Andhra Pradesh High Court - Amravati
Sri Tanuja Potluri Sritanuja.N vs The State Of Andhra Pradesh on 2 September, 2021
THE HON'BLE SRI JUSTICE CHEEKATI MANAVENDRANATH R0Y
Criminal Petition Nos.4294 and 4295 of 2021
COMMON ORDER:
These two Criminal Petitions under Section 482 Cr.P.C.
are filed seeking quash of the F.I.R. registered against the
petitioners in Crime No.08/RCO-ACB-GNT/2020 of A.C.B.
Police Station, Guntur, for the offences punishable under
Sections 13(1)(d)(ii) r/w.13(2) of the Prevention of Corruption
Act, 1988 (for short, the "P.C. Act") and under Sections 409,
420 r/w.120-B of IPC.
2) The petitioner in Crl.P.No.4294 of 2021 is A-10 and the
petitioners in Crl.P.No.4295 of 2021 are A-8 and A-11 in the
above crime. Therefore, both the petitions were heard together
and they are being disposed of by this common order.
3) A person by name Komatla Srinivasa Swamy Reddy, who
is totally a stranger to the private sale transactions in question
relating to private lands that took place between the petitioners
and their vendors, lodged a report with the D.G., ACB, A.P.,
Vijayawada, on 07.09.2021.
4) The gist of the allegations set out in the said report
germane for disposal of these Criminal Petitions may be stated
as follows:
(a) The de facto complainant claims to be an advocate from
Prakasam District. It is stated in the report that he has been
2
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
following the issues in the legal and in the social media relating
to insider trading that took place in Amaravati capital area
between Krishna and Guntur Districts in purchasing hundreds
of acres of land during the period from June, 2014 to December,
2014. A few public servants purchased large extents of land
between June, 2014 and December, 2014. In the Assembly
session held in January, 2020, the Government disclosed in the
Assembly that people in high position took advantage of being
involved in the decision making process relating to location of
capital of Andhra Pradesh between June, 2014 and December,
2014 and purchased lands for themselves, either in the name of
their binamis or in the name of their family members. They also
shared the said information relating to exact location of capital
with their followers, kith and kin and thereby enriched
themselves. One of the names referred to in this regard is
Mr.Dammalapati Srinivas, the then Additional Advocate-
General. Therefore, he has made his efforts to secure
information in the public domain about Mr. Dammalapati
Srinivas and his associates.
(b) It is stated that in the advocates circle also it is openly
proclaimed that Mr.Dammalapati Srinivas is close to the then
Chief Minister Sri N.Chandrababu Naidu and his associates in
the Telugu Desam Party. Mr.Dammalapati Srinivas was
appointed as an Additional Advocate-General as per G.O., dated
19.06.2014 and later he was appointed as Advocate-General as
per G.O., dated 28.05.2016. Further stated that between June,
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
2014 and December, 2014 there were rumours and leaks about
the location of the capital. The exact location of capital at
Amaravati and the details of villages within its limits were
known to very few people in the Government headed by Sri N.
Chandrababu Naidu. The document with the list of villages
included in the capital area was published in official draft only
in the month of December, 2014. It was placed before the
Council of Ministers in the last week of December, 2014, after
the Bill of Capital Region Development Authority was prepared.
The Council of Ministers approved the same in the last week of
December, 2014. Till then, all the details relating to location of
capital was kept secret.
(c) However, people who are close to top political leaders in
the Telugu Desam Party and their binamis bought huge extent
of lands at low price during the period from June, 2014 to
December, 2014 by exploiting the information that they had
regarding location of the capital. Thus, there was insider
trading, breach of trust and abuse of official position by those
people including the former Additional Advocate-General.
(d) Therefore, it is stated in the report that he searched in
the internet and the official website of Registration and Stamps
Department, Government of Andhra Pradesh, and secured the
information relating to purchase and sale of lands by
Mr.Dammalapati Srinivas, his family members, relatives and
binamis. It came to light at that time the father-in-law, brother-
in-law, wife and relatives of Mr.Dammalapati Srinivas
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
purchased large extents of land in the villages included in the
capital city area and abutting the said area and near arterial
roads and iconic bridge proposed to be constructed across the
River Krishna. Some lands which are initially purchased in the
name of the relatives of Mr.Dammalapati Srinivas were
subsequently transferred in the name of Mr.Dammalapati
Srinivas and his wife for the same price. The de facto
complainant has furnished about 11 names of the beneficiaries
of such transactions in the report and the list includes the
names of the petitioners herein and stated that
Mr.Dammalapati Srinivas, as Advocate-General, in prior
criminal conspiracy with his family members, friends and other
individuals, organized to purchase the lands by abusing his
position as public servant. The said lands were purchased to
gain pecuniary benefits to himself and other persons known to
him and related to him and thereby committed an act of
criminal misconduct punishable under Section 13(1)(d)(ii)
r/w.Sec.13(2) of the Prevention of Corruption Act, 1988 (for
short, the "P.C. Act"). He has also committed breach of trust as
a public servant in prior conspiracy with the above named
persons. Innocent farmers who had no knowledge of location of
the capital at their lands sold the property for a paltry sale
consideration and they were cheated. Therefore, he requested
the D.G., ACB, A.P., Vijayawada City, to initiate necessary
action to prosecute the persons named in the report.
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
5) On receipt of the said report lodged by the de facto
complainant on 07.09.2020, the D.G., ACB, AP, Vijayawada, by
his order dated 08.09.2020, passed in C.No.82/RE-VGT/2020-
S17, instructed Sri T.V.V. Pratap Kumar, Dy.S.P., ACB, Guntur,
to conduct a regular enquiry and submit report on the said
allegations made against former Advocate-General and others.
6) Accordingly, the Dy.S.P, ACB, Guntur, conducted a
preliminary enquiry and he has submitted his report, dated
14.09.2020, to the D.G, ACB, AP., Vijayawada, stating that
during the course of preliminary enquiry that he has collected
relevant documents pertaining to the sale of lands from internet
and the web-site belonging to the Stamps and Registration
Department, Government of Andhra Pradesh, and it is surfaced
during the course of his enquiry that the said sale transactions
took place during the months of June to December, 2014. In
the Assembly session that took place in January, 2020 the
Government disclosed in the Assembly that people in high
position took advantage of being involved in decision making
process about location of capital of Andhra Pradesh and thereby
they purchased lands during the period from June, 2014 to
December, 2014 for themselves either through their binamis or
through their family members by sharing the said information
about location of capital area.
7) It is also stated in the report that the de facto complainant
stated in his statement recorded during the course of enquiry
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
that in the advocates circle, it was openly proclaimed that
Mr.Dammalapati Srinivas with his close intimacy with the then
Chief Minister and his associates in Telugu Desam Party, was
initially appointed as Additional Advocate-General and was later
appointed as Advocate-General and he and other top leaders in
the Telugu Desam Party and businessmen bought lands in and
around the capital region with prior knowledge of exact location
of the capital and cheated the farmers, who sold their lands to
them.
8) The report also states that there were rumours and leaks
about the location of capital at Amaravati, but its limits were
known to very few people in the Government. The list of villages
included in the capital area was published only in the month of
December, 2014 and till then the villages coming within the
capital area are not known to the public. Therefore, even before
the official notification was issued on 30.12.2014, the accused,
who secured information relating to exact location of the capital
region in illegal manner, had, by indulging in insider trading,
purchased the said lands from the farmers. The names of the
beneficiaries of such sale transactions are furnished in the
report and they are:
1) Dammalapati Srinivas;
2) Dammalapati Nagarani;
3) Nannapaneni Krishnamurthy;
4) Nannapaneni Sita Rama Raju;
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
5) Nannapaneni Lakshmi Narayana;
6) Madala Vishnuvardhana Rao;
7) Mukkapati Pattabhi Rama Rao;
8) Yarlagadda Ritesh;
9) Yarlagadda Lakshmi;
10) Nuthalapati Sritanuja;
11) Nuthalapati Sribhuvana;
12) Katragadda Srinivasa Rao; and
13) Vellanki Renuka Devi.
9) It is stated that the innocent farmers, who have no prior
knowledge of location of capital in their area, sold away their
property at low price and thus, the farmers were cheated by the
accused.
10) Therefore, it is stated in the report that Mr.Dammalapati
Srinivas, who is privy to the information relating to exact
location of the capital area, grossly misused his official position
as Additional Advocate-General and divulged the said
information to his relatives, friends, which is a secret
information and thereby purchased the lands in the capital area
and adjacent to it for paltry sale consideration from the farmers,
who have no knowledge about the location of the capital area,
and thereby enriched himself and also got the lands purchased
by his associates from the farmers in the similar manner and
thereby committed an act of criminal misconduct. So, it is
stated that all the accused have indulged in insider trading and
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
that Mr.Dammalapati Srinivas is liable for prosecution for the
offences under Section 13((1)(d)(ii) r/w.Sec.13(2) of the P.C. Act
and also under Sections 409, 420 r/w.120-B of IPC and other
accused are liable for prosecution for the offences under
Sections 420 r/w.120-B of IPC.
11) On the basis of the aforesaid preliminary enquiry report
wherein it is stated that the accused have committed a
cognizable criminal offence and that it is necessary to register a
case against the accused and conduct a thorough investigation,
the D.G., ACB, AP, Vijayawada, by his order dated 14.09.2020,
instructed Sri T.V.V. Pratap Kumar, Dy.S.P, ACB, Guntur, to
register a case against the accused. Accordingly, the F.I.R.
was registered on 15.09.2020.
