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TMI Blog2011 (8) TMI 1321X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No. 794 of 2011, Ponnam Ashok Goud, Asst Solicitor Gen, G.P. for Gad, P. Keshav Rao, Adv. R. Ramachandra Reddy, Adv., S.R. Ashok, Adv., V.V. Prabhakar, Adv., Susheel Kumar, Adv. for C. Nageswara Rao, , M. Rajesh, Adv., C.V. Bhaskar Reddy, Adv. in Writ Petition No. 6604 of 2011, G.P., for Gad, B. Narasimha Sarma, Sr. Adv. for Comptroller General of India, M.S. Ramachandra Rao, Adv., G.P., for Industries, G.P., P. Keshav Rao, Adv., Bharadwaj Associates, M. Rajesh, Adv., R. Ramachandra Reddy, Sr. Adv. ACB and S. Niranjan Reddy, Sr. Adv. for Election Commission in Writ Petition No. 6979 of 2011 ORDER: Shri Nisar Ahmad Kakru, C.J. 1. A Member of the Legislative Assembly (MLA) Secunderabad Cantonment (SC) Constituency, Andhra Pradesh, alleging misappropriation of public property against Late Dr. Y. S. Rajasekhara Reddy, Chief Minister of Andhra Pradesh and beneficiaries thereof through transfer, lease, licenses grants etc., sought the indulgence of the Chief Justice, High Court of Andhra Pradesh for registration of a crime which evoked the response of the then Acting Chief Justice of this Court on 22-11-2010, directing the Registrar (Judicial) of this Court to register the letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emise. 5. In the letter and the additional material, the petitioner furnishes information as to the manner in which thousands of crores of kickbacks were paid to the family of the then Chief Minister. In substance, it is averred that respondent No.52 and his family defrauded the public exchequer under the clout of the then Chief Minister and managed transfer of public properties and permissions, leases and licenses favouring various companies at throw-away prices in lieu of thousands of crores of kickbacks, paid by the individuals and corporates to respondent No.52 which was routed through the investments made in his (respondent No.52) companies and businesses, and it is in furtherance of the said purpose that investments in power companies, print and television media and other businesses of the said respondent (No.52) were made and the value of the shares in such companies grew at a premium rate of over 100 times apparently over and above the value of the share. It is also averred that the beneficiaries of the official favours from the late Chief Minister resorted even to money laundering by adopting Hawala routes through tax haven countries such as Mauritius and these monies are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . When these matters were taken up for hearing, learned Amicus Curiae, appearing in Taken-up Writ Petition No.794 of 2011, submitted that the modus operandi adopted by the then Chief Minister for receiving illegal gratification for exchange of official favours is evident from the phenomenal growth of companies owned and managed by respondent No.52. He submitted that though these investments made by the beneficiaries are being tried to be explained on the ground that they are business deals and pure commercial decisions to invest, learned Amicus pointed out that such explanation is unacceptable on the face of it, as no prudent person would invest crores of rupees in a company, which has neither any achievements nor any possibility of returns. He relied upon a decision of the Supreme Court in Vishwanath Chaturvedi v. Union Of India (2007) 4 SCC 380), particularly, paragraphs 15 to 20 thereof to contend that it was a case where huge amassing of wealth by the then Chief Minister of Uttar Pradesh was sought to be justified by showing the registered documents executed in his favour as well as that of his family members but by apparent consideration mentioned in the said documents, the we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estors, who had, in turn, invested huge amounts in various businesses of respondent No.52. Each individual case, therefore, needs to be examined to establish the modus operandi as to the manner in which and proximity within which the benefits are received from official favours on the one hand and the investments of kickbacks in companies of respondent No.52 on the other hand. We find from the record as well as from the additional particulars given by the petitioner in his letters that even Mauritius-based companies have invested Rs. 125 Crores in Sandur Power Company Limited owned and managed by respondent No.52. The said investment was made in the year 2005, the very first year of operation of the company and at a premium of Rs. 61/- per share and in spite of such huge investments, instead of appointment of it's nominee on the board of the said company, the personal auditor of late Chief Minister's businesses is said to be appointed as a nominee of the said foreign investors. 