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IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 23RD DAY OF SEPTEMBER 2013

BEFORE

THE HON’BLE MR.JUSTICE N.ANANDA

CRIMINAL PETITION No.4597/2013 BETWEEN:

SRI N.VISWANATHAN S/O NALGAMU CHETTIAR VISWANATHAN AGED ABOUT 72 YEARS R/AT NO. 135, 1ST CROSS 5TH BLOCK, KORAMANGALA BANGALORE-560095. ... PETITIONER

(BY SRI ASHOK HARANAHALLI, SENIOR ADVOCATE FOR SRI ABHIJIT HARANAHALLI, ADV.)

AND:

STATE BY CENTRAL BUREAU OF INVESTIGATION-ACB AT BANGALORE, REP. BY ITS SPECIAL PUBLIC PROSECUTOR. ... RESPONDENT

(BY SRI C H JADHAV, SENIOR ADVOCATE)

THIS PETITION IS FILED UNDER SECTION 439 CR.P.C., PRAYING TO ENLARGE THE PETITIONER ON BAIL IN FIR NO.RC 19(A)/2011 REGISTERED BY CBI, ACB, BANGALORE & ETC.

***

THIS PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 12.09.2013, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:

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O R D E R The petitioner has been arrayed as accused No.5 in

final report submitted in R.C.19(A)/2011 for offences

punishable under sections 120B r/w 379, 420, 427 & 447

IPC and also for an offence punishable under section 13 (2)

r/w 13(1)(d) of the Prevention of Corruption Act, 1988 (for

short, ‘the P.C.Act’). He has been in judicial custody from

05.06.2013. He has sought for bail.

2. The aforestated final report is the outcome of

investigation conducted in pursuance of the orders of

Supreme Court dated 23.09.2011 in Special Leave (Civil)

7366-7367 & connected matters reading as hereunder:-

“(iii) Vide the said report of CEC, it is further

pointed out to this Court that massive illegal

mining by a third party was being done in

mining lease No.1111 of M/s.NMDC. That,

despite various complaints to the numerous

authorities in the State of Karnataka by

M/s.NMDC no steps were taken to prevent that

third party from resorting to massive illegal

mining in mining lease No.1111 of M/s.NMDC

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till this court banned mining. These complaints

were made against the third party, namely,

M/s.Deccan Mining Syndicate (“DMS” for short)

for encroaching into M/s.NMDC’s mining lease

area. Even the complaint lodged by M/s.NMDC

against M/s.DMS to the Police Circle Inspector,

Sandur on 10.07.2009 was interpolated (See

Annexure R-1 to the Report being letter dated

15.09.2011 by M/s.NMDC Limited to CEC). We

also want CBI to investigate the above illegalities

including encroachment by M/s.Deccan Mining

Syndicate in the area leased out to M/s.NMDC.”

3. Based on the above order, CBI, ACB, Bangalore

registered FIR in RC.19(A)/2011 for offences punishable

under sections 120-B, 379, 411, 420, 427, 447, 468 & 471

IPC, for offences punishable under sections 13(2) r/w

13(1)(d) of P.C.Act, for an offence punishable under section

26 of the Indian Forest Act, 1927 and also for offences

punishable under sections 21 r/w 4(1), 4(1)(A) & 23 of the

Mines & Minerals (Development and Regulation) Act, 1957.

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4. In brief, the allegations made against petitioner

(accused No.5) in chargesheet and annexed documents are

as follows:-

“Shri N Viswanathan (A-5) is a retired IAS officer

of Karnataka cadre and he was the then

Principal Secretary, Commerce and Industry

Department from 26.06.1996 to 25.10.1999.

He is responsible for submitting the proposal to

Govt. of India without mentioning the intention

of Govt. of Karnataka to change the sketch and

suppressed the fact including the illegalities

committed by M/s.DMSPL. This act committed

by him with an intention to get renewal for

M/s.DMSPL with a revised sketch to facilitate

illegal mining. He had given illegal instructions

to his subordinates to suppress the facts in the

letter sent to Govt. of India. He also responsible

for withdrawing the proposal from Govt. of India

and dealt at Govt. of Karnataka resulted in

renewal of mining lease to M/s.DMSPL with a

revised sketch on 25.01.1999 which is against

the MMDR Act and Mineral Concession Rules

and thereby facilitated the illegal iron ore mining

by M/s.DMSPL from the mining area of

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M/s.NMDC. This he had done with a conspiracy

with other accused persons for which undue

benefit has derived by the mine owners and

facilitated the illegal iron ore mining which

resulted in wrongful loss to the tune of Rs.1232

crores to the State exchequer and corresponding

wrongful gain to accused persons.”