12) The petitioners, who are A-8, A-10 and A-11, sought
quash of the said F.I.R. primarily on the grounds that they hail
from a respectable family and A-8 is a Post-Graduate with
stellar educational credentials and currently engaged in
entrepreneurial ventures and his wife A-11 is a Senior
Radiologist and A-10 is an advocate by profession commanding
good practice before various High Courts and they have been
falsely implicated in this case with ulterior motive to tarnish
their image and the image of their family members. Also on the
grounds that the F.I.R. or the preliminary enquiry report do not
establish any connection between A-1 and the petitioners and
that the de facto complainant is not an aggrieved person who
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
sold the lands to the petitioners or to any one and that there is
a delay of six years in lodging the report relating to the said sale
transactions by the de facto complainant, who is totally stranger
to the said sale transactions. It is the specific version of the
petitioners that they have purchased only small portions of land
in their individual capacity in the month of July, 2015 long after
the notification was issued notifying the capital region and
location of capital for valid sale consideration paid to their
vendors. Therefore, no offence of cheating or any criminal
conspiracy is made out against these petitioners. So, it is
stated that allowing the criminal proceedings to continue in the
said facts and circumstances of the case against them would
amount to abuse of process of Court and thereby sought for
quash of the F.I.R. registered against them.
13) Smt.A.Gayathri Reddy, learned Standing Counsel-cum-
Special Public Prosecutor for ACB, for the 1st respondent State,
filed memo adopting the counter-affidavit filed by the State in
W.P.No.16468 of 2020, stating that the facts are similar in both
the Writ Petition and the present Criminal Petitions and
requested to read the said counter-affidavit as part and parcel
of the present Criminal Petitions. A copy of the said counter-
affidavit is filed along with the said memo.
14) The said counter-affidavit was filed by Sri T.V.V. Pratap
Kumar, Dy.S.P., ACB, Guntur denying material averments of
the petitions. It is pleaded that the Hon‟ble Supreme Court has
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
repeatedly held that on any information furnished regarding
commission of a cognizable offence, a Station House Officer is
obliged to register an F.I.R. and in the instant case, on the
information furnished before the Station House Officer and after
conducting preliminary enquiry, the F.I.R. was registered
against the persons named therein. It is stated that the F.I.R.
was registered on the basis of the bona fide information that
was furnished and on the basis of the law laid down in the case
of Lalitha Kumari v. State of Uttar Pradesh1 by the Apex
Court. Therefore, the registration of F.I.R. is completely
legitimate and it is unexceptionable. It is stated that the
information disclosed in the F.I.R. clearly constitutes a
cognizable offence and as mandated by the Supreme Court in
various judgments, the present F.I.R. was registered. It is
further stated that, as further investigation was stayed by this
Court on the very day of registration of F.I.R. i.e. on 15.09.2020
in W.P.No.16468 of 2020 preferred by A-1, that no further
investigation could be made. It is pleaded that the Apex Court
repeatedly held that the investigation cannot be scuttled at a
nascent and early stage and the power under Section 482
Cr.P.C. and under Article 226 of the Constitution of India
cannot be sought to be exercised for thwarting an investigation
of a cognizable offence and the said law has been reiterated in
the case of Neeharika Infrastructure Pvt. Ltd. v. State of
1 (2014) 2 SCC 1
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
Maharashtra2. It is finally pleaded that as the petitioners seek
to raise several factual issues of complexity and defence that the
same cannot be considered under Section 482 Cr.P.C. While
making parawise denial of all the averments made in the Writ
Petition No.16468 of 2020, it is prayed to dismiss the Criminal
Petitions.
15) Sri O.Kailashnath Reddy, learned counsel for the 2 nd
respondent de facto complainant, has submitted that he is
adopting the aforesaid counter-affidavit of the State filed in
W.P.No.16468 of 2020.
16) When the Criminal Petitions came up for hearing before
this Court, heard arguments of learned counsel Sri Posani
Venkateswarlu, appearing for the petitioners and learned
Advocate General for the 1st respondent State and Sri O.
Kailashnath Reddy, learned counsel for the 2nd respondent de
facto complainant.
17) Learned counsel for the petitioners would submit that, in
fact, these are covered matters in view of earlier common order
of this Court passed in a batch of Criminal Petitions in
Crl.P.Nos.4819 of 2020 decided on 19.01.2021, which was
confirmed by the Hon‟ble Supreme Court in Petition for Special
Leave to Appeal (Crl.) No.2636 of 2021 and batch, as per order
dated 19.07.2021. He would submit that all the issues which
2 (2020) 10 SCC 118 = (2021) SCC Online SC 315
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
are raised in these Criminal Petitions were already considered
by this Court in the aforesaid earlier common order of this
Court and held that the facts of the case do not constitute any
offences punishable under Sections 420, 406, 409 and 120-B of
IPC. He would submit that this Court has elaborately discussed
regarding the legal position relating to the said offences under
Sections 406, 409, 420 and 120-B of IPC and gave a categorical
finding that the facts of the case do not constitute any such
offences. So, he would submit that as the present F.I.R. was
also registered against the petitioners herein based on similar
allegations and identical facts that the petitioners, who are
similarly placed, are also entitled for quash of F.I.R. He would
submit that even this Court has elaborately dealt with the
concept of offence of insider trading in the aforesaid earlier
common order and held that the said offence of insider trading
is alien to our criminal law under I.P.C. and it was only an
offence punishable under the Securities and Exchange Board of
India Act, 1992 (herein after called as "SEBI Act, 1992") relating
to unlawful disclosure of information pertaining to sale of
securities in stock market. Therefore, he would submit that in
view of the above common order of this Court, which was also
confirmed by the Apex Court in Petition for Special Leave to
Appeal (Crl.) No.2636 of 2021 and batch, as per order dated
19.07.2021, that the present prosecution against the petitioners
for the offences punishable under Sections 420 r/w.120-B of
IPC is also not maintainable under law and thereby prayed to
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
quash the F.I.R. registered against the petitioners in the present
case.
18) Learned counsel for the petitioners further vehemently
contended that the allegations set out in the F.I.R. and also the
contents of the preliminary enquiry report show that the
notification notifying the capital region and location of capital
city was issued in the month of December, 2014 i.e. on
30.12.2014 and prior to issuance of the said notification that
the information relating to location of capital city and the area
covered by it is a confidential information which was within the
knowledge of the officials of the Government who are at the
helm of affairs at that time and it is not a public information
and as such, all the sale transactions that took place relating to
the accused between June, 2014 and December, 2014 took
place on account of the information that was secured by the
accused by resorting to insider trading in conspiracy with A-1
who was the Additional Advocate-General at that time. He
would submit that the petitioners herein did not purchase any
lands during the said period from June, 2014 to December,
2014 and it is even the admitted case of the prosecution that
the petitioners have purchased their lands only in the month of
July, 2015 long after issuance of notification in the month of
December, 2014 relating to the location of capital city at
Amaravati and as such, nothing can be attributed to the
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
petitioners regarding alleged involvement in the insider trading
and securing the information relating to location of the capital.
19) He would then contend that there is nothing to indicate
either in the F.I.R. or in the preliminary enquiry report that the
petitioners are associates of A-1, the former Additional
Advocate-General, or that they got any association with A-1, to
show that they are conspired with him in purchasing the said
lands. He submits that the petitioners are private individuals
wholly unconnected with the official acts and affairs of the
Government and they have only purchased small extent of lands
in their individual capacity with their own earnings for a valid
consideration from the owners of the lands, who offered to sell
the said lands to them, under registered sale deeds.
20) He then contends that as the purchase of land by the
petitioners is long after issuance of official notification regarding
location of capital city on 30.12.2014, the question of their
securing clandestine information relating to location of capital
and thereby purchasing the lands does not arise at all and
nothing can be attributed to them in this regard. He submits
that by the date of purchasing lands by these petitioners in the
month of July, 2015, as the official notification was issued on
30.12.2014 declaring the area where the capital would be
established, the entire public and the whole world knows about
the area where the location of capital. He would also submit
that even prior to issuance of official notification on 30.12.2014
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
also, the information is very much in the public domain as the
proposal of the Government to locate the capital between
Krishna District and Guntur District by the side of River
Krishna was widely published in all newspapers. So, he
submits that even prior to 30.12.2014 and subsequent to
30.12.2014 the entire information relating to location of capital
is very much in the public domain and when the petitioners and
others have purchased the lands in exercise of their
constitutional right and legal right to acquire property, no
criminal liability can be attributed to them in entering any such
sale transactions.
21) He finally submits that the owners of the lands, who sold
the same to the petitioners and their vendors no grievance
whatsoever that they were cheated and they did not lodge any
report with the Police and they also did not initiate any civil
action in this regard. Therefore, he submits that the very
registration of the F.I.R. on the basis of the report lodged by the
de facto complainant, who is totally a stranger to the said sale
transactions, is legally unsustainable and launching of criminal
prosecution against the petitioners on the basis of the said
report amounts to sheer abuse of process of Court. Therefore,
he would pray for quash of the said F.I.R. registered against the
petitioners.
22) He also contends that the petitioners, who hail from a very
respectable family with high reputation in the society, have
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
been falsely implicated in this case to accomplish the ulterior
motive of some persons with vested interest who engineered the
fabrication of the report that was lodged with the ACB by setting
up a stranger to the sale transactions as a de facto complainant
and it is undoubtedly a malicious prosecution and it is liable to
be quashed.
23) Per contra, learned Advocate-General appearing for the 1st
respondent State would submit that the allegations set out in
the F.I.R. disclose commission of a cognizable offence and as
such, it is mandatory on the part of the concerned police to
register a case as per the law laid down by the Apex Court in
the case of Lalitha Kumari1. He would submit that even after
lodging the F.I.R. on 07.09.2014, the D.G., ACB, AP,
Vijayawada, without taking any hasty decision to register the
F.I.R., ordered for preliminary enquiry and after the preliminary
enquiry report was submitted, wherein it is stated that the facts
disclose commission of a cognizable offence and it requires
investigation, then only the DG, ACB, AP, Vijayawada, ordered
to register the F.I.R. Therefore, he would submit that there is
no legal infirmity in registering the F.I.R. in a case which
discloses commission of a cognizable offence. So, he would
submit that the case is at the nascent stage and the
investigation cannot be foiled and thereby prayed for dismissal
of these Criminal Petitions.
