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