Andhra Pradesh High Court - Amravati
Nalamaru Chinna Lakshmaiah vs The State Of Andhra Pradesh on 17 March, 2023
Author: R. Raghunandan Rao
Bench: R. Raghunandan Rao
HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO
Crl.P.Nos.6568, 6569 and 9258 of 2022
COMMON ORDER:
Crl.P.No. 6568 of 2022 has been filed by accused Nos. 2,3,12 and 26, Crl.P.No.6569 of 2022 has been filed by accused No.1 and Crl.P.No.9258 of 2022 has been filed by accused Nos.4, 8 and 10 in C.C.No.9 of 2022 on the file of the Special Judge for ACB Cases, Kurnool, for quashing the same. The offences set out in the charge sheet against these petitioners are Sections 406, 408, 409, 420, 465, 468, 120-B read with Section 34 and 109 IPC and Sections 79(1)(a), 79(1)(f), read with Sections 79(2), 79A(1)(b), 79A(1)(c) read with Sections 79A(2) and 79(1)(h) read with Sections 79(3)(1) of the A.P. Cooperative Societies Act, 1964 (hereinafter referred to as 'the Act'; and Section 13(1)(c) of the Prevention of Corruption Act, 1988.
2. As all the criminal petitions arise out of the same facts and raise similar issues, they are being disposed of by way of this common order.
3. Heard Sri Siddarth Luthra, learned Senior Counsel appearing for Sri N. Ashwani Kumar, learned counsel for the petitioners in Crl.P.No.6568 and 6569 of 2022; Sri D.V.Sitharam Murthy, learned Senior Counsel appearing for Sri N. Ashwani Kumar, learned counsel for the 2 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 petitioners in Crl.P.No.9258 of 2022; and Smt. Y.L. Siva Kalpana Reddy, learned Special Public Prosecutor appearing for the State.
4. The 1st accused in C.C.No.9 of 2022 (hereinafter referred to as the petitioner) was initially appointed as the President of Dayankhanpalli Handloom Weavers Co-Operative Society Ltd., situated in Khajipeta Mandal, Kadapa District, (hereinafter referred to as 'the society'), for the years 2005-2006 and 2007-2008. Thereafter, the petitioner had been elected as the Chairman of M/s. Andhra Pradesh State Handloom Weavers Cooperative Society (hereinafter referred to as 'APCO'), which is the Apex Body for the Handloom Industry in the State of Andhra Pradesh, on 04.08.2016. His term expired on 24.02.2018. The Government appointed a Person In-charge Committee, after his term had expired, under Section 32(7) of the Act. However, he continued as Chairman till August, 2019.
5. Initially, a notice was issued by the Deputy Superintendent of Police, Anti Corruption Bureau (ACB), Kadapa, on 28.05.2019 indicating that an enquiry was being initiated in relation to certain irregularities said to have been committed by the petitioner as Chairman of APCO. Aggrieved by this notice, the petitioner filed W.P.No.8027 of 2019 before this Court. This writ petition was disposed of on 15.10.2019, holding that the notice, under challenge, was related to irregularities, which would fall within the ambit of Section 79A of the Act, and the investigation would not be within the jurisdiction of the power of the ACB. This Court had also 3 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 observed that the said order would not preclude the authorities from initiating proceedings strictly in accordance with law. This order was stayed by a division bench of this court, by order dated 22.10.2021, in W.A.No.368 of 2020 filed, by the State of Andhra Pradesh. S.L.P.(Criminal).Diary.No.32266 of 2021 was filed against this order and the Hon'ble Supreme Court by an order dated 04.02.2022 had stayed the order passed by the Division Bench.
6. Thereafter, the Director General, Vigilance and Enforcement, initiated another investigation, which was challenged by the petitioner by way of W.P.No.10836 of 2019, which is pending before the Court.
7. The Director, Handloom and Textiles, Andhra Pradesh, had ordered for an enquiry, by his proceedings dated 28.11.2019, for violation of the provisions of Section 51 of the Act by the petitioner. These proceedings were challenged before this Court by way of W.P.No.20281 of 2019 and the same was stayed by an order of this Court dated 02.01.2020.
8. One Sri K. Ramana Reddy had filed a complaint before the Director General of Police, C.I.D., on 09.12.2019 and the petitioner had approached this Court by way of W.P.No.21215 of 2019 wherein stay of all further investigation against the 1st accused was granted on 26.12.2019.
