Case Background
The petitioner, Aditya Multicom Private Limited, is a company incorporated under the Companies Act, 1956. It was the minerals concessionaire (settlee) for sand ghats in the entire districts of Aurangabad and Rohtas from 2015 to 2019 for excavation and sale of sand.
After the initial five-year settlement period ended, the company received several extensions, taking the settlement up to 30.09.2021. On 20.04.2021, the company surrendered its settlement.
During its operations, the petitioner obtained “K Licences” in Aurangabad and Rohtas under Rule 39 of the Bihar Minerals (Concession, Prevention of illegal Mining, Transportation and Storage) Rules, 2019 (referred to in the judgment as the 2019 Rules, though the heading mentions 2021 Rules). These licences allowed the company to store sand beyond the leasehold area. The petitioner claimed that the sand stocked at these K Licence sites was royalty paid.
After surrender of the settlement, generation of e-challans for sand transport in favour of the petitioner was suspended or blocked from 01.05.2021. The company requested the Mining Department to conduct physical verification of sand stocked at the K Licence sites and to allow sale of that stock. According to the petitioner, no verification took place and the K Licences in both districts were cancelled.
Subsequently, the Mining Department lodged several FIRs against the petitioner alleging misappropriation of sand from the K Licence sites, sale without e-transit challans, and consequent loss of revenue to the State. The details of these FIRs were set out in paragraph 20 of both writ petitions.
Meanwhile, the Directorate of Enforcement (ED) registered ECIR PTZO/07/22 dated 10.01.2022 under the Prevention of Money Laundering Act, 2002. During its investigation, ED obtained information from the Income Tax Department that had been gathered during a raid on another company.
On the basis of that material, ED concluded that from April 2020 to August 2020, sand worth Rs. 90,92,71,400/- was sold from sand ghats of Aurangabad and Rohtas. Comparing this figure with data from the Mining Department, ED formed the view that sand worth Rs. 38,71,46,070/- had been sold without e-transit challans, causing loss to the public exchequer.
ED shared this information with the Mining Department. Relying on the ED’s letter, the Assistant Directors, District Mining Offices of Aurangabad and Rohtas, lodged two FIRs against the petitioner for alleged illegal transportation of sand worth Rs. 38,71,46,070/- during April–August 2020 without e-transit challans.
Based on these complaints:
- Daudnagar PS Case No. 47 of 2024, dated 08.02.2024, Aurangabad, was registered under Sections 379 and 420 of the Indian Penal Code (IPC) and Rule 56 of the 2019 Rules.
- Dehri Town PS Case No. 115 of 2024, dated 13.02.2024, Rohtas, was registered under Sections 379 and 420 of the IPC.
The company filed Criminal Writ Jurisdiction Case No. 1613 of 2024 to quash Daudnagar PS Case No. 47 of 2024, and Criminal Writ Jurisdiction Case No. 1597 of 2024 to quash Dehri Town PS Case No. 115 of 2024. Since the issues overlapped, the Patna High Court decided both writ petitions by a common judgment.
What the Court Examined and Decided
Hon’ble Mr Justice Arvind Singh Chandel first noted that both FIRs were based on the same ED letter and alleged the same figure of revenue loss. On a plain reading, the FIRs were virtually identical in wording.
The petitioner argued that the FIRs were lodged only on the basis of unverified information supplied by ED, which itself drew from loose sheets of paper seized by the Income Tax Department during a search of another company. According to the petitioner, this material was unsubstantiated and had not been independently checked by the Mining Department before filing complaints.
The petitioner pointed out that it had regularly filed monthly returns which had been accepted by the Mining Department without objection. If the Department believed, upon receiving ED’s letter, that these returns were wrong, it should have started an assessment under Rule 46(5) of the 2019 Rules, determined any shortfall, and then recovered dues under Rule 82 through certificate proceedings under the Bihar Public Demands Recovery Act, 1914. Instead, the Department directly chose to initiate criminal prosecution.
