Dr. KBJ & KGRJ 07.03.

2012

JUDGMENT IN WRIT PETITION NO.44071/2011 (GM-KLA)

IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 7TH DAY OF MARCH 2012 PRESENT THE HONBLE DR. JUSTICE K. BHAKTHAVATSALA AND THE HONBLE MR. JUSTICE K GOVINDARAJULU WRIT PETITION NO.44071/2011 (GM-KLA) BETWEEN Sri B S Yeddyurappa, S/o Siddalingappa, Age: 67 years, Residing at No.1 Race-Course Road, Bangalore-560 001. (By Sri Ashok Haranahalli, Sr. Counsel, for Ashok Haranahalli Associates, for petitioner) AND The Lokayukta of Karnataka, Having its Office at M S Building, Dr. Ambedkar Veedhi, Bangalore-560 001. By its Registrar. The State of Karnataka, Represented by its Chief Secretary, Vidhana Soudha, Dr. Ambedkar Veedhi, Bangalore-560 001.

Petitioner

The Superintendent of Police, Karnataka Lokayukta, M S Building, Dr. Ambedkar Veedhi, Bangalore-560 001. The Principal Secretary, Governor of Karnataka, Raj Bhavan, Bangalore-560 001.

Respondents

(By Sri B A Belliappa, Adv., for R-1 and 3) (By Smt. Revathy Adinath Narde, HCGP, for R-2) (By Sri Nagananda, Sr. Counsel, for M/s. Just Law, for R-4) - -- This Writ Petition is filed under Articles 226 & 227 of the Constitution of India, praying to quash the complaint filed by R-3 dated 22.8.2011 against the petitioner herein under Sections 7,8,9 and 13(1)(d) r/w Section 13(2) of the Prevention of Corruption Act, 1988 vide Annexure-A, etc.

This Petition coming on for Orders, the same having been heard and reserved for pronouncement of Orders, Dr.

Bhakthavatsala, J., made the following:

ORDER

The petitioner, who was the former Chief Minister (BJP) of the State of Karnataka, is before this Court under Articles 226 & 227 of the Constitution of India, praying for the following reliefs:

(i)

to issue a writ of certiorari and quash the Complaint dated 22.8.2011 filed of by Police, the 3rd

respondent/Superintendent

Karnataka

Lokayukta, Bangalore, against him for the offences under Sections 7,8,9 and 13(1)(d) r/w Section 13(2) of Prevention of Corruption Act, 1988, at Annexure-A; (ii) to issue a writ of certiorari and quash the FIR registered in Crime No.36/2011 against the petitioner for the offences under Sections 7,8,9 and 13(1)(d) r/w Section 13(2) of the Prevention of Corruption Act, 1988 at Annexure-A-1; (iii) to quash the Order of Sanction dated 2.8.2011 for initiating criminal proceedings against the petitioner at Annexure-B on the file of Governor of Karnataka;

(iv)

to quash the relevant portion of the Report at Chapter 22 of Lokayukta dated 27.7.2011 at Annexure-C and

(v)

to grant such other relief or reliefs as this Court may deem fit in the circumstances of the case.

2. It is pleaded that Commerce and Industries Department in Government of Karnataka, by its Notification bearing No.CI-164 of the

MMM2006 dated 22.7.2006 (Annexure-D) in exercise

powers conferred under section 3 of the Commission of Inquiry Act,1952, appointed Mr. Justice U L Bhat (former CJ of Gauhati and Madhyapradesh High courts) to be the Commission to inquire into the allegations relating to illegal mining in the State of Karnataka, commencing from 1.1.2000 till date and submit an interim report within two months and final report within six months to the Government. As per Notification bearing No.CI 164 MMM 2006 Dated 26.10.2006, the Commission was granted four more months time to submit interim report. Though 7 months period had elapsed from the date of appointment of the

Commission, it did not make any progress in the inquiry on the ground that the Commission was boycotted by the opposition

parties

and

the

persons

who

have

complained

about

the

irregularities and illegalities. Thus, the Commission being unable to function efficiently, Mr. Justice U L Bhat himself intimated the Government that he would cease to attend the work with effect from 8.3.2007. Accordingly, by notification bearing No.CI 164

MMM 2006 dated 12.3.2007 (Annexure-E), declared that the Commission shall cease to exist with immediate effect. Thus the Justice U L Bhat Commission came to an end. In pursuance of letter dated 29.2.2005 from the Principal Chief Conservator of Forests and the Department of Forests letter dated 26.4.2005, Government of Karnataka in Forest Secretariat, in exercise of its powers conferred upon it under Section 7(2A) of the Lokayukta Act (in short, the K L Act) by Government Order No:FEE 21 FDE 2005 dated 23.6.2006 (Annexure-F), referred the allegations of illegal activities in the mining and transportation of iron ore in the Forest lands of Bellary, Hospet and Sandur regions and also regarding issuance of fake permits to the Honble Karnataka Lokayukta for thorough investigation and to make specific recommendation and submit a report, expeditiously, to the Government. The Offices of the Principal Chief Conservator of

Forests, Addl. Principal Chief Conservator of Forests (Vigilance), Conservator of Forests, Bellary Circle, etc., were directed to furnish documents and records required for investigation.

3.

The

Government

of

Karnataka

in

Commerce

and

Industries Secretariat, in continuation of Government order dated 23.6.2006 (Annexure-F), and for the purpose of widening the scope of illegal mining entrusted to Lokayukta, in exercise of the powers under Section 7(2A) of the Karnataka Lokayukta Act, 1984, issued a Government order bearing No CI 164 MMM 2006 dated 12.3.2007 (annexure-G) and referred the actions, for thorough investigation, and submission of report to the Government. The scope of investigation by the Lokayukta was to cover the period commencing from 1.1.2000 to 22.7.2006. The Department of Mines and Geology, Mysore Minerals Limited and Forest

Department were directed to produce all the documents and records to the Lokayukta.

