SC restores possession of mine to Rajasthan government from UltraTech

The Supreme Court has held that the Rajasthan government will take back possession of a mine from Gotan Limestone Khanji Udyog Pvt Ltd (GLKUPL), which was transferred to cement major Ultra Tech, saying that competent authority was “misled” by concealing the real transaction.
The apex court set aside the order of the Rajasthan High Court which had dismissed the state government’s plea to restore to it the possession of a mine, located in 10 sq km area near Gotan town in Nagaur district, the lease of which was transferred in contravention of rules to Ultra Tech Cement Ltd (UTCL), also known as Ultra Tech.
It also directed the Rajasthan government to frame and notify its policy with regard to transfer of mining lease within one month and said, “Till such a decision is taken, status quo may be maintained.”
Holding that the Rajasthan government rightly exercised its power to cancel the lease transferred in violation of rules, a bench of Justices A R Dave and A K Goel said, “In the present case, it was not a case of mere transfer of shareholding or change of Directors or even a routine merger, but use of device to unauthorisedly acquire mining lease by misleading the competent authority by concealing the real transaction.
“Real transaction is of impermissible sale of the lease which was the only asset of the company. If true facts that lease was to be sold were disclosed, power to permit transfer of lease may not have been exercised. Lease could not be transferred to make profit. Thus, the doctrine of lifting the corporate veil should be invoked,” the bench said.
“The public power of permitting transfer of lease could not be used to benefit a private operator, who sells its rights in natural resources given to it by the State, in violation of law,” the bench said.
The state’s Mines Department on December 16, 2014 had cancelled the mining lease granted in favour of GLKUPL, which was set aside by the single judge bench of the high court on March 25, 2015.
The Rajasthan government’s appeal against the single judge order was also dismissed on May 14, 2015, by a division bench which said there was no contravention of the 1986 rules in the transfer of the lease of the mine in question.
The bench noted the contention of the state government that Ultra Tech cement has purchased the mine from GLKUPL, the shareholders of which were four brothers, who were booked by Anti-Corruption Bureau in August 2014 for the lease transfer.
Further, along with the state government, rival cement major J K Cements Ltd had also contended that the high court had failed to take note of the fact that Gotan Limestone had not even “come into existence when it asked for or made an application seeking transfer of the lease”.
It was contended that the same by no stretch of imagination can be termed as legal as at relevant time Gotan Pvt Ltd was not a legal entity and hence had no existence in the eyes of law.
Noting that minerals vest in the State and it has to exercise its power as per doctrine of public trust, the apex court said, “In the present case, this principle (of corporate veil’) clearly applies as transfer of shares to cover up real transaction which is sale of mining lease for consideration without the previous consent of competent authority, as statutorily required.
“The statutory requirement is sought to be overcome with the plea that it was a transaction merely of transfer of shareholding when on the face of it the transaction is clearly that of sale of the mining lease. In view of the above, the view taken by the high court cannot be sustained,” it said.
The bench said, “It was clear that formation of GLKUPL itself was a device for transfer of mining lease from GLKUPL to UTCL for monetary consideration without disclosing the real transaction to the competent authority.”
It said a lessee privately and unauthorisedly cannot sell its rights for consideration and profiteer from rights which belong to State.
“Once it is held that transfer of lease is not permissible without permission of the competent authority, the competent authority was entitled to have full disclosure of facts for taking a decision in the matter so that a private person does not benefit at the expense of public property.
“The original lessee did not disclose that the real purpose was not merely to change its partnership business into a private limited company as claimed but to privately transfer the lease by sale to a third party. This aspect has also escaped the attention of the high court,” the bench said.
The court held that sale of shareholding by GLKUPL to Ultra Tech was a private “unauthorised” sale of mining lease which being in violation of rules is “void”.
“GLKUPL has been formed merely as a device to avoid the legal requirement for transfer of mining lease and to facilitate private benefit to the parties to the transaction, to the detriment of the public,” the bench said.