11. Mr. K.T.S. Tulsi, learned Senior Counsel appearing for respondent No.52 has, however, strongly refuted the said contentions and submitted that the author of the letter, which is registered as a Taken-up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded that the present case would fall under phase III dealing with transparency and probity in governance as per ratio in Uttaranchal's case (3 supra) and the decisions relied upon by the learned Senior Counsel were all referred to by the Supreme Court in the Uttaranchal's case. 16. Similarly, reliance placed by the learned Senior Counsel upon the decision of the Supreme Court in State Of West Bengal v. Committee For Protection Of Democratic Rights (AIR 2010 SC 1476 = (2010) 3 SCC 571) was also noticed and followed by us in our order dated 12.07.2011. We, however, find difficulty in accepting the contention of the learned Senior Counsel that Article 21 of the Constitution of India and the word 'life' used therein would still be available to protect the dignity of the then Chief Minister, who is no more. There cannot be two opinions that the dignity of a dead person has to be respected, but that is far from saying that the word 'life' used under Article 21 would include protection under Article 21 post-death also. The further decisions in Bandhua Mukti Morcha v. Union Of India (1984) 3 SCC 161) and Smt. Nilabati Behera Alieas Lalita Behera v. State Of Orissa (1993) 2 SCC 746), r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submits that on account of lesser investments net worth of respondent No.52 rose to Rs. 8.77 Crores, and for the year 2005-2006 it came down to Rs. 7.7 Crores. These figures are relied upon to show that before or after the father of the respondent No.52 became the Chief Minister there was no phenomenal increase in net worth and the increase in net worth in March 2011, was about Rs. 372 Crores on account of capital gain out of disinvestments in M/s. Bharathi Cements. Learned counsel, therefore, submits that there is absolutely no basis for the allegation that the assets of respondent No.52 rose to Rs. 43,000 Crores as stated in the letter. 20. Learned Senior Counsel also explained the other investments in the other group companies of respondent No.52 and has also explained that the allegation of any favour in grant of mining lease etc. with reference to M/s. Raghu Ram Cements, as alleged was already investigated by the Commission of Enquiry by a retired Hon'ble Judge of this Court and no irregularities were found. Learned Senior Counsel also made criticism of the note submitted by the learned Amicus Curiae on the ground that various aspects, as mentioned in the counter affidavit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arify that investment in VANPIC Projects attributed to Mr. N. Prasad is a pure investment from business point of view and the said project between the Government of India and a Saudi Arabean country is even now an on-going project and the VANPIC is only a partner therein. He also placed reliance upon State Of Karnataka v. Arun Kumar Agarwal (AIR 2000 SC 411 = (2000) 1 SCC 210) and contended that the allegations in the present case are not even closer to those facts. 24. Mr. C. Kodanda Ram, learned Senior Counsel appearing for respondent No.8 and Mr. K. Srinivas Reddy, learned counsel appearing for respondent No.32, besides adopting the arguments of Mr. L. Nageswara Rao, submitted that there are no direct allegations against these respondents. Respondent No.32, it is claimed, is a subsidiary French company and as such, unnecessarily roped into the present controversy. 25. Mr. S. Sriram, learned counsel appearing for respondent Nos.12 and 37, submitted that respondent No.12 has not invested any amount in any of the companies of respondent No.52 and no grant or favour was ever made in favour of respondent No. 37 by the State of Andhra Pradesh. 26. Mr. Vedula Venkatarama, learned Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, PML Act etc., since the allegations, if proved to be true, have inter-State ramifications, as Obulapuram mining area falls under the territorial and administrative jurisdiction of the Karnataka State where the Anti Corruption Bureau of AP does not have jurisdiction to investigate and in any case, investigation by ACB would be inadequate and cannot comprehensively cover all incidental aspects of the allegations. Moreover, the Lokayuktha of Karnataka State and CBI, Regional Unit, are already seized of the matter relating to Obulapuram mines. In view of the above, it is beyond the purview of ACB, AP, to cause enquiry into the above mentioned allegations." 31. Relying upon the averment, as above, the learned counsel states that existence of prima facie case was already noticed by ACB authorities of the State but on account of limitations of their power of investigation, they have expressed inability to act. Learned counsel, therefore, justifies the action of the petitioners in approaching this Court through the present writ petition. He placed reliance upon the statements of the learned senior counsel appearing for sixth respondent herein (who is also respondent No.52 in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r company - R.R. Global Enterprises Private Limited for the year 2009-2010 and contended that the huge turnover of thousands of lakhs from illegal mining is evident from the said report and that company also made investments in group companies of the sixth respondent for facilitating illegal mining. 