The company also argued that, as a valid settlee or mineral concessionaire during April–August 2020, any criminal prosecution for violation of the 2019 Rules or settlement conditions required sanction or decision by the Collector under Rule 47(4). In the present case, the FIR had been lodged by the Assistant Director, Mines, without any approval from the Collector.
On the penal provisions, the petitioner submitted that at the relevant time failure to issue transport challans for sand was punishable under Rule 39(3) of the 2019 Rules, with simple imprisonment up to one year or fine up to Rs. 10,000/- or both. Rule 39(3) was later amended by Notification No. 1652 dated 02.07.2021, making such failure punishable under Rule 56 of the 2019 Rules.
The petitioner stressed that the alleged illegal transport period (April–August 2020) was prior to the amendment. Therefore, the FIR could not rely on the post-amendment Rule 56. Further, breach of Rule 39(3) was a non-cognizable offence, so police could not register an FIR for it.
The petitioner also contended that the ingredients of Sections 420 and 379 IPC were not made out. The FIR did not allege any fraudulent or dishonest intention, inducement, or deception, all of which are essential for Section 420. Nor did it allege that the company sold or excavated sand in excess of its entitlement, which is necessary for theft under Section 379.
On the issue of two FIRs, the petitioner argued that once Daudnagar PS Case No. 47 of 2024 had been registered on the basis of ED’s letter, a second FIR on the same facts (Dehri Town PS Case No. 115 of 2024) was not maintainable. The company relied on Supreme Court decisions such as T.T. Antony, Amitbhai Anilchandra Shah, and Tarak Dash Mukharjee.
The Mining Department, on the other hand, contended that the writ petitions were premature, that cognizable offences appeared from the FIR allegations, and that the High Court should not evaluate annexed documents not forming part of the FIR or charge-sheet. They relied on a Division Bench judgment in Cr WJC No. 299 of 2022 and on the Supreme Court’s decision in P.P. Sharma. However, counsel for the Department fairly admitted that Dehri Town PS Case No. 115 of 2024 was lodged on the same set of facts and on the same ED letter as Daudnagar PS Case No. 47 of 2024.
After hearing both sides, the Court carefully examined the FIRs, the relevant provisions of the 2019 Rules and the law on quashing FIRs laid down by the Supreme Court in State of Haryana v. Bhajan Lal. The Court noted that its powers under Articles 226 and 227 can be used to prevent abuse of process and to secure justice where allegations do not make out any offence or where legal bars exist.
On the second FIR from Dehri Town, the Court held that, since Daudnagar PS Case No. 47 of 2024 had already been registered on 08.02.2024 on the same facts and based on the same ED letter, a second FIR on 13.02.2024 with identical allegations was not maintainable. This was also admitted by counsel for the Mining Department. Therefore, without entering into the merits, the Court quashed Dehri Town PS Case No. 115 of 2024.
Turning to Daudnagar PS Case No. 47 of 2024, the Court reproduced and examined Rules 39, 43, 46, 47 and 56 of the 2019 Rules as they stood before and after amendment. From these provisions, the Court deduced that:
- A mineral concessionaire must transport sand from leasehold areas only with valid e-transit challans.
- Rule 39(2) governs storage and transport from K Licence stockyards beyond leasehold areas, requiring issuance of transport challans in Form G.
- Failure of a K Licence holder to issue challans was punishable under Rule 39(3) prior to amendment.
- Prior to amendment, Rule 43 did not itself prescribe a specific punishment for transport of minerals from leasehold areas without challans; Rule 56 only covered illegal excavation and carriers transporting without valid challans.
- After amendment, Rule 56 explicitly penalised illegal mining, transportation and storage of minerals without a valid challan or licence.
