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The State of Karnataka & Ors. v. M/S Vedanta Limited (Formerly Known as Sesa Sterlite Limited) & Ors.

Criminal Appeal · 2018 INSC 215Decided 6 Mar 2018
Criminal Appeal Nos. 348-356 of 2018
Justice A.K. Sikri · Justice Ashok Bhushan

Background

About 5 lakh metric tonnes of illegally stocked iron ore was seized by Karnataka authorities in 2010 under forest-law offences, and a trial court later permitted the State to dispose of a large quantity of this seized ore by e-tender in an order dated 8 May 2015. Vedanta Limited (and other petitioners) went to the Karnataka High Court seeking release of roughly 34,544 metric tonnes of this ore in its favour, relying on a quite different proceeding: a separate Lokayukta/CBI "Crime No. 2/2014" investigation into alleged corruption, in which a final report finding no case against the company had been accepted by a court in December 2015. The High Court allowed the writ petitions and ordered release of the ore to the company based on that unrelated final report.

Decision Breakdown

The Supreme Court held that the High Court had committed a basic factual error: the final report accepted on 15 December 2015 belonged to an entirely separate case (Crime No. 2/2014, a corruption investigation), while the ore actually seized and covered by the 8 May 2015 disposal order came from a different proceeding altogether (the 2010 Ankola FIR and connected CBI chargesheets). Because the two proceedings were unconnected, the acceptance of the "B" report in the corruption case had no bearing on the ore seized in the forest-offence case, so the High Court's entire basis for ordering release was mistaken. The Court therefore set aside the High Court's judgment, while leaving it open to the company to apply afresh before the trial court (the Special Judge for CBI Cases) to establish its ownership and existence claims over the specific ore it sought, to be decided on its own merits.

Lesson Learnt

Courts must verify that the proceeding being relied upon for relief is actually the same proceeding under which the property in dispute was seized: a favourable outcome in an unrelated case cannot be used as the basis to release property seized in a different case.

Official source (sci.gov.in)View Judgment (PDF)

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