A.Yadav Reddy v. State Of Telangana, For Acb

THE HON'BLE SRI JUSTICE M.SATYANARAYANA MURTHY CRIMINAL PETITION NO.3149 OF 2018 ORDER:

This criminal petition is filed under Section 437 & 439 of Cr.P.C to enlarge the petitioner/A-2 on bail in relation to Crime No.2/RCACR.2/2018, pending on the file of Anti-Corruption Bureau, City Range, Hyderabad, Hyderabad District, for the offences punishable under Sections 13(1)€ r/w 13(2) of Prevention of Corruption Act, 1988 (henceforth, for short 'Act').

The petitioner was arrayed as A-2 in the above crime and during investigation, the officials came to the house of the petitioner on 04.02.208 at 10:30 AM, conducted check till 11:30 PM. During search proceedings, the Investigating officials enquired about the whereabouts of A-1, as he was absconding. Again, on 05.02.2018 and on 06.02.2018, the police officials came to the house and office of the petitioner and threatened to disclose the whereabouts of A-1. Since the petitioner did not have any knowledge about A-1, as such, he could not give any details and finally to put pressure on A-1, the petitioner is falsely implicated in the above case without any material and the petitioner was shown as arrested on 08.02.2018 when he went to the office of the ACB officials, in response to a notice issued under Section 41-A of Cr.P.C.

The petitioner was arrayed as A-2 in the above crime and allegedly aided A-1 though his mother-in-law and his brother-in-law to invest the amount in M/s Sri Sai Hari Hara Estates Pvt. Ltd and the petitioner aided A-1 to screen the ill-gotten amount through his kith and kin, invest the same in the said M/s Sri Sai Hari Hara Estates Pvt. Ltd, which is being run in the names of Smt. A. Vasantha and K. Vijaya. The petitioner/A-2 who worked as Sanitary Inspector in M.C.

his job and colluded with the Accused Officer and promoted M/s Sri Sai Hari Hara Estates Pvt. Ltd and the petitioner allowed the accused officer Sri K. Purushotham Reddy to park his ill-gotten money in the said company for development and construction activities in the real estate business. Further, the petitioner with a common intention has colluded and conspired with accused officer/Sri K. Purushotham Reddy in the purchase of immovable properties and he allegedly invested the amount in the name of Sri B. Srinivas Reddy, brother-in-law of the petitioner. The following table is the Ledger account of Sri B. Srinivas Reddy found in the books of accounts of Sri Sai Hari Hara Estates Pvt. Ltd., Hyderabad, which is owned by the petitioner.

Payments (Investments in the company) 24.03.2011 - 7,00,000 25.03.2011 - 6,50,000 29.03.2012 5,00,000 - 21.07.2012 - 20,00,000 05.10.2012 5,00,000 - 31.01.2014 5,00,000 - 31.01.2014 - 5,00,000 27.03.2014 - 48,00,000 29.03.2014 - 39,00,000 17.04.2014 - 10,00,000 27.01.2017 46,00,000 - 30.01.2017 11,00,000 - 20.04.2017 7,00,000 - 01.06.2017 10,00,000 - 03.07.2017 5,00,000 - 11.07.2017 25,00,000 - 13.09.2017 3,00,000 - S.No Date Payments (Received from the company) The following table is the Ledger account of Smt. B. Sudeshna found in the books of accounts of Sri Sai Hari Hara Estates Pvt. Ltd., Hyderabad, which is owned by the petitioner.

S.No Date Payments (Received from the company) Payments (Investments in the company) Journal 24.03.2011 - 13,50,000 - 06.04.2011 - 21,25,000 -

31.03.2012 - - Rs.34,75,000/- transferred to profit & loss account 26.11.2012 - 31,00,000 - 31.03.2014 - - Rs.31,00,000/- adjusted against a purchase of a plot at Rampally. Paid by Hari Hara Estates It is also alleged that A-1/K. Purushotham Reddy purchased property in the joint name of the petitioner/Sri A. Yadava Reddy, Sri B. Srinivas Reddy (brother-in-law of the petitioner) and Smt. B. Sudeshna (mother-in-law of the petitioner), as his benamis, and the following are the properties purchased by A-1

On suspicion, the officials verified the call data of both A-1 & A-2 and found the following information regarding Evidence for linkage between K. Purushotham Reddy and A. Yadava Reddy between August, 2016 to August, 2017.

S.No Mobile No. of A.O Mobile No. of A.