Teesta’s fund embezzlement case: SC extends arrest protection

The Supreme Court today extended by four weeks the interim protection from arrest granted to Teesta Setalvad and her husband in a case of alleged embezzlement of funds for a museum at Ahmedabad’s Gulbarg Society that was devastated in the 2002 riots.

A bench comprising Justices A R Dave and Adarsh Kumar Goel said the interim protection from arrest will continue till October 15.

Senior advocate Kapil Sibal mentioned the issue on behalf of the couple, saying the interim order was expiring on September 15.

Setalvad and her husband Javed Anand have challenged the order of the Gujarat High Court denying them anticipatory bail in the case.

The High Court order was stayed by the apex court and has been pending to be heard by a three-jteestaudge bench.

The apex court had on April 16 constituted a three-judge bench to hear afresh the anticipatory bail plea of Setalvad and her husband as a two-judge bench of Justices Dipak Misra and Adarsh Kumar Goel on March 19 had referred it to a larger bench and extended its interim order protecting them against arrest till the larger bench takes up the matter.

The couple have denied all charges levelled by the Gujarat Police, which in an affidavit in July had alleged that they had misappropriated funds meant for charity for personal expenses buying items ranging from wine to mobile phone, besides tampering with evidence.

Teesta and her husband, who have been fighting for justice for the victims of the riots, have denied all allegations contending that they have been implicated in the case and were victims of political vendetta.


Crucial hearing on NJAC by constitution bench of SC

njacTwo days after the government notified the controversial NJAC law to remove the collegium system of appointment of judges, a Constitution Bench of the Supreme Court will commence hearing from tomorrow to examine the validity of new measure and is likely to consider passing an interim order to staying the operation of the Act.

A three-judge bench of the apex court on April 7 had referred to a five-judge Constitution Bench, a batch of petitions challenging the validity of National Judicial Appointments Commission (NJAC) Act to replace the two-decade- old collegium system of appointing judges to higher judiciary.

The court had refused to stay the implementation of law with the observation that all the issues arising out of the petitions would be decided by the Constitution Bench.

Two days thereafter, the Chief Justice of India H L Dattu Constituted the Constitution Bench comprising Justices A R Dave, J Chelameswar, Madan B Lokur, Kurian Joseph and Adarsh Kumar Goel to hear the matter.

Justices Joseph and Goel are the two new judges in the bench while the other three had heard the matter before thinking it fit that the issues in the pleas required to be adjudicated by a larger bench.

However on April 13, the government notified the National Judicial Appointments Commission (NJAC) Act along with a Constitutional Amendment Act (99th Amendment Act) to give constitutional status to the new body to appoint judges.

NJAC was signed into an Act by President Pranab Mukherjee on December 31, 2014.

Under the collegium system which came into existence in 1993 after a Supreme Court judgement, five top judges of the apex court recommend transfer and elevation of judges to Supreme Court and 24 High Courts.

According to the new Article 124(A) inserted in the Constitution, two eminent persons will be nominated to the Commission as members by the committee consisting of the Prime Minister, the Chief Justice of India and the Leader of Opposition in Lok Sabha or where there is no such LoP, then the leader of single largest Opposition party.

One of the eminent persons will be nominated from among the persons belonging to Scheduled Castes, Scheduled Tribes, Other Backward Classes, minorities or women.

SC sets free two Italians guilty of friend’s murder

The Supreme Court has set free two Italians, undergoing life imprisonment for murder of their friend in 2010, saying the evidence submitted by the prosecution to suggest motive does not inspire confidence.

A bench of justices A R Dave, Kurian Joseph and R Banumathi set aside the Allahabad High Court order which had confirmed the life imprisonment to Italian nationals Tomaso Bruno and Elisa Betta Bon Compagni

“In the case at hand, evidence adduced by the prosecution suggesting motive is only by way of improvement at the stage of trial which, in our view, does not inspire confidence of the court…In the present case, the courts have not properly appreciated the evidence and gap in the chain of circumstances sought to be established by the prosecution.

