Isabella Mariam

The High Court of Telangana Single Bench of Justice Dr. Chillakur Sumalatha discharged a former Secretary of the Industries and Commerce Department from allegations of criminal conspiracy and corruption in relation to illegal iron ore mining leases. The Court held that the petitioner could not be held liable under Section 120-B read with Section 409 of the Indian Penal Code or Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. It further directed that the order of the trial court, which had refused to discharge the petitioner, be set aside.

Concluding that the petitioner was not responsible for the original decisions leading to the mining leases granted in favour of a private company, the Court recorded that "had the alleged G.Os. been issued with a rider 'captive mining', thereby restricting the utilization of iron ore mined only for consumption in the proposed steel plant, the impetus would have been to develop the steel plant and to conserve the iron ore till that time and use it for the production of steel in the steel plant".

Also Read: Supreme Court : "Fraud Unravels Everything," Recalls Its Own Judgment and Sets Aside High Court Order in NOIDA Land Dispute

Consequently, the trial court's framing of charges was held to be without legal foundation, and the High Court discharged the petitioner from all charges under the impugned provisions.

The case arose out of allegations of illegal mining activities by M/s Obulapuram Mining Company Private Limited (OMCPL) and M/s Bellary Iron Ores Private Limited (BIOPL) within the Bellary Reserve Forest in the Anantapur District. The Central Bureau of Investigation (CBI) initiated proceedings through Crime No. RC 17(A)/2009-CBI/Hyd, registering offences under multiple sections of the IPC, Prevention of Corruption Act, Indian Forest Act, and Mines and Minerals (Development and Regulation) Act.

Initially, the CBI filed a charge sheet against five accused. Subsequently, a supplementary charge sheet was filed implicating the petitioner as Accused No.6, who had served as Secretary to the Government of Andhra Pradesh, Industries and Commerce Department, from 17.05.2006 to 10.10.2009.

The allegations stemmed from the issuance of two Government Orders, G.O.Ms.Nos.151 and 152, both dated 18.06.2007, which granted mining leases to OMCPL. The CBI alleged that these orders facilitated illegal mining by omitting a "captive mining" clause that would have restricted use of the mined ore to a proposed steel plant.

According to the supplementary charge sheet, the petitioner abused her official position and entered into a criminal conspiracy with other accused, resulting in the grant of mining leases that caused financial loss to the government. The petitioner was accused of facilitating the rejection of competing applications for the lease, omitting the required "captive use" rider, and favouring OMCPL.

CBI's contentions included that the petitioner gave preferential treatment to OMCPL over other applicants, failed to forward reasoned rejections to the central government, and issued G.Os. in furtherance of a pre-decided conspiracy. It was alleged that her actions deviated from established procedures under the Mines and Minerals (Development and Regulation) Act, 1957, and the Mineral Concession Rules, 1960.

The petitioner filed an application under Section 239 CrPC seeking discharge, which was rejected by the trial court by a detailed order dated 17.10.2022. Aggrieved, the petitioner approached the High Court.

Before the High Court, the petitioner contended that she took office only after the major decisions regarding lease recommendations had already been made. She argued that no direct or indirect communication was ever established between her and the other accused and that the G.Os. in question were consequences of earlier decisions taken by the department, including memos issued in 2005 when she was not in office.

The CBI, opposing the discharge, argued that the G.Os. issued during the petitioner’s tenure formed the basis for the illegal mining activities. It asserted that the petitioner was instrumental in omitting the "captive mining" clause and that this omission enabled OMCPL to commercially exploit the ore.

The High Court examined the original notification for lease re-grant, applications, internal departmental memos, and the sequence of administrative decisions leading up to the issuance of G.Os. The Court reviewed a timeline submitted by CBI that confirmed that most relevant administrative acts, including the application process and provisional approvals, occurred before the petitioner assumed charge as Secretary.