5. The details of mining lease and subsequent renewals

are stated thus:-

“f. M/s.Deccan Mining Syndicate Private Ltd.

(DMSPL) was registered with ROC, Bangalore

with the following Directors; viz. Shri SM Jain

and Smt.Kamala Devi, later Shri Rajendra

Kumar Jain S/o Shri S M Jain took over as the

Managing Director of the Company consequent

upon the death of his father, Shri S M Jain, on

01/05/2005. M/s.DMSPL took over the

partnership firm M/s.DMS and all its liabilities

w.e.f.25/09/1991. Thus, the Mining Lease

no.636, initially granted in favour of Shri M J

Boal on 19.05.1966, was renewed by the Dept.

of Mining and Geology, GOK, on various

occasions as detailed under:-

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Sl. No. M L No. Period

1 636 From 20.05.1966 to 19.05.1986 (20 Years)

2 2080 From 20.05.1986 to 19.05.1996 (first renewal executed on 26.11.1988)

3 2080A From 20.05.1996 to 19.05.2006 (Second installment of the first renewal with a modified sketch and penalty of Rs.10 lakhs for the illegal mining done by the lessee, vide notification dtd.29.01.1999

4 2525 From 20.05.2006 to 19.05.2026 (second renewal executed on 15.07.2006)

6. It is alleged that petitioner (the then Principal

Secretary, Department of Commerce & Industries,

Government of Karnataka) had committed illegal acts

attracting offences stated in final report in the matter of

renewal of second instalment of first renewal of mining lease

in favour of M/s.Deccan Mining Syndicate Private Limited

(for short, ‘DMSPL’) vide Notification dated 29.01.1999.

7. I have heard Sri Ashok Haranahalli, learned senior

counsel for petitioner and Sri C.H.Jadhav, learned senior

counsel for respondent (CBI).

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8. Before adverting to the submissions of learned counsel

for parties and documents relied upon by learned counsel for

parties, it is necessary to state that a detailed examination of

the evidence is to be avoided while considering the question

of bail, to ensure that there is no prejudging and no

prejudice, a brief examination to be satisfied about the

existence or otherwise of a prima facie case is necessary.

9. The perusal of documents filed along with final report

would prima facie indicate that offences alleged against

petitioner are economic offences involving huge loss of public

funds to State exchequer. In the final report, it is stated that

there is wrongful loss of a sum of Rs.1,232 crores to

State/NMDC and Government of India and corresponding

wrongful gain to DMSPL.

10. Sri C.H.Jadhav, learned senior counsel for CBI has

relied upon decisions reported in:-

I. 2013 AIR SCW 2800 (in the case of Y.S.Jagan

Mohan Reddy Vs. Central Bureau of Investigation)

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II. Criminal Appeal No.728/2013 dated 09.05.2013 (in

the case of Nimmagadda Prasad Vs. Central Bureau

of Investigation)

11. In a decision reported in 2013 AIR SCW 2800 (in the

case of Y.S.Jagan Mohan Reddy Vs. Central Bureau of

Investigation), the Supreme Court has held:-

“15. Economic offences constitute a class

apart and need to be visited with a different

approach in the matter of bail. The economic

offence having deep rooted conspiracies and

involving huge loss of public funds needs to be

viewed seriously and considered as grave

offences affecting the economy of the country as

a whole and thereby posing serious threat to the

financial health of the country.

16. While granting bail, the court has to

keep in mind the nature of accusations, the

nature of evidence in support thereof, the

severity of the punishment which conviction will

entail, the character of the accused,

circumstances which are peculiar to the

accused, reasonable possibility of securing the

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presence of the accused at the trial, reasonable

apprehension of the witnesses being tampered

with, the larger interests of the public/State and

other similar considerations.”

12. In a decision reported in Criminal Appeal

No.728/2013 dated 09.05.2013 (in the case of Nimmagadda

Prasad Vs. Central Bureau of Investigation), the Supreme

Court has held:-

“26. Unfortunately, in the last few years,

the country has been seeing an alarming rise in

white-collar crimes, which has affected the fiber

of the country’s economic structure.