4. The

background and terms of reference to the

Commission under Section 3 of the Commissions of Inquiry Act,1952 and the reference of actions to the Lokayukta under

section 7(2A ) of clause (g).

the

KL

Act

are

one and the same, except

The background for reference/action is as under:

(i) The spurt in the international prices of steel and iron ore during last 3-4 years has made the mining and export of high quality iron ore from the mining in Bellary, Tumkur and Chitradurga Districts very lucrative. With the average cost of production of iron ore at around Rs.150 per ton, and the royalties to be paid to the Government being abysmally low at Rs.16.25 per ton for different grades there have been serious systemic distortions due to the high profit margins. This has led to allegations of large scale corruption and complaints of profiteering through illegal mining with the complicity of the authorities in all levels of Government. (ii) The Government in its orders vide notification No. CI 16 MMM 2003 and No.CI 33 MMM 1994 both Dated: 15.03.2003, de-reserved for private,

mining an area of 11620 square km in the State, meant for State exploitation/ mining by the public sector and notified the surrender of an area of 6832.48 hectares of prime iron ore bearing

lands respectively, which has paved way for distribution of public assets to select private individuals / entities without regard to their professional or technical or business background. (iii) The entire exercise was undertaken in a manner so as to benefit only a select few individuals/entities. The main objectives behind de-reservation i.e. to encourage mining based industries to create more employment opportunities in private sector, to attract private capital and professional

management for optimal use of state mineral resources were given a go by and allotments were made to the applicants on considerations other than merit. (iv) It has been alleged that in the name of issuing temporary transportation permits to lift and transport iron ore in patta lands [which by itself is nor permissible in law], large scale illegal mining activity was allowed to be carried out for certain period, even in the forest areas, having no link to the survey numbers of patta lands and for transportation of the illegally mined ore from the forest areas on the strength of such forest passes/ transport permits. (v) It has been reported that the State has been deprived of its revenues. There have been many complaints from transporters associations

regarding overloading of Transport vehicles, that illegal gratification of iron was etc., sought and for the allowing repeated

overloading

complaints and representations by transporters associations, it has been alleged to have not been seriously considered by the Government. It is also alleged that most of the ore not accounted for and transported illegally in excess was the outcome of illegal mining activities.

The issues/actions referred for investigation and submission of report to the Government are as follows:

(a) Various alleged illegalities, irregularities, events, issues and executive and other decisions set out in clause (i) to (viii) and to assess the quantum of losses to the Government and to suggest remedial measures illegalities. (b) To enquire into the affairs so the Mysore Minerals Ltd., (MML) and its commercial activities carried out in a manner to cause losses to the company and the instances of direct/ indirect political interference/ affairs of patronage the company. in To the fix to undo such irregularities and

commercial

responsibility and initiate suitable action, both, civil and/ or criminal as may be appropriate,

10

against all persons found responsible, including private contracting parties. (c) To fix responsibility and initiate suitable action against all public servants including ministers whether in office or or otherwise State state, its

instrumentalities

owned

Companies/Corporations or other bodies and authorities, either in collusion with private parties or otherwise for various acts of omission and commission leading to various illegalities,

irregularities, events and executive decisions set out in clause (i) to (viii) and also pertaining to issues such as: (1) The process and timing of disposal of applications, both in case of notified areas and free areas, for grant of Mining Lease, Reconnaissance Licenses; (2) the irregularities reported in issue of permits by both Forest and Mines Permits and Prospecting

departments; (3) the irregularities of minerals reported such in as

transportation

overloading, the issue of informal "token systems", transportation without permits etc; (4) the entire range of the various aspects of illegal mining ranging from

11

encroachments, mining without necessary permits and clearances, mining outside the permitted areas, mining beyond permitted quantities, illegal transportation of minerals etc.

(5) the mining and transportation of major minerals from Patta lands without valid mining leases etc; (6) the legality in transfer of leases from one lease holder to another. This will include the case wise examination of legality and validity of grant of mining leases, with reference to the basic policy/ objectives behind the decisions taken to de-reserve the areas meant for exploitation by the public sector held and surrendered areas and the instances of direct or indirect political

interference.

(d)All instances where the mandatory regulations and statutory provisions have been given a go-by and not observed, including environmental and other clearances, to directly or indirectly facilitate and/ or encourage illegal and/ or unregulated mining operations and to suggest remedial

measures and suitable action against persons

12

found responsible for their commissions and omissions.

(e) Any other related issues, event and/ or instance which the Hon'ble Lokayukta may deem fit and proper to go into the illegal and unregulated mining and related issues, including de-

reservation of the areas meant exclusively for public sector in Karnataka's mining regions ask mentioned above. (f) To comprehensively inquire into the charges, allegations, complaints of misuse and abuse of the office, if any elected representatives, ministers and officers who held or hold offices of profit for pecuniary benefit pertaining to illegal/

unregulated mining and incidental issues thereof, resulting in loss of revenue to the Government of Karnataka and Public Undertakings under the Government of Karnataka.

(g) Illegal granite quarrying in Bangalore Rural District and other Districts.

5. Originally the scope of investigation by the Lokayukta was from 1.1.2000 to 22.7.2006. As per the Government Order dated

13

9.9.2008

(Annexure-H),

the

scope

of

investigation

by

the

Lokayukta was extend up to 9.9.2008. Again, the Government, by its notification dated 24.12.2008, extended the scope of

investigation up to 24.12.2008 (vide Annexure-J). On 19.7.2010, again the Government extended the scope of investigations up to 19.7.2010 (vide Annexure-K). Thus, the scope of investigation by the Lokayukta was from 1.1.2006 to 19.7.2010.

6. It is pleaded in para-5 of the Writ Petition that Lokayuktha submitted a report noticing certain irregularities committed by the former Chief Minister-Sri Dharam Singh and Smt. Jija Hari Singh, who was the then Managing Director of Mysore Minerals Limited in relation to the business by Mysore Minerals Limited, but the report in so far as Sri Dharam Singh, was not accepted by His Excellency Governor of Karnataka. But, in the case of the petitioner, no opportunity was given to him before his indictment and he came to know the same through certain Television channels reporting that the Lokayuktha had indicted the petitioner in his report alleging that the petitioners children, who are the Trustees of M/s. Prerana Education Trust have received donation of 5,00,00,000 on 17.3.2010 and a sum of 5,00,00,000

14

on 18.3.2010 from the mining company- M/s. JSW Steel Ltd., and that his children and son in law have received `20 crore as sale consideration, for one acre of land from M/S South West Mining Ltd. Lokayukta in his Press Conference said that the report had been leaked and the reports were true. Thus, the petitioner was held guilty even before the report was submitted. The petitioner, being Chief Minister of the State, maintained that he would react to the allegations only after the report is submitted officially. But, even before the report was submitted an atmosphere was created as if the Chief Minister has been indicted and he was bound to quit his Office. Thus, on the alleged two allegations certain political

leaders issued statements questioning the petitioner continuing as CM though the petitioner was implicated in the Loayukta report. Though the allegations made against the petitioner was baseless, on 25.7.2011, he tendered resignation as Chief Minister of Karnataka and his Excellency the Governor of Karnataka accepted the same; whereas the Lokayukta forwarded his report on 27.7.2011 to His Excellency Governor of Karnataka. On 3.8.2011 the Governor of Karnataka accepted the report of Lokayukta and accorded sanction (vide Annexure-M) for initiating criminal

15

proceedings

against

the

petitioner.