35. Responding to the contentions of the learned counsel appearing for the petitioner, Mr. Susheel Kumar, learned Senior Counsel for the sixth respondent read out several paragraphs of 6th respondent's counter and in deference to his experience and standing, we behaved as listeners to allow him to proceed according to his own sequence but after sometime we reminded him that the counter of his client - 52nd respondent in this petition is almost identical to the counter affidavit filed in Taken-up Writ Petition No.794 of 2011 (where he is 6th respondent), relevant portions whereof were read out by Mr. K.T.S. Tulsi, learned Senior Counsel appearing for the said respondent in Taken-up Writ Petition No.794 of 2011, therefore, we requested Mr. Susheel Kumar, learned Senior Counsel to confine only to such of the paragraphs which were not read earlier. In fairness, he agreed and after reading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... glaring illegalities are writ large, dismissal of a public interest litigation on the ground of mala fides emanating from political motivation cannot be conceived. 37. Contention was also urged by learned Senior Counsel Mr. Susheel Kumar that surprisingly the petitioner has not made a single complaint nor lodged any FIR except writing a letter to the Hon'ble the Chief Justice after a long delay of about two years after the death of the then Chief Minister. In support of his contention, the learned Senior Counsel referred to page 351 of the paper book which shows that the first petitioner herein made a complaint to the Enforcement Directorate, New Delhi as early as on 05.03.2009 and the first petitioner was asked to submit documents of certain companies, which were not enclosed with the complaint. Learned Senior Counsel, therefore, states that no explanation whatsoever is forthcoming from the first petitioner as to why he had not pursued the complaint before the Enforcement Directorate nor the record sought for is produced by him and after keeping silent, suddenly the present writ petition is filed after noticing that the High Court had entertained Takenup Writ Petition No.794 of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icability of Section 13, the sixth respondent cannot be said to be a public servant prior to his election as Member of Parliament in May, 2009, and so far as Sections 8 and 9 are concerned, neither there are any particulars nor there are any specific acts attributed to the sixth respondent. No record is produced nor there any material to come to the conclusion against the sixth respondent and relied upon the order of the Supreme Court in SLP (Civil) No.20116 of 2011, dated 22.07.2011, which is extracted hereunder: "These special leave petitions are directed against the interim order passed by the High Court of Judicature of Andhra Pradesh at Hyderabad. We are not inclined to interfere with the same. The special leave petitions are accordingly dismissed. It is needless to mention that the principles of natural justice would be applied in case the Court wants to proceed against the petitioner." 39. Placing strong reliance upon the last sentence of the order, as extracted above, he contended that in terms of the said observation, compliance with the principles of natural justice would include an opportunity to the sixth respondent to examine the record and make submissions to clari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sixth respondent is prejudiced. 41. The State Government has chosen not to file counter affidavit nor has produced the records. So far as orders of admission calling for records is concerned, as per the rules of the Court, every writ petition once admitted, the standard proforma of Rule Nisi will be issued, which was also followed in the present case. It is, however, for the respondents to respond to the affidavit by a counter affidavit and records, and on their failure to do so, appropriate inference can be drawn. It is, however, not possible to accede to the request of the learned Senior Counsel that we should call upon the State to file counter and produce the records and as a party respondent if the State has not produced the record and filed counter affidavit, this Court will be left with no option but to draw an appropriate inference. We are, therefore, of the view, as held by the Supreme Court in Dosu Aardeshir Bhiwandiwala's case (8 supra) that irrespective of the State's counter affidavit and the records, the other material available on record has to be examined to satisfy ourselves as to whether the relief sought for can be granted. In other words, merely because there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cast Finance; M/s. Excel Prosoft; M/s. Sai Surya Warehousing and M/s. Sigma Oxygen. It is alleged that all the aforesaid companies merged in M/s. Keelawn Technologies Limited in which the sixth respondent has major stake. It is alleged that though the take over money was Rs. 4 Crores, these companies have allegedly invested Rs. 533 Crores in M/s. Sandur Power Company Limited. It is also alleged that another 21.42 lakh shares were allotted to Mr. Nimmagadda Prasad at a premium of Rs. 650/- per share and Rs. 140 Crores were received, and in turn, Mr. N. Prasad was given 15,000 acres of land as a promoter of M/s. VANPIC Projects Private Limited. 