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
24) I have given my anxious and thoughtful consideration to
the aforesaid submissions made by the learned counsel for the
petitioners and leaned Advocate-General for the 1st respondent
State and Sri O.Kailashnath Reddy, learned counsel for the 2nd
respondent de facto complainant.
25) Before adverting to the merits of the case to ascertain
whether the allegations ascribed in the F.I.R. and the contents
of the preliminary enquiry report prima facie constitute any
offence punishable under Sections 420 r/w.120-B of IPC
against these petitioners, it is essential to note the brief history
relating to bifurcation of the erstwhile State of Andhra Pradesh
into two States of State of Telangana and the State of Andhra
Pradesh and the need to establish a capital city for the present
State of Andhra Pradesh.
26) The State of Andhra Pradesh was established under States
Reorganisation Act, 1956 with effect from 01.11.1956 consisting
of three regions viz., Andhra, Rayalaseema and Telangana. The
said State of Andhra Pradesh was bifurcated into two States i.e.
the State of Telangana and the State of Andhra Pradesh in the
year 2014 under A.P. Reorganisation Act, 2014. The said Act,
2014 received the assent of the President on 01.03.2014. The
appointed day for formation of the two States as per Act, 2014
under Section 4 of the said Act is 02.06.2014. Hyderabad
which was the original capital of the combined State of Andhra
Pradesh from 01.11.1956 was initially made a common capital
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
for ten years for both the States and thereafter it was made a
capital exclusively for the State of Telangana. Sub-Section (2) of
Section 5 of the Act, 2014 specified that there shall be a new
capital for the State of Andhra Pradesh after the expiry of the
said period of ten years. Therefore, the newly carved out State
of Andhra Pradesh with effect from 02.06.2014 has no capital
for the State. So, it necessitated to build a capital city for the
State of Andhra Pradesh.
27) In the General Assembly elections that took place in the
year 2014, the Telugu Desam Party came into power. Sri N.
Chandrababu Naidu was sworn as the Chief Minister of the
State of Andhra Pradesh on 09.06.2014. He made a public
announcement that the new capital city would come in between
Krishna District and Guntur District by the side of River
Krishna. Accordingly, the Government has initiated process for
establishing a new capital city for the State. After undertaking
necessary exercise for the said purpose, the Andhra Pradesh
Capital Region Development Authority Act, 2014 (hereinafter
called as "AP CRDA Act") was brought into force and it received
the assent of the Governor on 29.12.2014 and was published on
30.12.2014 in the Andhra Pradesh Gazette for general
information. The location of the capital at Amaravati between
Krishna District and Guntur District has been notified as per
the said publication in the official gazette on 30.12.2014.
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
28) In the backdrop of aforesaid factual scenario, the present
F.I.R. came to be lodged, almost six years after declaration of
the location of capital city and six years after the present sale
transactions of the petitioners took place. As noticed supra
while narrating the facts of the case in detail, the substratum of
the prosecution case is that the information relating to exact
location of capital city is a confidential information, which is
known to only few officials in the Government and it was not a
public information and A-1, who was an Additional Advocate-
General at that time, was privy to the said information
regarding location of the capital and he shared the said
information unauthorisedly with other accused, who are his
relatives and close associates and they purchased the lands in
and around the capital region and there was a conspiracy
between all the accused and they all indulged in insider trading
and thereby committed the aforesaid offences.
29) Therefore, the prosecution seeks to prosecute A-1 for the
offence of criminal misconduct punishable under Sections
13(1)(d)(ii) r/w.13(2) of the P.C. Act and under Sections 409,
420 r/w.120-B of IPC and they seek to prosecute all other
accused including the petitioners herein for the offences
punishable under Sections 420 r/w.120-B of IPC.
30) Thus, at the very out-set it is to be noticed that the
dispute primarily relates to purchase of private lands by the
petitioners from the lawful owners under various registered sale
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
deeds for a valid sale consideration. Therefore, it is a peculiar
case where the prosecution seeks to criminalize private sale
transactions relating to private individuals pertaining to private
lands entered into between the petitioners as buyers of the
lands and owners of the said lands as sellers, long back about
six years ago, by invoking the concept of offence of insider
trading applying the same to the facts of the present case and
also on the ground that the petitioners as buyers of the lands
did not disclose to the owners of the lands that the capital city
is going to be located in the said area and thereby concealed the
said material fact and cheated the owners of the lands.
WHETHER A-1 IS PRIVY TO THE INFORMATION RELATING
TO EXACT LOCATION OF CAPITAL CITY AND WHETHER HE
DISCLOSED THE SAME TO THE PETITIONERS AND
WHETHER THE PETITIONERS PURCHASED LANDS ON THE
BASIS OF THE SAID INFORMATION:-
31) It is the version of the prosecution that A-1 was an
Additional Advocate-General from 30.06.2014 and was an
Advocate-General from 30.05.2016 and during his tenure as an
Additional Advocate-General that he was privy to the
information which is confidential in nature relating to exact
location of capital region and instead of maintaining the
confidentiality of the said information that he has shared and
disclosed the said information to his family members, relatives
and close associates and they purchased the lands based on the
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
said information. Therefore, there is criminal conspiracy
between A-1 and the other accused.
32) Admittedly, A-1 was an Additional Advocate-General for
the State of Andhra Pradesh from 30.06.2014 till 28.05.2016.
He was an Advocate-General from 30.06.2016 onwards for the
State of Andhra Pradesh. The said period during which he
worked as Advocate-General is not germane in the context to
consider. Since the process relating to location of capital city
took place during the period from June, 2014 to December,
2014 when official notification to that effect was issued on
30.12.2014 and as the sale transactions in question took place
between June, 2014 and December, 2014 and in the month of
July, 2015 during which period A-1 was only an Additional
Advocate-General, his tenure as an Additional Advocate-General
from 30.06.2014 till 28.05.2016 alone is relevant in the context
to consider. It is stated that as he was privy to the information
which is confidential in nature relating to the location of capital
city which took place during the period from June, 2014 to
December, 2014 and that he has disclosed the said information
to his relatives and associates. As the entire case of the
prosecution rests and predicates on the said ground to
prosecute A-1 and also the other accused in the case, it is
essential to ascertain whether as an Additional Advocate-
General during the said period of time, by the very nature of his
duties as an Additional Advocate-General, he has any
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
constitutional function or statutory duty to involve or be part of
any decision making process in respect of location of capital city
which is the main function of the Legislature and Executive of
the State Government.
33) In this context, it is very much relevant to note at the very
outset that appointment of Additional Advocate-General for the
State is not contemplated under Article 165 of the Constitution
of India or in the scheme of the Constitution of India. Article
165 deals with appointment of Advocate-General for the State.
It reads thus:
"165. Advocate-General for the State.-- (1) The Governor of
each State shall appoint a person who is qualified to be appointed a
Judge of a High Court to be Advocate-General for the State.
(2) It shall be the duty of the Advocate-General to give advice
to the Government of the State upon such legal matters, and to
perform such other duties of a legal character, as may from time to
time be referred or assigned to him by the Governor, and to
discharge the functions conferred on him by or under this
Constitution or any other law for the time being in force.
(3) The Advocate-General shall hold office during the
pleasure of the Governor, and shall receive such remuneration as
the Governor may determine."
34) Therefore, a plain reading of the aforesaid Article makes it
explicit that appointment of only an Advocate-General for the
State is contemplated and it does not contemplate any
appointment of Additional Advocate-General.
35) As per the settled law, even though appointment of an
Additional Advocate-General is not contemplated under Article
165 of the Constitution of India, the State can appoint any
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
lawyer on its behalf to conduct any case or to defend it and the
State can designate any such lawyer with whatever designation
the State may propose including by conferring designation on
him as an Additional Advocate-General.
36) Whether such Advocate, who is appointed by the State
and designated as an Additional Advocate-General, is competent
to discharge any constitutional duties and statutory functions
on behalf of the State or whether his role is confined only to
appear on behalf of the State to conduct cases or to defend the
State in the cases before the Court or not, is the crucial
question which assumes significance in the present context.
37) Therefore, the crucial question that arises for
consideration is whether A-1 during his tenure as Additional
Advocate General from the period from 30-06-2014 to 28-05-
2016, was actually involved in any decision making process
relating to location and establishment of the capital city and in
the process of preparing draft bill for bringing the enactment i.e.
the Andhra Pradesh Capital Region Development Authority Act,
2014 (for short, the "A.P. C.R.D.A. Act") into force or not.
38) Admittedly, accused No.1 was not the Advocate-General
during the period when decision as to where capital city is to be
located was taken between June to December, 2014 by the
Government of the State and when A.P. C.R.D.A. Act was
passed by the State Legislature and was notified on 30.12.2014.
He was only an Additional Advocate-General during the said
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
period of time. So, he has no other authority under law as
Additional Advocate General to perform any constitutional or
statutory duties or functions attached to the office of the
Advocate General. It is only the Advocate General who holds a
constitutional office under Article 165 of the Constitution of
India and he alone performs the duties and functions which are
constitutional and statutory for the State which are attached to
his office.
39) The legal position whether an Additional Advocate General
holds any constitutional office and whether he is competent to
perform any constitutional and statutory duties and functions
is not res nova and the same has been succinctly explained and
dealt with by the Apex Court in the case of M.T. Khan v. Govt.
of A.P3.
40) Considering the true import of Article 165 of the
Constitution of India which deals with the appointment of an
Advocate General and the functions to be performed by him, the
Apex Court while interpreting Article 165 of the Constitution of
India held that the constitutional scheme is that it envisages
appointment of only one Advocate General and the appointment
of an Additional Advocate General is not contemplated under
Article 165 of the Constitution of India.
3 (2004) 2 SCC 267
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
41) However, it is held by the Apex Court that even though in
the scheme of the Constitution it is not provided for
appointment of an Additional Advocate General that the State in
exercise of its jurisdiction under Article 162 is competent to
appoint a lawyer of its choice and designate him in such
manner as it may deem fit and proper and once it is held that
any such person is designated as Additional Advocate General
that he is not authorized to perform any constitutional and
statutory functions, but he can discharge other functions as an
Advocate appointed by the State while appearing on behalf of
the State in the Court to conduct cases on behalf State or to
defend the State in other cases.
