Writ Petition No.794 of 2011
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 as a “Taken-up case” and was numbered as Writ Petition No.29358 of 2010.
2. During pendency of the above said “Taken-up Writ Petition No.29358 of 2010”, another letter was filed before the Registrar (Judicial) by the same MLA for taking on record the documents accompanying therewith. The letter along with annexures was posted by the Registrar (Judicial) before the 5th Division Bench, being seized of “Taken-up Writ Petition No.29358 of 2010” and the Division Bench passed the following order:
"The scope of this Taken-up case and the scope of the relief sought to be taken in this present letter dated..11.2010 is distinct and different on separate cause of actions requiring to implead various corporations and companies said to have been floated by him as annexed in Annexures-1 to 3. We are therefore of the opinion that this letter requires to be placed by the Hon’ble Chief Justice for taking appropriate action. The Registry is directed to place this letter before the Hon’ble Chief Justice for taking appropriate action".
3. Pursuant to the above direction of the Division Bench, orders were sought by the Registrar (Judicial) from the Chief Justice, who directed its posting as per roster. Accordingly, it was registered as “Taken-up Writ Petition No.794 of 2011”. There are two more Writ Petitions No.6604 and 6979 of 2011 claiming similar relief almost on similar assertions, and we propose to dispose of all the three together by this common judgment.
4. Proceeding in that direction, we would like to begin with “Taken-up Writ Petition No.794 of 2011”, wherein it is averred that Dr. Y.S. Rajasekhara Reddy extended huge benefits in the shape of allotment of lands, mineral rights, licences, SEZs rights to develop ports all along the Eastern coast forming part of Eastern Andhra Pradesh apart from permission for star hotels and complexes in and around Hyderabad and other major cities in Andhra Pradesh. It is also averred that the corporates and individuals, who benefited from these official favours were in turn made to invest kickback amounts into several individual and corporate businesses of the then Chief Minister’s son Sri Y. S. Jaganmohan Reddy, 52nd Respondent herein. It is also alleged that on account of the aforesaid Quid Pro Quo arrangement, the income of respondent No.52 rose from Rs.11 lakhs in 2004 to Rs.43,000 Crores by the time of his father’s demise.
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 brought into the companies and businesses of respondent No.52 at huge premium, though the track record and business assets of companies of respondent No.52 had hardly any achievements, assets to its credit or business on hand. It is also stated that apart from money laundering, as above, huge cash consideration received as kickbacks were brought in as investments by non-descript companies said to have been located in different parts of India which have hardly any business, income or means to support such huge investment, and favours to individuals and companies by the former Chief Minister are said to be traceable and linked to the phenomenal growth of the companies and businesses of respondent No.52 resulting from a huge corruption by respondent 52, his father and his family which requires thorough probe into each transaction by a central investigating agency, therefore, petitioner seeks a writ for investigation by the Central Bureau of Investigation (CBI).
6. Several beneficiaries, of such largesse, licenses, allotments, who are also investors in one form or the other in the business of respondent No.52 were impleaded and put on notice and most of them responded through counter affidavits, primarily, opposing the maintainability of this Taken-up writ petition. Some of them have endeavoured to justify the investments in the companies of respondent No.52 as commercial business decisions and have denied the receipt of any benefit from the Government of Andhra Pradesh or from anybody else. Respondent No.52 had earlier filed a counter affidavit only to the extent of maintainability without touching upon the merits of the allegations and had denied any violation of the Reserve Bank of India Act, FEMA or the Prevention of Money Laundering Act, 2002, contending further that the Enforcement Directorate is seized of enquiries with reference to the alleged violation and, as such, seeking investigation by CBI is only to unleash a political battle and to gain political advantage.
7. The learned Senior Counsel appearing for the respondents and the learned Amicus Curiae were heard on 12.07.2011 on the question of maintainability of the Writ Petitions. Among other things, there being involvement of substantial public interest, preliminary objection could not prevail on us and petitions were held to be maintainable, accordingly admitted to hearing by a detailed order.
8. 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 wealth amassed was shown to be disproportionate and unexplained, therefore, the Supreme Court directed a preliminary report to be furnished by the CBI and the present case being of a similar nature where gratification received is by a different modus operandi, investigation by CBI is essential.