46. The counter affidavit of the sixth respondent states in para 16 that 83.20 lakh shares of M/s. Sandur Power Company Limited were sold by the sixth respondent in 2005-2006 at Rs. 1875/- per share to different companies, as mentioned by the petitioner. The sixth respondent admits that he has major stake in M/s. Keelawn Technologies Limited and that all the companies named by the petitioners were amalgamated with M/s. Keelawn Technologies Private Limited. The investment of Rs. 533 Crores by the said companies in M/s. Sandur Power Company Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rival factual contentions. As a matter of fact, we have already indicated to the learned counsel for the ninth respondent and the other impleaded respondents that the scope of the present writ petition is not with respect to involvement or otherwise of any individual company and as such, at this stage, it is neither desirable nor possible to go into the role played by the impleaded respondents or such of the investors, who may or may not have been impleaded, and the entire matter, if ordered for investigation, will have to be appropriately investigated and ascertained by the investigating agency. We hasten to add that there may or may not be genuine investments from the business point of view and that can be ascertained only by a detailed investigation, and we are sure that the investigating agency will appropriately segregate the genuine investors from others in the sweep of such investigation. 51. Prima facie, it emerges from the record forming part of the writ petitions including pleadings of the parties that from May, 2004 onwards, respondent No.52 floated number of companies wherein Quid Pro Quo investments have been made out of the benefits received by the investors / b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t needs to be placed on record that the learned Senior Counsel argued that in case the Court is inclined to use the preliminary report of the CBI against the respondents, in that eventuality, they have a right to get the copy of the report to respond to it. The argument to furnish copy of a document would appear to be sound because if a document is used against a party to the litigation by the Court, on principles of natural justice, he should be given an opportunity to deal with such document before it is used against him but will it apply to the CBI report which is now going to be the part of a Case Diary, because we have ordered registration of a crime and investigation and even against those who are not party to this writ petition? Therefore, a million dollar question would arise as to whether a copy of preliminary report could be furnished in the given facts and circumstances but this question need not be dwelt upon in this case because we have not taken the preliminary report of the CBI into consideration against the respondents and have drawn prima facie satisfaction for registration of case and investigation independently on the basis of material available on record relatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jagathi Publications Private Limited with the Registrar of Companies informing allotment of shares. The list of allotment shows allotment in favour of M/s. Gilchrist Investment Private Limited to the extent of 5,55,554 shares for a value of Rs. 19,44,43,900/-; M/s. Alpha Villas Private Limited to the extent of 4,16,666 shares for a value of Rs. 14,58,33,1000/; M/s. Alpha Avenues Private Limited to the extent of 2,50,000 shares for Rs. 8,75,00,000/- and M/s. Sandesh Labs Private Limited to the extent of 6,66,664 for Rs. 23,33,32,400/-. Learned counsel seeks to connect these allotments to various GOs issued by the Government to the promoter/director of all the aforesaid companies. One Mr. N. Prasad and his brother relies upon G.O.Ms.No.29, dated 07.07.2008, revising port limits of VANPIC and G.O.Ms.No.30, dated 10.07.2008 awarding 2000 acres each for the two ports under VANPIC project on build, operate and transfer basis. However, the said GOs are not produced, but the learned counsel has produced a copy of Form - 32 filed before the Registrar of Companies with respect to Ms/. Gilchrist Investment Private Limited, which shows the name of the Managing Director as Mr. Nimmagadda Prakas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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