Yadava Reddy No.

of Calls Duration in Seconds 8978822662 of A.O 9848090109 30124 8978822662 of A.O 9948091333 14205 7337387447 of A.O's official number 9848090109 9337387447 of A.O's official number 9948091333 The cell phone number 8978822662 is in the name of Sri K. Purushotham Reddy (A-1) and it is his personal number. Cell phone number 7337387447 is the official number of A.O., i.e. HMDA. Thus, A-1 and A-2/petitioner herein had contacts with each other closely and within a span of few months, several calls were recorded as per the information collected by the Investigating Officials shown in Column No.4 of the table referred above. The Investigating Officials also collected huge material which prima facie established that Sri B. Srinivas Reddy (brother-in-law of the petitioner) and Smt. B.

Sudeshna (motherin-law of the petitioner) had no capacity to invest the amount, who invested an amount of Rs.1.07 crores in M/s Sri Sai Hari Hara Estates Pvt. Ltd in the year 2014 and it is one such transaction to indicate nexus between A-1 & A-2. Further, the income of Sri. B. Srinivas Reddy is disproportionate to the amount invested in M/s Sri Sai Hari Hara Estates Pvt. Ltd, which is being run by the petitioner/A-2, his wife Smt. A. Vasantha and his son Sri A. Sairam Hari Hara Kumar Reddy and facilitated Sri K.

earned by abusing his official position. Thus, Sri K. Purushotham Redy/A-1, Sri A. Yadava Reddy/A-1 and Sri B. Srinivas Reddy have colluded and conspired among themselves with common intention and further have aided, assisted and abetted, for the offences punishable under Sections 13(1)€ r/w 13(2) read with 109 of I.P.C. of the Act and thus, all the accused, including the petitioner/A-2 are liable for punishment prima facie.

The remand case diary disclosed several transactions, amounting to crores of rupees, allegedly invested by A-1 in M/s Sri Sai Hari Hara Estates Pvt. Ltd and during the course of investigation, the house of Sri E. Veerender Reddy was searched and incriminating documents were seized. The development agreement-cum-general power of attorney between M/s Ockham Technologies Pvt. Ltd and M/s Golden Ridge Projects and Infrastructures and partnership deed were seized during inventory proceedings. Further, one Sri P. Prabhakar Reddy is a land owner and possessor of an extent of land admeasuring Ac.6-13 guntas in Sy.No.383/P, Manchirevula Village, Gandipet Mandal, Ranga Reddy District. When Sri P.

Prabhakar Reddy applied to HMDA for development of layout and construction of villas in the above site, HMDA rejected his application as Full Tank Level is within 500 mtrs. Sri E. Veerender Reddy pursued the matter of getting permission from HMDA and entered into development agreement. Thus, A-1 and Sri Veerender Reddy contacted with each other and started M/s. Golden Ridge Projects and Infrastructures, a partnership concern to develop the layout and construction of villas in Ac.6-13 cents land in Sy.No.383/P, Manchirevula Village, Gandipet Mandal, Ranga Reddy District, with the project cost proposed around Rs.30 crores. During 31.10.2016 to 23.06.2017 there were 180 cell phone calls between Sri K.

Reddy and Sri Veerender Reddy and the details of the cell Nos are as follows:

1. 8978822662 - Sri K. Purushotham Reddy (A-1)

2. 9849027377 - Sri Veerender Reddy It is stated that there are outgoing calls from Sri K. Purushotham Reddy to Sri Veerender Reddy and 96 incoming calls to Sri K. Purushotham Reddy from Sri Veerender Reddy. Similarly, A-1 through his confederates invested huge amount in various projects and started developmental activities, and fully engaged in real estate business affairs and thus committed offences punishable under Sections 13(1)€ r/w 13(2) of the Act.

The main contention of the petitioner is that, he is not a government employee and he only helped A-1 who started his business in the name of M/s Sri Sai Hari Hara Estates Pvt. Ltd and therefore, he is no way concerned with the offences punishable under Sections 13(1)€ r/w 13(2) of the Act. Apart from that, the petitioner is in judicial custody since 09.02.2018 in relation to the above crime and the amount is allegedly paid to the first accused. Further, the petitioner was given to the custody of Investigating Agency for few days and now, he is languishing in jail from 09.02.2018. It is urged that, as the entire investigation is completed, the detention of this petitioner in prison as a pre-trial detenue would not serve any purpose and prayed to enlarge the petitioner on bail, as there is no material to connect this petitioner in relation to Crime No.2/RCA-CR.2/2018, pending on the file of AntiCorruption Bureau, City Range, Hyderabad, Hyderabad District, for the offences punishable under Sections 13(1)€ r/w 13(2) of the Act and Section 109 of I.P.C.