9. The Deputy Superintendent of Police, C.I.D., registered Crime No.1 of 2020 on the file of the C.I.D. Head Quarters Police Station, 4 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 Mangalagiri, against the petitioner and others. The registration of the said crime was challenged by the petitioner by way of W.P.No.922 of 2020 and this Court by an interim order dated 17.01.2020 had directed the respondents therein not to arrest the petitioner in connection with the investigation of the said case and not to take any coercive steps against the petitioner.
10. The petitioner had also filed W.P.No.2434 of 2020 against a notice issued under Section 91 Cr.P.C., requiring the petitioner to assist the police in regard to the investigation of the case. This Court by order dated 04.02.2020 had stayed the execution of the said notice.
11. The petitioner had approached this Court again by way of W.P.No.7832 of 2020 challenging a complaint given by one Sri Bellala Muniswamy, which was registered as Crime No.13 of 2020. This Court by order dated 20.03.2020 stayed all further proceedings.
12. After the completion of investigation in Crime No.1 of 2020, the investigating officer had filed a charge sheet, which has now been taken cognizance by the Special Judge for ACB Cases, Kurnool and numbered as C.C.No.9 of 2022.
13. The charges made out by the investigating officer in the charge sheet are as follows:
Charge No.1:
The petitioner as well as the other accused, including the petitioners in Crl.P.Nos. 6568 and 9258 of 2022, as members of the Committee of the 5 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 Society, had shown many non-existent members as actual members of the society. This is said to have been done to obtain two advantages. Firstly, to fraudulently draw benefits in the name of fake members and to misappropriate the said money; and secondly, to procure power loom cloth, which is cheaper to manufacture, and sell it to M/S. APCO by showing the power loom cloth as handloom cloth woven by the non- existent members. The allegation in the charge sheet is that 473 fake / untraced members and 33 members, who are long dead had been added to the rolls of membership of the society in the relevant period. Charge No.2:
In pursuance of the above scam, yarn advances and wages advances against the said fake members are said to have been drawn and misappropriated by the petitioners in the criminal petitions. The total amount of such wage advances against the fake members is said to be Rs.36.78 crores for the relevant period. The yarn advances obtained in the name of fake members and dead members, which is said to have been misappropriated by the petitioners, during the relevant period, was estimated at Rs.159 crores (approx).
Charge No.3:
The petitioners, taking advantage of the excess fake members and dead members, are said to have procured power loom cloth from Siricilla and supplied the same to M/s APCO by passing off the said power loom cloth as handloom cloth. The difference in value between the acquisition 6 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 of the power loom cloth and the sale of the cloth as handloom cloth to M/s. APCO, for the relevant period, is said to be Rs.30.93 crores. Charge No.4:
The petitioners are said to have obtained sanction of loans to the society and misappropriated the same leaving the loans unpaid. The amounts so diverted is estimated at Rs.14.25 crores. Charge No.5:
The petitioners are said to have maintained irregular purchase advances with various third parties for long periods of time and had got these advances diverted to themselves or their organisations. In this manner, a sum of Rs.1.89 crores (approx) is said to have been misappropriated.
14. The petitioners have now approached this Court for quashing the said charge sheet, on the following grounds:
a) No case is made out on the facts of the charge sheet.
b) The petitioners are being charged with offences under Section 13 (1) (c) of the Prevention of Corruption Act, 1988 in the chargesheet filed in the year 2021, and the same is not permissible as Act 16/2018 had deleted the said provision from the Prevention of Corruption Act, in the year 2018 itself. The petitioners have relied 7 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 upon the judgement of the Hon'ble Supreme Court in Pradeep Wodeyar vs. State of Karnataka1
c) The cognizance of the charge under Section 13(1)(c) of the Prevention of Corruption Act, 1988, by the trial Judge, clearly indicates non-application of mind while taking cognizance of the case. The following judgments of the Hon'ble Supreme Court have been cited.
i) Birla Corporation Lts., vs. Adventz Investments & Holdings Ltd., & Ors.,2
ii) State of Gujarat vs. Afroz Mohammad Hasanfatta3
iii) Sunil Bharti Mittal vs. CBI4
d) This Court in W.P.No.8027 of 2019 had held that the allegations against the petitioners fall within the four corners of Section 79A of the Act and the ACB has no jurisdiction in the matter. However, the police had still registered Crime No.1 of 2020 and had filed the present charge sheet, which is clearly in violation of the directions of this Court in W.P.No.8027 of 2019.
