Telangana High Court
Mr. Pradeep Koneru vs The Directorate Of Enforcement, on 18 June, 2025
THE HON'BLE SRI JUSTICE E.V.VENUGOPAL
CRIMINAL REVISION CASE No.772 OF 2024
ORDER
1. The present Criminal Revision Case is filed by the
petitioner/accused No.13 under Sections 397 and 401 of Cr.P.C.,
aggrieved by the order dated 30.04.2024 passed in Crl.MP No.1521 of
2022 in SC No.1 of 2019 on the file of the learned Principal Special
Judge for CBI Cases-cum-Special Court under the Prevention of Money
Laundering Act, 2002 at Hyderabad (for short “trial Court”) wherein the
request of the petitioner/A13 for his discharge under Section 227 of
Cr.P.C., from SC No.1 of 2019 was rejected.
2. Heard Sri Avinash Desai, learned senior counsel for Sri
Mohammed Omer Farooq, learned counsel for the petitioner/A13 and
Sri D.Narender Naik, learned standing counsel for the Central
Government/Enforcement Directorate/respondent.
3. As seen from the record, Enforcement Case Information Report
(ECIR) No.08/HZO/2011 on the file of the Directorate of Enforcement
(ED), Hyderabad was registered against the petitioner/Accused No.13
and other accused for the offence under Section 3 punishable under
Section 4 of the Prevention of Money Laundering Act, 2002 (PMLA)
basing on the investigation and final report of CBI case registered vide
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its RC.No.35-A-2011-0018, dt.17-08-2011 in pursuance of the orders of
the High Court for the erstwhile composite State of Andhra Pradesh in
WP No.29358 of 2010, regarding the alleged misappropriation of public
property relating to the integrated project at Manikonda and transfer of
property including all other aspects relevant thereto for the offences
under Section 120-B read with Sections 420, 409, 477-A IPC and
Section 13 (2) read with Section 13(1) (c) and (d) of Prevention of
Corruption Act, 1988.
4. The main allegation is that BP Acharya (A1) and others, named
in the FIR, entered into a criminal conspiracy to cheat APIIC during
2005-2010, and towards that end, Emaar Properties, Dubai, and Emaar
Hills Township Pvt., Ltd., entered into an agreement with M/s.Stylish
Homes on 29.01.2005, appointing it as sole agent to sell villa plots at
pre-determined price which was less than the market value. The said
fact was done without the knowledge or consent of APIIC. Stylish
Homes, represented by T.Ranga Rao, started booking of villa plots in the
integrated town ship from the month of March, 2005. Further, CBI
alleged that Emaar Hills Township assigned the rights of development to
Emaar-MGF without in-principle approval of APIIC. The joint venture
between APIIC and Emaar Properties, Dubai, was to develop an
integrated project consisting of golf course, club house, boutique, hotel,
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township, on the land admeasuring Ac.535-00 Gnts., at Manikonda on
the outskirts of Hyderabad in Ranga Reddy District besides a business
hotel and convention centre on adjoining leased land. While APIIC’s
stake in the Manikonda project was 26%, the same in the convention
centre was 49%. According to CBI, while the GOs mandated that only
Emaar Properties, Dubai, should execute the project, in the MoUs,
signed between APIIC and Emaar, later a clause was inserted by the
developer assigning the rights towards development, management and
operation of the project to a third party. Subsequently, in April 2005,
Emaar Properties, Dubai, assigned the project to three other firms i.e.,
Emaar Hills Township Pvt., Ltd., Boulder Hills Leisure Pvt., Ltd., and
Cyberabad Convention Centre Pvt., Ltd.
5. According to CBI, Stylish Homes collected excess amounts in
cash ranging from Rs 5,000/- to Rs 50,000/- per sq.yd., from villa plot
buyers. In all, Stylish Homes sold 105 villa plots and pocketed at least
Rs.95 crores over and above the documented rate of Rs.5,000/- per
sq.yd., and deprived APIIC of its due share in the revenue generated by
the sale of villa plots. In the meantime, the stake of APIIC was reduced
both in Emaar Hills Township and the convention centre. Incidentally,
CBI’s efforts in the case were facilitated by an inquiry in the matter
earlier by the Vigilance and Enforcement Department of AP
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Government. The V&E report had unravelled the scandal and exposed
the nexus. CBI charged against BP Acharya as VC and MD of APIIC,
and other accused alleging that in furtherance of criminal conspiracy
hatched among the accused, A1 abused his official position and
knowingly and intentionally did not object the sale of villa plots at lower
price. He failed to bring these facts to the knowledge of APIIC and did
not ensure that the project was implemented as per norms and
agreement executed between APIIC and Emaar Properties, Dubai.