9. A note given by Amicus Curiae in this Taken-up writ petition gives illustrative examples as under:
(a) M/s. Gilchrist Investments Pvt. Ltd., Alpha Villas Pvt. Ltd., and Alpha Avenues Pvt. Ltd., all promoted by Sri N. Prasad, are stated to have been allotted shares, face value of which, is Rs.10/-, for a premium amount of Rs.350/- each, in return for an official favour of allotment of Government land, to VANPIC PORTS PVT. LTD. and VANPIC PROJECTS PVT. LTD., on build, operate and transfer basis.
(b) M/s. Eres Projects Pvt. Ltd., promoted by RAMKY Group is stated to have been allotted 2,22,222 shares, face value of which, is Rs.10/-, for a premium of Rs.340/- each, in return for an official favour of allotment of land pertaining to Housing Board at Gachibowli and SEZ land at Visakhapatnam.
(c) M/s. P.V.P. Business Ventures Pvt. Ltd., is said to have been allotted 1,38,888 shares, face value of which, is Rs.10/-, for a premium of Rs.340/- each, in return for an official favour of allotment of Government land in an extent of Ac.598 at Nadargul Village, Ranga Reddy District.
(d) M/s. Pioneer Infrastructure Holding Ltd., promoted by Sri Pratap Reddy of PENNA Group, is stated to have been allotted 5,55,555 shares, face value of which, is Rs.10/-, for a premium of Rs.340/- each, in return for an official favour of relaxation of Building Regulations for construction of a Star Hotel on Road No.2, Banjara Hills.
(e) M/s. Trident Life Sciences Pvt. Ltd., which belongs to the HETERO Group, is stated to have been allotted 13,889 shares, face value of which, is Rs.10/-, for a premium of Rs.340/- each, in return for an official favour of allotment of land in an extent of Ac.240 at Nakkapalli and Jadcherla Villages, Mahabubnager District, for establishment of SEZ.
10. Learned Amicus Curiae submitted that these investments are prima facie directly linked to the benefits received by the individuals/companies in the area of interest of their business through the official favours from the then Chief Minister. In other words, valuable State largesse was bestowed on investors, 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 writ petition, is a known political adversary of the father of respondent No.52 – the then Chief Minister and submits that the present proceedings are mala fide and are initiated for political gain. He has placed reliance upon a decision of the Supreme Court in KUNGA NIMA LEPCHA AND ORS. v. STATE OF SIKKIM (2010) 4 SCC 513 and relies upon paragraphs 10 and 11 to submit that judicial intervention in such case for setting criminal law in motion was disallowed by the Supreme Court in the aforesaid latest judgment.
12. We find that the aforesaid decision was rendered in a writ petition filed before the Hon’ble Supreme Court under Article 32 of the Constitution of India but the petitioner had failed to establish and demonstrate violation of any of his fundamental rights to seek relief under Article 32. Further, the Supreme Court held that if it gives direction for prosecution it would cause serious prejudice to the accused. In that view, the prayer for directing prosecution through CBI was denied.
13. Learned Senior Counsel also submitted that the fact that the State has not launched any prosecution indicates that either it is not accepting the allegations against respondent No.52 or apprehends involvement of several members of the then Chief Minister’s Cabinet. He referred toSTATE OF UTTARANCHAL v. BALWANT SINGH CHAUFAL AIR 2010 SC 2550 and placed reliance upon paragraphs 18, 163 and 164 and particularly, drew our attention to the ratio of GURPAL SINGH V. STATE OF PUNJAB[(2005) 5 SCC 136].
14. We, however, feel that the decision in GURPAL SINGH’scase dealt with locus standi of the petitioner in raising a dispute relating to service of an employee and sustainability of public interest litigation in a service matter. Para 163 relied upon refers to the decisions of the Supreme Court in BALCO EMPLOYEES UNION (REGD.) V. UNION OF INDIA[AIR 2002 SC 350] as well as S.P. GUPTA v. UNION OF INDIA[AIR 1982 SC 149] and particularly, the observations of the Supreme Court with respect to the public interest litigation, as mentioned, in the said decisions.
