Telangana High Court
Yerram Venkata Subba Reddy, Hyd vs Cvbi, Spe, Hyd on 7 March, 2024
Author: K.Lakshman
Bench: K.Lakshman
THE HON'BLE SRI JUSTICE K.LAKSHMAN
CRIMINAL PETITION No.4321 OF 2016
ORDER:
The Criminal Petition is filed under Section 482 of the Code of Criminal Procedure, 1973 (for short, 'the Cr.P.C.') to quash the proceedings in C.C.No.26 of 2014 pending on the file of Principal Special Judge for CBI cases at Hyderabad. The offences alleged against the petitioner herein/A.6 are punishable under sections 120-B of IPC and Section 9 of the Prevention of Corruption Act, 1988 (for short, 'PC Act'). The petitioner herein is accused No.6.
2. Heard Mr. V.Vivek Reddy, learned Senior Counsel representing Mr. K.Prateek Reddy, learned counsel for the petitioner and Mrs. S. Anandi, learned Special Public Prosecutor for CBI.
Brief facts:-
3. Pursuant to the directions in the order dated 10.08.2011 in W.P.No.794 and 6604 of 2011 of the High Court of Andhra Pradesh, to investigate into the financial misdeeds involving Government largesee and corporate dealings as part of quid pro quo arrangement for grant of largesse in the State of Andhra Pradesh, CBI, Hyderabad Branch, had registered a case on 17.08.2011 under various offences of 2 KL,J Crl.P. No.4321 of 2016 IPC and PC Act against 74 persons. On completion of investigation, CBI has filed 10 charge sheets against various accused. In 11th charge sheet, the petitioner herein is arraigned as A.6.
i) It is alleged against the petitioner herein/A.6 that on 28.02.2005, Andhra Pradesh Housing Board (APHB) entered into Development Agreement with A.9-Vasantha Projects Private Limited, for development of Gachibowli Housing Projects. As per Clause No.4.2 of the said Development Agreement, A.9 was obligated to pay Development Fee of Rs.45,00,000/- per acre for the land admeasuring Ac.4.29 totaling to Rs.1,93,05,000/- payable in five equal installments at the rate of Rs.38,61,000/- each. First installment was paid by A.5 on behalf of A.9 and subsequently A.5 became a shareholder of A.9.
When the second installment was becoming due, A.9 sought loan from M/s Sree Swarna and Company Private Limited owned by the petitioner herein. On 09.05.2005, the petitioner's company had credited an amount of Rs.11.50 lakhs to the account of A.9. On 11.05.2005, A.9 paid Rs.38.61 lakhs to APHB towards second installment of Development Fee under Development Agreement. On 17.05.2005, a High Powered Committee (HPC) comprising of A.3 had recommended for additional allotment of 15 acres of land to A.8- 3 KL,J Crl.P. No.4321 of 2016 CHIDCO Private Limited without waiting for feasibility report of the Executive Engineer.
ii) A memorandum of Understanding (MOU) between A.4, A.6, A.7 and A.9 was executed on 30.03.2007 and the petitioner herein/A.6 became a shareholder of A.9. By virtue of the said MOU, 51% of the equity shareholding held by A.5 in A.9 was transferred to the petitioner herein/A.6 and A.7. Consequently, A.6 acquired 50% shareholding and A.7 acquired 1% shareholding held by A.5 and A.9. Therefore, A.6 had obtained 50% shareholding in A.9 company without making any payment. The said shareholding was given to A.6 as he exercised personal influence of his co-brother i.e. late Dr.Y.S.Rajasekhar Reddy, Former Chief Minister in according approval for awarding housing projects to A.6. The petitioner/A.6 had purchased the shareholding in A.6 company at face value and agreed to pay the profit element which shows that the transaction was for consideration. The Investigating Officer had recorded the statements of 48 witnesses and collected documents in support of its allegations and filed the same along with charge sheet. The MOU also reflects that the petitioner had to pay an amount of Rs.1,05,00,000/- to A.5 upon successful completion of the project. The same represents the 4 KL,J Crl.P. No.4321 of 2016 profit which would have been earned by Indu projects. The amount given by Sree Swarna & Company Private Limited which is alleged to have been owned by A.6 to A.9 was reflected in the balance sheet of A.9 as a liability for financial years 2005 to 2011.
4. Vide order dated 21.11.2014, the trial Court has taken cognizance against the petitioner - A6 for the offences punishable under Sections 120-B and Section 9 of the Prevention of Corruption Act, 1988 vide C.C. No.26 of 2014. The petitioner - accused No.6 had filed the present petition to quash the proceedings in the said C.C. on the following grounds:-
i. Neither the documents nor statements of the witnesses show that the petitioner/A.6 has exercised personal influence with the former Chief Minister to attract Sections 8 and 9 of the PC Act.
ii. The charge sheet is silent about identification of gratification which the accused has accepted or obtained for exercising influence on public servant.
iii. The documents and the witness statements annexed to the charge sheet do not support the allegations leveled against the petitioner herein in the charge sheet.5
KL,J Crl.P. No.4321 of 2016 iv. In the witness statements, there is no allegation against the petitioner herein/A.6 that he involved in the allotment of additional land by APHB to A.5.
v. The main allegation of the prosecution against the petitioner herein has got 50% shareholding in A.9 company represented by A.7 without making any payment and that the MOU dated 30.03.2007 shows that the petitioner has paid for the face value of 50% of shareholding acquired by him and has to pay an amount of Rs.1,02,00,000/- on successful completion of the project, on the face of it is false and belies by the documents produced by CBI.
vi. The documents produced by the CBI also shows that the petitioner had never received any money from A.5 or from A.4. vii. The statement of Sri Basani Mahender Reddy (L.W.22) shows that A.5 lent an amount of Rs.01 Crore to the company owned by the petitioner/A.6 towards Inter Corporate Deposit (ICD) on business necessities and the said amount was also paid back with interest to A.5 which was duly recorded in the books. The said fact clearly shows that he could not have taken any gratification for any allotment of land in favour of A.5. 6
KL,J Crl.P. No.4321 of 2016 viii. The allegation against the petitioner with regard to taking gratification for exercising personal influence does not arise since he is shareholder in A.9 company only in March, 2007, whereas the allotment of land to A.5 happened in the year 2005 on a recommendation made by High Powered Committee of the then Government of Andhra Pradesh.
ix. Neither the documents nor the witness statements show that the petitioner herein either directly or indirectly involved in the recommendations made by the Housing Board or the HPC in allotment of the said land to A.5.
x. Even if the evidence on record relied on by the CBI is taken as true, no case is made out against the petitioner herein. xi. No witness stated that the petitioner herein actively colluded and conspired with the other accused. There is nothing to connect the petitioner and other accused inter se and there are no allegations which show a chain of conspiracy. xii. The Charge sheet filed against the petitioner/A.6 is an abuse of process of law and that the petitioner is unnecessarily implicated in the present case.