42) Therefore, the legal position is now manifest from the
exposition of law made by the Apex Court in the above judgment
that even though the Government of a State as a litigant can
appoint as many lawyers as it likes on its behalf and for the
said purpose, the State is not prohibited from conferring such
designation on such legal practitioners as it may deem fit and
proper and it can designate any lawyer as Additional Advocate
General, the said Additional Advocate General cannot discharge
any constitutional and statutory functions.
43) Even Clause (2) of Article 165 of the Constitution makes
the said position very clear. It enjoins that it shall be the duty
of only Advocate General to give advice to the Government of the
State upon such legal matters and to perform such other duties
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
of a legal character, as may from time to time be referred or
assigned to him by the Governor, and to discharge the functions
conferred on him by or under the Constitution or any other law
for the time being in force. For better appreciation, Clause (2) of
Article 165 of the Constitution of India is reproduced hereunder
and it reads thus:
"165. Advocate-General for the State.--
(1) .........................................................
(2) It shall be the duty of the Advocate-General to give advice to
the Government of the State upon such legal matters, and to
perform such other duties of a legal character, as may from
time to time be referred or assigned to him by the Governor,
and to discharge the functions conferred on him by or under
this Constitution or any other law for the time being in force.
44) Therefore, when Article 165 and the aforesaid legal
position enunciated by the Apex Court while interpreting Article
165, makes it explicitly clear that an Advocate who is appointed
by the Government of a State is designated as Additional
Advocate General, he has no right or power to discharge any
constitutional or statutory duties and functions on behalf of the
State and his right is confined only to conduct or defend the
cases on behalf of the State in the Court. The said power to
perform constitutional and statutory duties is exclusively
conferred only on the Advocate General and it is his exclusive
duty to give advice to the Government of the State upon legal
matters and to perform other duties of legal character which are
assigned to him by the Governor and to discharge the functions
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
conferred on him by or under the Constitution or any other law
for the time being in force.
45) When that be the clear legal position, A-1 who was only an
Additional Advocate General during the relevant period from
30-06-2014 to 28-05-2016 had absolutely no opportunity to
involve himself in any statutory or constitutional functions/
affairs to be performed by the State or by the office of the
Advocate General so as to hold that he is involved in the
decision making process relating to exact location of capital and
had an opportunity to know the information relating to exact
location of the capital city, which according to the prosecution
is a confidential information and that he is privy to the said
information. He has absolutely no role to play in the decision
making process relating to location of capital city or in bringing
A.P. C.R.D.A. Act into force.
46) There is absolutely nothing to indicate either in the F.I.R
or in the preliminary enquiry report as to how A-1 was privy to
the said confidential information. Therefore, owing to the very
nature of duties and functions of an Additional Advocate
General who has to only conduct or defend cases on behalf of
the State, it is to be held that he has absolutely no opportunity
to be privy to any such information, which is within the
exclusive knowledge of the officials of the State Government and
other authorities at the helm of the affairs of the State
Government.
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
47) The version of the prosecution that it is in the common
knowledge in the advocate circles that A-1 has close
acquaintance with the then Chief Minister Sri N.Chandrababu
Naidu and his group in Telugu Desam Party and as such, he is
privy to the said information cannot be countenanced. It is a
vague allegation and too hypothetical in nature. No criminal
liability can be fastened in this regard against A-1 on surmise
and conjecture. Political leaders would be in public life and
many people including lawyers and other professionals would
have some acquaintance with them. It cannot be inferred or
presumed or held that on account of such acquaintance that A-
1 as an Additional Advocate-General was privy to the said
information. As noted supra, it is a vague allegation which was
hypothetically made on supposition. Therefore, it cannot be
countenanced.
48) The said version as per contents of the F.I.R. and the
preliminary enquiry report shows that the de facto complainant
has only overheard from the advocate circles that accused No.1
had close acquaintance with the then Chief Minister
N.Chandrababu Naidu and his group in Telugu Desam Party
and on the basis of the said information which was overheard
by him that it is alleged that accused No.1 is privy to the
information relating to location of capital city. So, it is clear
that even the de facto complainant has no personal knowledge
of the said fact. Criminal proceedings cannot be initiated on the
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
basis of any such information which was overheard by the de
facto complainant and on the basis of mere conjecture and
surmise and on the basis of vague allegations. The Apex Court
in the case of State of Karnataka v. Arun Kumar Agarwal4 at
para 15 of the judgment held as follows:
".....The acts of persons will not be subject to criminal
investigation unless a crime is reported and have been
committed or reasonable suspicion thereto arises.
On mere conjecture or surmise as a flight of fancy that
some crime might have been committed, somewhere, by
somebody but the crime is not known, the persons involved
in it or the place of crime unknown, cannot be termed to be a
reasonable basis at all for starting criminal investigation."
49) Therefore, A-1 in his official capacity as an Additional
Advocate-General is not directly connected with any affairs of
the State relating to identifying the area where the capital city is
to be located. Obviously, he being an Additional Advocate-
General is not directly connected with the process of decision
making relating to the location of the area where the capital is
to be established. It is not at all part of his official duty. At that
point of time, there was an Advocate General for the State to
discharge any constitutional or statutory functions, if any,
entrusted to him and to advice the Government of the State. It
is not the version of the prosecution as can be seen from the
F.I.R. or from the preliminary enquiry report that A-1 was either
directly or indirectly involved in the process of identifying the
4 (2000) 1 SCC 210
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
area where the capital city is to be located. Therefore, unless it
is prima facie established either from the allegations set-out in
the F.I.R. which is a detailed report or from the findings of the
preliminary enquiry report that A-1 had any direct role to play
in decision making process relating to establishment of capital
and location of its area, it cannot be said under any stretch of
reasoning or imagination that he was privy to the said
information which is exclusively within the knowledge of the
concerned Government officials who are dealing with the said
issue. Therefore, when it is not shown that he was privy to the
said information, the question of divulging the same or sharing
the same with his associates or family members does not arise
at all. It purely appears to be a figment of imagination of the
de facto complainant.
50) Therefore, there is absolutely no material whatsoever to
prima facie establish that accused No.1 was privy to any such
information relating to location of capital city. So, it is to be
held that A-1 is not privy to the said information and that the
petitioners did not buy their lands on the basis of the said
information.
RIGHT TO ACQUIRE PROPERTY IS A CONSTITUTIONAL
RIGHT AND A LEGAL RIGHT:-
51) Earlier Article 19(1)(f) and Article 31 of the Constitution of
India are part of Chapter III of the Constitution dealing with
fundamental rights of a citizen. Article 19(1)(f) guaranteed to
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
the Indian citizen a right to acquire, hold and dispose of
property. Article 31 provided that "no person shall be deprived
of his property save by authority of law". Therefore, in view of
Article 19(1)(f) and Article 31 of the Constitution, right to
property was part of fundamental rights of a citizen.
Subsequently, by 44th constitutional amendment both Article
19(1)(f) and Article 31 were repealed with effect from
20.06.1979. So, the right to property ceased to be a
fundamental right. However, the right to acquire property
continues to be a constitutional right, legal right and also a
human right. Provision akin to Article 31 has been
incorporated under Article 300-A in Chapter-IV of the
Constitution under the rubric "right to property".
52) The Supreme Court, in the case of D.B. Basnett v. The
Collector, East District, Gangtok, Sikkim5 held at para 14 of
the judgment as follows:
"We may note that even though rights in land are no
more a fundamental right, still it remains a constitutional
right under Article 300A of the Constitution of India."
53) In Tuka Ram Kana Joshi v. Maharashtra Industrial
Development Corporation6 the Supreme Court reiterated that
right to property is now considered to be, not only a
constitutional or a statutory right, but also a human right.
Though it is not a basic feature of the constitution or a
5 Judgment in Civil Appeal No. 196 of 2011 dated 02.03.2020
6 (2013) 1 SCC 353
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
fundamental right, the right to property is considered very
much to be part of new dimensions where human rights are
considered to be in realm of individual‟s rights such as the right
to health, the right to livelihood, the right to shelter and
employment etc., and such rights are gaining an even greater
multifaceted dimension.
54) Therefore, when the petitioners herein, as citizens of this
country, have in exercise of their constitutional right and legal
right to acquire property purchased the said lands under
registered sale deeds for valid consideration from the owners of
the land which are willingly sold by them, the prosecution is not
justified in seeking to criminalize the said private sale
transactions entered into by private individuals in respect of
private lands. Therefore, the present prosecution under the
aforesaid sections of law is not maintainable on this ground
also.
CONCEPT OF OFFENCE OF INSIDER TRADING AND ITS
APPLICATION TO THE PRESENT FACTS OF THE CASE:
55) As regards the concept of offence of insider trading is
concerned, a study of history and origin of the offence of insider
trading reveals that the said offence of insider trading basically
relates to trading of public company‟s stocks or other securities
(such as bonds or stock options) based on material, nonpublic
information about the affairs of the company. As it is found
that the persons who are connected with the affairs of the
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
company have been sharing by disclosing the material and
nonpublic information relating to the affairs of the company
with other persons which is resulting into severe loss to the
company and its share holders, various countries brought
enactments to curb the said offence of insider trading in the
field of stock market. Therefore, insider trading is essentially an
offence relating to trading of public company‟s stocks or other
securities such as bonds or stock options based on material,
nonpublic information about the affairs of the company. The
said offence of insider trading has absolutely nothing to do with
the sale and purchase of private lands which is an immovable
property which are private sale transactions between private
individuals which are wholly unrelated to the affairs of the stock
market business.
