Karnataka court sentences Congress MLA to 7 years in jail in six mining fraud cases of 2010, imposes fine of Rs 44 crore

Under Section 8 of the Representation of People Act, 1951, elected representatives stand disqualified for a period of six years for convictions of more than two years in criminal cases.

The special court has sentenced Sail to seven years of imprisonment on charges of cheating under Section 420 of the Indian Penal Code. The court has also sentenced him to five years of imprisonment on charges of criminal conspiracy under Section 120 B of the IPC in all the six cases. A fine amount of Rs 20,000 has been imposed on all the accused in each case.

Sail has also been sentenced to three years of imprisonment on charges of theft under Section 379 of the IPC in a couple of cases with a fine of Rs 20,000.

The conviction and sentencing on Saturday by special court judge Santhosh Gajanan Bhat is the first major outcome in the trial of multiple cases registered in 2010 over the theft and illegal exports of iron ore that was stored at the Belekeri port.

Sail was a businessman when the mining scam occurred and was later elected as an Independent MLA from Karwar in the 2013 state polls. He lost the 2018 polls and was elected in 2023 on a Congress ticket.

The Belekeri case was prosecuted by the CBI after an initial probe by the Karnataka Lokayukta in March 2010 found that nearly eight lakh tonne of iron ore was transported from Bellary to the Belekeri port near Karwar in Karnataka without mining, forest or transport permits.

The stolen iron ore is alleged to have been exported illegally through a conspiracy involving then deputy conservator of the port Mahesh Biliye and stevedore agencies at the port like the Mallikarjun Shipping Company owned by Sail.

Apart from Sail, Biliye and the Mallikarjun Shipping Company – nine others, including owners of iron ore export companies and the firms have been convicted and sentenced in the cases.

The court has imposed fines of over Rs 9 crore in four of the six cases, Rs six crore in one case and Rs 90,000 in another. The heaviest amount of Rs 9.52 crore was imposed for cheating involving exports by a firm called Swastik Steel from Hospet in the erstwhile Bellary district.

“The accused No. 1 Sri. Mahesh J.Biliye, accused No.2 M/s.Swastik Steels (Hospet) Pvt Ltd., accused No.3 Sri K.V.Nagaraj @ Swastik Nagaraj, accused No.4 K.V.N.Govindraj, accused No.5 M/s.Sri Mallikarjuna Shipping Pvt Ltd., accused No.6 Sri Satish Krishna Sail are hereby convicted for the offence punishable under Section 420 of IPC and accused No. 1, 3, 5 and 6 are sentenced to undergo a Rigorous Imprisonment for a period of Seven years and imposed with a fine of Rs.9,52,43,000/- Crores (Rupees Nine crores, fifty two lakhs, Forty Three thousand Only) to be paid jointly with accused No.2 and 5 Companies and in default of payment of fine, they shall undergo a Simple Imprisonment for a period of one year. (Accused No.2 and Accused No.5 are companies which are legal entities and hence, the representative cannot be sentenced for corporeal punishment). However, accused No.2 and 5 Company shall be liable to pay fine jointly and severally with other accused persons for the aforesaid offence,” the special court said in its order on Saturday.

Biliye has also been sentenced under the Prevention of Corruption Act for a period of three years with a fine of Rs 50,000.

The prison sentences will run concurrently. “Acting under section 357 A of the CrPC suitable compensation requires to be ordered to the victim that is the state and hence the entire amount shall be ordered to be forfeited to the state,” the court said about the fines imposed.

Over 50 lakh metric tonne of iron ore worth Rs 2,500 crore exported illegally

The CBI officially stated in 2014 that the case involves the alleged “illegal excavation of iron ore to the tune of 50 lakhs metric tonnes worth Rupees 2500 crores (approx) and its subsequent export from the Belekeri Port in Karnataka”.

The Supreme Court on September 7, 2012, directed the CBI “to investigate the case(s) relating to the illegal extraction of about 50.79 lakh MT of iron ore from the forest areas of Karnataka during the period January 1, 2009 to May 31, 2010, the illegal transport of the aforesaid quantity of iron ore from the area(s) of extraction to Belekeri Port and from there its illegal export to other countries”.

The CBI has filed multiple chargesheets with regard to illegal exports of iron ore from the Belekeri port naming several politicians like former BJP ministers G Janardhan Reddy and Anand Singh, Congress MLA B Nagendra (who was with the BJP in 2010) and the export firms they operated.

Several government officials have also been accused in the cases. The cases against BJP leaders like G Janardhan Reddy are still under trial in the special court.

“Though the offence was not committed by him as an MLA, it is required to be reminded that the people in high office should always behave in a manner which will be exemplary to the society and certainly not of committing fraud on the public at large,” the court observed while referring to Sail.

Meanwhile, advocates for the accused sought relief from imprisonment under the Probation of Offenders Act the court observed that “time and again it has been held by the Hon’ble Apex Court that economic offences are to be considered a class apart and the court shall not show leniency by looking into the punishment imposed”.