The Court then referred to a coordinate Bench decision in CWJC No. 111 of 2023 (M/s Harsh Construction v. State of Bihar & Others), which held that amended Rule 56 does not apply to a valid settlee. It was undisputed that the petitioner was a valid settlee during April–August 2020. Therefore, the amended Rule 56 could not be used against the petitioner.
On this basis, the Court held that registering the FIR under Rule 56 of the amended 2019 Rules was completely unjustified and inapplicable.
The Court further observed that the complaint forming the basis of the FIR was filed only on the strength of information from ED, which had itself come from the Income Tax Department. There was nothing to show that the Mining Department had independently verified these facts before lodging the FIR.
The Court held that it was incumbent upon the Mining Department, on receiving ED’s information, to:
- Conduct an assessment under Rule 46 of the 2019 Rules to determine actual liability.
- Proceed to recover any civil liability under Rule 82 through proper legal process.
Instead, the Department skipped these statutory steps and directly resorted to criminal prosecution.
On the requirement of approval from the Collector, the Court noted that Rule 47 empowers the Collector to cancel or suspend the settlement of a settlee and, in case of violation, to impose financial penalties and/or start criminal prosecution. In the present case, the petitioner was undeniably a settlee. Allegations related to transport of sand without e-transit challans. In such circumstances, only the Collector, or the State Government, could decide to start criminal prosecution. Yet the FIR was lodged by the Assistant Director, Mines, without any such approval. The Court found substance in the petitioner’s objection on this point.
The Court also emphasised that, for the period in question, the relevant penal provision was Rule 39(3), punishable with simple imprisonment up to one year and fine up to Rs. 10,000/-. By virtue of the First Schedule, clause two, of the Code of Criminal Procedure, 1973, this offence was non-cognizable. Therefore, police could not treat it as a cognizable offence to justify direct registration of an FIR.
On IPC offences, the Court conducted a plain reading of the complaint and FIR. It found:
- No allegation of deceit, cheating or fraudulent intention by the petitioner to attract Section 420 IPC.
- No allegation that the petitioner had excavated or sold sand in excess of its entitlement or leasehold rights to attract Section 379 IPC.
Therefore, offences under Sections 420 and 379 IPC were prima facie not made out.
Considering all these factors together, the Court concluded that continuation of criminal proceedings against the petitioner would amount to abuse of the process of the Court. Relying on the principles in Bhajan Lal and other precedents cited, the Court exercised its power to quash.
Finally, the Court quashed:
- Dehri Town PS Case No. 115 of 2024, dated 13.02.2024; and
- Daudnagar PS Case No. 47 of 2024, dated 08.02.2024,
along with all subsequent proceedings arising out of these FIRs. Both writ petitions were allowed.
Why This Judgment Matters
This judgment is important for sand ghat settlers, mining contractors, transporters, and government officials in Bihar.
First, it confirms that a person cannot face two FIRs on the same facts and same alleged loss merely because the mining areas fall under different police stations or districts. Once one FIR exists, a second, “copy-paste” FIR is not permissible.
Second, it clarifies that, for valid settlers operating under a mining lease, the Mining Department must follow the procedure in the 2019 Rules. Before rushing to criminal law, it should:
- verify information independently,
- conduct assessment under Rule 46, and
- recover dues under Rule 82 through proper channels.
Third, the judgment stresses that criminal cases under Sections 379 and 420 IPC cannot be started unless the FIR clearly alleges all necessary ingredients like cheating, dishonest intention, or excess excavation.
Finally, the Court highlights that for offences which are non-cognizable under the mining rules, police cannot directly register an FIR. The Collector’s role and sanction, where provided by the Rules, cannot be bypassed.
Legal Issues and Answers
- Issue: Can a second FIR be registered on the same set of facts and on the basis of the same ED letter against the same company in another district?