“Upon consideration of the facts and circumstances of the case, we are of the view that the circumstances and the evidence adduced by the prosecution do not form a complete chain pointing to the guilt of the accused and the benefit of doubt is to be given to the accused and the conviction of the appellants is liable to be set aside,” the bench said.

It also said that the courts have ignored the importance of “best evidence” i.E CCTV camera in the case at hand and also have not noticed the absence of symptoms of strangulation in the medical reports.

According to the prosecution, Tomaso and Victa along with their friend Francesco Montis had arrived in Varanasi from London on January 31, 2010 and checked in at a hotel in the city.

On February 4, 2010, Victa informed the manager of the hotel that Francesco’s condition was not fine after which they took him to a hospital, where the doctors declared the tourist as “brought dead”.

Later, on the basis of the postmortem report and other materials, an FIR against Tomaso and Victa was lodged.

In July 2011, the lower court had awarded life imprisonment to them besides a fine of Rs 25,000.

The High Court upheld the verdict

Supreme Court refuses to entertain plea of Kingfisher Airlines

vijaymallyaThe Supreme Court today refused to entertain a petition filed by Kingfisher Airline against being declared as wilful defaulter, saying it has become infructuous as the Grievance Redressal Committee of Union Bank of India has already passed an order.

“Your grievance has been, that Grievance Redressal Committee (GRC) should not decide the matter but they had already decided it, therefore your plea is infructuous” a bench comprising justices A R Dave and U U Lalit said.

The Kingfisher Airlines had alleged that the order by GRC was passed yesterday, ignoring the plea that the director should be allowed to be represented through lawyers.

However, after the bench said that the plea has become infructuous, the airline counsel submitted that they would challenge the GRC order before the concerned High Court.

State-run United Bank of India yesterday became the first lender to declare debt-ridden Kingfisher Airlines and its promoter Vijay Mallya as wilful defaulters.

Superme Court extends stay on execution of death sentence of Veerappan

Hanging of four aides of sandalwood smuggler Veerappan has been further delayed with the Supreme Court extending its interim order staying the execution of death sentence imposed on them for killing 22 police personnel in a landmine blast in Karnataka in 1993.

A bench headed by Chief Justice of India Altamas Kabir said it was keeping the matter pending since another bench, which has heard an identical plea, has reserved its judgement.

“In our view, the proper course of action is to adjourn the matter until another bench renders its judgement on similar matters. Therefore, accordingly we adjourn the hearing of this matter for six weeks to enable another bench to deliver the judgement in another pending matter.

“As a consequence, the interim order staying the execution of petitioners (Veerappan aides) passed on February 18 shall continue” until further orders, the bench also comprising justices A R Dave and Vikramajit Sen told.

The bench noted that the subject matter of the petition was relating to the right of the death row convicts to get their sentence commuted to life imprisonment on account of delay of execution of their death sentence.

“This is the main question involved when this matter was taken by us. It was brought to our notice that other writ petitions involving the same issue were heard by a bench of two judges in which senior advocates Ram Jethmalani and T.R. Andhyarujina were requested as amicus curiae,” the bench said.

Veerappan’s elder brother Gnanaprakash and his aides Simon, Meesekar Madaiah and Bilavendran were awarded death sentence in 2004 in connection with a landmine blast at Palar in Karnataka in 1993 in which 22 police personnel were killed.

Their mercy petition was rejected by President Pranab Mukherjee on February 13 and they are presently lodged in a jail in Belgaum in Karnataka.

A TADA court in Mysore had in 2001 sentenced them to life term which was enhanced to death sentence by the apex court.

Gang leader Veerappan was killed in an encounter with the Tamil Nadu Police in October 2004.

The apex court also noted that the judgement in the writ petition heard by another bench on the issue was reserved on April 19, 2012.

