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The court, however, said the two could be summoned at a later stage if there were sufficient grounds to do so.
A three-judge bench headed by Chief Justice H L Dattu said the lower court was wrong in issuing summons against Mittal and Ruia. “The legal principle has been wrongly applied. We set aside the order of the special court,” the Bench said.
In a statement, Essar said, “The judgment re-establishes that the directors and shareholders cannot be made vicariously liable in criminal matters. We welcome the judgment. It will assuage concerns among corporate leaders regarding misuse of judicial processes and help re-instil confidence among investors and corporates, especially at a time when India is looking to attract fresh investments and increase growth.”
In April 2013, Bharti and Essar had moved the Supreme Court, challenging judge O P Saini’s decision to summon Mittal, Ruia and Asim Ghosh, Hutchison Essar’s former managing director, as accused. Saini had said there was “enough material on record to proceed against them” and the acts of these companies were “attributed and imputed to them”.
This matter pertains to a case filed by the Central Bureau of Investigation (CBI) on alleged irregularity in the allocation of additional spectrum to GSM operators, including Bharti and Vodafone in 2002, under then telecom minister Pramod Mahajan. However, in its charge sheet in December 2012, the CBI had named only Shyamal Ghosh, then telecom secretary, and three private companies —Bharti Cellular (now Bharti Airtel), Hutchison Max and Sterling Cellular (now Vodafone) — as accused.
Last month, the counsels of Mittal and Ruia had argued the trial court should not have summoned the two, as they weren’t named in the charge sheet. The allegation that Mittal had met Pramod Mahajan and then telecom secretary Shyamal Ghosh wasn’t substantial grounds for issuing summons, Mittal’s counsel had said.
At that time, the apex court had reserved its order.
In its charge sheet, the CBI had alleged Ghosh had abused his position as a public servant and extended undue favours to beneficiary companies, which led to a loss of Rs 846 crore to the exchequer.