In

pursuance

of

the

recommendation on 22.8.2011, the Lokayukta registered a case and issued, FIR against the petitioner, his sons and son-in-law.

7. Sri Ashok Haranahalli, learned Senior Counsel appearing for the petitioner has urged as under:(i) that the impugned report of the Lokayukta is outside the scope of reference and also in violation of principles of natural justice; (ii) that under Section 9 of the KL Act, Lokayukta gets jurisdiction to inquire into the allegations when a complaint is lodged by any person or when a

reference is made by the State Government under Section 7(2A) of the K L Act, subject to

compliance of principles of natural justice; (iii) that the Lokayukta erred in recommending initiation of criminal proceedings against the petitioner on the ground of suspicion that the donation

received by M/s. Prerana Education Trust and the sale consideration by his sons and son-in-law, as the case may be, from the companies so as to get favourable reply from the Government; (iv) that the Lokayukta erred in making for the an

recommendation

without

calling

explanation either from the petitioner or his sons

16

and son in law or Prenana Trust or South West Mining Company Limited or and Jindal Group of companies; (v) that Lokayukta erred in coming to the conclusion that the petitioner has committed the alleged offences under the Prevention of Corruption Act, 1988; (vi) that His Excellency the Governor of Karnataka also erred in not giving him an opportunity of hearing, before the acceptance of report of the Lokayukta and granting an order of sanction to initiate criminal proceedings against him; (vii) that on account of acceptance of the unilateral report of the Lokayukta, the petitioners image is tarnished; (viii) that Dr. U V Singhs report indicates that there is no reference of whatsoever regarding involvement of the petitioner in respect of any of the transactions referred to therein; (ix) that Dr. U V Singh has recorded in his report that his observations are not conclusive on the ground that certain clarifications are required; (x) that there are glaring contradictions in the report submitted by Dr. U V Singh; (xi) that the documents annexed to the report of Dr. U V Singh themselves show that the petitioner at no

17

point of time either directly or remotely has shown any favour to South West Mining Limited; (xii) that it is unfortunate that the Lokayukta has not even referred to any of the documents before recommending initiation of criminal proceedings against the petitioner; (xiii) that the action of the Lokayukta has, in turn,

resulted in the petitioner demitting the Office of Chief Minister; (xiv) that the report of Dr. U V Singh as well as the report of Lokayukta are based on mere assumptions and irrational conclusions as M/s. South West Mining Limited, M/s. Vijayanagar Minerals Pvt. Ltd., and JSW Steel Limited had all submitted applications for grant of Mining Lease in Donimalai range in Sandur Taluk, Bellary District, to the extent of 184.14 hectares, 181.70 hectares and 188.12 hectares, respectively, and the applications were considered by the State Government in the year 2007 itself recommended to grant Mining Lease in favour of M/s. South West Mining Limited, M/s. Vijayanagar Minerals Pvt. Ltd., and JSW Steel Limited on 25.9.2007, 25.9.2007 and

21.9.2007, respectively, during which period the petitioner was not either holding Mining portfolio or had any role to play in these aspects;

18

(xv)

that being aggrieved by the grant of Mining Leases in favour of the above-said Companies, some persons namely V.S.Lad & Sons, P.R. Chenna Reddy and others who were not recommended for grant of Mining Leases, had challenged the before the High Court of

recommendation Karnataka 1221/2008,

in W P Nos.563/2008, 888/2008, 6960/2008, 4275/2008 and

9404/2008 and they were together heard by a Division Bench and by order dated 5.6.2009, all the Writ Petitions were dismissed; (xvi) that according to Rule 22(4) of Concession Rules, 1960, on the Mineral receipt of the

application for the grant of a mining lease the State Government shall take decision to grant precise area and communicate such decision to the applicant, who on receipt of the

communication from the State Government, the applicant shall submit a mining plan to the Central Government for its approval; the

applicant shall submit the mining plan duly approved by the Central Government or by an officer duly authorized by the Central

Government, to the State Government to grant mining lease over that area. Therefore, the grant of approval of the mining plan was a matter, which was between the Central Government and

19

the Companies and there was no question of making favourable or unfavourable reply from the State Government in this regard; (xvii) that the Government of India had sent three letters to the Director, Department of Mines and Geology to report as to the legal status of the Special

Leave Petition filed by M/s. V S Lad & Sons. With reference to the the letters of the Central

Government,

above-said

Companies

themselves replied to the Ministry of Mines, Government of India, clarifying that the Special Leave Petition was pending before the Supreme Court and that there was no stay order granted by the Court; (xviii) that the three Companies viz., M/s. South West Mining Company, M/s. JSW Steels Limited and M/s. Vijayanagar Minerals Pvt. Ltd., addressed letters dated 31.3.2010, 5.3.2010 and 31.3.2010, respectively, to the Director of Mines and Geology, stating that there was no stay order granted by the Supreme Court. The Director of Mines and

Geology, on clarification sought by the Ministry of Mines, Government of India, addressed three letters on 17.8.2010, 18.3.2010 and 29.4.2010 and brought about legal status of the Special Leave Petition, but the petitioner was implicated for no fault of his own;

20

(xix)

that the Lokayukta has adopted pick and choose method while considering the documents, which leads one to conclude that the same was done

only to indict the petitioner in the report; (xx) that the registration of the First Information Report by the Lokayukta Police for the offence under Sections 7,8,9 and 13(1)(d) r/w Section 13(2) of Prevention of Corruption Act is illegal; (xxi) that the petitioner had filed Writ Petition in No.29439/2011 challenging the on an earlier report occasion of the

preliminary

Lokayukta, and during the pendency of the Writ Petition, as the report was accepted by His Excellency Governor of Karnataka, complaint was filed and FIR was issued, the petitioner withdrew the Writ Petition, but there was no decision on merits; (xxii) that the registration of case suo motu by the Superintendent of Police, Lokayukta, is also bad in law as on the same allegation, one Sirajun Basha has instituted a private complaint in PCR No.2/201 arraying the petitioner and others as accused challenging de-notification of land in Sy. No.55/1 and that the said land was purchased by Sri Raghavendra, Sri Vijayendra and Sri Sohan Kumar and the same was sold in favour of South West Mining Company Limited and according to

