerned are quashed for no basis to sustain. The bail bonds of the petitioner/A3-Sri N. Srinivasan if any shall stand cancelled. The miscellaneous petitions pending if any stand closed. Issues Involved:1. Vicarious liability of the petitioner/A3 under IPC and Prevention of Corruption Act.2. Personal liability of the petitioner/A3 for acts committed by India Cements Limited.3. Validity of cognizance taken by the Special Judge without specifying the basis of liability.4. Quashing of proceedings against the petitioner/A3.Detailed Analysis:I. Vicarious Liability of the Petitioner/A3 under IPC and Prevention of Corruption Act:The court examined whether the petitioner/A3, being the Vice-Chairman and Managing Director of India Cements Limited (A7), could be held vicariously liable for the offenses under Sections 120-B read with 420 IPC and Section 12 of the Prevention of Corruption Act. It was noted that the petitioner/A3 was not named in the original FIR and no specific role was attributed to him in the charge-sheet. The court emphasized that vicarious liability under IPC and the Prevention of Corruption Act requires specific statutory provisions or legal fiction, which were absent in this case. The court concluded that the mere status of the petitioner/A3 as Vice-Chairman and Managing Director does not automatically make him liable for the alleged offenses without specific allegations or evidence.II. Personal Liability of the Petitioner/A3 for Acts Committed by India Cements Limited:The court analyzed the allegations against India Cements Limited (A7) and the petitioner/A3's involvement. It was found that the transactions and benefits conferred to A7, such as land leases and water allocations, were done through proper governmental procedures and approvals. The investments made by A7 in companies controlled by A1 (Jagan Mohan Reddy) were also scrutinized. The court noted that there was no evidence to show that the petitioner/A3 personally conspired or abetted the alleged offenses. The investments were part of A7's business activities, and there were board resolutions ratifying these investments. The court concluded that the petitioner/A3 could not be held personally liable for the acts of A7 in the absence of specific allegations of his personal involvement.III. Validity of Cognizance Taken by the Special Judge:The court examined whether the cognizance taken by the Special Judge was valid, given that it did not specify whether the petitioner/A3 was being held liable vicariously or personally. The court noted that the order of cognizance must reflect judicial application of mind and provide reasons for taking cognizance. In this case, the Special Judge's order lacked such reasoning, and the material on record did not support the allegations against the petitioner/A3. The court held that the cognizance taken by the Special Judge was unsustainable due to non-application of judicial mind and lack of specific reasons.IV. Quashing of Proceedings Against the Petitioner/A3:Based on the analysis, the court concluded that the proceedings against the petitioner/A3 were liable to be quashed. The court emphasized that there was no prima facie material to make the petitioner/A3 liable for the alleged offenses. The investments and transactions by A7 were part of its business activities and were ratified by board resolutions. The court also noted that the petitioner/A3's status as Vice-Chairman and Managing Director did not automatically make him liable without specific allegations or evidence of his personal involvement. Consequently, the court quashed the proceedings against the petitioner/A3 and canceled his bail bonds.Conclusion:The court allowed the petition and quashed the proceedings in CC No. 24 of 2013 against the petitioner/A3 for lack of basis to sustain the cognizance taken by the Special Judge. The court found no material to hold the petitioner/A3 personally liable for the offenses charged and emphasized the need for specific allegations and evidence to establish personal or vicarious liability.