SC Sets Aside Karnataka HC Order Quashing CBI Case Over Illegal Iron Ore Export

SC set aside judgement of the Karnataka HC quashing 2013 criminal case against a company and others in an alleged illegal iron ore export case.

New Delhi:In a relief to the CBI, the Supreme Court on Monday set aside a judgement of the Karnataka High Court quashing a 2013 criminal case against a company and others in an alleged case of illegal iron ore export. A bench comprising Chief Justice Sanjiv Khanna and Justice Sanjay Kumar asked the Dharwad bench of the Karnataka High Court to decide the case afresh on some counts except the amount of the alleged iron ore exported by M/S MSPL Limited and others.

"We have set aside the (HC) judgement. The parties are directed to appear before the high court on February 3, 2025,” the bench said, "we have not expressed any opinion on the merits of the case." The bench was hearing about 11 appeals of the CBI against the December 12 judgement of Justice M Nagaprasanna of the high court.

The HC judge quashed the proceedings initiated by the CBI in the case related to the illegal export of iron ore and said the registration of the case and the filing of the chargesheet by the CBI against M/S MSPL Limited and others were contrary to law. The high court said the apex court had empowered the CBI to investigate cases of export of over 50,000 metric tonne of iron ore without valid permits.

It noted the total quantity alleged in the chargesheet against the company was 39,480 metric tonne, below the threshold set by the apex court. The high court held the CBI lacked jurisdiction to register the case or file the chargesheet, but said it did not mean that MSPL Limited could not be investigated.

The high court said the special investigating team constituted by the Karnataka Lokayukta was empowered to initiate proceedings for cases below the 50,000 metric tonne threshold, going by the Supreme Court's directions. It held since the CBI had no jurisdiction, all actions arising from the chargesheet, including the cognisance taken by the trial court, were invalid.

On the issue of the role of directors, the high court said their specific roles must be clearly established in the complaint, investigation, and chargesheet. The directors cannot be arraigned as accused without clear evidence of their active involvement in the alleged illegality, it said.

The company and others were prosecuted before a trial court at Ankola, Uttara Kannada District in the case of the CBI registered on October 24, 2013. The central probe agency filed its chargesheet in 2022, for offences punishable under Section 120B (criminal conspiracy) and sections 379 (theft), 411 (keeping stolen property), 420 (cheating) and 447 (criminal trespass) of the IPC.

The apex court on September 7, 2012, passed an order directing the CBI to conduct a preliminary investigation with respect to 50.79 lakh metric tonne of iron ore exported from January 01, 2009 to May 31, 2010 from Belekeri port by various companies/individuals or exporters who had exported iron ore over 50,000 metric tonne without valid permits.

The CBI lodged the FIR under the provisions of the IPC and the Mines and Minerals (Development and Regulation) Act. Nine years after lodging the FIR, the CBI filed the chargesheet against the firm and others on February 1, 2022. The high court observed the apex court had clearly indicated that the CBI would step in only if the export by an individual or company would be more than 50,000 metric tonne.

"What would unmistakably emerge is, (i) in cases where exporters who have exported more than 50,000 metric tonnes without valid permits the CBI would get jurisdiction to register crimes and (ii) in cases where export is less than 50,000 metric tonne, Government of Karnataka has to take further action in accordance with law..,” it said.

The HC order therefore partly allowed the petition and quashed the chargesheet.