Though APIIC held 26% equity in Emaar Hills Township Project,
Acharya did not raise any objection to the decision of Emaar Properties,
Dubai, and Emaar Hills Township, to sell the villa plots through Stylish
Homes despite being aware of the fact that Stylish Homes was selling
the plots by accepting upfront payments from buyers without the APIIC
board having finalized the rate. Thus it is alleged that the accused
gained pecuniary advantage and caused loss to the Government
exchequer.
6. The prosecution alleges that Rs.167.29 Crores was the
proceeds of crime amassed by various other accused and out of which
Rs.96.01 crores was collected by T.Ranga Rao, Director of Stylish
Homes.
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7. That being the case, so far as the role and complicity, as
alleged against the petitioner/A13 in the said crime is concerned, it is
alleged that he purchased a parcel of land admeasuring Ac.36-14
Guntas at Bilkal and Mallikarjunagiri Villages, Marpalle Mandal, Ranga
Reddy District, Telangana State and paid Rs.2.50 crores out of the
amount of Rs.96.01 Crores, knowing well that the said amount is the
crime proceeds, collected from the villa plot buyers and paid by
Tummala Ranga Rao and hence, he is directly involved in the offence of
money laundering making him liable for the offence under Section 3 of
PMLA, 2002, punishable under Section 4 of the said Act. Basing on the
statement of T.Ranga Rao, accused No.10, the petitioner/A13 was
arrayed as an accused.
8. Further, it is alleged in the charge-sheet that M/s.Southend
Projects/A4 has given an advance of Rs.36.82 Crores to the petitioner
between the period December, 2009 and March, 2010 towards purchase
of land in Hyderabad, which is part of the proceeds of the crime and the
sale of land did not take place and the amount was kept with the
petitioner and the said act of the petitioner amounts to cheating and
breach of trust. In view of resistant gloom prevailing in the real estate
sector in Hyderabad, it has been decided by accused No.4 to keep the
the available funds in the bank and M/s.Walden Properties Pvt. Ltd.,
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Hyderabad a real estate company, promoted by the petitioner and his
wife to buy 4.01 gnts., of land in Ranga Reddy District and paid
advance amount to the land owners and got registered the property in
the name of the petitioner.
9. Besides the investigation conducted by CBI the
complainant/ED conducted its own investigation, collected material and
basing on the said material, laid charge-sheet into the trial Court for the
offence under Section 4 read with Section 3 of Prevention of Money
Laundering Act, 2002, which Court has taken cognizance of the
offences on 15.06.2019 and numbered the same as SC No.1 of 2019
and proceeded further by complying with the procedural aspects.
10. Challenging his array as an accused in SC No.1 of 2019 the
petitioner filed Crl.M.P.No.1521 of 2022 before the trial Court mainly
contending that he was not arrayed as an accused by the CBI and
subsequently, basing on the sole testimony of another
accused/Tummala Ranga Rao/A10 the petitioner was roped-in as an
accused without there being any knowledge, involvement or
corroborative evidence against him; there is no prima-facie case made
out against the petitioner and that he was falsely implicated in the
present case.
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11. The complainant/ED filed a counter opposing Crl.M.P.No.1521
of 2022 contending that due to the conspiracy hatched among the
accused, APIIC lost its revenue generated from and out of sale of land
as the accused sold the land over and above the agreed rate of
Rs.5,000/- per square yard and gained pecuniary advantage for
themselves and caused wrongful loss to the Government agency APIIC.