21

the

said

complaint,

by

such

sale,

illegal

gratification was paid to the petitioner and an enquiry has been ordered; (xxiii) that now the Lokayukta, in its report, states that the transaction entered between the sons and son-in-law of the petitioner on the one hand and South West Mining Limited on the other is a sham transaction when an enquiry is pending before the Lokayukta Police; (xxiv) that it is impermissible in law for the Lokayukta Police registering two cases for the alleged crime and the FIR is liable to be quashed; (xxv) that when the Lokayukta Court has seized the matter, it is not permissible for the same Lokayukta Police to once again make an

investigation into the same; (xxvi) that according to Sections 9,12 and 13 of the K L Act, issuance of notice and hearing of the delinquent is contemplated in all stages and any adverse recommendation/report/finding requires to be made only after hearing the persons concerned; (xxvii) that the Lokayukta, while dealing with Chapter-22, recommended prosecution of the petitioner under the provisions of Prevention of Corruption Act, 1988 and having regard to the position of the petitioner as Chief Minister, the recommendation

22

must be construed to be a recommendation of removal; (xxviii) that the petitioner was never heard either during the investigation or before the acceptance of the

report by the competent authority and therefore both the investigation and acceptance of the report are violative of Sections 9,12 and 13 of K L Act; (xxix) that the petitioner made a representation dated 1.8.2011 to the Lokayukta seeking re-

consideration of the report and give him an opportunity to substantiate his claim, but the same was not considered; (xxx) that the Lokayukta has not followed the procedure as provided in sub-Sections (3) and (4) of section 9 of the KL Act; (xxxi) that Lokayukta, in its report, has relied upon the judgment of a Single Judge reported in ILR 1990 KAR 798 in the case of Dr. K Chowdappa Vs. State of Karnataka, to hold that in a reference under Section 7(2A) there is no necessity to give an opportunity as contemplated under Section 9(3) of theKL Act, ignoring the decision otherwise rendered in N Gundappa Vs. State (reported in affirmed by

ILR 1990 KAR 223), which was

Division Bench of this Court (reported in ILR 1990 KAR 4188).The above said decision was

23

followed in another case in W P No.33151/2001 (Arjundas Vs. State). Thus compliance of Section 9(3) of the KL Act, is mandatory even in the case of investigation of the action on a reference made under section 7(2A) of the KL Act; (xxxii) that in the decision reported in ILR 2004 KAR 3892 (Prof. S N Hegde Vs. Lokayukta), it was held that as the finding recorded by the authorities after such investigation would have serious

consequences, resulting in civil consequences, naturally the minimum that is expected in such an investigation or enquiry is that the person conducting the investigation should follow the principles of natural justice; (xxxiii) that in the absence of complaint and no

substantive evidence to prove the

factum of

demand, presumption cannot be drawn (relied on (2009) 6 SCC KERALA); (xxxiv) that when the averments made in the complaint are cryptic, the order under of Magistrate 156(3) directing without 587 - A SUBAIR Vs. STATE OF

investigation

Section

applying his mind to the allegations made in the complaint is bad in law (relied on 1999 CRL. L.J 3909: GURUDUTH PRABHU AND OTHERS Vs. M S KRISHNA BHAT AND OTHERS);

24

(xxxv)

that Police investigation under Section 157 of Cr. P C, can be commenced only if FIR prima facie discloses commission of a cognizable offence and when such an offence is not disclosed, the court is justified in interfering with the investigation and quashing the same under Art. 226 and 227 of the Constitution of India (relied on (1982) 1 SCC 561 (STATE OF WEST BENGAL AND OTHERS Vs. SWAPAN KUMAR GUHA AND OTHERS);

(xxxvi) that power of the Court to discharge the accused at the stage of framing charge or existence of remedy of appeal and revision is not a bar to invoke the jurisdiction of the High court under Article 227 or Section 482 of Cr. P C (relied on (1998) SCC 749 (PEPSI FOODS LTD. AND ANOTHER Vs. SPECIAL JUDICIAL MAGISTRATE AND OTHERS); (xxxvii) that it is open to the petitioner to withdraw a petition filed by him. Normally, a court of law would not prevent from withdrawing his petition. But, if such withdrawal is without the leave of the court, it would mean that the petitioner is not interested in prosecuting or continuing the

proceedings and he abandons his claim. In such cases, obviously, public policy requires that he should not start a fresh round of litigation and the court will not allow him to re-agitate the claim which he himself had given up earlier(relied on

25

(2008) 14 SCC 58 :RAMESH CHANDRA SANKLA AND OTHERS Vs. VIKRAM CEMENT AND

OTHERS); (xxxviii) that where the cause of action and the relief claimed in the second suit are not the same as the cause of action and the relief claimed in the first suit, the second suit cannot be considered to have been brought in respect of the same subject matter as the first suit (relied on AIR 1970 SC 987 (VALLABH DAS Vs. DR. MADANLAL AND OTHERS); (xxxix) that withdrawal or abandonment of a petition under Articles 226/227 without permission to file fresh petition there under would bar such a fresh petition in the High Court subject matter (relied on involving (1987) 1 some SCC 5

(SARGUJA TRANSPORT SERVICE Vs. STATE OF TRANSPORT APPELLATE TRIBUNAL, M P

GWALIOR, AND OTHERS); (xl) 1983 (1) SCC 124 (BOARD OF TRUSTEES OF THE PORT OF BOMBAY Vs. DILIPKUMAR

RAGHAVENDRANATH NADKARNI AND OTHERS) on the point where employer appoints legally

trained personnel for presenting and prosecuting the case in the enquiry when delinquent officer was arrested by another officer, who was not shown to be legally trained person, the enquiry

26

would be one sided, enquiry weighed against the Officer and would result in violation of one of the essential principles of natural justice, namely, that a person against whom enquiry is held must be afforded a reasonable himself; (xli) (1985) 3 SCC 545 (OLGA TELLIS AND OTHERS Vs. BOMBAY MUNICIPAL CORPORATION AND opportunity to defend

OTHERS) on the point that procedure established by law must be reasonable, just and fair. Authority exercising statutory power must act reasonably,otherwise the procedure prescribed by the statute itself would be deemed to be unreasonable and violative of Article 21 of the Constitution on the ground of procedural

unreasonableness; (xlii) (1986)(4) SCC 537 (INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA Vs. L K RATNA AND OTHERS) on the point that delinquent member of Institute of Chartered Accountants of India is entitled to be afforded an afforded an opportunity of hearing by the Council of the Institute before taking decision on the question of his guilt, irrespective of the fact that a hearing had already been given to him in proceedings before

Disciplinary Committee and that an appeal lay against the Councils decision before High Court,