e) Sanction has been obtained for the prosecution of the petitioner, under the provisions of Section 197-B Cr.P.C., Section 83(3) of the Act and Section 13(1)(c) of the Prevention of Corruption Act, 1988, by way of G.O.Ms.No.328, dated 23.04.2021 from the Government. 1 2021 SCC Online SC 1140 2 (2019) 16 SCC 610 3 (2019) 20 SCC 539 4 (2015) 4 SCC 609 8 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022
f) The sanction required under Section 83(3) of the Act is the sanction that is to be granted by the Registrar under the Act. G.O.Ms.No.1039 dated 04.11.1968 has designated the Director of Handlooms as the Registrar under the Act. Consequently, it is only the sanction of the Registrar / Director of Handlooms that meets the requirement of Section 83(3) of the Act. The Government does not have power or jurisdiction to grant sanction of prosecution under Section 83 (3) of the Act and as such the entire prosecution and cognizance has to fail. The petitioners have cited the following judgments of the Hon'ble Supreme Court.
i) State of Uttarakhand vs. Yogendra Nath Arora and Ors.,5
ii) State (Inspector of Police) Visakhapatnam vs. Surya Sankaram Karri6
iii) State of Goa vs. Babu Thomas7
iv) Yogendra Kumar Jaiswal and Ors., vs. State of Bihar and Ors.,8
v) State of Maharashtra & Ors., vs. Lalit Somdatta Nagpal and Anr.,9
vi) Mansukhlal Vithaldas Chauhan vs. State of Gujarat10 5 (2013) 14 SCC 299 6 (2006) 7 SCC 172 7 (2005) 8 SCC 130 8 (2016) 3 SCC 183 9 (2007) 4 SCC 171 10 (1997) 7 SCC 622 (para 32) 9 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022
15. Sri D.V. Sitharam Murthy, learned Senior Counsel appearing on behalf of Sri N. Ashwini Kumar, learned counsel for the petitioners in Crl.P.No.9258 of 2022 would point out that the report of the Vice- Chairman and Managing Director of the APCO dated 29.09.2020 sent to the Secretary to the Government, stating that the allegation, that the petitioners herein had swallowed the commission of Rs.4000 crores is clearly untenable as the turnover of the APCO during that period is about Rs.2000 crores. He would submit that it is sufficient to show that the allegations against the petitioners are inherently absurd and as such the principle laid down in Bhajan Lal vs. State of Panjab and ors.,11 that such absurd allegations should be quashed, should be followed.
16. Smt. Y.L. Siva Kalpana Reddy, learned Special Public Prosecutor, in reply, submits as follows:
a) The judgment of the leaned Single Judge in W.P.No.8027 of 2019 had taken into account the circular issued by the Director General of ACB, demarcating the areas where the ACB would investigate irregularities and offences under the Act and had held that the ACB would have jurisdiction only in relation to the disproportionate assets cases and trap cases and as such the anti corruption bureau cannot investigate the allegations against the petitioners. She would submit that the learned Single Judge had 11 (1971) 1 SCC 34 10 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 also observed that the said order would not preclude the authorities from taking appropriate action. She further submits that as the present case has been registered and investigated by the C.I.D., Department and not the ACB, there is no violation of the orders of this Court in W.P.No.8027 of 2020.
b) She submits that the contention that the petitioners cannot be charged for any offence under Section 13((1)(c) of the Prevention of Corruption Act, 1988, as the said offence is not available any more, on the statute book, is incorrect. She submits that Section 13(1)(c) was available on the Statute book during the period in which the offences under Section 13(1)(c) had been committed by the petitioners and subsequent deletion of this provision would not preclude the prosecution from invoking the said provision even after the said provision had been deleted.
c) Smt. Y.L. Siva Kalpana Reddy, would submit that while Section 83(3) of the Act requires that sanction should be granted by the Registrar, the said provision does not preclude a superior authority, viz., the Government, from granting such sanction. Consideration of the court:
17. The issues that arise out of the rival submissions set out above are:
11 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022
1. Whether the earlier orders of this court preclude investigation and filing of charge sheet in crime No. 1 of 2020 ?
2. Whether, a charge sheet can be filed under section 13 (1) ( c ) of the Prevention of Corruption Act, after it's repeal in 2018 ?
3. Whether, the sanction granted by the Government of Andhra Pradesh, can be treated as a sanction granted by the Registrar, under section 83 (3) of the Andhra Pradesh Co-operative Societies Act ?
ISSUE NO. 1
18. The following are the relevant orders of this Court:
A. W.P. No. 8027 of 2019, dated 15.10.2019 B. W.P. No. 21215 of 2019, dated 26.12.2019 C. W.P. No. 922 of 2020, dated 17.01.2020 D. W.P. No. 2434 of 2020, dated 04.02.2020 and 27.02.2020.