Further, the petitioner/A13 purchased land to an extent of Ac.36.14
Gnts., and paid Rs.2.5 crores out of the crime proceeds of Rs.96.01
crores, collected from villa plot buyers and paid by accused
No.10/Tummala Ranga Rao knowingly well its nature, which proves his
involvement in the crime. Further, M/s.Southend Projects/A4 has paid
an advance of Rs.36.82 crores to the petitioner between December,
2009 and March, 2010 towards purchase of land in Hyderabad, which
is a part of crime proceeds and that the sale of the land did not take
place and the said amount is lying with the petitioner. Further, due to
the resistant gloom prevailing in the real estate sector in Hyderabad it
has been decided by accused No.4 to park the available funds in the
bank and M/s.Walden Properties Pvt. Ltd., a Hyderabad based real
estate company, promoted by the petitioner and his wife and intended
to buy land admeasuring Ac.4.01 Gnts., in Ranga Reddy District and
paid advance to the land owners and accordingly registered the property
in the name of the petitioner and further accused No.4 represented by
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N.Manohar Reddy wanted to buy the land of Ac.4.01 Gnts., owned by
the petitioner and paid the above said Rs.36.82 crores as an advance.
It is further contended that the investigation so far done and the
material collected and statements recorded, revealed prima-facie case
against the petitioner and hence, he is not entitled for discharge.
12. The said application was dismissed by the trial Court as per
orders dated 30.04.2024 holding that the documents relied by the
complainant and also the CBI and the statements recorded under
Section 50(2)&(3) of PMLA, 2002 and also the statements of approvers
i.e. accused Nos.3 and 10 corroborated by the documents, clearly show
that the complainant had a prima-facie case against the accused
including the petitioner and that the guilt or innocence of the accused
will be determined at the trial but not at the stage of framing charges
and that the complainant not only relied on the documents collected
and investigation conducted by CBI, but they also conducted their own
investigation in all aspects and recorded the statements of accused and
upon such exercise only, they proceeded against the accused and
hence, when the investigating agency could able to prove existence of
prima-facie case against the accused, detailed trial is required to find
out the true set of facts.
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13. Aggrieved by the said order, the petitioner herein filed the
present criminal revision case mainly contending that the petitioner had
no occasion either with EHTPL or with any of the group companies of
EMAAR, he don’t know about payment of Rs.2.50 Crores made by
Tummala Ranga Rao towards purchase of any property in his name, his
financial source for purchasing the land to an extent of Ac.36.04 Gnts.,
was his salary, savings, rent, sale of shares, gifts etc., the rate of his
purchase of the said property was similar to the sale of the
neighbouring plot owners, but the respondent authorities have
erroneously issued provisional attachment order No.03 of 2014 dated
21.11.2014 and got confirmed the same through the Adjudicating
Authority vide its order dated 09.04.2015 in OC No.386 of 2014 in-spite
of his filing defence statement. Further, the trial Court, without giving
proper reasoning and without appreciating the grounds urged by the
petitioner, has erroneously dismissed the application of the petitioner
seeking discharge. The petitioner was not even an accused in the
charge-sheet filed by the CBI, whose investigation is the main source for
the registration of present case and arraying the petitioner in the
present case is contrary to the decisions of Hon’ble Supreme court in
Vijay Madanlal Choudhary Vs. Union of India 1 and Parvathi Kollur
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2022 SCC Online SC 929
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Vs. Directorate of Enforcement (Criminal Appeal No.1254 of 2022)
wherein it was categorically held that without arraying the accused as
an accused in the CBI charge-sheet, he cannot be arrayed as an
accused in PMLA case.
14. Learned counsel for the petitioner while placing reliance on the
findings of the Hon’ble Apex Court made in a case between Prem
Prakash Vs. Union of India (SLP (Crl.) No.5416 of 2024) that no prima-
facie case can be said to be made out based solely on the statement of a
co-accused and the prosecution cannot start with such a statement to
establish its case, contended that only basing on the statement of
Tummala Ranga Rao, dated 09.01.2012 under Section 164 of Cr.P.C.,
the petitioner herein is arrayed as an accused and hence, in view of the
proposition of law laid down in the above decision the case against the
petitioner cannot stand for legal scrutiny, though full-fledged trial is
conducted. Furthermore, even after full-fledged investigation conducted
by the respondent/ED no evidence is found against the petitioner apart
from the sole testimony/statement of Tummala Ranga Rao that as per
the instructions of Koneru Rajendra Prasad, he paid part of sale
consideration i.e. Rs.2.50 crores out of the crime proceeds of Rs.96.01
crores while the petitioner purchasing landed property admeasuring
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Ac.36.14 Gnts. The said statement cannot attribute any knowledge to
the petitioner in this regard.