27

the decision of the Council, in the absence of such an opportunity of hearing, liable to be quashed; (xliii) (2003)8 SCC 361 (STATE OF BIHAR Vs. LAL KRISHNA ADVANI AND OTHERS) on the point that person, whose conduct is being inquired into or who is likely to be prejudicially affected by the inquiry, notice to such person being a sine qua non of the principles of natural justice, failure to comply with principles of natural justice-audi alteram partem would affect the right of an individual. Right to reputation is a facet of right to life. Hence, right of an individual heard, before being can be

adversely remarked by the

Commission of Inquiry, is statutorily recognised; (xliv) (2007) 3 SCC 587 ( STATE OF MAHARASHTRA Vs. PUBLIC CONCERN FOR GOVERNANCE TRUST AND OTHERS) on the point passing adverse

remarks/observations against CM, who was not party before High Court, without calling any

explanation from him did not merit consideration. Condemnation of CM without affording

opportunity of hearing to him was a complete negation of principles of natural justice. Hence, the remarks/strictures passed against CM were illegal, incorrect and unwarranted. liable to be expunged; Hence, were

28

(xlv)

(2003)3 SCC 542 (DIVINE RETREAT CENTRE V. STATE OF KERALA AND OTHERS) on the point that the jurisdiction under section 482 of Cr.P.C has to be exercised sparingly, carefully and with caution only where such exercise is justified by the test laid down in section 482 itself. The three circumstances under which inherent

circumstances may be exercised are: (a)to give effect to an order under the Cr.P.C (b)to prevent abuse of the process of the court; and (c) to otherwise secure ends of justice. High court, in the exercise of its writ jurisdiction under Art.226 can interfere with the investigation only in the rarest of the rare case where as case of abuse of power of investigation and non-

compliance with the provisions under Chapter XII of Cr.P.C is clearly made out. But even in such cases, High court cannot direct the police as to how the investigation is to be conducted, but can always insist for the observance of the process as provided for in Cr.P.C. (xlvi) ILR 1994 KAR 3595 (S RANGANARASAIAH Vs. STATE OF KARNATAKA) on the point that under Section 9(3)(a) of the K L Act, a copy of the complaint shall be forwarded to the public servant and the competent authority concerned, after making preliminary enquiry under sub-

29

Section (3). An opportunity to offer his comments on such complaint shall be afforded to the public servant under Clause (b) of sub-Section (3). The said provision is mandatory. The opportunity

that should be given to a public servant is not merely based on principles of natural justice is a mandatory statutory provision.

8.

Respondent

No.2/State

of

Karnataka

did

not

file

statement of objections and Learned High Court Government Pleader Smt. Revathy Adinath Narde, did not submit any arguments.

9. Respondent Nos.1 and 3 viz., the Lokayukta and Superintendent of Police of Karnataka Lokayukta, have filed a

joint statement of objections stating that the Writ Petition is not maintainable; on the basis of Dr. U V Singhs report on illegal iron ore mining in the State of Karnataka; Lokayukta submitted the report and recommended suitable action; on the basis of the report the Governor of Karnataka has issued Prosecution Sanction Order with liberty to the Lokayukta to take further necessary action and on the basis of the Sanction Order case has been registered in

30

Crime No.36/2011 for the offences under Sections 7,8,9,13(1)(d) r/w Section 12(2) of Prevention of Corruption Act, 1988 and the same is being investigated. They have denied the case of the

petitioner that he had no role in recommending the proposal given by the Companies for mining plan and that he has not shown any favour or abused his office. It is stated that a sum of `10 crores has been remitted to M/s. Prerana Education Trust, of which the children of the petitioner are Director and Trustees. It is also stated that the children and son-in-law of the petitioner have received remittances to the extent of `20 crores through cheques,

to their individual Bank accounts. It is stated that the law laid down in Prof. S N Hegde and Another Vs. The Lokayukta, Bangalore and Others is not applicable to the present case. The complaint filed by Sirajuddin Pasha in PCR No.2/2011 later registered in Crime No.36/2011 is nothing to do with present case and prayed for dismissal of the petition.

10. Sri B A Belliappa, learned Counsel appearing for respondent Nos.1 and 3, submitted that admittedly huge amount of 10 crores is paid to M/s. Prerana Education Trust, of which the

31

children of the petitioner are the Director and Trustees and in the other case, 1 acre of property, which was worth about ` one crore was sold for `20 crores and on account of the admitted money transactions and documents collected during the course of

investigation by Dr. U P Singh, a prima facie case is made out and after careful consideration of the report, Sanction Order was issued and case has been registered in Crime No.36/2011 for the offence under Sections 7,8,9,13(1)(d) r/w 12(2) of Prevention of Corruption Act, 1988, and investigation taken is up and there is no merit in the Writ Petition.

11. Respondent No.4/ the Principal Secretary to Governor of Karnataka, has filed statement of objections contending that the petition is not maintainable as it is barred by the principles of res judicata in view of dismissal order dated 29.8.2011 made in W P No.29430/2011; as the authorities have registered FIR and the

proceedings are governed by the Code of Criminal Procedure, the present Writ Petition is not maintainable. Without prejudice to the above grounds urged, it is stated that the Lokayukta investigated the reference made by the Government and therefore the process of affording an opportunity to the petitioner to offer his comments

32

contemplated under Sub-Section (3) of Section 9 of the K L Act is not applicable to the proceedings initiated pursuant to the reference made by the State Government under Section 7(2A) of the KL Act. It is pleaded that Lokayukta submitted his report on illegal mining recommending for initiation of criminal proceedings and the petitioners decision to demit the Office was not based on any declaration made by the Lokayukta, but it was because of other reasons, which may be political or otherwise. Thus, denied all the grounds urged in the Writ Petition and prayed for dismissal of the Writ Petition.

12.

Sri Naganand, learned Senior Counsel appearing for

respondent No.4, submits that the Petition is not maintainable on two scores viz., since the petitioners Writ Petition in

No.29430/2011 filed under Articles 226 & 227 of the Constitution of India against Lokayukta, praying for quashing the report (Chapter-22) dated 27.7.2011, in so far as it relates to

recommendation, was dismissed unconditionally by order dated 29.8.2011; the present petition filed under Articles 226 and 227 of the Constitution of India for quashing FIR in Cr. No 36/2011 is not

33

maintainable in law. With regard to the merits of the case is concerned, he submits that question of affording an opportunity of hearing the petitioner does not arise as the investigation was conducted in pursuance of the reference made by the Government under Section 7(2A) of the KL Act and the provisions of Section 9 are not applicable. He relies on the following decisions:

(i)

AIR

1987

SC

88

(SARGUJA

TRANSPORT

SERVICE Vs. STATE TRANSPORT APPELLATE TRIBUNAL, GWALIOR AND OTHERS) on the point that withdrawal of Petition under Article 226 without permission to institute a fresh petition is not maintainable; (ii) AIR 1996 2450 (CH. RAMA RAO Vs. THE LOKAYUKTA AND OTHERS) on the point that it would not be necessary to issue notice or give opportunity to a public servant at preliminary verification or investigation. When the

