The Andhra Pradesh High Court has quashed the criminal case filed by the Andhra Pradesh government which alleged that ‘insider trading’ was carried out by former Chief Minister Chandrababu Naidu, his family members and some other leaders close to the TDP. The criminal complaint filed by the Jagan Mohan Reddy-led government had also named the family members of a sitting Supreme Court judge, a former Advocate General of the state, and others, accusing them of insider trading.
The Andhra Pradesh High Court has held that the land was sold willingly and that there was no criminality or insider trading involved.
The FIR in question had been registered with the Mangalagiri police station and had accused those close to the former Telugu Desam Party (TDP) government and former Chief Minister N Chandrababu Naidu of having prior knowledge and buying large tracts of land for cheap rates where the Andhra Pradesh capital region was to be set up in Amaravati. The FIR accuses these persons of buying the land before the Capital Region Development Authority Act declaring 24 villages adjacent to the Krishna river was passed in December 2014.
The petitioners had accused that there was a conspiracy between highly-placed government officials of the former government, political leaders and the those who purchased the lands during the period June to December 2014. The FIR accused officials of leaking information to the persons who purchased the lands from farmers.
A preliminary investigation by the police found that land parcels were sold to Good Life Estates Private Limited, Vertex Homes Private Limited and others between June and December 2014.
The respondents in the case argued that the news relating to the location of the capital was in the public domain and was widely reported in news reports. The respondents pointed out that the then Chief Minister had publicly announced on May 9, 2014, about the government contemplating to locate the new capital for Andhra Pradesh in between the Krishna District and the Guntur District by the side of the Krishna river.
A single bench headed by Justice Manavendranath Roy on Tuesday quashed the FIR, stating that, “The sellers did not sustain any loss on account of the said sale transactions. No element of criminality is involved in the sale transaction. So, the petitioners cannot be even remotely connected with any criminal acts or offence to attribute or fasten any criminal liability to them in the facts and circumstances of the case.”
The Andhra Pradesh High Court also pointed out that the concept of ‘insider trading’ does not arise, as its an offence in the field of the stock market and cannot be applied to offences under Indian Penal Code (IPC). “The court ruled that the concept of the offence of insider trading which is essentially an offence in the field of stock market relating to selling and buying the securities and bonds cannot be applied to the offences under Indian Penal Code and cannot be read into Section 420 IPC or into any provisions in the scheme of Indian Penal Code. The said concept of offence of insider trading is totally alien to IPC and it is unknown to our criminal jurisprudence under the Indian Penal Code. So, it cannot even contextually or relatively applied to the facts of the case to prosecute the petitioners," the single bench ruled.
The court also said that no element of fraud or deception is made out since there are proper documents to show legal transactions.
"When the petitioners have acquired the property lawfully by paying valid sale consideration to the sellers under registered sale deeds, it cannot be said that any element of fraud or deception is involved in the transaction," the court said. "A meticulous perusal of the recitals of the registered sale deeds executed by the sellers in favour of the petitioners selling their lands to them clearly proves that it is not the petitioners as buyers who have approached the sellers to sell the property to them. The recitals of the sale deed show that it is the sellers who offered to sell their lands to the petitioners to meet their legal necessities," the judge added.
The Andhra Pradesh Police had registered the FIRs under Sections 420 (cheating), Section 409 (Criminal breach of trust by public servant), Section 406 (criminal breach of trust) and 120-B (criminal conspiracy) of the Indian Penal Code.