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KL,J Crl.P. No.4321 of 2016 xiii. The offence of conspiracy is not made out since cognizance was not taken for the offence under Section 9 of PC Act against any of the other accused.
xiv. The allegation that the allotment of Villas in Gachibowli Housing Project was made in violation of Section 2.7.2 of the Development Agreement, does not constitute offence against the petitioner herein since the allotment of Villas is done by A9 but not by him.
xv. Since there is no allegation that the petitioner was in charge of the day-to-day affairs of A.9 company, the petitioner cannot be held vicariously liable for any of the offences alleged against him.
xvi. Even if there is any violation of the Development Agreement, the same constitutes a civil wrong but not a criminal offence. The question of discriminatory allotment does not arise since residential units are still available in the said land. xvii. The sale of Villas by A.9 cannot amount to criminal offence since it was duly approved by APHB and the said APHB did not suffer any loss as it derived its due revenue out of sale of the 8 KL,J Crl.P. No.4321 of 2016 said Villas. Thus the allegation of misappropriation is not made out based on the material filed by CBI.
xviii. The present charge sheet is not maintainable since it is not in pursuance of the order in W.P. No. 794 and 6604 of 2012. xix. With an ulterior motive to harass the petitioner herein, CBI made the petitioner herein as accused in 11th Charge sheet was filed only after he has become the Member of Parliament.
5. On the other hand, learned Special Public Prosecutor for CBI would contend that there is specific allegation against the petitioner - accused No.6 that in furtherance of criminal conspiracy hatched with accused No.4 and others have obtained gratification in the form of 50% share in Gachibowli Housing Project worth Rs.25.42 Crores as a motive or reward for exercising his personal influence on his co- brother and former Chief Minister, late Dr. Y.S. Rajasekhara Reddy in according approvals for awarding the said housing project to accused No.4 and the private companies promoted and controlled by him attracting the provisions of Section - 120B of IPC and Section - 9 of the P.C. Act. A careful reading of charge sheet would disclose the role played by the petitioner herein. The petitioner was part of criminal conspiracy which is discernible from the material on record. 9
KL,J Crl.P. No.4321 of 2016 Whether the petitioner has committed the aforesaid offences or not has to be found out only after full-fledged trial, but not at this stage. Thus, there is enough material to prove the offences alleged against the petitioner herein. Therefore, the present petition is nothing but premature.
6) She would further contend that the petition filed by accused Nos.7 and 9 vide Crl.P. No.10131 of 2015 was dismissed by this Court vide order dated 09.12.2022. Therefore, she sought to dismiss the present petition.
7. Perusal of the charge sheet would reveal that M/s. Carmel Asia Holdings Pvt. Ltd., accused No.14 was evaluated by M/s. Jagadisan & Co. represented by Mr. P. Prabhakar and the valuation ranged from Rs.294.00 Crores to Rs.309.00 Crores and the valuation was based on the projections provided by Mr. V. Vijaya Sai Reddy, accused No.2. Although the valuation report was completed by January, 2007, the report was antedated as 01.11.2006 at the instance of Mr. V. Vijaya Sai Reddy, accused No.2. The purchase of shares of M/s. Carmel Asia Holdings Pvt. Ltd., accused No.14 by Mr. I. Syam Prasad Reddy, accused No.3 through Mr.Nimmagadda Prasad at a 10 KL,J Crl.P. No.4321 of 2016 value of Rs.262/- in December, 2006/January, 2007 is only to cover the quid pro quo amount paid to Mr. Y.S. Jagan Mohan Reddy, accused No.1 for the undue benefits received by Mr. I. Syam Prasad Reddy, accused No.4 from Government of Andhra Pradesh. Further the valuation of M/s. Carmel Asia Holdings Pvt. Ltd., accused No.14, was based on the projections of M/s. Indira Televisions Pvt. Ltd., M/s. Jagati Publications Pvt. Ltd., and M/s. Janani Infrastructure Pvt. Ltd., which had not even started their operations.
8. The specific allegations levelled against the petitioner herein
- accused No.6, are that in furtherance of criminal conspiracy hatched with accused No.4 and others, have obtained gratification in the form of 50% share in Gachibowli Housing Project worth Rs.25.42 Crores as a motive or reward for exercising his personal influence on his co- brother and former Chief Minister, late Dr. Y.S. Rajasekhara Reddy in according approvals for awarding the said housing project to accused No.4 and the private companies promoted and controlled by him attracting the provisions of Section - 120B of IPC and Section - 9 of the P.C. Act.
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9. Thus, by the aforesaid acts, accused Nos.1 to 14 including the petitioner herein, had committed the offences of criminal conspiracy, criminal breach of trust by public servant and agent, cheating by impersonation, cheating, forgery for the purpose of cheating, using of forged documents as genuine, falsification of accounts, taking gratification for exercise of personal influence with public servants to show favour or disfavor to any person, abetting a public servant to obtain valuable thing for himself or for any other person, without consideration from person connected in proceeding or business transacted by such public servant, criminal misconduct by abusing his official position obtains for himself or for any other person any valuable thing or pecuniary advantage, by a public servant resorting to dishonestly allowing other person to misappropriate or convert for his own use, punishable under Sections - 120B, 409, 420, 468, 471, 477A IPC and under Sections - 9, 11, 12, 13 (2) read with 13 (1) (c) and (d) of the P.C. Act, 1988.