15. In fact, the decision in STATE OF UTTARANCHAL’s case (3 supra) is the latest decision of the Supreme Court with respect to Public Interest Litigation jurisdiction and the manner and situations in which Public Interest Litigation can be entertained by the Courts. In our order dated 12.07.2011, we have already recorded 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, relied upon were also referred to in the Constitution Bench judgment in STATE OF WEST BENGAL’s case (4 supra).
17. It is, however, to be noted that as held in BANDHUA MUKTI MORCHA’s case (5 supra), even if conditions for issuance of any writ are not fulfilled, the Constitutional Court would not be constrained to fold its hand in despair and plead its inability to help the citizens, who come before it for judicial redressal.
18. Learned Senior Counsel also submitted that the assessment of assets of respondent No.52, which are highlighted for invoking jurisdiction of this Court are contrary to and in ignorance of the income tax returns of respondent No.52 but no care has been taken to verify the same. He also places reliance on a Commission of Enquiries report relevant in the matter rendered by one of the retired Hon’ble Judges of this Court. He, therefore, submits that the assets, acquisition as well as the valuation of the businesses of respondent No.52, particularly, Bharathi Cements and Jagathi Publications, are mischievously exaggerated contrary to the factual realities and a deliberate distorted picture is presented before this Court.
19. Learned Senior Counsel submits that the figures of assets of respondent No.52 for the year 2003-2004 and the latest figures, which are given in the letter shows very high growth of income and takes serious objection to the figures in the letter of the petitioner on the ground that these figures are irresponsibly given without verifying the returns filed by respondent No.52. He submits that when the allegation of phenomenal increase in the assets is made by the petitioner, who has written the letter, it has to be presumed that he is in knowledge of the figures reflected in the returns of respondent No.52. He, therefore, submits that in reality the returns of respondent No.52 for the year 2003-2004 show total assets to the tune of Rs.20.67 Crores and not Rs.11.02 lakhs, as alleged. He also submits that the book assets as per the year 2003-2004 have increased in the recent years only on account of disinvestments of shares by respondent No.52 in M/s. Bharathi Cements and thereby, the fixed assets of respondent No.52 by the time his father became the Chief Minister were Rs.19.43 Crores with liabilities to the extent of Rs.18.93 Crores and as such individual net worth was Rs.1.73 Crores. For the subsequent year also, he 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 of respondent No.52, have not been taken note of by the learned Amicus Curiae. Learned Senior Counsel also explained the business venture of respondent No.52 viz. M/s. Jagathi Publications in order to explain investments made by various individuals and companies therein and according to the learned Senior Counsel, on account of achievements in reaching position of No.2 in the State in the regional print media and superior quality of publication, the investments were made by various companies and individuals purely as a prudent business decision.
21. Learned Senior Counsel also submitted that respondent No.52 became a public servant only in May, 2009 and prior to that the Prevention of Corruption Act cannot be applied to him. Learned counsel also tried to distinguish VISHWANATH CHATURVEDI’s case (1 supra) from the present case on hand by contending that the respondents/politicians in the said case were only politicians, whereas respondent No.52 is basically a businessman. Several paragraphs of the counter affidavit of respondent No.52 are read out where he has explained the investments with respect to M/s. Jagathi Publications and M/s. Bharathi Cements and also with regard to the benefits conferred on the individuals by the State, but the learned Senior Counsel pleads that he is not aware of the same.
22. So far as other contentions of the learned Senior Counsel explaining investments and businesses of respondent No.52 are concerned, though we had allowed the learned Senior Counsel to make submissions in detail, we are of the view that it would not be appropriate within the scope of the present writ petition to examine each and every allegation and to probe into the correctness, validity or genuineness of every investment and every business venture and to compare and verify as to whether the same is linked with any corresponding Quid Pro Quo benefit received by such investor from the State of Andhra Pradesh. We also feel that such investigation into every such investment could be impossible without reference to records, accounts, corresponding entries in the official records etc., and that would convert the scope of this writ petition into an investigative enquiry, which is not permissible.