15. Learned counsel for the petitioner further contended that the
finding of the trial Court in holding that predicate offence has been
prima-facie proved against the petitioner and hence, the allegations
levelled against the petitioner by the respondent/ED are also having a
prima-facie case is an erroneous one and made on presumptions. It is
pertinent to note that the petitioner was not arrayed as an accused
initially by the CBI in the predicate offence and subsequently, by way of
additional charge-sheets, they arrayed the petitioner as an accused.
Further, the trial Court erroneously placed reliance on Section 24 of
PMLA ignoring the fact that while deciding a discharge petition the
Court has to see whether a prima-facie case is made out against the
petitioner or not. Section 24 of PMLA cannot be construed to mean that
the respondent/ED can make a vague allegation of money laundering
and it would be for the accused to prove that he has not committed the
said offence.
16. It is further contended by learned counsel for the petitioner
that the trial Court without specifically referring any document or
allegation against the petitioner has erroneously and mechanically
recorded its finding in the impugned order that prima-facie case is
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made out against the petitioner. In the absence of any allegation in the
complaint or any material against the petitioner that he requested the
amount for purchase of land or that the amount was paid by T.Ranga
Rao at his instructions, it cannot be construed that the monies spent by
the petitioner are the proceeds of the crime. The petitioner did not
involve in the crime. The trial Court completely ignored the
aforementioned facts and has erroneously passed the impugned order.
17. On the other hand, learned standing counsel for the
respondent/ED, while reiterating the facts that lead to registration of
the present case against the petitioner and opposing the present
criminal revision case, by way of a counter, has vehemently contended
that T.Ranga Rao in his statement under Section 50 of PMLA, 2002
stated that out of crime proceeds of Rs.96.01 crores, he paid an amount
of Rs.2.50 crores towards part consideration of the land purchased by
the petitioner, knowing well that the said amount is the crime proceeds,
collected from the villa plot buyers and hence, he is directly involved in
the offence of money laundering making him liable for the offence under
Section 3 of PMLA, 2002, punishable under Section 4 of the said Act.
Basing on the statement of T.Ranga Rao, accused No.10, the
petitioner/A13 was arrayed as an accused.
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18. It is contended that Section 5(1) of the Act is not limited to the
accused named in the criminal activity relating to a schedule offence
and it applies to any person, though he is not an accused, if he involved
in any process or activity connected with the proceeds of the crime,
such person besides facing the consequence of provisional attachment
order, may end up in being named as accused in the complaint to be
filed by the authorised officer under Section 3 of the Act.
19. It is further contended by learned standing counsel that the
plea of the petitioner for discharge is a frivolous attempt to object the
valid Court order of the trial Court, which was rendered after thorough
and comprehensive review of the evidence and applicable law and that
there were no errors in the interpretation of the facts or application of
legal principles. The petitioner did not provide new evidence or
compelling legal arguments necessitating to reconsider the order of the
trial Court.
20. It is further contended that it is a herculean task to exactly
identify the quantum of generation of cash out of illegal activities and in
such circumstances depositions of involved or associated persons will
matter the most and in that view of the matter, the statement of
Tummala Ranga Rao is a concrete evidence to establish the role of the
petitioner. Further, the PMLA, 2002, being a special statute, cast a
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reverse burden on the accused to prove that the proceeds of crime are
untainted and when the said principle is applied to the facts of the case
on hand, the petitioner has to discharge his burden after examination of
ocular evidence or production of documentary evidence, which cannot
be done at this juncture. The present criminal revision case is filed to
hinder the trial proceedings and hence, the said effort of the petitioner
cannot be allowed at this premature stage. While stating thus, in
support of above submissions, learned standing counsel relied upon the
decisions rendered in Criminal Revision Case No.2370 of 2016 of
this Court and Criminal Appeal No.2779 of 2023 of Hon’ble Apex
Court.
21. This Court perused the entire material available on record and
heard the rival contentions advanced on both sides. The main
contention of the petitioner is that the initial investigation conducted by
CBI did not find anything against him but subsequently, basing on the
statement of co-accused his name was added as an accused without
there being his involvement in any of the transactions. On the other
hand, learned standing counsel for the ED contended that part of crime
proceeds was channelized through the petitioner as with the amount
paid by A10, he purchased landed property and hence, his complicity in
commission of offence cannot be denied and the same has to be
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examined in detail and without such exercise, he cannot be declared as
innocent.
