In a major relief to Bharti Cellular Ltd CMD Sunil Mittal and Essar Group promoter Ravi Ruia, the Supreme Court on Friday quashed an order to summon them in a case related to allocation of additional 2G spectrum in 2002.
A bench headed by Chief Justice H L Dattu said that the trial court applied the legal principle wrongly in summoning the duo, citing their vicarious liability for acts of the companies.
The court however clarified that they could be summoned as accused as and when substantial evidence against them surfaces, as envisaged under the criminal laws.
During the arguments, senior advocate F S Nariman, appearing for Mittal, had contended that a Managing Director cannot be held vicariously liable for a criminal offence of a company unless there was concrete evidence to show his complicity.
Nariman had told the bench that there was nothing unusual in the alleged assertion that Mittal had meetings with then Telecom Minister Pramod Mahajan and then Telecom Secretary Shyamal Ghosh.
CBI had however defended the decision of the 2G trial court to summon them as accused although the agency did not name them in its chargesheet. CBI described them as the “mind and nerve-centre” of the accused companies.
“The fact that they were the controlling minds of the company are the matter of evidence. They have been summoned and they have an opportunity to seek discharge before the trial court. A person or a group of persons, who have been the guiding force behind a company, are responsible for the alleged criminal act of the company,” CBI counsel K K Venugopal had argued.
He said that “guilty minds of directors or managers constitute the criminal offence of a company too” and that the CBI had evidence of Mittal’s meetings to get additional spectrum for Bharti Cellular Ltd. Venugopal had further said that such evidence was not available in Ruia’s case but the agency could investigate further.
The bench was adjudicating petitions by Mittal and Ruia against an order of the 2G trial judge to summon them as accused in the case, which they have claimed, was not permissible in the law. They have sought quashing of the summoning orders. The proceedings before the trial court have been suspended by the apex court till a decision on their petitions.