Incontrovertibly, economic offences have serious

repercussions on the development of the country

as a whole. In State of Gujarat vs. Mohanlal

Jitamalji Porwal and Anr. (1987) 2 SCC 364 this

Court, while considering a request of the

prosecution for adducing additional evidence,

inter alia, observed as under:-

“5.....The entire Community is aggrieved if

the economic offenders who ruin the economy of

the State are not brought to book. A murder may

be committed in the heat of moment upon

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passions being aroused. An economic offence is

committed with cool calculation and deliberate

design with an eye on personal profit regardless

of the consequence to the Community. A

disregard for the interest of the Community can

be manifested only at the cost of forfeiting the

trust and faith of the Community in the system

to administer justice in an even handed manner

without fear of criticism from the quarters which

view white collar crimes with a permissive eye

unmindful of the damage done to the national

economy and national interest....”

27. While granting bail, the court has to

keep in mind the nature of accusations, the

nature of evidence in support thereof, the

severity of the punishment which conviction will

entail, the character of the accused,

circumstances which are peculiar to the

accused, reasonable possibility of securing the

presence of the accused at the trial, reasonable

apprehension of the witnesses being tampered

with, the larger interests of the public/State and

other similar considerations. It has also to be

kept in mind that for the purpose of granting

bail, the Legislature has used the words

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“reasonable grounds for believing” instead of

“the evidence” which means the Court dealing

with the grant of bail can only satisfy it as to

whether there is a genuine case against the

accused and that the prosecution will be able to

produce prima facie evidence in support of the

charge. It is not expected, at this stage, to have

the evidence establishing the guilt of the

accused beyond reasonable doubt.

28. Economic offences constitute a class

apart and need to be visited with a different

approach in the matter of bail. The economic

offence having deep rooted conspiracies and

involving huge loss of public funds needs to be

viewed seriously and considered as grave

offences affecting the economy of the country as

a whole and thereby posing serious threat to the

financial health of the country.”

13. The learned senior counsel for petitioner has relied on

the judgment of the Supreme Court reported in (2012) 1 SCC

40 (in the case of Sanjay Chandra Vs. Central Bureau of

Investigation), wherein the Supreme Court has held:-

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“20. The appellants are facing trial in respect of

the offences under Sections 420-B, 468, 471 and

109 of Penal Code, 1860 and Section 13(2) read

with 13(1)(d) of Prevention of Corruption Act,

1988. Bail has been refused first by the Special

Judge, CBI, New Delhi and subsequently, by the

High Court. Both the courts have listed the

factors, which they think, are relevant for

refusing the Bail applications filed by the

applicants as seriousness of the charge; the

nature of the evidence in support of the charge;

the likely sentence to be imposed upon

conviction; the possibility of interference with

witnesses; the objection of the prosecuting

authorities and the possibility of absconding

from justice.

21. In bail applications, generally, it has been

laid down from the earliest times that the object

of bail is to secure the appearance of the

accused person at his trial by reasonable

amount of bail. The object of bail is neither

punitive nor preventative. Deprivation of liberty

must be considered a punishment, unless it is

required to ensure that an accused person will

stand his trial when called upon. The courts owe

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more than verbal respect to the principle that

punishment begins after conviction, and that

every man is deemed to be innocent until duly

tried and duly found guilty.

22. From the earliest times, it was appreciated

that detention in custody pending completion of

trial could be a cause of great hardship. From

time to time, necessity demands that some un-

convicted persons should be held in custody

pending trial to secure their attendance at the

trial but in such cases, ‘necessity’ is the

operative test. In this country, it would be quite

contrary to the concept of personal liberty

enshrined in the Constitution that any person

should be punished in respect of any matter,

upon which, he has not been convicted or that

in any circumstances, he should be deprived of

his liberty upon only the belief that he will

tamper with the witnesses if left at liberty, save

in the most extraordinary circumstances.

23. Apart from the question of prevention

being the object of a refusal of bail, one must not

lose sight of the fact that any imprisonment

before conviction has a substantial punitive

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content and it would be improper for any Court

to refuse bail as a mark of disapproval of former

conduct whether the accused has been

convicted for it or not or to refuse bail to an un-

convicted person for the purpose of giving him a

taste of imprisonment as a lesson.

24. In the instant case, we have already noticed

that the “pointing finger of accusation” against

the appellants is “the seriousness of the charge”.

The offences alleged are economic offences

which has resulted in loss to the State

exchequer. Though, they contend that there is a

possibility of the appellants tampering with the

witnesses, they have not placed any material in

support of the allegation. In our view,

seriousness of the charge is, no doubt, one of

the relevant considerations while considering

bail applications but that is not the only test or

the factor: The other factor that also requires to

be taken note of is the punishment that could be

imposed after trial and conviction, both under

the Indian Penal Code and Prevention of

Corruption Act. Otherwise, if the former is the

only test, we would not be balancing the

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Constitutional Rights but rather “recalibrating

the scales of justice”.