Lokayukta or Up-Lokayukta, as the case may be, conducts a regular investigation into the

34

complaint, it would be necessary to give prior opportunity to the public servant, etc; (iii) AIR 1984 SC 273 (K L TRIPATHI Vs. STATE BANK OF INDIA AND OTHERS) on the point whether principles of natural justice has been violated or not has to be judged in the

background of nature of charges, nature of the investigation conducted in the back ground of any statutory or relevant Rules governing such enquiries; (iv) AIR 2007 SC 1527 (SECRETARY, A P SOCIAL WELFARE RESIDENTIAL EDUCATIONAL

INSTITUTIONS Vs. PINDIGA SRIDHAR & ORS.) on the point that to sustain the complaint of the violation of principles of natural justice one must establish that he was prejudiced for non observance of the principles of natural justice; (v) AIR 1996 SC 186 (SUPERINTENDENT CHOWDHARY OF AND

POLICE OTHERS)

Vs.

DEEPAK

on the point that the

question of

35

giving opportunity to the charged Officer before granting sanction does not arise since it is not a quasi judicial function. Grant of sanction is an administrative function. What is required is that the investigating officer should place all the necessary material before the sanctioning

authority who should apply his mind to the material and accord sanction. Therefore, the

question of giving opportunity of hearing to the accused before granting sanction under Section 6 of the Prevention of Corruption Act, 1947 does not arise; (vi) AIR 2004 SC 86 (ASSISTANT COMMISSIONER, ASSESSMENT-II, BANGALORE AND OTHERS Vs. M/S. VELLIAPPA TEXTILES LTD. AND OTHERS) on the point that an order of sanction, by itself, does not have the effect of a conviction or imposing a penalty causing any injury of any kind on the accused. The accused will get full opportunity to defend him in the trial and the

36

trial

will

take

place

in

accordance

with

procedure established by law.

13. In the light of the arguments addressed by the learned Counsel for the parties, we formulate the following points for our consideration:

(i)

Whether the present Writ Petition is not maintainable on the ground that the petitioners earlier Writ Petition No.29430/2011 was dismissed on 29.8.2011 unconditionally? as withdrawn

(ii)

Whether the present petition is not maintainable on the ground that there is a specific provision under Section 482 of Cr.P.C for quashing criminal proceedings?

(iii)

Whether Lokayuktas report called M/S SOUTH WEST MINING

COMPANY LIMITED at Chapter-XXII (at Annexure-W) is within the scope of reference of action made by the

37

Government

of

Karnataka

under

section 7(2A) of the KL Act? (iv) Whether Lokayukta was required to comply with clauses (a) and (b) of sub section (3) of Section 9 of the KL Act? (v) Whether a prima facie case is made out by the Lokayukta for registering a case for the offences under section 7,8,9 and 13(1)(d) r/w section 13(2) of the Prevention of Correction

Act,1988, at annexure-A? (vi) whether the order of sanction

granted by the Governor to initiate criminal petitioner proceedings and against the

consequently

registering case in Cr.No.36/2001 for the offences under section 7,8,9, and 13(1)(d) r/w section 13(2) of the Prevention of Corruption Act,1988, at annexure quashed? (vii) What order? A-1 are liable to be

14. Our answer to the above points is as under:Point No (i): In the Negative. Point No (ii): In the Negative.

38

Point No (iii): In the Negative. Point No (iv): In the Affirmative. Point No. (v): In the Negative. Point No. (vi): In the Affirmative. Point No. (vii): As per final order.

Point No (i) and (ii)

15.

Preliminary objections raised by the respondents are

(i)that Writ Petition in W P No.29430/2011 (GM-KLA), in so far it relates to the recommendation/report made by the Lokayukta against the petitioner for initiation of prosecution was withdrawn unconditionally and therefore the present petition is not

maintainable; (ii) that since the petitioner has sought for relief of quashing complaint dated 22.8.2011, FIR in Crime No.36/2011

for the offences under Sections 7,8,9 and 13(1)(d) r/w Section 13(2) of P C Act, on the file of 3rd respondent/Superintendent of Police, Karnataka Lokayukta, Bangalore, the petition under Art. 226 and 227 of the Constitution of India is not maintainable as the remedy lies under section 482 of Cr.P.C

39

16. We have perused the file relating to W P No.29430/2011 (GM-KLA). When the Petition was listed for orders on 29.8.2011, Sri Ravi B Naik, learned Senior Counsel appearing for the petitioner, submitted that the Petition may be dismissed as withdrawn. In view of the submission made by the learned Senior Counsel, the Division Bench dismissed the Writ Petition as withdrawn, but added a rider unconditionally. In this regard, Sri Ashok Haranahalli, learned Senior Counsel, submits that as on 29.8.2011 the Writ Petition became infructuous, as the Governor granted an order of Sanction for prosecution and on 22.8.2011 respondent No.3/Superintendent of Police, Sub Division,

Lokayukta, registered a case in Crime No.36/2011 for the offences under the P C Act and issued FIR. Since the petitioner had to

challenge registering the case in Crime No.36/2011, the Writ Petition was withdrawn, but the Division Bench of this Court erred in adding a rider unconditionally.

17.

It is pertinent to mention that when the aggrieved

persons approach Courts, pleading violation of fundamental rights, rights cannot be curtailed. In other words, if the Court is of the

40

view that there is no merit in the Writ Petition, it should pass an order on merits, so that the aggrieved party will have an opportunity to challenge the same before the appellate Court. But, in the instant case, there is no mention that the matter was heard and when the Court came to a conclusion that there was no merit in the Writ Petition, learned Counsel for the petitioner offered to withdraw the Writ Petition unconditionally. In view of the fact

that respondent No.3 herein had already registered a case in Crime No.36/2011 for the offences under P C Act, the right course of action was to dismiss the petition as withdrawn with liberty to take such course of remedy available in law. In this regard, learned

Counsel for the petitioner as well as respondents relied upon a decision reported in AIR 1987 SC 88 (SARGUJA TRANSPORT SERVICE Vs. STATE TRANSPORT APPELLATE TRIBUNAL,

GWALIOR AND OTHERS) on the point that withdrawal of Petition under Article 226 without permission to institute a fresh petition is not maintainable. He submits that since the Writ Petition was

withdrawn with permission; petitioner is entitled to file another Writ Petition with reference to the grounds urged in the Writ Petition as well as other contention in view of subsequent events.

41

The decision cited by the learned Counsel for the petitioner supports the case of the petitioner. Therefore, in our view, the order of dismissal of the Writ petition would not come in the way of the petitioner challenging the subsequent orders, etc., on all grounds. Since the case was not decided the doctrine of res

judicata is not applicable to the case on hand.