10. As far as the petitioner is concerned, the offences alleged against him are under Section -120B of IPC and Section - 9 of P.C. Act, 1988. Conspiracy can be proved through circumstantial evidence. Conspiracy is an issue of fact which can be proved or 12 KL,J Crl.P. No.4321 of 2016 disproved only during trial. The offence under Section - 9 of the P.C. Act relate to bribing a public servant by a commercial organization. Whether the petitioner was part of the conspiracy or not as alleged by the prosecution has to be considered only on the basis of evidence which would be let in during the course of trial, and at this stage, it is not desirable to discard the case of prosecution against the petitioner herein. Therefore, the allegations levelled against the petitioner by the prosecution cannot be brushed aside at the threshold. Therefore, the contention of learned senior counsel appearing for the petitioner that there are no ingredients of the aforesaid offences cannot be accepted. Even though the inherent jurisdiction of this Court under Section - 482 is very wide, it has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in the section itself. It is to be exercised ex debito justitiae to do real and substantial justice for the administration of which alone, Courts exist as held by the Hon'ble Supreme Court in various judgments including Dr. Monica Kumar v. State of Uttar Pradesh 1.
1 . (2008) 8 SCC 781 13 KL,J Crl.P. No.4321 of 2016
11. There is no dispute that the petitioner herein/A.6 is the co- brother of late Dr.Y.S.Rajasekhar Reddy, the then Chief Minister of Andhra Pradesh. The allegation against the petitioner herein is that he has conspired with the other accused and obtained gratification in the form of 50% share in Gachibowli Housing Project worth Rs.25.42 Crores a motive as referred for exercising his personal influence and his co-brother and former Chief Minister. in according approval in awarding the said Housing Project to A.4 and the private companies. He has permitted and controlled private companies. There is transfer of cash.
12. During the course of investigation the Investigating Officer has recorded the statements of as many as 48 witnesses and also collected 46 documents including note files, MOUs and supplementary agreements and relevant portions of the statements of witnesses are as follows:-
1. Sri Datla Suryanarayana Raju (L.W.6), Superintending Engineer, Vijayawada Circle, AP:-
i. Turnover of Rs.100 Crores per year during the last five years; ii. The developer company/consortium must have a minimum net worth of Rs.100 Crores, 14 KL,J Crl.P. No.4321 of 2016 iii. The purpose of prescribing the minimum criteria is to ensure that the selected bidder has the capability to design, finance, build and market the project.
iv. Embasy-Unity Consortium has been declared qualified on the basis of combined financial strength of all the consortium members. v. I would also like to draw your attention that on 23.02.2005, Sri I. Syam Prasad Reddy, confirmed that the shareholding pattern in the SPVs viz., M/s CHIDCO and M/s Vasantha Projects Pvt.Ltd., would be in accordance with the RFP i.e. (i) 20% by M/s Embassy Realtors Pvt.Ltd.,
ii) 51% by M/s Indu Projects Ltd., (iii) 1% by M/s Unity Infraprojects Ltd., (iv) 14% by M/s Soma Enterprises Ltd. and (v) 14% by Avinash Bhoale.
vi. I would like to clarify that if the SPVs do not satisfy the requisite shareholding pattern, they are not legally entitled to enter into development agreements/contract with APHB.
vii. Accordingly, on 28.02.2005, Development Agreements were signed with respective PVs for the two projects on the basis of declaration dated 23.02.2005 given by Sri I. Syam Prasad Reddy, regarding the share holding pattern in the SPVs.
viii. The Power of Attorney was executed in favour of M/s Vasantha Projects Pvt.Ltd., on 23.05.2007 for Gachibowli Housing Project. ix. Similarly, the shareholding pattern existed on the ate was declared as (i) M/s Indu projects Limtied - 51%; (ii) M/s Embassy Realtors Pvt.Ltd-20% and (iii) Sri Vasantha Venkata Krishna Prasad, Smt. Vasantha Hemavathy and Dr.C.K.Naidu - 29% in respect of Ac.4.575 housing project at Gachibowli.
x. I have to agree that there was substantial variation in the equity holding of both the SPVs, but we have not acted upon, in the absence of specific directions of our Vice Chairman.
xi. After going through the records, I have no hesitation to state that both the Housing Projects at Kukatpally and Gachibowli have gone into the hands 15 KL,J Crl.P. No.4321 of 2016 of an ineligible company i.e. M/s Indu Projects Ltd., in the name of Embasssy-Unity consortium, which became its lead member initially and subsequently 100% owner of the PVs for these projects.
2. Sri Garikipati Kamalesh (L.W.7), Financial Advisor, Vasantha Group of Companies shows as follows:-
i. M/s Vasantha Project Pvt.Ltd. has commenced sale of villas from June, 2005 onwards much prior to grant of Power of Attorney by the APHB.
ii. I identify my signatures on some of the correspondence addressed to APHB in this regard starting from May, 2006, as I remember today. Vide my letter dated 12.11.2008, I have submitted the details of villa buyers and sought for permission for registration. The details included the name of Ms. V. Bhavana Sri Lakshmi and Ms. V. Hima Sahithi, minor daughters of Sri V.V. Krishna Prasad for Villa Nos. 11 & 12. Sri P. Ravi Kumar, S/o Sri P.V.V. Prasad Rao, an NRI is also a relative of Sri Krishna Prasad. Other names included (1) Smt. B. Sachi Devi, W/o Sri B. Srinivasa Reddy, former Minister and sister of Sri Y.V. Subba Reddy; (ii) Sri Rayapati Ranga Rao, S/o Sri Rayapati Sambasiva Rao, MP; (iii) Sri Y. Hanuma Reddy, brother of Sri Y.V. Subba Reddy; (iv) Sri B. Vamsi Krishna, 5/o B. Parthasaradhi Reddy of Hetero Drugs; (v) Smt. M. Supriya, W/o Sri Sai Ram Sandeep who is son of Sri K.V.P. Ramachandra Rao apart from others.