The bench said it has been informed by Additional Solicitor General Haren Raval that while considering the two writ petitions, of Devender Pal Singh Bhullar and M N Das, the other bench had the occasion to consider similar matters in which the mercy petitions were pending before the President.

The CJI said that since another bench has already heard and reserved its judgement on the issue, there is a possibility that the pleas of Veerappan aides can be heard by the same bench also.

The court is hearing two petitions, out of which one was filed by the four convicts and the other by advocate Samik Narain, on their behalf.

Urging the apex court to intervene, the four death convicts pleaded that a decision on their mercy petition has been delayed by nine years and as per its earlier order they are entitled to seek remedy for undue long delay in the execution of the sentence of death.

“Nine years delay in disposal of the petitioners’ mercy petitions has given them a right to approach this Court or the High Court to seek a commutation of the sentence of death,” according the petition.

On the last date of hearing, the court gave Narain the liberty to amend and rectify the petition after objections were raised on its maintainability by Attorney General G E Vahanvati who was asked to assist the court.

Senior advocate Colin Gonsalves, appearing for the four convicts, had said their execution should be stayed as another apex court bench had reserved its order on a plea for commuting death sentence to life imprisonment on the ground of delay in deciding mercy plea.

CAG has powers to scrutinise Government’s performance: SC

Observing that CAG is not a “munimji” (accountant), the Supreme Court on Monday said scrutinising the effective use of resources is his primary duty and it was for Parliament to accept or reject his reports.

Dismissing a plea challenging the Comptroller and Auditor General’s power to conduct performance audit of coal block allocation and other issues, a bench of justices R M Lodha and A R Dave said the CAG is a constitutional authority entitled to review and conduct such audit on revenue allocations relating to the Centre, the states and the Union territories.

“CAG is not a munimji or an accountant or something like that… He is a constitutional authority who can examine the revenue allocation and matters relating to the economy,” the bench told counsel Santosh Paul, who appeared for petitioner Arvind Gupta, head of an NGO, which had filed the petition.

The apex court brushed aside the petitioner’s argument that the CAG had no Constitutional mandate to scrutinise the effectiveness or economic aspect of the Government’s policy matters.

“Parliament is there to guide and correct the CAG. CAG is the principal auditor whose function is to go into the economy, effectiveness and efficiency of the use of resources by the government. If the CAG will not do, then who else will do it.

“Effective use of resources is the primary duty of the CAG. CAG shall examine all aspects about effectiveness, efficiency and economy. There is a full fledged mechanism to consider the CAG reports,” Justice Lodha heading the bench observed

The bench said it is for the CAG to comment as to how the government has utilized the resources and ultimately it is for Parliament to take the final call on the CAT reports.

“Let the Parliament say your report is misconceived or misplaced for reasons a, b, c. How can you say CAG has trespassed the functions of the other organs.

“Even if an opinion is given without strictly conforming to the CAG’s powers, how does it affect anybody. Parliament may say you have no business to do all this. We have to understand the scheme of the Constitution. Under Articles 148-151 comprehensive provisions have been made in the Constitution on the powers of the CAG,” the bench said.

The bench said Section 16 of the 1971 act provides that it shall be the duty of the CAG to audit all receipts which go into the consolidated fund of India or the state exchequer to satisfy himself that proper allocations of revenue are being made.

“It is thus clear that the CAG’s function is to carry out audit on the economy, efficiency and effectiveness with which the government uses its resources.

“Performance audit report submitted by the CAG have to be read accordingly. Moreover, article 131 provides that reports of the CAG shall be submitted to Parliament and state assemblies as the case may.

“Audit reports thus submitted by CAG are subject to scrutiny by Parliament or assemblies. The petition is misconceived and it is dismissed accordingly,” the court said.

The PIL had alleged that performance audit conducted by the CAG is ultra vires the Constitution as in effect it authorises the CAG to review or assess a scheme or policy of the Government, which is beyond the constitutional authority given to the CAG under Article 149 of the Constitution.

(Source: PTI)