39. Coming back to the facts of the present case,

both the Courts have refused the request for

grant of bail on two grounds:- The primary

ground is that offence alleged against the

accused persons is very serious involving deep

rooted planning in which, huge financial loss is

caused to the State exchequer ; the secondary

ground is that the possibility of the accused

persons tempering with the witnesses. In the

present case, the charge is that of cheating and

dishonestly inducing delivery of property and

forgery for the purpose of cheating using as

genuine a forged document. The punishment for

the offence is imprisonment for a term which

may extend to seven years. It is, no doubt, true

that the nature of the charge may be relevant,

but at the same time, the punishment to which

the party may be liable, if convicted, also bears

upon the issue. Therefore, in determining

whether to grant bail, both the seriousness of

the charge and the severity of the punishment

should be taken into consideration.

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40. The grant or refusal to grant bail lies within

the discretion of the Court. The grant or denial

is regulated, to a large extent, by the facts and

circumstances of each particular case. But at

the same time, right to bail is not to be denied

merely because of the sentiments of the

community against the accused. The primary

purposes of bail in a criminal case are to relieve

the accused of imprisonment, to relieve the State

of the burden of keeping him, pending the trial,

and at the same time, to keep the accused

constructively in the custody of the Court,

whether before or after conviction, to assure that

he will submit to the jurisdiction of the Court

and be in attendance thereon whenever his

presence is required.

41. This Court in Gurcharan Singh and Ors. Vs.

State (AIR 1978 SC 179) observed that two

paramount considerations, while considering

petition for grant of bail in non-bailable offence,

apart from the seriousness of the offence, are

the likelihood of the accused fleeing from justice

and his tampering with the prosecution

witnesses. Both of them relate to ensure the fair

trial of the case. Though, this aspect is dealt by

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the High Court in its impugned order, in our

view, the same is not convincing.

42. When the undertrial prisoners are detained

in jail custody to an indefinite period, Article 21

of the Constitution is violated. Every person,

detained or arrested, is entitled to speedy trial,

the question is: whether the same is possible in

the present case.

43. There are seventeen accused persons.

Statement of the witnesses runs to several

hundred pages and the documents on which

reliance is placed by the prosecution, are

voluminous. The trial may take considerable

time and it looks to us that the appellants, who

are in jail, have to remain in jail longer than the

period of detention, had they been convicted. It

is not in the interest of justice that accused

should be in jail for an indefinite period. No

doubt, the offence alleged against the appellants

is a serious one in terms of alleged huge loss to

the State exchequer, that, by itself, should not

deter us from enlarging the appellants on bail

when there is no serious contention of the

respondent that the accused, if released on bail,

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would interfere with the trial or tamper with

evidence. We do not see any good reason to

detain the accused in custody, that too, after the

completion of the investigation and filing of the

charge-sheet.

44. This Court, in the case of State of Kerala Vs.

Raneef (2011) 1 SCC 784, has stated :-

“15. In deciding bail applications an important

factor which should certainly be taken into

consideration by the court is the delay in

concluding the trial. Often this takes several

years, and if the accused is denied bail but is

ultimately acquitted, who will restore so many

years of his life spent in custody? Is Article 21 of

the Constitution, which is the most basic of all

the fundamental rights in our Constitution, not

violated in such a case? Of course this is not the

only factor, but it is certainly one of the

important factors in deciding whether to grant

bail. In the present case the respondent has

already spent 66 days in custody (as stated in

Para 2 of his counter-affidavit), and we see no

reason why he should be denied bail. A doctor

incarcerated for a long period may end up like

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Dr. Manette in Charles Dicken's novel A Tale of

Two Cities, who forgot his profession and even

his name in the Bastille.”

45. In Bihar Fodder Scam (Laloo Prasad case23),

this Court, taking into consideration the

seriousness of the charges alleged and the

maximum sentence of imprisonment that could

be imposed including the fact that the

appellants were in jail for a period more than six

months as on the date of passing of the order,

was of the view that the further detention of the

appellants as pre-trial prisoners would not serve

any purpose.

46. We are conscious of the fact that the

accused are charged with economic offences of

huge magnitude. We are also conscious of the

fact that the offences alleged, if proved, may

jeopardize the economy of the country. At the

same time, we cannot lose sight of the fact that

the investigating agency has already completed

investigation and the charge sheet is already

filed before the Special Judge, CBI, New Delhi.