iii. Sri V.V. Krishna Prasad has also purchased Villa No. 36 in his name for an amount of Rs.23.00 lakh.
iv. Vide my letters dated 12.10.2010 and 10.02.2011, we have informed the details of sales of villas and apartments. As per the report, we have constructed 23 villas; 10 flats each in the name of Vasantha Green Leaves and Vasantha Sahitya Apartments, In Vasantha Sahitya Apartments, Flat No. 501 & 502 have been purchased by Sri V.V. Krishna Prasad in the name of his two minor daughters.16
KL,J Crl.P. No.4321 of 2016 v. On 06.06.2011, I have addressed a letter to the National Academy of Construction, Hyderabad for conducting 'Rebound Hammer Test' and 'Ultrasonic Pulse Velocity Test' on the LIG Housing Block. However, they have not responded to our request. Therefore, we have approached Industrial Consultancy Services (ICS), JNTUH College of Engineering who conducted the test on 18.06.2011.
vi. They have submitted the test report, a copy of which was furnished to APHB. As per the report, four columns were found to be of medium quality of concrete and one column at S.W. Bed Room corner was found out to be of doubtful quality.
3. Sri Nimmagadda Ramesh Kumar (L.W.9), Principal Secretary to Governor of Andhra Pradesh:-
i. As desired by the VC, Housing Board, the Minutes of the Meeting were also circulated to the Chief Minister through the Housing Minister from time to time, Chief Minister's Office was also monitoring the progress of the projects from time to time and also since the VC, Housing Board wanted that the minutes should go up to the Chief Minister, the same were sent to the Chief Minister as a matter of abundant precaution. ii. The then Chief Minister, Dr. Y.S. Rajasekhara Reddy accorded his approval on 21.07.2005 and was communicated to the. Housing Board on 27.07.2005.
iii. Subsequent to this, during the course of my tenure certain apprehensions have also arisen whether the allottees of the projects adhere to the conditions of the allotment. Hence, the Housing Department has taken the Initiative to write to the APHB to ensure that the allottees implement the project as per the DPR without any deviation. More importantly, our concern was also to check possible profiteering through secondary sale of allotted land. Safeguards were already built as part of the contractual obligations and the enforceability of the same was brought to the specific 17 KL,J Crl.P. No.4321 of 2016 notice of the Housing Board. Lastly, to prevent, cartelization and also roping in other parties through the back door, Housing Board was asked to ensure that there is no material alteration in the shareholding pattern of the allottee. In other words, no new members are to be allowed into the winning consortium, as equity partner or otherwise. In case any changes have to be made in the composition of the special purpose vehicle - companies formed to implement the project, it should be allowed only with the approval of the HPC, which is the competent authority in this regard.
4. Sri Trilok Kumar Dewan (L.W.14), Former Chief Secretary, Government of Andhra Pradesh and presently Member of West Bengal, Legislative Assembly:-
i. It is seen from the above documents that there was a deviation in the structure of the consortium as approved by the HPC, by APHB and CRISIL at a later stage.
ii. The Cabinet Memorandum prepared by Smt. K. Ratna Prabha, the then Secretary, IT&C Department is silent on the minimum financial and technical criteria prescribed by the CCITI forselection of the IT developers.
iii. In this context, I am of the view that the original MOU as approved by the Cabinet has been sought to be diluted without incorporating Inbuilt safety mechanism to ensure that the government land should not go into the hands of parties which do not fulfill the criteria as laid down by the CCITI.
iv. The draft Memorandum was approved by the then Minister, IT&C Smt. P. Sabitha on 28.06.2006 and the Chief Minister late Dr. Y.S. Rajasekhara Reddy on 01.07.2006. The same has been placed before the Council of Ministers in their meeting held on 07.07.2006, which approved the proposed amendments to the MOU 18 KL,J Crl.P. No.4321 of 2016
5. Sri Velamati Nagarjuna (L.W.17) Presently working as Executive Engineer, APHB:-
i. Since there was huge variation on selling price of similar units in most same period is observed and APBH felt that there was revenue lots of revenue due to this deviation, APHD has appointed auditors with legal experts to assess the revenue loss. Auditors have not furnished the report during my tenure as Project Coordinator at the Head Office Hyderabad.
Even then they have not completed the project. Consortium members of the developers have completely changed withut intimating the same to APIHB, which is violation of terms & conditions of the bid document hence a notice was issued to M/s Vasantha Projects Pvt. Ltd, and Projects vide letter Nc.100/Gen/AE/PC/2007 dated 01.11.2012.
6. Sri Kishore Krishnarao Avarsekar (L.W.35), Chairman, M/s Unity Infra projects Ltd.:-
i. Now I am shown copies of Consortium Agreements dated 10.03.2004 among Embassy-Unity consortium.
ii. I am not aware anything about these agreements.
iii. I have gone through the contents of these documents. I am totally unaware of these documents and I have seen them only today.
iv. Prior to the date of agreements wit APHB, we had withdrawn from the consortium and confirmed that we are not the shareholders of the proposed SPVs for execution of the housing projects awarded by APHB.19
KL,J Crl.P. No.4321 of 2016 Subsequently, we learnt M/s Indu Projects Ltd., formed SPVs without our participation and went ahead with the projects.
v. In this context, I would also like to confirm and declare that we have not entered into any financial transactions in the form of equity holding, ICD/Loans etc. with M./s Indu Projects Ltd., or their group companies or their promoters in respect of housing projects awarded to them by APHB.
vi. Now my attention is drawn to the letters dated 23.02.2005 of Sri 1. Syam Prasad Reddy addressed to APHB informing about constitution of SPVs viz., M/s. Vasantha Projects Pvt. Ltd., and M/s, Cyberabad Hi-tech Integrated Township Development Corporation Pvt. Ltd., (CHIDCO) as the developer companies to implement housing projects awarded through Letters of Award dated 19.11.2004. In the letter he declared our company as one of the partner with equity of 14%.
vii. This is the first time I am seeing this letter and I confirm that our company was not a party in forming these SPVs and I have no knowledge on these projects after my discussions with Sri Syam Prasad Reddy.