Answer: No. The Patna High Court held that Dehri Town PS Case No. 115 of 2024, being verbatim to Daudnagar PS Case No. 47 of 2024 and founded on the same ED letter, was not maintainable and was quashed. - Issue: Was registration of Daudnagar PS Case No. 47 of 2024 under amended Rule 56 of the 2019 Rules and Sections 379 and 420 IPC legally justified against a valid settlee for acts alleged in April–August 2020?
Answer: No. The Court held that amended Rule 56 did not apply to a valid settlee and was not in force during the alleged period; the applicable Rule 39(3) created only a non-cognizable offence; no Collector’s approval was taken; and the FIR lacked necessary allegations for Sections 379 and 420 IPC. The FIR and all proceedings were therefore quashed. - Issue: Was the Mining Department justified in lodging criminal complaints solely on ED’s unverified information without following the assessment and recovery process under the 2019 Rules?
Answer: No. The Court held that the Department should have verified ED’s information, conducted assessment under Rule 46 and proceeded under Rule 82 for civil recovery. Going straight to criminal prosecution, in the circumstances, amounted to abuse of process.
Cases Cited by the Court
- State of Haryana & Others v. Bhajan Lal & Others, 1992 Supp (1) SCC 335 – on categories of cases where FIRs can be quashed.
- CBI v. V.C. Shukla, (1998) 3 SCC 410 – cited by petitioner regarding evidentiary value of loose sheets.
- Manohar Lal Sharma v. Union of India, (2017) 11 SCC 731 – cited by petitioner.
- Salib @ Shalu @ Salim v. State of UP & Others, 2023 SCC Online SC 947 – cited regarding quashing in abuse of process cases.
- T.T. Antony v. State of Kerala & Others, (2001) 6 SCC 181 – on impermissibility of second FIR on same facts.
- Amitbhai Anilchandra Shah v. CBI & Another, (2013) 6 SCC 348 – on multiple FIRs.
- Tarak Dash Mukharjee & Others v. State of Uttar Pradesh & Others, 2022 SCC Online SC 2121 – also on second FIR issues.
- The State of Bihar & Another v. P.P. Sharma & Another, AIR 1991 SC 1260 – relied on by respondents.
- CWJC No. 111 of 2023, M/s Harsh Construction v. State of Bihar & Others – Patna High Court decision on inapplicability of amended Rule 56 to a valid settlee.
- Cr WJC No. 299 of 2022 – Division Bench judgment of Patna High Court cited by Mining Department regarding maintainability of FIRs.
Case Details
Case Numbers: Criminal Writ Jurisdiction Case No. 1597 of 2024; Criminal Writ Jurisdiction Case No. 1613 of 2024
Case Titles: Aditya Multicom Private Limited through its Chief Executive Officer Sadashiv Prasad Singh v. The State of Bihar & Others (in both writ petitions, with district-specific respondents)
Coram: Hon’ble Mr Justice Arvind Singh Chandel
Citation: 2024 (4) PLJR 498
Nature of the Case: Criminal writ petitions seeking quashing of FIRs and criminal proceedings (Daudnagar PS Case No. 47 of 2024 and Dehri Town PS Case No. 115 of 2024)
Offences Mentioned in FIRs: Sections 379 and 420 of the Indian Penal Code; Rule 56 of the Bihar Minerals (Concession, Prevention of illegal Mining, Transportation and Storage) Rules, 2019 (as referred to in the judgment)
Advocates:
- For the petitioner (in both writ petitions): M/s Suraj Samdarshi, Avinash Shekhar, Vijay Shankar Tiwari, Advocates
- For the State (Cr WJC No. 1597 of 2024): Mr SC XIX
- For the State (Cr WJC No. 1613 of 2024): Mr SC XX
- For the Mines Department (respondents 6 to 9, in both writ petitions): Mr Naresh Dixit, Advocate
Date of Judgment: 07.10.2024
CAV Date: 26.09.2024
Link to the Judgment: Patna High Court Judgment – Criminal WJC Nos. 1597 and 1613 of 2024
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