22. The Petitioner’s argument, that he is not an accused in the
predicate offence, and to be discharged from the prosecution under
PMLA, is untenable, since it is a settled proposition that though a
person may not have committed the predicate offence but has
subsequently been involved in the offence of money laundering is liable
for prosecution under Section 3 of PMLA. The decision of the Hon’ble
Supreme Court, relied upon by the learned counsel for the petitioner
rendered in Vijay Madanlal Choudry‘s case (Supra), supports the
Respondent/Complainant since admittedly a scheduled offence has
taken place and the same is being prosecuted by the CBI, the said
scheduled offence has resulted in the generation of proceeds of crime,
and the petitioner is alleged to have involved in the process and activity
of placement, layering, and integration of the proceeds of crime. Record
shows that the petitioner was made an accused in the subsequent
charge-sheets by the CBI.
23. Section 3 of PMLA stipulates that whosoever directly or
indirectly attempts to indulge or knowingly assists or is a party or is
actually involved in any process or activity connected with the proceeds
of crime including its concealment, possession, acquisition or use and
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projecting or claiming it as untainted property shall be guilty of offence
of money laundering. The prime object of PMLA is that money
laundering possesses a serious threat, not only to the financial systems
of the country but also to its integrity and sovereignty. The cases
registered under PMLA cannot be dealt akin to that of the criminal
cases registered under general penal provisions. The economic related
offences stand in a different footing, modus operandi of money
laundering being complex in nature, an iota of doubt in the nature of
transactions must be held in favour of the Enforcement Directorate.
24. The Hon’ble Apex Court, time and again, held that it is no
more res integra that economic offences constitute a class apart, as they
have deep rooted conspiracies involving huge loss of public funds, and
therefore, such offences need to be viewed seriously. They are
considered as grave and serious offences affecting the economy of the
country as a whole and thereby posing serious threats to the financial
health of the country. Vast and deliberate impact of the economic
offences on public exchequer produces genocidal outcomes of silently
destroying lives, cultures, and futures through deprivation.
25. It is the settled proposition of law that if the Enforcement
Directorate is able to establish a prima facie case against the accused
persons, it would be sufficient to allow the trial to go on. Certain
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technical grounds cannot override the effect of other material evidences
available on record in the complaint filed by the Enforcement
Directorate under PMLA. The connecting material evidences would be
sufficient for the purpose of allowing the trial to go on. It is not
necessary that there must be a direct link between the accused and the
offence of money laundering. Indirect involvement and the connecting
link, if established, would be sufficient for the purpose of prosecuting
the person.
26. The scope of PMLA is distinct and different and the objectives
are louder in order to protect the economy of the State. The material
evidences required for prosecuting the person under PMLA cannot be
equated with the material evidences required for the purpose of
prosecuting a person under the general penal law.
27. At this juncture, it is pertinent to mention the findings of the
Hon’ble Apex Court made in Anil Bhavarlal Jain and another Vs. The
State of Maharashtra and others2 wherein the Hon’ble Apex Court
relying upon the findings in Gian Singh Vs. State of Punjab 3 and
Parbatbhai Aahir Vs. State of Gujarat and another 4 held that heinous
and severe offences should not be quashed even if the parties have
2
Spl.Leave Petition (Crl.) No.10078 of 2023
3
(2012) 10 SCC 303
4
(2017) SCC OnLine SC 1189
18
settled. Further held that the economic offences involving financial and
economic well-being of the State have implications which lie beyond the
domain of a mere dispute between the private disputants. The High
Court would be justified in declining to quash where the offender is
involved in an activity akin to a financial or economic fraud or
misdemeanour. The consequences of the act complained of upon the
financial or economic system will weigh in the balance. Thus, it can be
concluded that economic offences by their very nature stand on a
different footing than other offences and have wider ramifications. They
constitute a class apart. Economic offences affect the economy of the
country as a whole and pose a serious threat to the financial health of
the country. If such offences are viewed lightly, the confidence and
trust of the public will be shaken.