Therefore, their presence in the custody may not

be necessary for further investigation. We are of

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the view that the appellants are entitled to the

grant of bail pending trial on stringent

conditions in order to ally the apprehension

expressed by CBI.

14. In view of what has been held in the aforestated

decisions, this court in order to decide this petition has to

consider the following amongst others:-

I. The nature of accusations;

II. The nature of prima facie material in support of

accusations;

III. The severity of punishment, which conviction will

entail;

IV. The character of accused;

V. The circumstances which are peculiar to accused;

VI. The reasonable possibility of securing petitioner at

the time of trial;

VII. The reasonable apprehension of witnesses being

tamped with;

VIII. The larger interest of public/State;

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IX. The prospects of speedy trial;

X. The stage at which bail is sought.

15. As already stated, offences for which final report is

filed and the documents filed along with final report would

prima facie indicate that offences are economic offences,

involving wrongful loss to State exchequer and

corresponding wrongful gain to DMSPL. In the final report, it

is projected as a sum of Rs.1,232 crores (Rupees One

Thousand Two Hundred Thirty Two crores).

16. Before recording a finding on prima facie case within

the limitations set out supra, it is necessary to state certain

facts which are not in dispute:-

It is not in dispute and cannot be disputed that

petitioner was the Principal Secretary, Department of

Commerce & Industries, Government of Karnataka, during

period between 26.06.1996 to 25.10.1999. The mining lease

(MOL) 2080 with modified sketch was renewed by

Government of Karnataka in favour of DMSPL vide

Notification dated 29.01.1999 reading as hereunder:-

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“GOVERNMENT OF KARNATAKA

No.CI 50 MMM 97 Karnataka Govt Secretariat, M.S.Building,

Bangalore, dated: 29.01.1999.

NOTIFICATION

In pursuance of Sub-Section (2) of Section

8 of the MM(R&D) Act, 1957 and as per letter

No.7(2)/98-M.IV, dated 5.8.1998 of Government

of India, Ministry of Mines, New Delhi, read with

the Notification No.16(56)/96-M-VI, dated

30.1.97, the Government of Karnataka hereby

accord sanction for the 2nd instalment of 1st

renewal of Mining lease NO.2080 for a period of

10 years with effect from 20.5.1996 to 19.5.2006

in favour of M/s.Deccan Mining Syndicate (P)

Ltd., for Iron Ore over an area of 47.00 acres of

land in Kammataravu village, Sandur Taluk,

Bellary District, as per the modified sketch

furnished by the Director of Mines and Geology,

Bangalore, with his letter No.DMG/246 AML

95/RML.2080/140, dated 16.4.98 subject to

compliance of the provisions of the MM(R&D)

Act, 1957, and Mineral Concession Rules, 1960

as amended from time to time and all other

applicable Acts and Rules including Forest

(Conservation) Act, 1980. The grant of Mining

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Lease is also subject to the terms and conditions

appended hereto.

BY ORDER AND IN THE NAME OF THE GOVERNOR OF KARNATAKA,

(B.V.KUMARASWAMY) Desk Officer (Mines),

Commerce & Industries Department”

17. The official correspondence and various office notes

approved by petitioner, which had preceded the issuance of

aforestated notification of renewal of lease with modified

sketch are part of investigation records.

18. On consideration of investigation records, the following

facts are prima facie established:-

The petitioner was aware that DMSPL had carried out

its mining activities beyond the mining area (47 acres) leased

to it. The DMSPL has defaced boundary marks with

impunity. The DMSPL had shifted mining area leased to it

towards South-West and encroached 10 acres of mining area

leased to NMDC. Before renewal of mining lease in favour of

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DMSPL, this illegal encroachment committed by DMSPL was

a well known fact. The petitioner was also aware of this fact.

19. At the first instance, petitioner and concerned officials

had thought of sending the application for renewal of lease in

favour of DMSPL to the Government of India. They had

written a letter to Government of India, seeking approval of

Government of India for renewal of lease in favour of DMSPL

for a period of 10 years with effect from 20.05.1996. The

concerned officials of Department of Commerce & Industries

had addressed a letter to Government of India with the

approval of petitioner. In the aforestated letter, they had

conveniently omitted to state illegal encroachment made by

DMSPL and violation of conditions of lease by DMSPL. As per

the statements of witnesses namely M.Venkatarasappa, the

then Under Secretary, Department of Commerce &

Industries, Government of Karnataka that petitioner had

given instructions to witnesses not to disclose details

relating to revised mining sketch for which renewal was

sought and also about illegal encroachment of mining area

25

by DMSPL in the letter dated 22.04.1998 sent to

Government of India, Ministry of Mines & Geology. The

statement of witnesses namely Appaiah Gouda B.Patil, the

then Minister of Mines & Geology, Government of Karnataka

would reveal that petitioner (Principal Secretary) had not

brought to the notice of the Minister about illegal

encroachment of mining area by DMSPL and also renewal of

lease with modified mining sketch in favour of DMSPL.