23. Mr. L. Nageswara Rao, learned Senior Counsel appearing for respondent Nos.20 to 25, made primary submissions on behalf of one of the investors – Mr. N. Prasad to clarify 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 Senior Counsel appearing for respondent No.42, submits that the said respondent is an investor in M/s. Jagathi Publications and the allegations in this writ petition are made, as if the said investor is a group company of RAMKY group,
who have been allotted land in Gachibowli. Learned Senior Counsel relies upon paras 14 to 16 of his counter to submit that respondent No.42 is not a part of RAMKY group at all and has not received any benefit from the State of Andhra Pradesh. Similar contention is adopted by Mr. S. Ravi, learned Senior Counsel, appearing for respondent No.9.
27. Mr. C. Nageswara Rao, learned counsel appearing for respondents 26, 33, 34 and 36, submitted that the said respondents are investors in the group companies of respondent No.52, but no benefits are granted by the State of Andhra Pradesh. Similar arguments are made on behalf of the learned counsel appearing for respondent Nos.39, 44 and 46.
28. Mr. S.R. Ashok, learned Senior Counsel appearing for respondent Nos.15 to 19, submits that merely on the basis of allegation of occupying Government land and having invested in the group companies of respondent No.52, these respondents are roped in, though as per para 8 of their counter, they are not occupying any land.
29. Learned counsel for respondent No.49 also submits that the respondent is only an individual investor and has not received any benefits from the State of Andhra Pradesh.
Writ Petition No.6604 of 2011
30. Mr. D. Srinivas, learned counsel for the petitioners, made submissions in support of this writ petition by drawing attention of the Court to para 27 of the affidavit and particularly to the averment that the first petitioner has made a complaint to the Central Bureau of Investigation (CBI) in February, 2009, but no action was taken and thereafter, the first petitioner sent a complaint to the Anti Corruption Bureau (ACB) authorities of the State. The ACB authorities of the State are impleaded as fourth respondent, who have filed a counter affidavit and the learned counsel places reliance upon the following paragraph of the said counter affidavit:
"It is submitted that the allegations mentioned in the representation require a thorough probe/enquiry by different agencies of Central Agency, which has jurisdiction to investigate into all the offences and violations of various regulations of FEMA, SEBI and offences under Income 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 connected Taken-up Writ Petition No.794 of 2011) which was heard by us a day before this petition and pointed out that as per the written note / submissions filed by the learned senior counsel, the net worth of sixth respondent in 2003-2004 was Rs.4.79 Crores and as per his declaration dated 15.04.2011 under the Representation of People’s Act before contesting Kadapa Parliamentary By-election, his net worth is shown as more than Rs.365 Crores and that of his wife at about Rs.42 Crores and submitted that this difference establishes the huge jump in the net worth of the sixth respondent.
32. Learned counsel also places strong reliance upon the assessment order of M/s. Jagathi Publications Private Limited,
the publisher of Telugu newspaper Saakshi, which is a media company of the sixth respondent. The said assessment order for the year 2008-2009, dated 31.12.2010 is heavily relied upon to show the conclusions of the Income Tax Department on the inflated value of the shares of M/s. Jagathi Publications Private Limited when it does not own any assets or any immovable property except plant and machinery, which has already earned depreciation. He also relied upon the conclusions in the order on some companies described as shell companies but had invested heavily through bank transfers in M/s. Jagathi Publications. He relies upon the conclusions of the assessment authority. We are, however, informed that an appeal against the said assessment is pending before the appellate authority and as such, the conclusions in the said order cannot be relied upon for any adjudication in this matter.
33. Learned counsel also submitted that one of the major investors, Mr. Nimmagadda Prasad, in the group companies of the sixth respondent was extended official favours by the State by allotment of 6,406.14 acres of land under G.O.Ms.No.1110, Revenue (ASSGN. VI) Department, dated 15.09.2008 for VANPIC Projects Private Limited, and under another G.O.Ms.No.1115 Revenue (ASSGN. VI) Department, dated 16.09.2008 another extent of Ac.5451.06 cents was allotted and it is contended that on account of these huge allotments of thousands of acres of land all along the eastern coast to the said investor, he has Quid Pro Quo invested hundreds of crores of rupees in the group companies of the sixth respondent.