Therefore, they have also specifically stated about the role played by the petitioner/A.6. The said aspects needs trial. The said statements includes several factual aspects which are to be considered by the trial Court on completion of full fledged trial. The petitioner has to face trial and prove innocence. He cannot seek for quashment of the present proceedings in C.C.No.26 of 2014 against him, more particularly where there are specific and serious overt acts, against him.20
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13. In the light of the said statements of the aforesaid witnesses, the contention of Sri K.Vivek Reddy, learned Senior Counsel appearing for the petitioner herein that there is no demand and gratification which are sine qua non cannot be accepted.
14. The statements of the aforesaid witnesses and perusal of material would reveal that there is demand and acceptance by the petitioner/A.6. There are specific allegations against him. Therefore, he has to face trial and prove his innocence. Quashing the proceedings against him in C.C.No.26 of 2014 at the threshold is impermissible as held by the Hon'ble Apex Court in several cases.
15. It is the specific contention of the petitioner that the contents of the charge sheet lacks ingredients of Section 9 of the PC Act and Section 120-B of IPC. In the light of the same, it is relevant to extract the said Sections which are as follows:-
9. Offence relating to bribing a public servant by a commercial organisation.--
(1) Where an offence under this Act has been committed by a commercial organisation, such organisation shall be punishable with fine, if any person associated with such commercial organisation gives or promises to give any undue advantage to a public servant intending--
(a) to obtain or retain business for such commercial organisation; or
(b) to obtain or retain an advantage in the conduct of business for such commercial organisation:
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KL,J Crl.P. No.4321 of 2016 Provided that it shall be a defence for the commercial organisation to prove that it had in place adequate procedures in compliance of such guidelines as may be prescribed to prevent persons associated with it from undertaking such conduct.
(2) For the purposes of this section, a person is said to give or promise to give any undue advantage to a public servant, if he is alleged to have committed the offence under section 8, whether or not such person has been prosecuted for such offence.
(3) For the purposes of section 8 and this section,--
(a) "commercial organisation" means--
(i) a body which is incorporated in India and which carries on a business, whether in India or outside India;
(ii) any other body which is incorporated outside India and which carries on a business, or part of a business, in any part of India;
(iii) a partnership firm or any association of persons formed in India and which carries on a business whether in India or outside India; or
(iv) any other partnership or association of persons which is formed outside India and which carries on a business, or part of a business, in any part of India;
(b) "business" includes a trade or profession or providing service;
(c) a person is said to be associated with the commercial organisation, if such person performs services for or on behalf of the commercial organisation irrespective of any promise to give or giving of any undue advantage which constitutes an offence under sub-section (1). Explanation 1.--The capacity in which the person performs services for or on behalf of the commercial organisation shall not matter irrespective of whether such person is employee or agent or subsidiary of such commercial organisation.
Explanation 2.--Whether or not the person is a person who performs services for or on behalf of the commercial organisation is to be determined by reference to all the relevant circumstances and not merely by reference to the nature of the relationship between such person and the commercial organisation.
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KL,J Crl.P. No.4321 of 2016 Explanation 3.--If the person is an employee of the commercial organisation, it shall be presumed unless the contrary is proved that such person is a person who has performed services for or on behalf of the commercial organisation.
(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the offence under sections 7A, 8 and this section shall be cognizable.
(5) The Central Government shall, in consultation with the concerned stakeholders including departments and with a view to preventing persons associated with commercial organisations from bribing any person, being a public servant, prescribe such guidelines as may be considered necessary which can be put in place for compliance by such organisations. 120B. Punishment of criminal conspiracy.--
(1)Whoever is a party to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence.
(2)Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both.
There is no dispute with regard to the legal position that there cannot be any charge of conspiracy against any accused without the aid of the substantive offence.
16. It is also apt to note that as per Section 10 of the Indian Evidence Act, where there is reasonable ground to believe that two or more persons have conspired together to commit an offence or an actionable wrong, anything said, done or written by any one of such persons in reference to their common intention, after the time when such intention was first 23 KL,J Crl.P. No.4321 of 2016 entertained by any one of them, is a relevant fact as against each of the persons believed to be so conspiring, as well for the purpose of proving the existence of the conspiracy as for the purpose of showing that any such person was a party to it. Section 10 of the Evidence Act, was explained by the Judicial Committee of the Privy Council in Mirza Akhar vs. King Emperor 2, it was held that things said, done or written while the conspiracy was on foot are relevant as evidence of the common intention, once reasonable ground has been shown to believe in its existence. But it would be a very different matter to hold that any narrative or statement or confession made to a third party after the common intention or conspiracy was no longer operating and had ceased to exists admissible against the other party. This is because there is then no common intention to the conspirators to which the statement can have reference.
17. The said observation was also made by this Court in the order dated 09.12.2022 in Crl.P.No.10131 of 2015.
18. The Apex Court in Badri Rai v. State of Bihar 3 considered the scope and true import of section 10 of the Evidence Act, 1872 and held 2 AIR 1940 PC 176 3 AIR 1958 SC 953 24 KL,J Crl.P. No.4321 of 2016 that documents actually used in effectuating the objects of the conspiracy, were admissible, but documents which had been created by one of the conspirators after the object of the conspiracy had been achieved, were not admissible.
19. In the light of the above, as discussed supra, prima facie there are specific allegations against the petitioner herein, more particularly with regard to conspiracy and demand and acceptance. Therefore, the proceedings in C.C.No.26 of 2014 against the petitioner herein cannot be quashed.