20. The petitioner had consented to levy of penalty on

DMSPL for illegal encroachment of mining area by DMSPL.

The petitioner had agreed for withdrawing letter sent to

Government of India for renewal of lease in favour of DMSPL.

The petitioner had agreed that lease in favour of DMSPL vide

Notification dated 29.01.1999 could be renewed by

Government of Karnataka and approval of Government of

India was not necessary. This is in clear violation of section 8

of the MMDR Act, as it was in force on 29.01.1999 Section 8

reads thus:-

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“8. Periods for which mining leases may be

granted or renewed.-

b[(1) The maximum period for which a

mining lease may be granted shall not exceed

thirty years:

Provided that the minimum period for

which any such mining lease may be granted

shall not be less than twenty years.]

a [(2) A mining lease may be renewed for c

[a period not exceeding twenty years]:

Provided that no mining lease granted in

respect of a mineral specified in the First

Schedule shall be renewed except with the

previous approval of the Central Government.]

(3) Notwithstanding anything contained in

sub-section (2), if the Central Government is of

opinion that in the interests of mineral

development it is necessary so to do, it may, for

reasons to be recorded, authorise the renewal of

a mining lease for a further period or periods not

exceeding d[twenty years in each case].”

(underlining supplied by me)

27

21. At this juncture, it is relevant to state that as on

29.01.1999, iron ore was classified under I-schedule of the

MMRD Act. However, section 8 was amended by Act

No.38/1999 with effect from 18.12.1999 by brining

distinction between minerals specified in Part A or Part B of

the First Schedule and minerals specified in Part III of First

Schedule. Be that as it may, as per section 8 of MMRD Act,

which was in force on 29.01.1999, the approval of

Government of India was necessary for renewal of mining

lease granted in respect of a mineral specified in schedule 1.

In the instant case, renewal of mining lease was not in

relation to area and boundaries specified in original lease, it

also included new area, as lessee (DMSPL) had shifted

mining area towards South-West of area leased to it.

22. The petitioner was the Principal Secretary to the

Department of Commerce & Industries, Government of

Karnataka. The petitioner has shown official favour in favour

of DMSPL for renewal of lease with modified sketch. The

petitioner and other persons had usurped the powers of

28

Government of India in the matter of renewal of lease with

modified sketch in favour of DMSPL.

23. The learned Senior counsel would submit that decision

to renew of Lease in terms of the notification dated

29.01.1999 was taken not only by the petitioner but also by

other high ranking officers including the Director of Mines

and Geology. The Director of Mines and Geology had put up

a note suggesting an option to renew the lease with the

modified sketch by collecting penalty from DMSPL to

condone illegal acts of encroachment by DMSPL.

24. The learned Senior counsel would further submit that

in W.P.No.10335/1998 c/w W.P.No.19766/2005 dated

31.03.2008, this court has considered the boundary

disputes relating to mining areas between DMSPL and

M/s.NMDC. This court has passed the following order:

“i) W.P.No.10335/1998 and

W.P.No.19766/2005 are disposed of in the above

terms with the following directions.

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ii) The respondent-State Government is

directed to secure the survey done in terms of

Rule 33 of the MC Rules keeping in view the

above observations and redraw the sketch to

accompany the renewal of ML No.1111 and shall

thereafter treat the same as the sketch pursuant

to notification dated 04.04.2005 and may also

issue corrigendum if need be.

iii) The renewed lease deed in favour of

NMDC shall be executed enclosing the sketch to

be prepared in the manner stated above and

NMDC will be entitled to carry out mining

operations in such area subject to compliance of

other legal requirements.”

25. The learned Senior counsel would submit that in the

circumstances, if there was an error in the decision taken by

the petitioner, criminality cannot be attached to such

erroneous decision.

These submissions cannot be accepted for the

following reasons:

30

I The petitioner was aware that renewal of mining lease

in favour of DMSPL as per modified sketch, which included

area outside the area of original lease, cannot be done by the

Government of Karnataka and the approval of Government of

India was mandatory.