19. In W.P.No.8027 of 2019 the 1st petitioner had challenged a notice dated 28.05.2019 issued by the Deputy Superintendent of Police, ACB, Kadapa Range, calling for certain information from the Commissioner for Handlooms. The contention of the 1st petitioner was that the Anti Corruption Bureau did not have jurisdiction to investigate the offences under the Act and more specifically Section 79A of the Act. This contention was raised on the basis of a circular issued by the Director General of ACB, laying down guidelines as to the nature of the cases that can be investigated by the ACB. This circular stated that only trap cases and 12 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 disproportionate asset cases against cooperative employees should be taken up by the ACB and all other offences should be investigated by the local police.
20. The learned single Judge, held, that the details requested under the impugned notice relate to offences under Section 79-A of the Act and that, such offences, under the guidelines issued by the Director General of Police, ACB, should be investigated by the local police and not the ACB. The learned Single Judge had allowed the writ petition setting aside the impugned notices issued by the Deputy Superintendent of Police while observing that the judgment would not preclude the authorities from initiating proceedings in accordance with law. In the present case, the case has been registered with the C.I.D Police Station and the investigation was also taken up by the CID Department. As such there is no violation of the directions of the learned Single Judge in W.P.No.8027 of 2019. It may also be noted that a Division Bench had stayed the order of the learned Single Judge in W.A.No.368 of 2021. The order of the Division Bench was stayed by the Hon'ble Supreme Court in S.L.P.(Criminal) Diary No(s).32266 of 2021.
21. W.P.No.21215 of 2019 was filed by the 1st petitioner challenging the direction of the Director and Commissioner of Handlooms to entrust a criminal complaint given by the de facto complainant for investigation to CBCID. A learned Single Judge, after holding that such proceedings should have been issued only after a crime is registered, had 13 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 granted interim stay of the proceedings of the Director and Commissioner of Handlooms and Textiles. This order would not also be a hurdle in the investigation carried out in the present case.
22. The 1st petitioner had filed W.P.No.922 of 2020 challenging the registration of Crime No.1 of 2020 (which is the subject matter of the present writ petition) on the file of CID Headquarters Police Station, Mangalagiri. A learned Single Judge of this Court, by an order dated 17.01.2020, had directed that the 1st petitioner herein should not be arrested and that no coercive steps should be taken against the 1 st petitioner under the guise of investigation. As this order only restrained the respondents from arresting the 1st petitioner, it cannot be treated as an order staying the investigation.
23. W.P.No.2434 of 2020 is filed by the 1st petitioner challenging a notice issued under Section 91 Cr.P.C., calling upon the 1st petitioner to arrest the police in the investigation of Crime No.1 fo 2020. This Court had stayed the execution of the said notice on 04.02.2020 and the same was extended on 27.02.2020. These orders do not in any manner stop or stall the investigation into Crime No.1 of 2020.
ISSUE No.2
24. The petitioners contend that Section 13(1)(c) of the PC Act had been removed from the statute book in the year 2018 and as such the said proviso could not have been applied in a complaint filed in the year 14 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 2020. In the present case, the period of investigation is 2005 to 2018. The provisions of Section 13(1)(c) of the PC Act were available for this period. This court had considered the very same question in Dhulipala Narendra Kumar and anr., vs. State of A.P. and Anr., in I.A.No.1 of 2021 in Crl.P.No.2675 of 2021 dated 29.04.2021. This Court after considering the judgments of the Hon'ble Supreme Court in M.C. Gupta vs. Central Bureau of Investigation, Dehradun12 and Fibre Boards Private Limited Bangalore vs. Commissioner of Income Tax, Bangalore13 had held that, in view of the provisions of Section 6 and 6A of the General Clauses Act, the provisions of Section 13(1)(c) and (d) of the Prevention of Corruption Act would continue to be available, after amendment of 2018, in cases where the offence is said to have been committed prior to the amendment of 2018. Accordingly, investigation can be carried out and a charge sheet can be filed under Section 13(1)(c) of the PC Act, in the present case, even after its deletion in 2018. ISSUE No.3
25. The case of the petitioners is that the Act is a special Act and the provisions of the Indian Penal Code and the Prevention of Corruption Act cannot be applied against the petitioners as all the offences alleged against the petitioners fall squarely within the provisions of Section 79A of 12 (2012) 8 SCC 669 13 (2015) 10 SCC 333 15 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 the Act. For this proposition, the petitioners have relied upon the following judgments of the Hon'ble Supreme Court.