18.

The other contention is that since the petitioner is

praying for quashing the complaint and FIR in Crime No.36/2011, and in view of Section 482 of Cr.P.C, the Writ Petition is not maintainable.

19.

The petitioner has questioned the very validity of the

report of Lokayukta, order of sanction by the Governor, the complaint and issuance of FIR in Crime No.36/2011 on various grounds. Sri. Ashok Haranalli relies upon the following decisions reported in:

(i)

1992 SUPP (1) SCC 335 (STATE OF HARYANA AND OTHERS Vs. BHAJAN LAL AND

OTHERS),

on the point that extraordinary

42

power under Article 226 or the inherent powers under Section 482 of Cr.P C can be exercised by the High Court, either to prevent the abuse of process of any court or

otherwise to secure the ends of justice.

(ii)

(2008)3

SCC

542

(DIVINE OF

RETREAT AND

CNETRE

Vs.

STATE

KERALA

OTHERS) on the point the jurisdiction under Section 482 of Cr. P C., is not an unlimited arbitrary jurisdiction; Power under Section 482 of Cr. P C has to be exercised sparingly, carefully and with caution only where such exercise is justified by the test laid down in Section 482 itself. The three circumstances

under which inherent jurisdiction may be exercised are: (a) to give effect to an order under the Cr. P C; (b) to prevent abuse of the process of the Court; and (c) to otherwise secure ends of justice. High Court, in exercise of its writ jurisdiction under Article 226 can interfere with the investigation only in the

43

rarest of the rare case where as case of abuse of power of investigation and non-compliance with the provisions under Chapter XII of Cr. P C is clearly made out.

20. Reputation of a man is a very precious thing; the man cherishes most in his life. It is a natural or absolute right of a

man. In fact, the whole exercise which a man undertakes in life is to acquire fame, name and reputation. No office which a man

occupies in life is permanent. Therefore, between the removal of the man from that office and damage to his reputation what he is afraid of his damage to the reputation. Office does not last but

reputation is permanent. In fact, the reputation outlives a man. Therefore, the wide interpretation placed to the word life in Article 21 of the Constitution, leads to inevitable inference that Article 21 of the Constitution not only should be taken to mean protection of ones life and liberty while a person is alive, but equally covers the reputation of a person during his life and after. Any wrong action by the State or its agencies which sullies the reputation of a virtuous person would certainly come under the scope of Article 21

44

of the Constitution. Thus right to reputation is a part of right to life, which a fundamental right guaranteed to every citizen under Article 21 of the Constitution. Hence, no person should be deprived of such right to reputation, except in accordance with the procedure established by law (vide 2004(3) KAR. L.J. 505 - PROF. S N HEGDE Vs. THE LOKAYUKTA, BANGAORE AND OTHERS).

21. It was a fit case to call for response of the petitioner with regard to allegations, but both the authorities have failed to follow the principles of natural justice. It is pertinent to mention that the author of the report himself suspects as to the role of the petitioner in so for the amounts received by the Trust and kith and kin of the petitioner. The decision relied upon by the petitioner supports the case of petitioner and the provision under section 482 of Cr.P.C, cannot take away or trammel the jurisdiction of this under article 226 and 227 of the Constitution of India. There is a flagrant violation of principles of natural justice/ statutory provisions; it is a fit case to hold that there is no merit in the preliminary objections raised by the respondents as to the maintainability of

45

the Writ Petition. Hence, we answer the point No.(i) and (ii) in the negative.

Point Nos. (iii) to (vii)

22. Since the material on these points is interlinked and overlapping, we proceed to take up these points together for consideration.

23. The K L Act, 1984 was enacted by the Karnataka Legislature accepting the recommendations of the Administrative Reforms Commission to constitute the institution of

Lokayukta for the purpose of improving the standards of public administration, by looking into complaints against administrative favoritism and actions, official including cases in of corruption,

indiscipline

administration

machinery and all other allied matters. The President of India gave his assent to the Bill on 16th day of January, 1985. The Act came into force on 15.1.1986 abolishing the Vigilance Commission. According to Section 2(5) of the K L Act, corruption- includes

46

anything made punishable under Chapter IX of the Indian Penal Code, 1860 or under the Prevention of Corruption Act, 1947. Sections 161 to 171 of I P C deal with the offences by public servant. Sections 161 to 165-A of IPC were omitted by the P C Act, 1947. It was done with an intention to make the anti-corruption laws more effective by widening their coverage and by

strengthening the provisions. The P C Act, 1947 and the Criminal Amendment Act, 1951 were repealed under Section 30 under the P C Act, 1988. Corruption is deep rooted in the society. Even to get a Birth Certificate/Death Certificate, one has to oil the palm. In spite of the Indian Penal Code and Prevention of corruption Act, 1947, the State of Karnataka has brought a legislation viz., the Karnataka Lokayukta Act, 1984, but in vain.

24. Dictionary meaning of word Corruption means, the process of corrupting or condition of being corrupt. Bribe means, a gift, usually of money, offered to someone to persuade them to do something illegal or improper; something offered to someone in order to persuade them to behave in a certain way.

47

25. The definition of a public servant under Section 2(c) of P C Act, 1988 includes 12 authorities. The holder of a public office such as the Chief Minister is a public servant (vide M.Karunanidhi v. Union of India ,AIR 1979 SC598 ). The society expects that every public servant should have human approach and honest. corruption is growing in our society? Why

One of the reasons for

corruption appears to be Election. In our view, a person with corrupt mind is also corrupt and he would be most dangerous to the society than the other. Is it not offering TV, wet grinder etc., to the voters after the election is over amounting to corruption? It is the high time that the Representation of the People Act, 1950 has to be amended.