20. As discussed supra, this Court dismissed the criminal Petition vide Crl.P.No.10131 of 2015 filed by A.7 and A.9 to quash the proceedings in C.C.No.26 of 2014. Sri K.Vivek Reddy, learned Senior counsel contended that this court quashed the proceedings in C.C.No.26 of 2014 against A.4 vide order dated 15.11.2014 in Crl.P.No.346 of 2015. No SLP was filed. Therefore, the said order attained finality. The petitioner herein is also standing on the same footing. He is also entitled for the very same relief. This Court quashed the proceedings against the A.4 considering the allegations leveled against him and evidence produced by the Investigating Officer against him. Whereas, in the present case, prima facie, there are specific allegations against the petitioner/A.6. Therefore, 25 KL,J Crl.P. No.4321 of 2016 he cannot claim parity and seek quashment of proceedings in C.C.No.26 of 2014.
21. Reliance was placed on the principle laid down by the Apex Court in Mohmoodkhan Pathan vs. State 4, State vs. Anup Kumar Srivastava 5, Nagashetty vs. Karnataka Lokyakta 6, Latif vs. State of Karnataka 7,
22. The facts in Mohmoodkhan (supra) are that it is a criminal appeal and the accused therein was convicted by the trial Court, confirmed by the High Court. Therefore, the matter was carried to the Apex Court. In paragraph No.7 of the said judgment, the Apex Court held as follow:-
The primary condition for acting on the legal preemption Section 4(1) of the Act is that the prosecution should have proved that wher the accused received was gratification. The word 'gratification' is not defined in the Act. Hence it must be understood in its literal meaning the Oxford Advanced Learner's Dictionary of Current the "gratification" is shown to have the meaning to give please action to". The word "gratification' is used in Section 41 to demote, acceptance of something to the pleasure or satisfaction of the recipient. If the money pail is not for personal satisfaction of pleasure of the recipient, it is not gratification in the sense it is used in the section. In other words unless the prosecution proves that the money paid was not towards any lawful collection or legal remuneration, the court cannot take recourse to the presumption of law contemplated in Section 4(1) of the Act.
Whereas, in the present case, the proceedings are at CC stage. The trial Court has to frame charge basing on the material available on 4 (1997) 10 SCC 600 5 (2017) 15 SCC 560 6 CrlP. 7611/2010, Karnataka High Court 7 CrlP No.200589 of 2017, Karnataka High Court, 26 KL,J Crl.P. No.4321 of 2016 record and can consider the said aspects after conducting full fledged trial.
23. In P.Satyanarayana Murthy vs. State of A.P. 8 in paragraph No.23, the Apex Court held as follows:-
The proof of demand of illegal gratification, thus, is the gravamen of the offence under Sections 7 and 13(1)(2)(1) and (ii) of the Act and in absence thereof, unmistakably the charge therefor, would fail. Mere acceptance of any amount allegedly by way of illegal gratification or recovery thereof, dehors the proof of demand, ipso facto, would thus not be sufficient to bring home the charge under these two sections of the Act. As a corollary, failure of the prosecution to prove the demand for illegal gratification would be fatal and mere recovery of the amount from the person accused of the offence under Section 7 or 13 of the Act would not entail his conviction thereunder."
Hence, the proof of demand has been held to be an indispensable essentiality and of permeating mandate for the offence under Sections 7 and 13 of the PC Act.
24. Relying on the said principle in Anup Kumar Srivastava (supra), the Apex Court held that at the stage of framing of charge, the Court is not to examine and assess in detail the materials placed on record by the prosecution nor is it for the Court to consider the sufficiency of the materials to establish the offence alleged against the accused. At the stage of charge, the Court is to examine the materials only with a view to be satisfied that a prima facie case of commission of offence alleged has been made out against the accused persons. When the petition is filed by the accused under Section 482 of Cr.P.C. 8 (2015) 10 SCC 152 27 KL,J Crl.P. No.4321 of 2016 seeking for quashing of charge framed against him, the Court should not interfere with the order unless there are strong reasons to hold that in the interest of justice and to avoid abuse of the process of the court, a charge framed against the accused needs to be quashed. Such an order can be passed only in exceptional cases and on rare occasions. The Court is required to consider the 'record of the case' and documents submitted therewith and, after hearing the parties, may either discharge the accused or where it appears to the court and in its opinion there is ground for presuming that the accused has committed an offence, it shall frame the charge. Once the facts and ingredients of the section exist, then the court would be right in presuming that there is ground to proceed against the accused and frame the charge accordingly. The presumption is not a presumption of law as such. The satisfaction of the Court in relation to the existence of constituents of an offence and the facts leading to that offence is a sine qua non for exercise of such jurisdiction. It may even be weaker than a prima facie case.
25. As discussed supra, prima facie, there are specific allegation against the petitioner herein. However, the said aspects can be 28 KL,J Crl.P. No.4321 of 2016 considered by the trial Court while framing the charge and after conducting full-fledged trial.
26. The facts of the case in Nagashetty (supra) are altogether different to the facts of the present case. As discussed supra, there are specific allegations against the petitioner/A.6 and therefore, quashment of proceedings in C.C.No.26 of 2014 against him at the threshold is not proper.
27. Learned counsel for the petitioner would contend that merely because petitioner is co-brother of the then Chief Minister late Dr.Y..Rajasekhara Reddy, there is no presumption that he exercised personal influence. Placed reliance on the principle laid down in Chintalapati Srinivasa Raju vs Securities And Exchange Board Of India 9. In the said case, paragraph No.31, the Apex Court held that from the mere fact that the appellant promoted two joint venture companies, one of which ultimately merged with SCSL, and the fact that he was a co-brother of B. Ramalinga Raju, without more, cannot be stated to be foundational facts from which an inference of reasonably being expected to be in the knowledge of confidential information can be formed. But there was no evidence against the 9 (2018) 7 SCC 443 29 KL,J Crl.P. No.4321 of 2016 appellant therein except that he is co-brother of B.Ramalinga Raju. Whereas, in the present case, prima facie, there are specific allegation against the petitioner herein.