i) Sharat Babu Digumarti vs. Government (NCT of Delhi)14
ii) Maya Mathew vs. State of Kerala & Ors.,15
iii) Jeewan Kumar Raut & Anr., vs. CBI16
26. The petitioners further contend that a prosecution under Section 79-A of the Act can be maintained only when there is previous sanction of the Registrar of Cooperative Societies under Section 83 of the Act. The petitioners contend that, in the present case the sanction for prosecution was obtained from the Government and not the Registrar of Cooperative Societies, as such, the sanction is irregular and illegal requiring the same to be treated as null and void. Consequently, the entire investigation, charge, and cognizance of the charge sheet would have to fail.
27. The Government issued G.O.Ms.No.28 dated 23.04.2021 granting sanction for prosecution of the petitioners under Section 197 (b) Cr.P.C., Section 83(3) of the A.P. Cooperative Societies Act and under Section 13(1)(c) of the PC Act, 1998.
28. Section 83(3) of the Act reads as follows:
"83. Cognizance of offences. -
(1) xxxxx 14 (2017) 2 SCC 18 15 (2010) 4 SCC 498 16 (2009) 7 SCC 498 16 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 (2) xxxxxx (3) No prosecution shall be instituted under this Act without the previous sanction of the Registrar."
29. "Registrar" has been defined in Section 2 (n) of the Cooperative Societies Act, as follows:
(n) 'Registrar' means the Registrar of Co-operative Societies appointed under Section 3(1) and includes any other person on whom all or any of the powers of the Registrar under this Act are conferred;
30. Another provision which requires to be noticed is Section 3 of the Act which reads as follows:
3. Appointment of Registrar and other persons for the purpose of this Act. - (1) There shall be appointed a Registrar of Co-operative Societies for the State and as many other persons as the Government think fit for the purposes of this Act.
(2) Every other person appointed under sub-section (1) shall exercise under the general superintendence of the Registrar, such powers of the Registrar, under this Act as the Government may, from time to time, confer on him.
31. The petitioners contend that there is no Registrar appointed under the Act. However, the Government, by way of G.O.Ms.No.1039, Industries Department, dated 04.11.1968, appointed the Director of Handlooms and Textiles and conferred on him, in respect of Cooperative Spinning Societies, and Weavers Cooperative Societies, all the powers of the Registrar under the Act. This would mean that only the Director of Handlooms, as Registrar of Societies, would have the power of sanction of 17 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 prosecution against the petitioners. The Government cannot be equated to the position of a Registrar and any sanction given by the Government cannot be treated as sanction granted under Section 83 of the Act.
32. At first blush, this argument would appear to be attractive. However, a closer look at the provisions set out above would set out the true contours of the law.
33. Any person can be appointed as a Registrar under the Act. Further, any other person on whom, all or any of the powers of the Registrar, under the Act are conferred, would also be a Registrar. Section 3 (1) of the Act also states that there shall be a Registrar of Cooperative Societies appointed for the State and as many other persons as the Government thinks fit for the purpose of the Act. This would mean that a Registrar is not only a person, who is appointed under Section 3 of the Act but also a person conferred with such powers by the Government. This would lead to the logical conclusion that the Government is delegating the powers of the Registrar, available to it, to any person which it deems fit. Consequently, it would have to be held that the Government would be entitled to exercise the powers of the Registrar. Any other interpretation would mean that the Government can confer powers of the Registrar on any person but cannot exercise such powers by itself. Such an interpretation would be self contradictory.
18 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022
34. In the circumstances, it must be held that the sanction of prosecution granted by the Government under G.O.Ms.No.28 dated 23.04.2021 is a valid sanction granted under Section 83(3) of the Act.
35. The question of whether the offences, which are sought to be made out against the petitioners would have to be treated as offences falling only under Section 79A of the Act or whether some of the offences would fall even under the provisions of the Indian Penal Code or under the Prevention of Corruption Act, are questions of fact, which would require a trial before any conclusion can be drawn in this regard.
36. For all the aforesaid reasons, these criminal petitions are dismissed. As a sequel, pending miscellaneous petitions, if any, shall stand closed.
__________________________ R. RAGHUNANDAN RAO, J.
17th March, 2023 Js.
19 RRR,J.
Crl.P.Nos.6568, 6569 & 9258 of 2022 HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO Crl.P.Nos.6568, 6569 & 9258 of 2022 17th March, 2023 Js.