Based on the documents on record, including the first charge sheet and supplementary filings, the Court observed that G.O.Ms.No.151 was based on Memo No.18322/M.III (1)/2005, dated 10.11.2005, and G.O.Ms.No.152 on Memo No.11031/M.III (1)/2005-I, dated 08.11.2005. Both memos were issued prior to the petitioner's tenure and by another officer.

The Court noted that the petitioner had acted on existing approvals and failed to take corrective measures despite knowing the implications. However, it found no material showing a criminal agreement or active collaboration with the co-accused. Further, there was no evidence of illegal gratification or disproportionate assets linking the petitioner to any pecuniary gain.

The Court examined the material on record in detail and stated: "The supplementary charge sheet reveals as if the petitioner has played a prominent role in issuance of the alleged G.Os. The material placed before this Court by the investigating agency itself, through a memo, reveals that the alleged role, if any, played by the petitioner is very minimal and issuance of the alleged G.Os is in consequence of the earlier correspondence and the decisions taken."

Further, the Court recorded: "By the material produced by the prosecuting agency itself, it is clear that much water had flown before the petitioner has taken charge as Secretary, Industries and Commerce Department, Government of Andhra Pradesh."

On the charge of conspiracy, the Court categorically held: "Not even a single line statement is present in the entire material produced by the prosecuting agency that the petitioner at any time has contacted either accused No.1 or accused No.2 or any of the representatives of accused No.4."

Addressing the charge under Section 409 IPC, the Court found: "No where it is mentioned that the petitioner is entrusted with the alleged areas of mining and that she had exclusive dominion over the said mining areas."

With respect to the charge under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, the Court stated: "It is also not shown that the petitioner has obtained for herself or for any other person any valuable thing or pecuniary advantage or abused her official position for obtaining herself or for any other person any valuable thing or pecuniary advantage."

The Court further noted: "Though it is indicated in the charge sheet that one B.Rakesh Babu, brother-in-law of the petitioner, had acquired many properties during the relevant period, the prosecuting agency mentioned that evidence in that regard is being collected and the report, if any, would be submitted. However, no such report appears to have been filed."

Regarding the trial court’s refusal to discharge, the High Court remarked: "The trial Court having placed all the contents of the charge sheets, four in number, and the gist of voluminous documents produced, has concluded that because of such voluminous material, the petitioner can be charged of the offences alleged. That observation in the opinion of this Court is wholly undesirable."

The Court concluded its judicial reasoning by observing: "The petitioner while dealing with the subject matter has not taken care to meticulously peruse the earlier correspondence and the things transpired, and the petitioner thus was not diligent, thereby paving way for issuance of the alleged G.Os. However, as earlier indicated, Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988, does not attract. Same is the case with Section 120-B r/w 409 IPC."

The High Court issued the following final directions:

"This Criminal Revision Case is allowed. The order that is rendered by the Court of Principal Special Judge for C.B.I. Cases, Hyderabad in Crl.M.P.No.47 of 2021 in C.C.No.1 of 2012, dated 17.10.2022, is hereby set aside."

Also Read: Properties Constitute Proceeds Of Crime Under PMLA | Chhattisgarh High Court Affirms ED Attachment Orders And Dismisses Appeals | Court Notes It Is Not Essential To Establish Proceeds Of Crime By Direct Evidence

"There are no grounds for framing the charges against the petitioner for the offences punishable under Section 120-B r/w 409 IPC and Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988. Therefore, the petitioner shall be discharged of the said offences."

The Court also noted a qualification: "However, the trial Court to verify whether any other provisions of law attracts. In case charge(s) can be framed for any other offence(s), charge(s) to that effect may be framed and the trial proceedings may go on. Baring that, this order becomes final."

"As a sequel, miscellaneous applications, if any, pending, shall stand closed."

Advocates Representing the Parties:

For the Petitioners: Sri K. Raghavacharyulu, Advocate

Case Title: Dr. ___________ v. The State of Andhra Pradesh & Ors.

Case Number: Crl.R.C.No.693 of 2022

Bench: Justice Dr. Justice Chillakur Sumalatha