28. Sri K.Vivek Reddy, learned Senior Counsel would further contended that the Court can intervene under Section 482 of Cr.P.C. when there is no material to support allegations against the accused and he has placed reliance on the principle laid down by the Apex Court in R.P.Kapoor vs. State of Punjab 10, State of Karnataka vs. Muniswamy 11 and Harischandra vs. State of Jharkhand 12. As discussed supra, prima facie, there are specific allegations against the petitioner/A.6 as stated by L.W. Nos. 6,7,9,14,17 and 35. The Investigating Officer has collected and filed 46 documents including MOUs and note files etc. Thus, prima facie, there is material in support of said allegation and there are several factual aspects to be considered by the trial court after conducting full fledged trial.
29. Learned senior counsel further contended that the charge sheet based on mere suspicion is liable to be quashed under Section 482 of Cr.P.C. scope for interference under Section 482 of Cr.P.C. 10 (1960) 3 CR 388 11 (1977) 2 SCC 699 12 (2007) 15 SCC 494 30 KL,J Crl.P. No.4321 of 2016 widens at the stage of Charge sheet. Reliance is placed on the principle laid down in Satish Mehra vs. State (NCT of Delhi) 13. In the present case, prima facie, there are specific allegation against the petitioner herein as stated by the aforesaid witnesses.
30. It is further contended by the learned Senior counsel that the petitioner has not placed any new document, he is solely relying on prosecution documents, under Section 482 of Cr.P.C. courts can even look at credible evidence of the accused. Reliance is placed on Harshendra Kumar vs. Rebatial14, Anita Malhotra vs. AEPC 15. But as discussed supra, prima facie, there are specific allegations against the petitioner herein, more particularly with regard to conspiracy, demand and acceptance. The said aspects can be considered by the trial Court after conducting full fledged trial.
31. It is further contended by the learned Senior Counsel that there must be sufficient indication in the cognizance order that the Magistrate has indeed applied his mind to the allegations and the material. Reliance was placed on MemoodRehman v. Khazir 16, 13 (2012) 13 SCC 614 14 (2011) 1 SCC 520 15 (2012) 1 SCC 520 16 (2015) 12 CC 420 31 KL,J Crl.P. No.4321 of 2016 Chief Enforcement Officer vs. Videocon 17, Fakhruddin vs. State of Uttaranchal 18, Nagawwa vs. Veeranna 19, Pepsi Foods Ltd. vs. Special Judicial Magistrate 20 and Vanpic Projects vs. CBI 21.
32. As discussed supra, prima facie, there are specific allegations against the petitioner herein a stated by L.Ws.6, 7, 9, 14, 17 and 35. On completion of entire investigation, the Investigating Officer has filed 48 documents including supplementary agreement and note files. On consideration of the said statements and document only, learned Magistrate has taken cognizance against the petitioner herein. Therefore, the proceedings in C.C.No.26 of 2014 against the petitioner cannot be quashed at the threshold. The petitioner has to face trial and prove his innocence.
33. It is further contended by the learned Senior Counsel that the petitioner/A.6 cannot be held vicariously liable of offence of A.9 company and P.C. Act does not provide for vicarious liability. Reliance is placed on S.K.Alagh vs. State of UP 22. As discussed supra, prima facie, there are specific allegation of conspiracy and 17 (2008) 2 SCC 492 18 (2008) 17 SCC 157 19 (1976) 3 CC 736 20 (1998) 5 SCC 749 21 Crl.P.8113/2021 TSHC and Crl.P.No.7598 of 2018, dated 13.10.2023. 22 (2008) 5 SCC 662 32 KL,J Crl.P. No.4321 of 2016 demand and acceptance. However, it is a matter to be considered by the trial Court after conducting full-fledged trial. This Court cannot conduct roving enquiry in a petition filed under Section 482 of Cr.P.C.
34. It is further contended that learned senior counsel for the petitioner that no allegation or material indicating that petitioner conspired with anyone to commit the offence under Section 9 of the P.C.Act. Reliance is placed on Vijayan v. State of Kerala 23, Laloo vs. State of Uttar Pradesh 24, Topanda vs. State of Bombay 25 and Fakhruddin vs. State of Madhya Pradesh 26. The said contention of learned senior counsel is contrary to record. The Investigating Officer has recorded the statements of 48 witnesses and collected 46 documents and L.Ws.6, 7, 9, 14, 17 and 35 specifically stated the role played by the petitioner/A.6, Therefore, the petitioner has to face trial and prove his innocence. He cannot seek for quashment of proceedings in C.C.No.26 of 2014.
35. Learned Special Public Prosecutor for CBI would contend that this Court cannot conduct roving enquiry under Section 482 of Cr.P.C. and quash the proceedings against the accused herein. 23 (1999) 3 SCC 54 24 (2006) SCC OnLine All 245 25 (1955) 2 SCR 881 26 AIR 1967 SC 1326 33 KL,J Crl.P. No.4321 of 2016 Reliance is placed on the principle laid down in CBI v. Aryan Singh 27, in paragraph No.4.1, wherein the Apex Court held as follows:-
4.1: From the impugned common judgment and order passed by the High Court, it appears that the High Court has dealt with the proceedings before it, as if, the High Court was conducting a mini trial and/or the High Court was considering the application against the judgment and order passed by the learned Trial Court on conclusion of trial. As per the cardinal principle of law, at the stage of discharge and/or quashing of the criminal proceedings, while exercising the powers under Section 482 of Cr.P.C. the Court is not required to conduct the mini trial. The High Court in the common impugned judgment and order has observed that the charges against the accused are not proved. This is not the stage where the prosecution/investigating agency is/are required to prove the charges. The charge are required to be proved during the trial on the basis of the evidence led by the prosecution/investigating agency. Therefore, the High Court has materially erred in going in detail in the allegations and the material collected during the course of the investigation against the accused, at this stage. At the stage of discharge and/or while exercising the powers under Section 482 of Cr.P.C. the Court has a very limited jurisdiction and is required to consider "whether any sufficient material is available to proceed further against the accused for which the accused is required to be tried or not".
