The Supreme Court on Friday quashed a Special Court order summoning Chairman-cum-Managing Director of Bharti Cellular Limited Sunil Bharti Mittal and Essar Group promoter Ravi Ruia as accused in a corruption case relating to the allocation of additional 2G spectrum in 2002 during the NDA rule.
The ruling by a three-judge Bench led by Chief Justice of India H.L. Dattu came on petitions separately filed by Mr. Mittal and Mr. Ruia against summons issued on March 19, 2013 by a Special Court trying 2G spectrum cases. on March 19, 2013. They were summoned by that court to initiate criminal proceedings.
"Prima facie role of Mittal, Ruia not proved"
The Supreme Court on Friday quashed a Special Court order summoning Chairman-cum-Managing Director of Bharti Cellular Limited Sunil Bharti Mittal and Essar Group promoter Ravi Ruia as accused in a corruption case relating to the allocation of additional 2G spectrum in 2002 during the NDA rule.
The summons was issued despite the CBI, the prosecuting agency in the case, not naming Mr. Mittal and Mr. Ruia in its December 2012 charge sheet. The charge sheet had named only three telecom firms Bharti Cellular Ltd., Hutchison Max Telecom Pvt Ltd. (now known as Vodafone India Ltd.), Sterling Cellular Ltd. (now known as Vodafone Mobile Service Ltd) and former Telecom Secretary Shyamlal Ghosh.
However, Special Judge O.P. Saini went ahead to initiate criminal proceedings against Mr. Mittal and Mr. Ruia, who was Director at Sterling Cellular Ltd, on the ground that they prima facie “controlled” the affairs in their companies.
The court had said the companies were only following the “direction and will” of these men to allegedly commit the irregularities in spectrum allocation. In fact, the March 2013 order even terms the two industrialists “alter ego” of their respective companies.
In the Supreme Court, senior advocate K.K. Venugopal, representing the CBI, supported the Special Court’s summon order. He argued that “it is the human agency in the accused companies who was responsible and such an agency/person has to be the top person.”
The CBI argued that the Special Judge was within his powers to summon persons even if they were not named in the charge sheet.
The judgment, written by Justice A.K. Sikri on the Bench, agreed with the CBI to that extent. It said the trial court did indeed have the power to look beyond the CBI charge sheet and summon Mr. Mittal and Mr. Ruia. But to do so, the Bench held, the trial judge should have, after due application of mind, found “sufficient” prima face material in the police report to justify his summons order.
“Here no such exercise was done. He [Judge Saini] has not recorded his satisfaction by mentioning the role played by the appellants which would bring them within the criminal net,” Justice Sikri wrote in the verdict.
The Bench concluded that the Special Court had issued the summons order on an “erroneous presumption of law.”
However, the Bench observed that there was nothing preventing the Special Court from having a re-look, now or later on during the trial, at the evidence on record and issue appropriate orders if there was anything incriminating found against Mr. Mittal and Mr. Ruia.
The CBI had accused Mr. Ghosh and the three telecom firms for the offences of criminal conspiracy (120-B) under the IPC and under the Prevention of Corruption Act. The probe agency claims the allocation of additional spectrum to the three companies led to a loss of Rs. 846 crore to the public exchequer.
A statement issued by Essar in a reaction to the verdict said “the judgment re-establishes that the directors and the shareholders cannot be made vicariously liable in criminal matters.”
“We welcome the judgment. The judgment will assuage concerns among corporate leaders regarding misuse of judicial process. It will help re-instil confidence among investors and corporates, especially at a time when India is looking to attract fresh investments and increase growth,” it said.