During hearing, learned Senior Counsel Sri Vedula Venkataramana, appearing on behalf of Sri S. Ashok Anand Kumar contended that the petitioner has nothing to do with the alleged corruption of A-1 and he did not aid or assist A-1 in investing the alleged ill-gotten money in M/s Sri Sai Hari Hara Estates Pvt. Ltd through Sri B.

Srinivas Reddy (brother-in-law of accused No.1) and Smt. B. Sudeshna (mother-in-law of accused No.1) and that, he was falsely implicated, as A-1 was found absconding and unable to trace his whereabouts by the Investigating Agency. Therefore, no prima facie material is found against the petitioner/A-2 to connect with the offences punishable under Sections 13(1) r/w 13(2) of the Act, Section 109 of I.P.C. and prayed to enlarge him on regular bail. It is also contended by the learned counsel for the petitioner that the G. Nishanth Reddy/A-3 was enlarged on bail vide orders in Crl.P.No.2509 of 2018 dated 06.03.2018, the petitioner is similarly placed with him and by applying the principle of parity, this petitioner is also liable to be enlarged on bail.

Learned Special Public Prosecutor for A.C.B. the State of Telangana contended that, though the police custody was over, still they proposed to examine the Auditor of M/s Sri Sai Hari Hara Estates Pvt. Ltd and Sri E. Veerender Reddy, who supported the project of M/s Golden Ridge Projects and Infrastructures and the Investigating Agency proposed to file an application before the competent court having jurisdiction to record statement under Section 164 Cr.P.C and in case, the petitioner is enlarged on bail, thee is every likelihood of screening the evidence and prayed for dismissal of the criminal petition by placing reliance on the of the Supreme Court in P. Nallammal and another v.

State, represented by Inspector of Police1, in support of his contention.

The main allegation made against this petitioner/A-2 is that, the petitioner abated, aided and assisted A-1 in screening the ill-gotten money through Sri B. Srinivas Reddy (brother-in-law of the accused No.1) and Smt. B. Sudeshna (mother-in-law of accused No.1) and invested the amount in M/s Sri Sai Hari Hara Estates Pvt. Ltd. It appears from the material collected by the Investigating Agency that A-1 made investment through Sri B. Srinivas Reddy (brother-in-law of the accused No.1) as shown in table no.1 that the total amount invested by the brother in law of accused No.1 is Rs.1,35,50,000/- and the total amount paid by them is Rs.1,22,00,000/-. Similarly, from Table No.2, it appears that A-1 made investment through Smt. B. Sudeshna (mother in law of accused No.1 that the total amount invested by the mother in law of the petitioner is Rs.65,75,000/- and she did not make any payment. Several properties were purchased by Sri K. Purushotham Reddy (A-1) in the joint names of Sri. A. Yadava Reddy (A-2)/petitioner herein, Sri B.

Srinivas Reddy (brother-in-law of accused No.1) and Smt. B. Sudeshna (mother-in-law of accused No.1) who are his benamis, the values of the properties purchased by them is assessed by the Investigating Agency as Rs.2,43,50,000/- (approx). Similarly, there were 180 cell phone calls between Sri K. Purushotham Reddy and Sri Veerender Reddy and the details of the cell Nos are 8978822662 - Sri K. Purushotham Reddy (A-1) and 9849027377 - Sri Veerender Reddy. If, really, A-1 & A-2 were having no transactions between them, question of conversations between both of them for hundreds of times does not arise. 1 (1999) 6 Supreme Court Cases 559

An investment in crores of rupees in M/s Sri Sai Hari Hara Estates Pvt. Ltd by Sri B. Srinivas Reddy (brother-in-law of accused No.1) and Smt. B. Sudeshna (mother-in-law of accused No.1) is to be investigated into and apart from that, the various accounts seized from the petitioner would prima facie show that the petitioner accommodated A-1 to park the amount in crores of rupees through his nominees i.e. Sri B. Srinivas Reddy (brother-in-law of accused No.1) and Smt. B. Sudeshna (motherin-law of accused No.1). Therefore, at this stage, it is difficult to conclude that this petitioner did commit no offence prima facie, since the investigation is not yet completed and as the respondent proposed to examine the Auditor of M/s Sri Sai Hari Hara Estates Pvt. Ltd and Sri E.

Veerender Reddy, who supported the project of M/s Golden Ridge Projects and Infrastructures under Section 164 Cr.P.C. Therefore, at this stage, if the petitioner is enlarged on bail, there is every possibility of screening the proposed witnesses i.e. Auditor of M/s Sri Sai Hari Hara Estates Pvt. Ltd and Sri E. Veerender Reddy.