56) Similarly, on par with the other countries, India also
brought into force the SEBI Act, 1992, to curb the offence of
insider trading in the field of stock market in India. Therefore,
the insider trading in the field of stock market alone is an
offence according to Sections 12-A and 15-G of the SEBI Act,
1992. As per the above provisions of the SEBI Act, 1992, the
offence of insider trading is said to be committed only when a
person with access to nonpublic, price sensitive information
about the securities of the company, subscribes, buys, sells, or
deals, or agrees to do so or counsels another to do so as
principal or agent. Therefore, insider trading is made only an
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
offence in India under SEBI Act, 1992, and it essentially deals
with the sale and purchase of securities in stock market based
on nonpublic material information. It is a special enactment
which specifically and exclusively deals with the offences
relating to sale of securities in stock market. Therefore,
Sections 12-A and 15-G of the SEBI Act, 1992 cannot be read
into or imported into the provisions of the Indian Penal Code
much less into Section 420 of IPC. The said offence of insider
trading is totally alien to our criminal jurisprudence as per our
Indian Penal Code. Insider trading is not at all made an offence
under the provisions of the Indian Penal Code. It is not at all
the intention of the Parliament to attribute any criminal liability
to any person involved in such private sale transactions relating
to immovable property in the guise of insider trading either
under Section 420 of IPC or under any provisions in the scheme
of IPC. Therefore, it is legally impermissible to prosecute the
petitioners for the offence punishable under Sections 420
r/w.120-B of IPC by applying the said concept of insider trading
even contextually or relatively in the guise of the concept of
insider trading in the facts and circumstances of the case.
57) In fact, while deciding earlier batch of Criminal Petitions
in Crl.P.No.4819 of 2020 and batch, in a case arising out of
similar allegations with identical facts where the State sought to
prosecute the accused therein by applying the said concept of
offence of insider trading in purchasing lands in the capital
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
region area, this Court after elaborately discussing the law
relating to the concept of offence of insider trading and its
applicability to the offences under the Indian Penal Code and
particularly, to Section 420 of IPC, ruled out the application of
concept of insider trading to the facts of the case and clearly
held that it was only an offence under the SEBI Act, 1992,
relating to purchase of securities in stock market based on
nonpublic material information and held that the same cannot
be applied to prosecute the accused for the offence punishable
under Section 420 of IPC or any other offences in the scheme of
Indian Penal Code.
58) The said findings recorded by this Court relating to the
offence of insider trading are confirmed by the Apex Court in the
appeal preferred by the State in Petition for Special Leave to
Appeal (Crl.) No.2636 of 2021 and batch, as per order dated
19.07.2021. Therefore, it is no more open to the prosecution to
contend that the concept of insider trading applies either
relatively or contextually to the present facts of the case. So,
the prosecution cannot invoke the said concept of insider
trading which is essentially an offence under the SEBI Act,
1992 to prosecute the petitioners herein for the offence under
Sections 420 r/w.120-B of IPC. Therefore, the said contention
of the prosecution is hereby rejected.
APPLICABILITY OF SECTION 420 R/W.120-B OF IPC TO
THE FACTS OF THE CASE AND WHETHER ANY SUCH
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
OFFENCE IS CONSTITUTED AGAINST THE PETITIONERS IN
THE FACTS AND CIRCUMSTANCES OF THE CASE OR NOT:
59) While Section 420 of IPC deals with the punishment for
the offence of cheating, Section 415 IPC defines the offence of
cheating and it reads thus:
"415. Cheating.--Whoever, by deceiving any person,
fraudulently or dishonestly induces the person so deceived to
deliver any property to any person, or to consent that any
person shall retain any property, or intentionally induces the
person so deceived to do or omit to do anything which he
would not do or omit if he were not so deceived, and which
act or omission causes or is likely to cause damage or harm
to that person in body, mind, reputation or property, is said
to "cheat".
Explanation.--A dishonest concealment of facts is a
deception within the meaning of this section."
60) A reading of Section 415 of IPC which defines the offence
of cheating makes it manifest that the necessary ingredients
which are essential to constitute an offence of cheating under
Section 420 of IPC are: (i) there must be a false representation
said to have been made by the accused to the person deceived
knowing fully well that the said representation made by the
accused is false at the time of making it; (ii) the accused must
induce the deceived person fraudulently or dishonestly to
deliver any property to him or to any person based on the said
false representation made by the accused; (iii) and consequently
it must result into loss or damage to the said person deceived,
in body, mind or property. Therefore, considering the said
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
ingredients contemplated under Section 415 of IPC, it is obvious
that deception is the quintessence of the offence of cheating.
So, to hold a person to be guilty of cheating another person,
there must be an allegation that a false representation was
made by the accused to the person deceived knowing fully well
that the said representation is false to his knowledge at the time
of making it and thereby he must induce the person deceived to
deliver any property to him or to any person and consequently
the person so deceived must sustain damage or harm to him
either in body, mind, reputation or to any property.
61) Admittedly, it is not the case of the prosecution that the
petitioners have made any false representation to the owners of
the lands at the time of selling the lands by them to the
petitioners and thereby induced them to deliver any property to
them. So, the above basic ingredients which are essential to
constitute an offence of cheating under Section 420 of IPC are
conspicuously absent in the facts of the case.
62) It is also relevant to note that certain negative terms like
dishonest, fraudulent etc. are used to attribute criminal liability
to a person to hold him guilty for the offence of cheating. So, no
act can be construed as an offence under Section 415 of IPC
unless they are committed dishonestly and fraudulently.
Considering the cardinal principle of criminal law that there can
be no offence unless it is done with requisite mens rea i.e. guilty
intention, the above qualifying words like dishonestly and
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
fraudulently are used in the definition of the offence of cheating
under Section 415 of IPC.
63) Section 24 IPC defines the term "dishonestly" and as per
the said definition, when anything was done with the intention
of causing wrongful gain to one person and wrongful loss to
another person, it is said that the same has been done
"dishonestly".
64) Wrongful gain and wrongful loss are again defined in
Section 23 of IPC. As per the said definition, wrongful gain is
the gain by unlawful means of property to which the person
gaining is not legally entitled and wrongful loss is the loss by
unlawful means of property to which the person, who is losing it
is legally entitled.
65) Thus, a comprehensive definition of wrongful gain and
wrongful loss under Section 23 of IPC, clearly indicates that
unless an act was done by a person to have a wrongful gain for
himself by unlawful means of property to which he is not legally
entitled, it cannot be said that he had any wrongful gain.
Similarly, unless a person has committed an act by unlawful
means of property to cause loss to a person losing it is legally
entitled, it cannot be said that he has committed such wrongful
loss. In the instant case, as per the facts of the case, absolutely
no act was committed by the petitioners to have wrongful gain
for them by unlawful means of property to which they are not
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
legally entitled. Similarly they did not commit any act of
causing wrongful loss of property to any person or to their
vendors in respect of the property to which they are legally
entitled.
66) The owners of the land offered their lands to sell the same
and the petitioners have accepted the said offer and as per the
said contract, the petitioners have purchased the said lands for
a valid consideration which are willingly sold by its owners
under registered sale deeds. Therefore, no act was committed
by the petitioners to have any wrongful gain by unlawful means
of property to the petitioners to which they are not legally
entitled and no act is committed by them to cause wrongful loss
to any person or their vendors/owners. It is purely a genuine
sale transaction, validly took place as per the terms of the
contract between both the parties for a valid consideration
under registered sale deeds. So, no dishonest act is involved in
these transactions.
67) Similarly, Section 25 of IPC defines the term "fraudulently"
and as per the said definition, a person is said to do a thing
fraudulently if he does that thing with intent to defraud but not
otherwise.
68) The literal meaning of the word "defraud" is almost
synonym to „deception‟ and „hoodwink‟ etc. When the
petitioners have acquired the property lawfully by paying valid
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
sale consideration to the sellers under registered sale deeds, it
cannot be said under any stretch of reasoning that there is any
element of fraud or deception is involved in the said transaction.
69) Therefore, when the facts of the case are viewed in the
light of the aforesaid definition of the term "dishonestly" under
Section 24 of IPC, and "wrongful gain" and "wrongful loss"
under Section 23 of IPC, and the term "fraudulently" under
Section 25 of IPC, this Court has absolutely no hesitation to
hold that no dishonest act was fraudulently committed by the
petitioners relating to the said sale transactions. They have
acquired the property by a lawful means to which they are
legally entitled under registered sale deeds. They did not
deprive the owners of the said lands of their property by
unlawful means to cause any wrongful loss to them.
Therefore, absolutely no offence under Section 420 of IPC is
made out from the facts of the case.
70) The argument addressed on behalf of the prosecution that
as per the explanation appended to Section 415 of IPC which
says that "a dishonest concealment of fact is a deception within
the meaning of Section 415 IPC" and as the accused at the time
of purchasing the lands did not disclose to the owners that
capital is going to be located in their area, that it amounts to
dishonest concealment of fact and it amounts to cheating under
Section 415 of IPC also holds no water in the facts and
circumstances of the case. The prosecution sought to invoke
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
Section 55(5)(a) of the Transfer of Property Act also to convince
the Court that buyer has duty to disclose the said fact to the
seller and as the same is not disclosed that it amounts to
offence of cheating. The said argument has been already
addressed before this Court in the previous cases decided in
Crl.P.No.4819 of 2020 and batch. This Court after elaborate
discussion regarding the legal position, with reference to the
decided case law on the issue, categorically held that buyers
have no legal obligation to disclose any latent advantages that
they may derive from buying the lands and that the information
contemplated under Section 55(5)(a) of the Transfer of Property
Act does not embrace within it the information relating to
possible location of capital in the area where the lands are
situated. In the commentaries on the Law of Transfer of
Property Act authored by a renowned jurist Sri G.C.V.
Subbarao, in its Fourth Edition at page No.1197, under the
caption "Buyer‟s liabilities before completion of sale" while
dealing with the requirement of disclosure of facts materially
increasing the value under Section 55(5)(a) of the T.P. Act, it is
stated as under:
"Latent advantages need not be disclosed: A buyer
is not bound to disclose latent advantages or communicate
to his vendor facts which may influence his own judgment
in purchasing the property. In Fox vs. Mackreth ((1788) 2
Bro. C.C. 400 = 29 E. R. 224), A knowing that there was a
coal-mine in the estate of B of which he knew B was
ignorant entered into a contract to purchase the estate of B
for the price of the estate, without considering the mine. It
was held that the contract could not be set aside on the
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
ground of fraud since B, as the buyer, was not obliged from
the nature of the contract, to apprise the seller of the
existence of the mine."