26. Now coming to the point for consideration, we have to take note of the background for the Government making a reference to the Lokayukta. It is pertinent to state that the

government had rightly made use of the Commissions of Inquiry Act, 1952 and appointed Justice U L Bhat Commission. The

background and the terms of reference for the said commission and the reference/action under section 7 (2A) of the KL Act are

48

one and the same, except the one that is relating to illegal granite quarrying in Bangalore Rural District and other districts. The commission appointed under section 3 of the Act, has jurisdiction and authority to inquire into any definite matter of public importance and to perform such function and within such time as may be specified in the Notification. The Commissions of Inquiry Act provides all the necessary powers to the commission for the purpose of investigation. Further, section 8-B provides that persons likely to be prejudicially affected shall be heard. It is relevant to note that success of the commission depends not only on proper selection of the head of commission but also on his devotion and dedication to discharge his duty in public interest without fear or favour. As per section 7 of the KL Act Lokayuta may investigate any action which is taken by or with the general or special approval of the authorities. As per sub section 2A of

section 7, notwithstanding contained in sub-sections (1) and (2), the Lokayuta may investigate any action taken by or with the general or specific approval of a public servant, if it is referred to him by the State Government. Sub-section (1) of section 2 defines the term Action as an administrative action taken by way of

49

decision, recommendation or finding or in any other manner and includes willful failure or omission to act and all other expressions relating to such action shall be construed accordingly. Section 8 of the KL Act says the matters not subject to investigation. Section 9 of the KL Act is relating to complaints and investigations by the Lokayukta. Since the petitioner has urged that even in cases referred under section 7(2A) of KL Act the lokayukta should have complied with clause (a) and (b) of sub section 3 of section 9, it is useful to excerpt the same for immediate purpose. under: (3) lokayukta Where the Lokayuta or proposes, after an upasuch It reads as

making

preliminary inquiry as he deemed fit, to conduct any investigation under this Act, he:-

(a) shall forward a copy of the complaint and in the case of an investigation initiated suo motu by him, the opinion recorded by him to initiate the investigation under sub-section (1) or (2), as the case may be, of section 7 to the public servant and the Competent Authority concerned; (b) shall afford to such public servant and opportunity to offer his comments on such

50

complaint or opinion recorded under subsection (1) and (2) of section as the case may be; (c) may make such order as to the safe custody of documents relevant to the

investigation, as he deems fit.

27.

In the decision reported in ILR 1990 Kar 223

(N.Gundappa v. State of Karnataka), it was held that the investigation by Lokayukta is a quasi judicial power and the authority shall follow the rules of Natural justice. Therefore, it was necessary for the lokayukta to send a copy of the complaint to the petitioner and to the Competent Authority and afford an

opportunity to the petitioner to offer his comments on the said complaint. Thus, it was held that Clause (a) and (b) of sub-section (3) of section 9 are to be complied with in the manner provided therein. The decision of learned single judge was confirmed by Division bench of this court. Division Bench has held that having regard to the serious consequence contemplated under section 13 and 14 of the KL Act, provisions of clause (a) and (b) of sub section (3) of section 7 have to be complied (vide State of Karnataka v. N.Gundappa - reported in ILR 1990 KAR 4188).

51

28.

The scheme of KL Act does not deal with PUBLIC

INTEREST matters. Keeping in view the volume of work and public interest, appointment of a commission is more meaningful, as all the persons concerned can take part in the Commission of Enquiry. The Commission is bound to follow the Principles of Natural justice. There cannot be any discrimination in so far investigation of cases under Section 9(1) or under section 7(2A) and compliance of section 9(3)(a)and (b) of the KL Act. Further, there is no material produced by the Lokayukta to establish that the petitioner has done any favour to any of the alleged companies during the period 2007 to 2010. Even during the course of

arguments a specific question was put to the learned counsel for the Lokayukta to produce any material to connect the petitioner for the alleged offences, but he was mum. Suspicion cannot be a

ground to tarnish the image and reputation of a person who is holding a constitutional post. Courts shall decide on the materials produced by the police or party; whereas the commission has to collect materials by inquisitorial method by investigation; if necessary, to inquire into truth or otherwise of the facts available. The commission of Inquiry Act is perhaps unique in the world

52

where the commission takes the role of investigator, prosecutor, defender and judge of facts, with due safeguards of the rights of the involved parties as in a juridical proceeding, though it is not.

29. Lokayukta being a quasi-judicial authority, his decisions should be reasoned. The writ of certiorari will lie to set aside the decisions made in violation of the principles of natural justice. When important rights of parties of far-reaching consequence are adjudicated in a summary fashion, without giving a personal hearing where proposals and counter proposals are required to be examined, otherwise it would be directly destructive of judicial propriety and fair-play. The catena of decisions cited by the learned counsel of the petitioner on the point of violation of principles of natural justice supports the case of the petitioner. The contention of Respondent/Lokayukta that he has not given any direction for the petitioner to vacate his office and therefore question of giving him an opportunity of hearing the petitioner did not arise, holds no water, as the petitioner was the Chief Minister when the report was leaked through media as to his indictment and lot of dust was created in the political circle and on moral

53

ground the petitioner resigned as CM. He was condemned unheard. In a nut shell, there is no material placed on record to establish that the petitioner has shown any official favour to the companies. The SLP challenging the grant of lease is still pending before Supreme Court. Mining lease was granted in favour of the above said companies, by the State in the month of September 2007, during which period, the petitioner was neither a mining Minister nor a Chief Minister. As per Rule 22(4) of the Mineral Concession Rules, 1960, approval of mining plan is vested in the Central Government. Therefore, the petitioner showing any official favour to the companies during the year of 2007 to 2010 is beyond any ones comprehension.

30. Further, reference of action made to the Lokayukta is under section 7(2A) of KL Act, is in relation to illegalities and irregularities in mining in Bellary, Tumkur, and Chitradurga Districts, from 1.1.2006 to 19.7.2010. The report of Lokayukta at Chapter No22 is based on Dr.U.V.Singhs report, it is captioned as M/S South West Mining Company Limited. It has no connection with illegalities/irregularities in the mining. Therefore, we hold that

54

report of the Lokayukta is also not within the scope of reference made to it by the Government.

31. On careful examination of the case of the petitioner, the statement of objections and decisions cited by the learned Senior Counsel for the petitioner and learned Senior Counsel for respondent No.4, we are of the considered view that the petitioner was condemned unheard and there is flagrant violation of principles of natural justice/maxim audi alterm partem/fairness in administrative action and statutory provisions. The decisions cited by Sri Naganand, learned Senior Counsel, for respondent No.4 are of no avail. Hence, we answer point Nos. (iii) & (v) in the negative and Point Nos. (iv) & (vi) in the affirmative in favour of the petitioner.

32. For the reasons said supra, we pass the following

ORDER Writ Petition is allowed. The complaint dated 22.8.2011 (at Annexure-A); FIR registered in Crime No.36/2011 for the offences under Sections 7,8,9 and 13(1)(d) r/w Section 13(2) of the

55

Prevention of Corruption Act, 1988 (at Annexure-A1) on the file of respondent No.3; the Order of Sanction dated 2.8.2011 (at Annexure-B) on the file of respondent No.4 and the relevant portion of the Report at Chapter-XXII of the Karnataka Lokayukta dated 27.7.2011 (at Annexure-C) on the file of the Karnataka Lokayukta are quashed.

Sd/[Dr. K. BHAKTHAVATSALA] Judge

Sd/(K. GOVINDARAJULU] Judge

Bjs