36. In Mohd. Ali v. State of UP 28, the Apex Court observed that whenever an accused comes before the Court invoking either the inherent powers under Section 482 of Cr.P.C. or extraordinary jurisdiction under Article 226 of the Constitution to get FIR or the criminal proceedings quashed essentially on the ground that such proceedings are manifestly frivolous or vexatious or instituted with the ulterior motive for wreaking vengeance, then in such 27 Crl.A.Nos.1025-1026 of 2023 28 2023 Crl.L.J. 3896 = AIR Online 2023 SC 602 34 KL,J Crl.P. No.4321 of 2016 circumstances the Court owes a duty to look into the FIR with care and a little more closely. Once the complainant decides to proceed against the accused with an ulterior motive for wreaking personal vengeance, etc., then he would ensure that the FIR/complaint is very well drafted with all the necessary pleadings. The complainant would ensure that the averments made in the FIR/complaint are such that they disclose the necessary ingredients to constitute the alleged offence. Therefore, it will not be just enough for the Court to look into the averments made in the FIR/complaint alone for the purpose of ascertaining whether the necessary ingredients to constitute the alleged offence are disclosed or not. In frivolous or vexatious proceedings, the Court owes a duty to look into many other attending circumstances emerging from the record of the case over and above the averments and, if need be, with due care and circumspection try to read in between the lines. The Court while exercising its jurisdiction under Section 482 of Cr.P.C. or Article 226 need not restrict itself only to the stage of a case but is empowered to take into account the overall circumstances leading to initiation/registration of the case as well as the material collected in the course of investigation. 35
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37. In R.P.Kapur vs. State of Punjab 29, the Apex Court summarized some categories of cases where inherent power can and should be exercised to quash the proceedings which are as follows:-
i. where it manifestly appears that there is a legal bar against the institution or continuance e.g. want of sanction, ii. where the allegations in the first information report or complaint taken at its face value and accepted in their entirety do not constitute the offence alleged;
iii. where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge.
The Apex Court further held that in dealing with the last category, it is important to bear in mind the distinction between a case where there is no legal evidence or where there is evidence which is clearly inconsistent with the accusations made, and a case where there is legal evidence which, on appreciation, may or may not support the accusations. When exercising jurisdiction under Section 482 of the Code, the High Court would not ordinarily embark upon an enquiry whether the evidence in question is reliable or not or whether on a reasonable appreciation of it accusation would not be sustained. That is the function of the trial Judge.29
AIR 1960 SC 866 36 KL,J Crl.P. No.4321 of 2016
38. In the light of the aforesaid principles, as discussed supra, in the case on hand, prima facie, there are specific allegations against the petitioner herein/A.6. At the cost of repetition, as discussed supra, the Investigating Officer has collected 46 documents including note files, MOUs, Supplementary agreement etc., and examined 48witnesses. L.Ws. 6, 7, 9, 14, 17 and 35 specifically stated about the role played by the petitioner/A.6 including conspiracy, demand and acceptance. There are several factual aspects which will be considered after conducting full-fledged trial. Therefore, this is not a fit case to quash the proceedings in C.C.No.26 of 2014 in exercise of inherent powers of this court under Section 482 of Cr.P.C.
39. It is also apt to note that this Court vide order dated 09.12.2022, dismissed Crl.P.No.10131 of 2015 field by A.7 and A.9 to quash the proceedings in the very same C.C.No.26 of 2014. In paragraph No.14.1 of the said order, it is observed that A.7 is the promoter and Managing Director of M/s Vasantha Projects Private Limited and A.9. According to CBI he is an active partner in the criminal conspiracy and in furtherance of criminal conspiracy with other accused persons, he had induced Andhra Pradesh Housing Board to enter into Development. Agreement with accused No 9 on 37 KL,J Crl.P. No.4321 of 2016 28.02.2005 by making false representation that accused No.9 in a SPV (Special Purpose Vehicles) constituting all members of the Embassy Unity Consortium, it is alleged that accused No.7 is one of the end- beneficiaries of the Gachibowli Housing Project worth Rs.25.42 crores which was dishonestly and fraudulently disposed of by Sri Syam Prasad Reddy (accused No.4) and M/s.Indu Projects Limited (accused No.5) in gross violation of allotment conditions. Further allegation is that in violation of allotment conditions, accused No.7 had allotted three villas to himself and others to his relatives and close associates at Gachibowli Housing Project. That apart, it is alleged that accused No.7 had caused fabrication of records such as statutory register, minutes of meetings of the Board of Directors etc., and caused submission of annual reports to various statutory authorities, thus, committing the offence of forgery for the purpose of cheating, using forged documents as genuine and falsification of accounts. The charge sheet, therefore, concluded that accused No.7 had committed the offence of criminal conspiracy, cheating as well as cheating by impersonation and criminal breach of trust under Sections 120-B, 420 and 409 of IPC.
38
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40. In paragraph No.14.2 of the said order, it is also mentioned that as regards the petitioner No.2 therein, the charge sheet alleges that it is a corporate mask under which Sri Y.V.Subba Reddy (accused No.5) had operated and obtained gratification in the form of 50% share in Gachibowli Housing Project worth Rs.25.42 crores as a motive or reward for exercising his personal influence and that of his co-brother ie.. Chief Minister late Dr. Y S.Rajasekhara Reddy in according approvals and awarding housing projects to accused No.4 and his private companies. Accused No. 9 acting through accused No.4 had induced Andhra Pradesh Housing Board to execute development agreement and grant of power of attorney for Gachibowli Housing Project worth Rs.25.42 crores by making false representation that it was SPV formed and constituting all members of Embassy Unity Consortium. Thus, there are many triable issues and the petitioner has to face trial and prove his innocence.
41. In the light of the aforesaid discussion, quashing the proceedings against the petitioner herein/A.6 in C.C.No.26 of 2014 is impermissible and the same amounts to an abuse of process of Court. The petitioner has not made out a case to quash the proceedings in the 39 KL,J Crl.P. No.4321 of 2016 aforesaid C.C. The present petition fails and accordingly the same is liable to be dismissed.
42. In the result, the present Criminal Petition is dismissed. As a sequel, miscellaneous petitions, if any pending in the Criminal Petition shall stand closed.
_________________ K. LAKSHMAN, J Date: 7th March, 2024 Note: - Issue copy forthwith.
b/o.vvr.