71) Thus, this judgment in Fox vs. Mackreth7 provides a
complete answer to the contention raised that the petitioners as
buyers are bound to disclose to the sellers that the capital city
is going to come in the area where the lands are located while
purchasing the said lands and non-disclosure of the same
amounts to dishonest concealment of fact as contemplated
under Explanation appended to Section 415 IPC.
72) Therefore, even the said contention that as the petitioners
did not disclose the fact to the owners that the capital city is
going to be located in their area that it amounts to concealment
of fact as per the explanation appended to Section 415 of IPC
and it amounts to cheating has no merit and it is rejected.
73) The Hon‟ble Supreme Court also in the order dismissing
the Petition for Special Leave to Appeal (Crl.) No.2636 of 2021
and batch, arising out of the common order, dated 19.01.2021,
passed by this Court in Crl.P.No.4819 of 2020 and batch, held
at page 7 as follows:
"..... There was also no question of loss being caused to the
sellers or any cheating by the buyers because neither by law
nor by a legal contract, the buyers were obliged to disclose
the likelihood of the location of capital city, which facts were
already in public domain. Moreover, there was no such pre-
7 (1788) 2 Bro. C.C. 400 = 29 E. R. 224
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
existing legal relationship between the buyers and the sellers
for which, the buyers were bound to protect the interest of
the sellers."
74) Even otherwise, the facts of the case disclose as per the
details of sale transactions furnished in the tabular form
annexed to the preliminary enquiry report, the petitioners
herein i.e. A-8 purchased the lands in the year 2015 under a
registered sale deed dated 28.07.2015, A-10 also purchased the
lands in the year 2015 under registered sale deeds dated
28.08.2015, 29.07.2015 and 30.07.2015 and A-11 purchased
the lands in the year 2015 under registered sale deeds, dated
29.07.2015 and 30.07.2015 respectively. Therefore, it is
evident that all the sale transactions relating to these
petitioners, who are A-8, A-10 and A-11, under the aforesaid
sale deeds took place in the month of July, 2015 long after the
official notification notifying the location of capital area was
issued on 30.12.2014. By the time the petitioners herein have
purchased the lands in the month of July, 2015, the
information relating to location of capital was officially made
public and it is known to one and all. It is no more a secret or
confidential information. It was officially declared by way of the
said notification dated 30.12.2014 as to where the capital is
going to be located. Therefore, the question of A-1, who is privy
to the said confidential information, sharing the same with the
petitioners herein and thereby the petitioners purchasing the
said lands on the basis of the said information does not arise at
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
all. It is absolutely a false allegation. For the same reason, the
question of A-1 entering into conspiracy with the petitioners by
sharing the said confidential information and committing an
offence of criminal conspiracy under Section 120-B of IPC by all
of them also does not arise at all. The very fact that the
petitioners have purchased the lands in the month of July,
2015 as per the aforesaid sale deeds completely belies the said
version of the prosecution.
75) Simply because the petitioners have purchased the lands
from the persons who bought the same during the period from
June, 2014 to December, 2014, nothing can be attributed to the
petitioners in commission of any of the aforesaid offences. The
persons who purchased the lands during the period from June,
2014 to December, 2014, who became lawful owners of the
same by virtue of the registered sale deeds executed in their
favour are entitled to sell the same to meet their legal
necessities. The recitals of the sale deeds executed in favour of
the petitioners herein clinchingly establish that as their vendors
are in need of money to meet their legal necessities and as the
said lands are not profitable to them that they have offered to
sell the same to the petitioners and the petitioners have
purchased the same.
76) It is important to note that the original owners of the land
who sold the same to the vendors of the petitioners during the
period between July and December, 2014 have absolutely no
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
grievance and they did not come forward at any point of time
stating that they were cheated. Even the vendors of the
petitioners have no such grievance. So, the de facto
complainant cannot legitimately complain being a stranger to
the sale transactions that the owners of the lands were cheated
by the petitioners.
77) Therefore, no element of criminality or cheating or
criminal conspiracy as contemplated under Sections 420
r/w.120-B of IPC is involved in the said sale transactions. They
are all genuine sale transactions that took place validly under
registered sale deeds. The prosecution now cannot seek to
criminalize the said private sale transactions relating to the sale
and purchase of private lands of private individuals.
EVEN DURING THE PERIOD FROM JUNE TO DECEMBER,
2014, THE SAID INFORMATION RELATING TO LOCATION
OF CAPITAL IS VERY MUCH IN THE PUBLIC DOMAIN:-
78) It is also relevant to note here that even during the period
from June, 2014 to December, 2014, the information relating to
the proposal of the Government to locate capital city between
Krishna District and Guntur District by the side of River
Krishna was also in public domain. The evidence in the form of
newspaper clippings which are produced by the petitioners
bears ample testimony of the fact that the information relating
to decision of the Government to locate the capital city for the
State of Andhra Pradesh would be between Krishna District and
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
Guntur District by the side of River Krishna is very much in the
public domain. The Chief Minister of the State, who was sworn
on 09.06.2014, immediately after the swearing-in-ceremony,
declared publicly that the capital city is coming between
Krishna District and Guntur District by the side of River
Krishna. This news was widely published in all widely
circulated Telugu and English newspapers. On 10.06.2014 it
was published in English newspaper with the headlines "AP
capital near Guntur, Naidu says he wants capital between
Guntur and Vijayawada". The news reads as follows:
"It is official. The new capital of Andhra Pradesh will
come up between Vijayawada and Guntur. Andhra Pradesh
Chief Minister N. Chandrababu Naidu announced this on
Monday (i.e. on 09.06.2014).
Speaking to the media at his residence, Mr.Naidu said
that if the capital comes up between Vijayawada and
Guntur it will develop like Hyderabad city."
It was also published in Andhra Jyothi, Telugu daily newspaper,
on 10.06.2014. Similarly, again on 02.07.2014 it was
published in Eenadu, Telugu daily newspaper, which is another
widely circulated local news paper, that the Andhra Pradesh
Government is contemplating to establish the new capital for
the State would be established by the side of River Krishna,
making Amaravati as main centre. The same news has been
published in Times of India, English newspaper, on 02.07.2014
with the headline "AP capital in Amaravati? On 23.07.2014 also
a news was published in Sakshi, Telugu daily newspaper, which
is another widely circulated newspaper in the State, with the
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
caption "Capital will be in between Krishna and Guntur and it is
the suitable place for building capital city said by Chairman of
Advisory Committee Narayana. On 24.09.2014 again it is
published in Eenadu, Telugu daily newspaper, that the capital
city would be on ring road and it may be anywhere throughout
the length of 184 K.Ms as the farmers are now coming forward
and that 30,000 acres are necessary and the aerial photograph
of Putrajaya Nagara was also published in the newspaper.
79) It is important to note that on 30.10.2014, the Economic
Times published the news that the Andhra Pradesh will have a
"riverfront" capital on the south side of river Krishna as the
State Government ended months of suspense and
speculation today by announcing that 17 villages in the
existing Guntur District would be developed as new capital
city. It is also stated that it is for the first time that the Telugu
Desam Party lead government had come out with a clear
location of the new capital as it had so far been saying it would
come within Vijayawada region. Most importantly it is to be
noted that the names of the proposed villages that would form
part of the new capital area are published in the above news
paper stating that Neerukonda, Kurugallu and Nidamarru in
Mangalagiri Mandal; Borupalem, Tulluru, Nelapadu, Nekkallu,
Sakhamuru, Mandadam, Malkapuram, Velagapudi,
Mudalingayapalem, Uddandaraya-palem, Lingayapalem,
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
Rayapudi, Apparajupalem and Dondapadu in Tulluru Mandal
would form part of capital area.
80) In Deccan Chronicle, English daily newspaper, it was
published on 31.10.2014, stating that in tune with the dream of
Chief Minister N. Chandrababu Naidu of building a "riverfront
capital", the Cabinet sub-committee, on land pooling, met here
on Thursday, identified 17 villages - 14 in Tulluru Mandal and
three in Mangalagiri of Guntur District and most of the villages
that will be formed part of the A.P. capital on the banks of the
river Krishna.
81) Thus, even from June, 2014 till 30.12.2014 also, on which
day official notification relating to location of capital was issued,
the news relating to the location of capital city has been widely
published in various newspapers from time to time regarding
possible location of capital city between Krishna District and
Guntur District by the side of River Krishna. The prosecution
also did not deny or dispute the fact relating to publication of
the said news items in various newspapers as per the material
produced by the petitioners. Therefore, the information relating
to proposal of the Government to locate capital city between
Krishna District and Guntur District by the side of River
Krishna is not at all a confidential or secret information and it is
very much in the public domain known to not only the
petitioners but also the owners/sellers of the land and in fact to
the entire world. When that be the case, it cannot be said that
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
A1 being privy to the said secret information has shared the
same with his relatives and associates and to the petitioners
herein and based on said information that all the accused
herein have purchased the said lands. The said contention has
no merit at all.
82) Therefore, when the vendors of the petitioners have
purchased the lands probably on the basis of the said
information which is in public domain as per the news
published in various newspapers, the subsequent sale of the
said lands to the petitioners herein in the month of July, 2015
for valid sale consideration under registered sale deeds cannot
be impeached on the ground that there is any element of
cheating involved in it or conspiracy is involved in it. The facts
of the case absolutely do not admit commission of any such
offence as alleged by the prosecution. Even stretching the
reasoning to the extent of straining it, and viewed from any
angle, the facts of the case do not constitute any offence under
Sections 420 r/w.120-B of IPC.