34. Learned counsel also placed reliance upon the annual report of another investor 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 a few paragraphs, he primarily questioned the very entertainment of Taken-up Writ Petition No.794 of 2011 but the objection having been turned down by us vide our order dated 12.07.2011, followed by dismissal of SLP (Civil) No.20116 of 2011 and batch by order dated 22.07.2011 by the Hon’ble Supreme Court, he fairly accepted the legal position that that contention would not now be available to him and did not press it.
36. Mr. Susheel Kumar, learned Senior Counsel also contended that the MLA who wrote the letters, is from the ruling party and based on the timing of the letter and its entertainment as a Taken-up writ petition by this Court, he is alleged to have bargained and became a Cabinet Minister. The argument of Mr. Susheel Kumar that the petitioner is MLA of ruling party and he bargained to become a Minister is not relevant in this writ petition (Writ Petition No.6604 of 2011) because petitioners - MLAs herein are not from ruling party but from opposition party. No doubt, MLA of ruling party has also filed Writ Petition No. 794 of 2011, wherein 52nd respondent is 6th Respondent herein, and is represented by Mr. Susheel Kumar. Be that as it may, we have allowed this petition to survive in greater public interest and have appointed an Amicus Curiae, who ably assisted the Court throughout the hearing, and kept the petitioner Shri Shankar Rao, MLA, out of picture, so much so, we have neither sought any kind of assistance nor allowed him to participate in the proceedings of the Court. Regarding political rivalry, there is no denying that the movers of two writ petitions, out of three, are politicians, therefore, their bona fides are very seriously questioned by the respondents contending that these petitions owe their origin to the political vendetta. The contention needs to be appreciated in the light of the grievance urged in these petitions which suggests that a method was devised for a systematic swindling of the State exchequer by parting with government land through allotments, leases and licenses for various terms of duration, favouring a selected group of companies at throw-away prices and by financial misdeeds involving huge magnitude of Government largesse, corporate dealings including huge investments in lieu of disbursement and distribution of largesse, besides other benefits obtained by the investors from the State of Andhra Pradesh. When such 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 Taken-up Writ Petition No.794 of 2011. Learned Senior Counsel, therefore, submits that it is not a bona fide writ petition and even otherwise, the petitioners could have easily approached the CBI or proceeded under Section 156 of the Criminal Procedure Code, 1973. Learned Senior Counsel also submits that all decisions with respect to allotment of land etc., which are now attributed to the then Chief Minister, were Cabinet decisions. Learned Senior Counsel also pointed out that Rule Nisi was issued by this Court while admitting this writ petition wherein records were called for and made a strong objection with respect to non-filing of counter affidavit and non- production of record by the State. So far as the letter of Enforcement Directorate dated 05.03.2009 is concerned, we find that the said complaint was not filed after the death but during the lifetime of the then Chief Minister which would show that the petitioner had made an effort to bring the allegations to the notice of the authorities, therefore, a question arises as to whether Enforcement Directorate, New Delhi could not have taken cognizance because documents were not annexed with the complaint, and does it lack the power to have the record looked into or was it the status of the Chief Minister which worked as an impediment for the Director, expression of opinion is uncalled for in view of limited scope of the writ petition whether direction to register a crime is warranted or not. The contention that the petitioners could have approached CBI with a complaint is also not sustainable as CBI on its own cannot investigate any complaint except in accordance with Section 6 of the Delhi Special Police Establishment Act nor an FIR with the local police enabling them to investigate, especially when ACB authorities themselves in their counter affidavit have expressed inability to investigate, as quoted above. We, therefore, feel that the objections so raised by the learned Senior Counsel are not sustainable.
