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2G spectrum scam: SC junks order summoning Mittal, Ruia as accused in case

The allocation had caused a loss of Rs 846 crore to the public exchequer .

Written by Utkarsh Anand | New Delhi |
Updated: January 11, 2015 11:52:13 am

In a major relief to Bharti Cellular CMD Sunil Mittal and Essar group promoter Ravi Ruia, the Supreme Court on Friday quashed an order summoning and prosecuting them as accused in a case related to allocation of additional 2G spectrum in 2002. The allocation had caused a loss of Rs 846 crore to the public exchequer and a corresponding pecuniary gain to the cellular operators, according to the CBI.

The court nixed the theory of the two being “alter egos” of their respective companies, saying the principle was based on “an erroneous presumption in law” by the trial judge without assigning the specific reasons why Mittal and Ruia were to be held prima facie complicit in the conspiracy.

“While issuing summons against the appellants (Mittal and Ruia), the special magistrate has taken shelter under a so-called legal principle, which has turned out to be incorrect in law. He has not recorded his satisfaction by mentioning the role played by the appellants which would bring them within criminal net,” said a bench of Chief Justice HL Dattu and justices Madan B Lokur and AK Sikri.

Allowing the appeals against the March 2013 summoning order, the bench held that an order would be liable to be set aside if no reason was given while concluding there was a prima facie case against the accused.

“There has to be a proper satisfaction in this behalf which should be duly recorded by the special judge on the basis of material on record. No such exercise is done. In this scenario… it is difficult to sustain the impugned order dated March 19, 2013 in its present form insofar as it relates to implicating the appellants and summoning them as accused persons,” it said.

Mittal and Ruia were summoned as accused although the CBI had chargesheeted only their companies in the case. The trial court had, however, noted that they could be treated as controlling the affairs of the respective companies and representing the directing mind and will of each company. They were, thus, “alter ego” of their companies and the acts of the companies could be aptly attributed to them, it had said.

But the apex court junked this principle. It held that when a company was the offender, its directors and other officials could not be held vicariously liable of the offences automatically.

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