II The concurrence given by the petitioner to levy penalty

to condone illegal acts of encroachment and regularise the

illegal acts of encroachment made by DMSPL by renewing

the lease in the illegally encroached area cannot be

condoned in the eye of law.

III It is true that there are provisions under the MMDR

Act to levy penalty for mining outside the leased area

however, there are no provisions to regularise illegal

encroachment by the Lessee. There are no provisions to levy

penalty to regularize the illegal encroachment by the Lessee.

IV The decision rendered by this court in

W.P.No.10335/1998 c/w W.P.No.19766/2005 dated

31.03.2008 regarding boundary dispute between NMDCL

and DMSPL has been set at rest in view of acceptance of

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report of CEC (Central Empowered Committee) by the

Supreme Court of India.

V It is true that high ranking officials including the

Director of Mines and Geology have put up notes of renewal

of lease with modified sketch in favour of DMSPL. What

consequences should have followed the acts of aforestated

officials cannot be considered in this petition as they are not

before this court.

The statements of witnesses and investigation records

cannot be suspected at this stage. The statements of

witnesses would clearly indicate that even in the matter of

levy of penalty, the petitioner was in favour of DMSPL. The

then Minister of Mines and Geology, Government of

Karnataka namely Appaiah Gouda B. Patil in his statement

has clearly disclosed that petitioner had not passed any

orders with regard to levy of penalty. On the other hand, he

had argued with the Minister for taking letter from the

Lessee (DMSPL) for approval of lease. The witness has

further stated that the renewal of lease with modified sketch

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in favour of DMSPL as indicated in the notification dated

29.01.1999 was not brought to his notice by the petitioner

(Principal Secretary of Commerce & Industries Department).

26. The learned Senior counsel would submit that, as per

the final report, the petitioner is alleged to have conspired

with other accused namely accused no.1 to 4 and accused

no.6 to 8 during the period between 1980 and 2010. The

petitioner was the Principal Secretary of Industries and

Commerce Department, Government of Karnataka during

the period between 26.06.1996 and 25.10.1999. The

petitioner retired from the service in the month of

June’2002. Therefore, it is difficult to conceive that petitioner

had conspired with other accused before 26.06.1996 and

after his retirement in the month of June’2002. Therefore,

the allegations made against petitioner that he had

conspired with other accused are patently false.

27. In the discussion made supra, I have referred to the

Notification dated 29.01.1996 and corresponding

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investigation records to hold that there is prima-facie case

against petitioner in showing official favour in the matter of

renewal of lease in favour of DMSPL in terms of Notification

dated 29.01.1996. However, while considering other

aspects, it is necessary to refer to investigation records to

discuss the circumstances which are peculiar to petitioner.

28. The learned Senior counsel relying on the judgment of

Supreme Court reported in (2012) 1 SCC 40 (in the case of

Sanjay Chandra –vs- Central Bureau of Investigation)

has made following submissions:

I The presumption of innocence is very much available

to the petitioner until duly tried and duly found guilty.

II The punishment begins after conviction.

III Even while considering the bail application with

reference to economic offences of huge magnitude, this court

cannot lose sight of the fact that investigation agency has

completed the investigation and charge sheet is already filed.

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IV This court will have to consider not only the

seriousness of the charges but also the severity of

punishment for the offences with which the accused have

been charged.

The learned Senior counsel would submit that

petitioner is aged about 72 years and he is suffering from age

related ailments like Atypical Trigeminal Neuralgia Aching,

burning or severe pain localized to one or more teeth and

adjacent jaw, slip disc, Hypertension and other ailments. The

apprehensions that petitioner is likely to flee away from

justice is not reasonable so also the apprehension that

petitioner is likely to interfere with prosecution witnesses.

29. The learned Senior counsel would submit even in the

decision reported in 2013 AIR SCW 2800 (in the case of

Y.S.Jaganmohan Reddy –vs- Central Bureau of

Investigation) the Supreme Court having regard to the fact

that investigation is still under progress has rejected the

35

bail. The Supreme Court has not foreclosed the renewal of

request for grant of bail after the final report is filed.

30. The learned Senior counsel referring to the judgment

of the Supreme Court in Criminal Appeal No.728/2013 (in

the case of Nimmagadda Prasad –vs- Central Bureau of

Investigation) submits that, in the aforestated case, the

investigation is under progress. The Supreme Court has

reserved liberty to the appellant therein to renew his request

for bail before the trial court after the final report is filed and

the trial court is free to consider the bail application

independently on its own merits without being influenced by

dismissal of Criminal Appeal 728/2013.