38. Referring to the prayer in this writ petition, wherein the petitioners are seeking consequential direction against the third respondent (CBI) to prosecute the sixth respondent under the provisions of the Prevention of Corruption Act, Prevention of Money laundering Act and other applicable penal laws, the learned Senior Counsel submitted that a reading of Sections 8, 9 and 13 of the Prevention of Corruption Act shows that for applicability 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 clarify the lack of substance in all the allegations contained in the petition and repeatedly pointed out that in spite of Rule Nisi issued by this Court, the official respondents i.e. particularly, the State of Andhra Pradesh has not produced any record nor has responded by any counter affidavit and, therefore, implored us to call upon the State to produce the records so that principles of natural justice would be complied with. He also placed reliance upon the decision of the Supreme Court in CITY AND INDUSTRIAL DEVELOPMENT CORPORATION v. DOSU AARDESHIR BHIWANDIWALA AND OTHERS (2009) 1 SCC 168. The facts of the above decision show that the first respondent/writ petitioner claiming to be a trustee of a trust and owner of land in question approached the High Court complaining that the appellant – CIDCO was illegally using the said land without acquiring and without paying compensation. The said claim of the first respondent/writ petitioner was contested by the appellant – corporation, inter alia, claiming that the land was acquired 35 years back and is in possession of appellant – corporation and the writ petition filed after 35 years ought not to have been entertained. No counter affidavits were filed by the State of Maharashtra and the Collector, and on the basis of the oral statements of the officers conveyed to the Assistant Government Pleader during the hearing, the writ petition came to be disposed of by the High Court directing to acquire the land and pay compensation to the first respondent/writ petitioner. The legality of that order was in question before the Supreme Court, when their Lordships laid down that in exercise of extraordinary jurisdiction the High Court is bound to take all relevant facts and circumstances into consideration, even in the absence of proper affidavit from the State and its instrumentalities and whether a case desires relief must be ascertained. It was further held that in a public law remedy, the relief could not be granted only on the ground that the State did not file counter affidavit opposing the writ petition.
40. Placing strong reliance on the above judgment, the learned Senior Counsel contended that the affidavit on behalf of the State together with production of relevant records is absolutely essential for this Court to consider the relief sought for in this writ petition, as in the absence of counter affidavit, the 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 is no counter affidavit or records from the State, the relief as sought for cannot be automatically granted and the same depends only on satisfaction of the Court on the rest of the material available on record. More so, such failure of the State would lead to an inference that on the one hand State has failed to save the public exchequer and, on the other, it appears that a free hand is given to any one and every one, even if it means breach of law and such an inference in no way assists the learned Senior Counsel, conversely makes our intervention all the more necessary to safeguard the public interest.
42. Finally, while summing up, the learned Senior Counsel submitted that filing of the present writ petition is an abuse as they have suppressed entertainment of Taken-up Writ Petition No.794 of 2011 by this Court and the said information was not disclosed in this writ petition. He also submitted that the present writ petition, filed by the members of a political party, are politically interested in this writ petition and placed reliance upon the ratio of the Constitution Bench judgment of the Supreme Court in STATE OF WEST BENGAL v. COMMITTEE FOR PROTECTION OF DEMOCRATIC RIGHTS AIR 2010 SC 1476 = (2010) 3 SCC 571 as well as SECRETARY, MINOR IRRIGATION AND RURAL ENGINEERING v. SAHNGO RAM ARYA AIR 2002 SC 2225 = (2002) 5 SCC 521 and submitted that the petitioners failed to prove the prima facie case and in view of the failure of the State to produce the records, this Court would not be in a position to adjudicate upon the writ sought for.
43. Learned counsel for the ninth respondent submitted that there is no specific allegation against his client and as such, there is no reason to include him in the array of parties.
44. Learned Standing Counsel for the fifth respondent – Income Tax Department, also filed a counter and pointed out that the assessment order on which reliance is placed relates to M/s. Jagathi Publications, which is separately impleaded as seventh respondent herein and the same was already taken note of by us.
45. Petitioners in Writ Petition No.6604 of 2011 make allegations in para 9 of the affidavit on the following lines. In the year 2007-2008, the sixth respondent created a fictitious transaction of selling 82 lakh shares in M/s. Sandur Power Company Limited at Rs.675/- per share to host of companies viz. M/s. ZM Infotech; M/s. Nelcast 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 Limited was, however, denied. The sixth respondent also admitted that he sold 21.42 lakh shares of
M/s. Sandur Power Company Limited during 2006-2007 to Mr. N. Prasad at Rs.140/- per share. He, however, pleads ignorance with respect to allotment of 15,000 acres of land to Mr. N. Prasad.
47. Similarly, para 10 of the affidavit alleges that in 2005 Rs.124 crores were routed from Mauritius-based companies viz. M/s. 2i Capital and M/s. Pluri Emerging Company into M/s. Sandur Power Company Limited purely by selling 32.7% of shareholding of sixth respondent at Rs.61/- per share.