In any view of the matter, it is for this Court to strike balance between the fundamental right of individual liberty guaranteed under Article 21 of Constitution of India and societal interest. In Rajesh Ranjan Yadav @ Pappu Yadav v. CBI through its Director2 the Supreme Court held that, a balance has to be struck between right to individual liberty guaranteed under Article 21 of the Constitution of India and interest of society as no right can be absolute. No doubt, in the event of the petitioner's arrest, certainly, his Fundamental Right guaranteed under Article 21 of Constitution of India will be infringed. Fundamental Right under Article 21 of Constitution of India is not an absolute right and such liberty can be deprived of in 2 AIR 2007 SC 451

accordance with law. Arrest of a person in the process of investigation is permissible under the provisions of Criminal Procedure Code and such act of arrest by the police is deprivation of right of liberty of an individual in accordance with law. Therefore, it does not amount to violation of Fundamental Right guaranteed under Article 21 of Constitution of India. To strike a balance between the individual right of liberty and societal interest, the Court must take into consideration the impact of such serious crime, both on the society at large and on the economy of the State.

At the stage of granting of bail the court can only go into the question of the prima facie case established for granting bail. It cannot go into the question of credibility and reliability of the witnesses put up by the prosecution. The question of credibility and reliability of prosecution witnesses can only be tested during the trial vide:Satish Jaggi v. State of Chhattisgarh3 The Apex Court in "Gobarbhai Naranbhai Singala v. State of Gujarat4" relied on "State of U.P. v. Amarmani Tripathi5" held that while considering the application for bail, what is required to be looked is (i) whether there is any prima facie or reasonable ground to believe that the accused had committed the offence; (ii) nature and gravity of the charge;

(iii) severity of the punishment in the event of conviction; (iv) danger of the accused absconding or fleeing if released on bail;

3 (2008) 1 SCC (Cri.) 660 4 2008 Cri L J 1618 5 2005 (8) SCC 21

(v) character, behaviour, means, position and standing of the accused;

(vi) likelihood of the offence being repeated;

(vii) reasonable apprehension of the witnesses being tampered with; and (viii) danger, of course, of justice being thwarted by grant of bail. If these principles are applied to the present facts of the case the offence allegedly committed by the petitioner herein is aiding the accused No.1 to commit serious economic offence and when the petitioner aided for commission of such economic offence, the Court cannot grant bail as a matter of routine.

If, totality of the circumstances of the case is taken into consideration, the act of the petitioners is a serious economic offence and in such case, the petitioners are not entitled to claim even a regular bail as held by the Apex Court in "Nimmagadda Prasad v. Central Bureau of Investigation6".

In "State of Gujarat v. Mohanlal Jitamalji Porwal and another7", the Apex Court made a serious observation for considering bail for a serious economic offence and held in paragraph 5 as follows: "...............The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard 6 AIR 2013 SC 2821 7 (1987) 2 SCC 364

for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest."

If, the principles laid down by the Apex Court in the above judgment are applied to the present case, as the investigation is not completed and the amount involved in the crime is in crores of rupees, the petitioner cannot be enlarged on bail at this stage. One of the main contentions raised by the learned counsel for the petitioner is that the petitioner is not a government employee and he is only a business man as on the date of alleged offence, who allegedly accommodated A-1 to park the ill-gotten money through his benamies in M/s Sri Sai Hari Hara Estates Pvt. Ltd and thereby, he cannot be made liable for the offences referred supra.

But, the learned counsel for the respondent Sri Ravi Kiran Rao contended that, even if the petitioner is not a government employee, still the Court can try such person for the offences punishable under Sections 13(1)€ r/w 13(2) of the Act, Section 109 of I.P.C. and placed reliance on judgment of the Supreme Court in P. Nallammal and another v. State, represented by Inspector of Police (referred supra), in support of his contention, where the Apex Court held that, clause (b) of the Section 3(1) encompasses the offences committed in conspiracy with others or by abetment of "any of the offences" punishable under the Act If such conspiracy or abetment of "any of the offences" punishable under the Act can be tried "only" by the Special Judge, it is inconceivable that the abettor or the conspirator can be delinked from the delinquent public servant for the purpose of trial of the offence. If a non- public servant is

also a member of the criminal conspiracy for a public servant to commit any offence under the Act, or if such non-public servant has abetted any of the offences which the public servant commits, such non-public servant is also liable to be tried along with the public servant before the court of a Special Judge having jurisdiction in the matter. It is true that Section 11 deals with a case of abetment of offences defined under Section 8 and section 9, and it is also true that Section 12 specifically deals with the case of abetment of offences under Sections 7 and 11. But that is no ground to hold that the P.C. Act does not contemplate abetment of any of the offences specified in Section 13 of the P.C. Act. Learned counsel focussed on Section 13(1)(e) to elaborate that by the very nature of that offence it pertains entirely to the public servant concerned as there is no role for the co-accused for discharging the burden of proof.