83) Even as regards the offence under Section 120-B of IPC is
concerned, Section 120-A of IPC defines what is criminal
conspiracy. It reads thus:
"120A. Definition of criminal conspiracy.--When two or
more persons agree to do, or cause to be done,--
(1) an illegal act, or
(2) an act which is not illegal by illegal means, such an
agreement is designated a criminal conspiracy:
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
Provided that no agreement except an agreement to
commit an offence shall amount to a criminal conspiracy
unless some act besides the agreement is done by one or
more parties to such agreement in pursuance thereof.
Explanation.--It is immaterial whether the illegal act is
the ultimate object of such agreement, or is merely incidental
to that object."
84) A plain reading of the aforesaid Section shows that there
must be an agreement between two or more persons to do or
cause to be done: (i) an illegal act, or (ii) an act which is not
illegal by illegal means. Therefore, an agreement between two
persons to do an illegal act or to do an act which is not illegal by
illegal means alone is designated as an offence of criminal
conspiracy. It is also clear from the proviso to Section 120-A of
IPC that no agreement except an agreement to commit an
offence shall amount to a criminal conspiracy unless some act
besides the agreement is done by one or more parties to such
agreement in pursuance thereof. Therefore, the essence of
criminal conspiracy is an agreement to do an illegal act.
Section 43 of IPC defines illegal act. As per the said definition,
the word "illegal" is applicable to everything which is an offence
or which is prohibited by law, or which furnishes ground for a
civil action.
85) As per the findings recorded by this Court supra, after
elaborate discussion regarding the question of fact and question
of law based on the facts and circumstances of the case, it is
held in no uncertain terms that no offence whatsoever is
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
committed by the petitioners or by any other accused for the
offence punishable under Section 420 of IPC. Therefore, when
there is no offence at all that was committed in the facts and
circumstances of the case, the question of the petitioners
entering into an agreement either with A-1 or other accused for
the purpose of doing an illegal act or for doing an act which is
not illegal by illegal means does not arise at all. As this Court
held supra that no offence was constituted whatsoever under
Section 420 of IPC, as a corollary, it is to be held that there was
no attempt made by the petitioners in agreement with any other
person to do an illegal act or to commit an offence or to do an
act which is not illegal by illegal means.
86) To constitute an offence of criminal conspiracy under
Section 120-B of IPC, as defined under Section 120-A of IPC,
the facts of the case should indicate meeting of minds between
the conspirators for the intended object of committing an illegal
act or committing an act which is not illegal, by illegal means.
A few bits here and there on which prosecution relies on cannot
be knitted together for the purpose of making out an offence
under Section 120-B of IPC as has been done by the
prosecution in the present case. It has to be shown that all
means adopted and illegal acts allegedly done were in
furtherance of the object of conspiracy hatched. Since, it is
found from the facts of the case that no offence itself is made
out from the facts of the case, there cannot be any offence of
criminal conspiracy to commit any offence.
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
87) Therefore, the facts of the case as per the allegations set
out either in the F.I.R. or in the preliminary enquiry report do
not make out or constitute any offence punishable under
Section 420 r/w.120-B of IPC against the petitioners herein.
88) It is relevant to note that the F.I.R. registered against A-1
for the offence under Sections 13(1)(d)(ii) r/w.13(2) of the PC Act
and under Sections 409, 420 r/w.120-B of IPC was quashed by
this Court in the Writ Petition filed by him in W.P.No.16468 of
2020. Therefore, when it is found that A-1 did not commit any
offence of criminal misconduct as alleged and he was not privy
to any such information relating to location of capital and when
he did not disclose the same to any person and to the
petitioners, the petitioners cannot be made liable for any offence
under Section 420 r/w.120-B of IPC. Further, similar F.I.R.
registered against some other persons based on similar
allegations and identical facts in Crime No.49 of 2020 of CID
Police Station, AP, Amaravati of Mangalagiri, was also quashed
by this Court in Crl.P.No.4819 of 2020 and batch on
19.01.2021, which was also confirmed by the Apex Court in
Petition for Special Leave to Appeal (Crl.) No.2636 of 2021 and
batch preferred by the State affirming the findings of this Court
recorded in the said common order, the petitioners against
whom similar allegations are made and who are similarly placed
are also entitled for quash of F.I.R.
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
89) At the cost of repetition, it is to be held that the Apex
Court in the judgment cited supra in the case of State of
Karnataka v. Arun Kumar Agarwal4 at para.15 of the
judgment held that the acts of persons will not be subject to
criminal investigation unless a crime is reported and has been
committed or reasonable suspicion thereto arises. On mere
conjecture or surmise as a flight of fancy that some crime
might have been committed, somewhere, by somebody but
the crime is not known, the persons involved in it or the place
of crime unknown, cannot be termed to be a reasonable basis
at all for starting criminal investigation.
90) It is further held, "the attempt made in this case appears
to us to be in the nature of blind shot fired in the dark without
even knowing whether there is a prey at all. That may create
sound and fury but not result in hunting down the prey."
91) The Apex Court also time and gain has examined the
scope of jurisdiction of the High Court under Section 482
Cr.P.C. and laid down several principles which govern the
exercise of jurisdiction of the High Court under Section 482
Cr.P.C. A three-Judge Bench of the Apex Court in the case of
State of Karnataka v. L.Muniswamy8 held that the High Court
is entitled to quash a proceeding if it comes to the conclusion
that allowing the proceeding to continue would be an abuse of
8 (1977) 2 SCC 699
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
the process of the court or that the ends of justice require that
the proceeding ought to be quashed.
92) Similarly, another three-Judge Bench of the Apex Court in
the case of State of Karnataka v. M. Devendrappa9 by
analyzing the scope of Section 482 Cr.P.C. held that the power
is to be exercised ex debito justitiae to do real and substantial
justice for the administration of which alone courts exist.
Authority of the court exists for advancement of justice and if
any attempt is made to abuse that authority so as to produce
injustice, the court has power to prevent abuse. It would be an
abuse of process of the court to allow any action which would
result in injustice and prevent promotion of justice. In exercise
of the powers court would be justified to quash any proceeding
if it finds that initiation/continuance of it amounts to abuse of
the process of court or quashing of these proceedings would
otherwise serve the ends of justice. When no offence is
disclosed by the complaint, the court may examine the
question of fact. When a complaint is sought to be
quashed, it is permissible to look into the materials to
assess what the complainant has alleged and whether any
offence is made out even if the allegations are accepted in
toto.
9 (2002) 3 SCC 89
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
93) Also held that judicial process should not be an
instrument of oppression, or, needless harassment.
94) Most importantly, it is relevant to note in the present
context that the Apex Court in the case of Mohd. Ibrahim v.
State of Bihar10 held at para No.7 as follows:
"7. This Court has time and again drawn attention to
the growing tendency of complainants attempting to give
the cloak of a criminal offence to matters which are
essentially and purely civil in nature, obviously either to
apply pressure on the accused, or out of enmity towards
the accused, or to subject the accused to harassment.
Criminal courts should ensure that proceedings before it
are not used for settling scores or to pressurise parties to
settle civil disputes. ..."
95) At para.15, the Apex Court further held as follows:
"15........ If a person sells a property knowing that it
does not belong to him, and thereby defrauds the person
who purchased the property, the person defrauded, that is
the purchaser, may complain that the vendor committed
the fraudulent act of cheating. But a third party who is
not the purchaser under the deed may not be able to
make such complaint. ..........."
96) In the instant case, the de facto complainant, who is a
third party and who is a stranger to the sale transactions made
a complaint.
97) Therefore, in view of the above, ground Nos.1 to 3 and 5
enumerated in the case of State of Haryana v. Bhajan Lal11
10 (2009) 8 SCC 751
11 1992 Supp.(1) SCC 335 = 1982 CriLJ 527
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
squarely apply to the present facts of the case. As the
allegations set out in the F.I.R. do not prima facie constitute or
make out any offence against the petitioners for the offence
under Sections 420 r/w.120-B of IPC much less any offences for
which the F.I.R. was registered, the F.I.R. registered against the
petitioners is liable to be quashed.
SINCE INSTANCES OF IMPLICATING INNOCENT PERSONS
WHO PURCHASED LANDS NEAR THE CAPITAL REGION IN
FALSE CRIMINAL CASES ARE ON RISE, THERE IS NEED TO
CURB THE SAME AND TO DEAL WITH THE PERSONS
LODGING SUCH FALSE REPORTS ADEQUATELY
ACCORDING TO LAW:-
98) Before parting with the cases, it requires a mention that it
is noticed from the criminal cases being registered which are
being questioned before this Court that instances of registering
false criminal cases and implicating innocent persons who
purchased lands at the capital region on the basis of the
information that is available in public domain has been on rise
and thereby persecuting the innocent persons by false
prosecution. This Court previously has dealt with several
criminal petitions filed by several accused challenging
launching of criminal proceedings against them in respect of
lands purchased by them at the capital region in exercise of
their constitutional right and legal right to acquire property and
this Court after considering legal validity of the said criminal
proceedings, quashed the F.I.R. registered against several
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
persons. Now again, this is yet another set of cases came up
before this Court seeking quash of criminal proceedings
initiated on the same allegations based on identical facts in
respect of the purchase of lands by the petitioners and other
accused in exercise of their constitutional right and legal right
to acquire property as citizens of this country. A careful
consideration of the facts and circumstances of these cases
clearly show that some modus operandi is being adopted by
initially making some strangers to the sale transactions who are
nowhere related to the lands in question or to the said sale
transactions, lodge report with the police with some concocted
version with vague details on unfounded allegations and
thereafter, a preliminary enquiry is being conducted nominally
and on the basis of the said report lodged by a stranger and the
preliminary enquiry report, cases are being registered against
innocent persons on some imaginary grounds that there was
insider trading and there was cheating and conspiracy etc.
without even examining the legal position whether any such
offences are made out from the facts of the case by the
Investigating Officer and the police concerned. This is resulting
into grave injustice to the innocent persons, who are being
persecuted by such malicious criminal proceedings. The
instant case is another classic example of such nefarious
design.