28. In the case of Serious Fraud Investigation Officer vs. Aditya
Sarda 5, the Hon’ble Apex Court while citing the decisions rendered in
P.Chidambaram Vs. Directorate of Enforcement 6, Y.S.Jagan Mohan
Reddy Vs. Central Bureau of Investigation 7, Nimmagadda Prasad
Vs. Central Bureau of Investigation 8, Srikant Upadhyay and others
5
Spl.Leave Petition (Crl.) No.13956 of 2023
6
(2019) 9 SCC 24
7
(2013) 7 SCC 439
8
(2013) 7 SCC 466
19
Vs. State of Bihar and another 9 held that anticipatory bail should not
be granted as a matter of routine particularly in serious economic
offences, involving large scale fraud, public money or complex financial
crimes. Further held that economic offences stand as a different class
as they affect the economic fabric of the society. It is also held that the
economic offences having deep-routed conspiracies and involving huge
loss of public funds need to be viewed seriously and considered as grave
offences affecting the economy of the country as a whole and thereby
posing serious threat to the financial health of the country. Further
held that unfortunately in the last few years the country has been
seeing an alarming rise in white-collar crimes, which has affected the
fibre of the country’s economic structure. The economic offences have
serious repercussions on the development of the country. The entire
country is aggrieved if the economic offenders who ruin the economy of
the State are not brought to book.
29. Coming to the facts on hand, it is alleged that the petitioner
purchased a parcel of land admeasuring Ac.36-14 Guntas at Bilkal and
Mallikarjunagiri Villages, Marpalle Mandal, Ranga Reddy District,
Telangana State and paid Rs.2.50 crores out of the amount of Rs.96.01
Crores, knowing well that the said amount is the crime proceeds,
9
(2024) SCC OnLine SC 282
20
collected from the villa plot buyers and paid by co-accused/Tummala
Ranga Rao and hence, he is directly involved in the offence of money
laundering making him liable for the offence under Section 3 of PMLA,
2002, punishable under Section 4 of the said Act. Interestingly, the
gap of time between period of obtaining the crime proceeds and the
purchase of the subject properties by the petitioner is not much. The
record shows that though the petitioner was primarily not made
accused in the CBI charge-sheet, subsequently, basing on the
revelations made in the confession statement of co-accused/Tummala
Ranga Rao, who was given tender pardon vide orders in Crl.MP No.481
of 2012 dated 18.06.2012 by the trial Court, was arrayed as accused in
the supplementary charge-sheet. It is further alleged that the
predicative offence being prosecuted by the CBI, revealed generation of
proceeds of crime into the sale consideration of the landed property
purchased by the brother of petitioner. It is also alleged against the
petitioner that respondent/ED, in addition to the investigation did by
CBI, conducted its own independent investigation and found
incriminating material against the petitioner/accused mainly on the
aspect of purchase of land by the petitioner, which is corroborated with
the statement of A10 recorded under Section 164 of Cr.P.C., the said
land purchase is found to be coherent upon securing the registered sale
deeds and hence, registered the present case. In that view of the
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matter, the statement of A10 cannot be brushed aside and the
petitioner cannot be declared as innocent at the threshold without
subject him to the litmus test of trial.
30. When the above facts are scrutinized, prima-facie serious
allegations are levelled against the petitioner. This matter can only be
decided by conducting thorough trial. The petitioner cannot be let off at
the threshold without letting him to face the trial. Whether the case as
against the petitioner survives or not is the matter to be decided after
full-fledged trial. Taking all these facts into consideration, the trial
Court had rightly dismissed the discharge application of the petitioner
holding that the admissibility of Sections 24 and 50(2)&(3) of PMLA, as
guided by the Hon’ble Supreme Court, clearly emphasises the prima
facie case of the prosecution and hence, unless a detailed trial is
conducted, truth will not come to light. When the impugned order of
the trial Court is perused, this Court finds no infirmity or irregularity
warranting interference of this Court. Accordingly, the present criminal
revision case is liable to be dismissed.
31. In the result, the criminal revision case is dismissed. However,
in view of the submission of learned senior counsel appearing for the
petitioner the presence of the petitioner before the trial Court in
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connection with SC No.1 of 2019 is dispensed with for a period of two
months from today.
32. Miscellaneous applications if any pending stand dismissed.
________________________
E.V.VENUGOPAL, J
Dated :18-06-2025
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