The learned Senior counsel would submit that, apart

from the magnitude of offences and punishment provided

there of, the facts peculiar to the petitioner will have to be

considered. The detention of petitioner in Jail during pre trial

stage more particularly, when the entire investigation is over

and final report is filed, will be punishment before

conviction.

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31. The learned Senior Counsel for CBI would submit that

in a decision reported in (2012) 1 SCC 40 (in the case of

Sanjay Chandra –vs- Central Bureau of Investigation)

the Supreme Court was considering the bail petition after

charges were framed by the trial court.

32. In Sanjay Chandra’s case, the petitioner had sought

for bail after the charge was framed however, in Para 46 of

the judgment, the Supreme Court has held:

“46. We are conscious of the fact that the

accused are charged with economic offences of

huge magnitude. We are also conscious of the

fact that the offences alleged, if proved, may

jeopardize the economy of the country. At the

same time, we cannot lose sight of the fact that

the investigating agency has already completed

investigation and the charge sheet is already

filed before the Special Judge, CBI, New Delhi.

Therefore, their presence in the custody may not

be necessary for further investigation. We are of

the view that the appellants are entitled to the

grant of bail pending trial on stringent

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conditions in order to ally the apprehension

expressed by CBI.”

In the aforestated judgment, the emphasis is on the

completion of investigation and submission of final report.

Now adverting to maximum punishment provided for

offences for which the accused is charged, it is necessary to

state that an offence under Section 420 IPC and also

offences punishable under Sections 13 (1) (d) r/w 13 (2) of

the Prevention of Corruption Act, are punishable with

imprisonment extending to a period of 7 years.

33. The petitioner (accused) was the Principal Secretary of

Industries and Commerce Department, Government of

Karnataka during the period between 26.06.1996 and

25.10.1999. The illegal mining activities in the State of

Karnataka became rampant and assumed alarming

proportions after the year 2000 and shocking after the year

2004. Therefore, the petitioner cannot be prima-facie held

liable for illegal activities which had continued upto 2010.

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34. The final report has been submitted by the Central

Bureau of Investigation. The petitioner is aged about 72

years and he is suffering from aforestated ailments and other

age related ailments; the petitioner is a resident of

Bangalore; the petitioner does not bear criminal antecedents;

the petitioner has retired from the service in the month of

June’2002; the situation of petitioner fleeing away from

justice is rather remote. The incriminating evidence against

the petitioner is in the form of documentary evidence. In the

circumstances, the apprehension that petitioner is likely to

tamper with prosecution witnesses can be allyed by imposing

suitable conditions. If the petitioner were to tamper with

prosecution witnesses, the prosecution can seek for

cancellation of bail. The facts and circumstances do not

indicate that, if petitioner is released on bail, that would

affect the larger interest of public or State.

35. There are 112 chargesheet witnesses. The prosecution

has also relied on voluminous documentary evidence. In the

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final report, it is stated that investigation pertaining to role

played by Gali Janardhana Reddy and Mohammed Ali Khan

in pressurising the officials not to entertain the complaints

alleged by M/s.NMDC against M/s.DMSP after the year 2008

is in progress. In the circumstance the chances of speedy

trial are remote.

36. Thus, on overall consideration of facts and

circumstances, magnitude of offences alleged against the

petitioner, maximum punishment provided for such offences

and other relevant factors bearing on the bail application

and also having regard to age of petitioner and age related

ailments of petitioner, antecedents of petitioner and facts

and circumstances which are peculiar to the petitioner, I am

of the opinion that petitioner is entitled to bail.

37. Therefore, I pass the following:

ORDER

The petition is accepted. The petitioner is released on

bail, subject to following conditions:-

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I. The petitioner shall execute a bond for a sum of

Rs.1,00,000/- (Rupees One Lakh only) and offer

two sureties for the likesum to the satisfaction of

learned Special Judge.

II. The petitioner shall not intimidate or tamper with

prosecution witnesses.

III. The petitioner shall regularly attend the court.

IV. The petitioner shall not leave the jurisdiction of

Special Court, without prior permission of learned

Special Judge.

V. The petitioner for the purpose of further

investigation shall appear before the Investigating

Officer whenever called upon to do so.

VI. If the petitioner were to violate the aforestated

conditions, respondent (CBI) is at liberty to move

the Special Court for cancellation of bail.

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It is made clear that observations made in this order

are confined for disposal of this petition. The learned Special

Judge during subsequent stages of the case shall not be

influenced by the observations made herein.

Sd/- JUDGE SNN