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
99) It is to be noted that the petitioners herein as per the case
pleaded by them in their petitions and as submitted by the
learned counsel for the petitioners hail from a very respectable
family with considerable and high reputation in the society.
They are only private individuals wholly unconnected with the
official acts and affairs of the Government. They are not
associated with any officials at the helm of affairs in the
Government. They have only purchased lands from private
individuals for a valid consideration under registered sale deeds
purely in exercise of their right to acquire property which is a
constitutional right and a legal right. They have also purchased
the properties long after issuance of official notification on
30.12.2014 notifying the capital region between Krishna District
and Guntur District by the side of River Krishna. They
purchased the lands under registered sale deeds in the last
week of July, 2015, by which time, the information relating to
location of capital was officially made public on account of
official gazette notification issued on 30.12.2014 to that effect.
Yet, the petitioners have been falsely dragged into this criminal
case and they have been implicated in the case. Only a vague
allegation was made in the F.I.R. that they are the beneficiaries
of the said sale transactions. Except the said allegation, no
other allegation is made against them. On the basis of the said
vague allegation, the F.I.R. was registered against them. No
enquiry was conducted by the Dy.S.P., ACB, Guntur, to
ascertain as to how they have committed any such offence by
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
entering into the said sale transactions in the preliminary
enquiry. Except stating that they are the beneficiaries of the
said sale transactions, nothing could be culled out even from
the preliminary enquiry report as to how the petitioners are
liable for criminal prosecution. No nexus between the
petitioners and A-1 was also prima facie established in the
preliminary enquiry report to show that they are associates of
A-1. So, the Dy.S.P., ACB, Guntur, conducted enquiry in a
most irresponsible way and in a casual manner and erroneously
held in the preliminary enquiry report that a cognizable offence
is disclosed. Just for the simple reason that the petitioners
have purchased lands like any other citizen in exercise of their
constitutional right and legal right, in the capital region, they
have been targeted and falsely roped in to this case and they
have been falsely implicated to malign their reputation and the
reputation of their family members in the estimation of the
public. The Court seriously deprecates the false implication of
the petitioners on the basis of vague material placed before the
Investigating Agency. The petitioners are found to be absolutely
innocent. Implicating innocent persons in criminal cases would
certainly create any amount of mental torture and agony to
them till the cases are disposed of exonerating them from
criminal liability. The innocent petitioners have to undergo
unnecessary trauma and agony and the ordeal of being accused
in criminal case for all this length of time. They have to rush to
the Court in vindication of their honour and innocence and to
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
seek justice. The mental agony undergone by them would be
really inexplicable.
100) Reputation, liberty and property of any individual are
sacred and sacrosanct and the court zealously guards them to
protect them.
101) Therefore, the present criminal proceedings initiated
against the petitioners are to be regarded as an attempt made to
traduce the petitioners and their family members. In the said
circumstances, the criminal proceedings initiated against the
petitioners are frivolous which have the effect of denigrating the
reputation of the petitioners and the reputation of their family
members.
102) The de facto complainant is solely responsible for initiating
the said frivolous criminal proceedings against the petitioners
and other accused. A.C.B. police concerned are also equally
responsible for launching the said frivolous and vexatious
criminal proceedings against the petitioners. Machinery of
criminal law cannot be misused to malign innocent people to
accomplish ulterior motives of the de facto complainant or the
persons behind him by lodging false reports to implicate
innocent people in criminal cases. It is clear that taking
advantage of legal position that any person can set the criminal
law into motion and not necessarily by the aggrieved person,
that the de facto complainant has lodged the present report with
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
the police. Thus, the process of law and court has been badly
abused by the de facto complainant. In fact, owing to the fact
that the petitioners have been falsely implicated in this criminal
case to persecute them by implicating them in false criminal
case, the petitioners are entitled to claim adequate damages
against the de facto complainant. However, as they did not
claim any such damages or compensation in their petitions and
as this Court in other batch of writ petitions arising out of the
same crime left open to the petitioner therein to claim damages,
this Court deems it appropriate in these petitions also to leave it
open to the petitioners granting liberty to them to claim
damages/ compensation against the de facto complainant and
other concerned for launching false and frivolous criminal
proceedings against the petitioners.
DENOUEMENT:
103) To sum up the upshot of above discussion is that A-1
while holding the office of an Additional Advocate-General has
no authority to discharge any constitutional or statutory duties
and functions and he has no role to play in the decision making
process in locating the area where the capital is to be
established and in bringing into force the A.P. C.R.D.A. Act,
2014. He was not privy to any information relating to exact
location of capital city. He had no role to play in the process of
identifying the location to establish capital city to know the
information regarding exact location of capital city. Therefore,
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
the question of A-1 disclosing the said information to the
petitioners or to any other accused and that the petitioners
purchasing the lands from the owners on the basis of the said
information does not arise. There is no truth in the said
allegation. Therefore, there is no conspiracy between A-1 and
the petitioners and other accused as alleged by the prosecution.
The information relating to location of capital is not a
confidential information and it is very much in the public
domain from June, 2014 itself. Right to acquire property is a
constitutional right and legal right of the petitioners as citizens
of the country. As they purchased the lands in exercise of their
constitutional right and legal right and acquired property from
the owners/sellers of the lands, who willingly and voluntarily
sold the same to the petitioners for valid sale consideration
under registered sale deeds, the said private sale transactions
cannot be criminalized and no criminal liability can be
attributed to the petitioners in the facts and circumstances of
the case to prosecute them for any such offences under Sections
420 r/w.120-B of IPC or under Section 409 of IPC. The concept
of offence of insider trading which is essentially an offence in
the field of stock market relating to selling and buying the
securities and bonds cannot be applied to the offences under
the Indian Penal Code and it cannot be read into Section 420 of
IPC or into any provisions in the scheme of Indian Penal Code.
It is totally alien to I.P.C. and it is unknown to our criminal
jurisprudence under the Indian Penal Code. There is no
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
dishonest concealment of fact in respect of the sale transaction
in question as contemplated under Explanation appended to
Section 415 IPC. So, it does not amount to any deception
constituting an offence under Section 420 of IPC. The sellers
did not sustain any loss on account of the said sale
transactions. So, no element of criminal liability is involved in
the sale transactions. No offence of conspiracy to do any illegal
act or to commit an offence is made out from the facts of the
case against the petitioners. Therefore, in the said facts and
circumstances of the case, the prosecution of the petitioners for
the alleged offences for which the F.I.R. was registered is wholly
unjustified and clearly opposed to all cannons and basic tenets
of criminal law and it amounts to sheer abuse of process of
court warranting interference of this Court in exercise of its
inherent powers under Section 482 Cr.P.C. to quash the same
in view of the law enunciated and the grounds enumerated by
the Apex Court in Bhajan Lal11‟s case and other judgments of
the Apex Court in State of Karnataka v. L.Muniswamy8 and
State of Karnataka v. M. Devendrappa9.
104) Therefore, both the Criminal Petitions are allowed and the
F.I.R. registered against the petitioners, who are A-8, A-10 and
A-11 in Crime No.08/RCO-ACB-GNT/2020 of A.C.B. Police
Station, Guntur, is hereby quashed.
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
Consequently, miscellaneous applications, pending if any,
shall also stand closed.
________________________________________________
JUSTICE CHEEKATI MANAVENDRANATH ROY
Date:02-09-2021.
Note:
L.R. copy to be marked.
B/O
cs
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
THE HON'BLE SRI JUSTICE CHEEKATI MANAVENDRANATH R0Y
Criminal Petition Nos.4294 and 4295 of 2021
Dated: 02.09.2021
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
*HON'BLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY
+ Criminal Petition Nos.4294 and 4295 of 2021
% Dated 02-09-2021
Crl.P.No.4294 of 2021:
# Sri Tanuja Potluri @ Sritanuja.N.
..... Petitioner
Vs.
$ The State of Andhra Pradesh (D.S.P., ACB, Guntur P.S.,) rep. by the
Public Prosecutor, High Court of A.P, Amaravati & Anr.
.....Respondents
! Counsel for the petitioner/s : Sri Posani Venkateswarlu,
learned counsel.
^ Counsel for 1st respondent State: Learned Advocate-General
for Smt.A.Gayathri Reddy,
learned Standing Counsel
for ACB-cum-Special
Public Prosecutor;
Counsel for 2nd respondent: Sri O.Kailashnath Reddy,
Learned counsel.
<GIST:
> HEAD NOTE:
? Cases referred:
1. (2014) 2 SCC 1
2. (2020) 10 SCC 118 = (2021) SCC Online SC 315
3. (2004) 2 SCC 267
4. (2000) 1 SCC 210
5. Judgment in Civil Appeal No. 196 of 2011 dated 02.03.2020
6. (2013) 1 SCC 353
7. (1788) 2 Bro. C.C. 400 = 29 E. R. 224
8. (1977) 2 SCC 699
9. (2002) 3 SCC 89
10. (2009) 8 SCC 751
11. 1992 Supp.(1) SCC 335 = 1982 CriLJ 527
CMR,J.
Crl.P.Nos.4294 & 4295 of 2021
IN THE HIGH COURT OF THE STATE OF ANDHRA PRADESH
Criminal Petition Nos.4294 and 4295 of 2021
Crl.P.No.4294 of 2021:
Sri Tanuja Potluri @ Sritanuja.N.,
..... Petitioner
Vs.
The State of Andhra Pradesh (D.S.P., ACB, Guntur P.S.,) rep. by the
Public Prosecutor, High Court of A.P, Amaravati & Anr.
..Respondents
COMMON ORDER PRONOUNCED ON: 02-09-2021
HON'BLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY
1. Whether Reporters of Local newspapers --
may be allowed to see the Judgments?
2. Whether the copies of judgment may be -Yes-
marked to Law Reporters/Journals
3. Whether Their Ladyship/Lordship wish to see -Yes-
the fair copy of the Judgment?
JUSTICE CHEEKATI MANAVENDRANATH ROY