If the principle laid down in the above judgment is applied to the present facts of the case, the petitioner, though a non-government servant is punishable offences punishable under Sections 13(1)€ r/w 13(2) of the Act and Section 109 of I.P.C. and still he can be tried along with A-1 who is a government servant for the offences punishable under Sections 13(1)€ r/w 13(2) of the Act, as Section 12 applies only t the offence punishable under Sections 10 & 11, but not to the offences punishable under Sections 13(1)€ r/w 13(2) of the Act. But, such offences committed by the petitioner falls within the definition of abatement under Section 109. Therefore, the abettor who aided or instigated or assisted the A-1 in backing the ill-gotten money is also liable to be tried along with A-1 and punishable for the offences punishable under Sections 13(1)€ r/w 13(2) of the Act read with Section 109 of I.P.C.

It is not the case of the respondent that the petitioner committed offences punishable under Sections 13(1)€ r/w 13(2) of the Act, but he is liable for punishment under Sections 109 & 120-B r/w 34 I.P.C. Therefore, the contention of the learned counsel for the petitioner is without any substance, in view of the law declared by the Supreme Court.

The other contention raised by the learned counsel for the petitioner is that, when G. Nishanth Reddy/A-3 was enlarged on bail vide orders in Crl.P.No.2509 of 2018 dated 06.03.2018. Apart from that, the entire amount allegedly invested was repaid to the persons who invested in M/s Sri Sai Hari Hara Estates Pvt. Ltd and as the petitioner is similarly placed with him, by applying the principle of parity, this petitioner is also liable to be enlarged on bail. On the other hand, learned Special Public Prosecutor for A.C.B. for the State of Telangana contended that the transaction between A-3 and A-1 through his nominees is only one and he was a student by the date of enlargement of bail.

But, the petitioner herein developed acquaintance with A-1 while he was working in Municipal Corporation and continued his acquaintance even after resignation of petitioner to his employment, aided and assisted A-1 to back the ill-gotten money in M/s Sri Sai Hari Hara Estates Pvt. Ltd to screen the same through his kith and kin. Further, the amount involved is in crores of rupees and therefore, the petitioner cannot be treated on par with G. Nishanth Reddy/A-3 and he is not similarly placed. Therefore, the principle of parity cannot be applied to the present facts of the case.

Learned Special Public Prosecutor for A.C.B. for the State of Telangana produced various sale deeds to establish prima facie that there were transactions between the parties referred supra. The ledger account

of B. Srinivas Reddy and Smt. Sudeshna found in the accounts of M/s Sri Sai Hari Hara Estates Pvt. Ltd shown in the table disclosed prima facie that there was large amount of investment. A receipt dated 15.04.2013 contains the transaction between M/s Sri Sai Hari Hara Estates Pvt. Ltd and Smt. B. Sudeshna evidencing purchase of immovable property for Rs.31 lakhs, which clearly shows that there were transactions. In the income tax returns for various years of Sri A. Yadav Reddy and his wife Smt. Vasantha disclosed that the total income of the petitioner herein for the years 2011-2017 was Rs.1,81,61,327/- and he paid income tax of Rs.47,69,360/- during these years. Similarly the total income of Smt. Vasantha wife of the petitioner for the years 2010-2018 was Rs.1,87,57,301/- and she paid income tax of Rs.50,14,756/- during these years.

Therefore, the Investigating Agency has to record statements of witnesses i.e Auditor of M/s Sri Sai Hari Hara Estates Pvt. Ltd and Sri E. Veerender Reddy, who supported the project of M/s Golden Ridge Projects and Infrastructures under Section 164 Cr.P.C and mere completion of custodial interrogation by the Investigating Agency is not a ground to enlarge this petitioner. On overall consideration of the entire material on record, I find that there is prima facie material against this petitioner to investigate further and taking into consideration gravity of the offences, the petitioner cannot be enlarged on bail, while striking balance between liberty of this petitioner and public interest. Hence, I find no ground to enlarge this petitioner on bail at this stage and this criminal petition is liable to be dismissed.

In the result, the criminal petition is dismissed. Consequently, miscellaneous applications pending if any, shall stand dismissed. No costs.

_________________________________________ JUSTICE M. SATYANARAYANA MURTHY Date:23.03.2018 SP