48. Reply of the sixth respondent in para 15 admits that under Foreign Institutional Investors (FII), the Mauritius-based
M/s. 2i Company was allotted 1,48,73,250 equity shares at Rs.71/- per share on 11.07.2005 and 14.12.2005 for a total sum of Rs.105.6 Crores and 26,76,057 equity shares to M/s. Pluri Emerging Company also at Rs.71/- each for Rs.19 Crores. It is also admitted in the counter affidavit that commercial production of M/s. Sandur Power Company Limited started in 2005 shows that even at the inception so huge FII investment was made.
49. The learned Amicus Curie and the learned counsel for the petitioner have vehemently contended thatit is evident from the records that shares, with face value of Rs.10/-, of several companies owned and managed by respondent No.52 were allotted to several companies and individuals, who were beneficiaries of several official favours from the then Chief Minister by getting allotment of lands, development rights for ports/coastal line of Andhra Pradesh, commercial ventures in and around Hyderabad and rest of the Andhra Pradesh etc. The shares of companies of respondent No.52 were subscribed by these beneficiaries at a premium rate of Rs.340/- to about Rs.1,500/- per share.
50. The learned Amicus Curie and the learned counsel for the petitioner have vehemently contended that instances given above from the counter affidavits of the respondents show that the allegations of the petitioners in paras 9 and 10 of the affidavit are correct in view of admission made therein by the sixth respondent. With regard to the contention of the learned Amicus Curiae, the learned counsel for the petitioners, the learned senior counsel and other counsel for the respondents, we are of the view that in these proceedings it is not possible for us to deliberate upon 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 / beneficiaries from the decisions of the State Government in various forms like SEZs, irrigation contracts, relaxation/permission for real estate ventures, mines etc. besides payment of huge premium amounts paid in the shares and invested in the companies by such beneficiaries and the money so paid is nothing but corrupt money attracting Section 3 of the Prevention of Money Laundering Act, 2002. The investigation by the Income Tax authorities with respect to assessment orders of M/s. Jagathi Publications for the year 2008-09 shows huge unexplained cash credit. Similarly, huge escalated face value of shares to the extent of 35 times also was not accepted by the Income Tax authorities and respondent No.52 is directly or indirectly connected with some of the companies which are showing phenomenal growth and these facts make it necessary to ascertain the role of individuals/firms/public servants in the group companies of respondent No.52.
52. The material available supports a thorough probe and investigation in all the aspects into financial misdeeds involving huge magnitude of Government largesse, corporate dealings including huge investments as part of Quid Pro Quo arrangement for the largesse and benefit obtained by the investors from the State of Andhra Pradesh and all other aspects, and keeping in view the scope of the public interest litigation as settled by the decisions of the Supreme Court referred to above, we have confined ourselves to the considerations of prima facie satisfaction and regard being had to the manner in which the investments in the group companies of respondent No.52 have been made vis- -vis the benefits and official favours received by the investors from the Government of Andhra Pradesh, prima facie we are satisfied that there are violations of the provisions of the Indian Penal Code, Prevention of Corruption Act, Prevention of Money Laundering Act apart from criminal conspiracies and commission of other related offences involving huge magnitude of investment by local and foreign companies, some located in tax haven countries, for which registration of a crime and investigation to remedy the public interest which has suffered,is just and necessary by a well-equipped and specialized agency, having expertise to handle such situations and has the credibility. Analysing as such, the most appropriate agency would be the CBI.
53. It 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 relating to the writ petitions. We have also made it clear in the judgment rendered in Writ Petition No.29358 of 2010 that the preliminary report was resealed after perusal and it shall remain sealed, among other things in view of the contention of some of the appearing learned counsel for the respondents that in case report of the CBI becomes public, their clients may have to face condemnation in the eyes of the public by unwarranted media publicity even before completion of the investigation. For the reasons mentioned in this paragraph, we have resealed the report.
54. Accordingly, Writ Petition Nos.794 and 6604 of 2011 are disposed of directing the Central Bureau of Investigation to register a crime and investigate into the accusations indicated hereinabove and other aspects relevant thereto and take the investigation to its logical end in accordance with law.
Writ Petition No.6979 of 2011
55. An Advocate - writ petitioner, in this public interest litigation, seeks a relief to call for and examine the records connected with three G.Os, referred to in the prayer clause, issued by the Government of Andhra Pradesh in favour of respondent Nos.7 to 10 and for a consequential direction for investigation into the irregularities and illegalities in investment of the companies of respondent No.7 by respondent Nos.2 to 6 and 11. In support of the relief sought, he submitted that G.O.Ms.No.318, dated 03.12.2008 has extended exemption from payment of seinorage fee in favour of VANPIC Projects and G.O.Ms.No.95, dated 27.03.2006 has granted limestone lease in favour of M/s. Raghu Ram Cements and submitted further that in his counter affidavit the seventh respondent accepts that he has taken over M/s. Raghu Ram Cements on 06.08.2008 and named it as M/s. Bharathi Cements. Learned counsel refers to the resolution of Board of M/s. Raghu Ram Cements dated 25.01.2007 to contend that the seventh respondent and his group have been allotted equity of 4,20,10,000 shares of M/s. Raghu Ram Cements and seeks to contend that even before the formal take over in 2008, the seventh respondent would control M/s. Raghu Ram Cements and on account thereof, G.O.Ms.No.95 was issued by the Government in favour of M/s. Raghu Ram Cements granting mining lease for limestone on an extent of 2,037.52 acres for a period of 30 years.
56. Learned counsel also relies upon a copy of form-II filed by M/s. 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 Prakash, who is said to be brother of Mr. N. Prasad. On the basis of the aforesaid material, the learned counsel seeks to contend that the investing group companies in M/s. Jagathi Publications, all belong to Mr. N. Prasad, and in return he has been granted VANPIC project with the benefits aforesaid.
57. Mr. Vedula Venkataramana, learned Senior Counsel appearing for the seventh respondent has, in the first instance, pointed out several deficiencies in the writ petition purported to be filed in public interest. Learned Senior Counsel relies upon averments in paras 10 to 14 of the affidavit as well as the verification of the affidavit and contends that the petitioner has not based the writ petition on any authentic source of information nor it appears to be a responsible writ petition, especially when an advocate is the petitioner. He submits that no source of information or any document is disclosed and merely on the basis of downloaded copies from the internet, the argument is sought to be built. Learned Senior Counsel also relies upon the detailed counter affidavit filed on behalf of the seventh respondent and according to him, the said counter affidavit explains every allegation made by the petitioner for which no rejoinder has been filed by the petitioner. Learned Senior Counsel, therefore, submitted that this writ petition ought to be dismissed on preliminary objections.
58. Learned counsel for the third respondent – Securities Exchange Board of India (SEBI) – has filed a counter affidavit stating that none of the companies named are listed companies and even otherwise there is no material before SEBI to take action under Section 11 of the SEBI Act.
59. Learned counsel for the eighth respondent adopted the submission of the learned Senior Counsel, referred to above and contended that no relief should be granted against the eighth respondent.
60. We have considered the submissions. So far as the deficiencies in the affidavit and verification of the affidavit and the bonafides required of a petitioner, who approaches the Court in public interest, are concerned, the objections raised by the learned senior counsel appear to be tenable. The petitioner himself states in para 10 of the affidavit that he is aware of Taken-up Writ Petition No.794 of 2011 and Writ Petition No.6604 of 2011 pending before this Court. The basic contentions raised by him are already covered by the material produced in Taken-up Writ Petition No.794 of 2011 as well as connected Writ Petition No.6604 of 2011. This writ petition is, therefore, only a reiteration of the self-same pleas and is based upon the downloaded documents from the internet. The present writ petition, therefore, does not satisfy the requirements as per rules of this Court for a public interest litigation and as such, is not entertainable, as the petitioner has failed to explain and substantiate the source and authenticity of the information relied upon. Even otherwise, the aspects sought to be contended in this writ petition are already under consideration in Taken-up Writ Petition No.794 of 2011 and Writ Petition No.6604 of 2011.
61. We, therefore, decline to entertain Writ Petition No.6979 of 2011 and it is accordingly dismissed.
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