Telangana High Court
The State Of Telangana, vs Rajulapati Yashoda Rao, on 11 August, 2025
THE HONOURABLE SMT. JUSTICE K. SUJANA
CRIMINAL PETITION No.4527 of 2025
ORDER:
This Criminal Petition is filed seeking to quash the order
dated 23.12.2024 passed in Crl.R.P.No.57 of 2024 by the
learned Principal District and Sessions Judge-cum-Family
Court, Medchal-Malkajgiri District at Malkajgiri.
2. The brief facts of the case are that the Criminal Revision
Petition was filed by the Inspector of Police, EOW Police Station,
Cyberabad commissionerate under Section 438 of the BNSS,
aggrieved by the order dated 10.12.2024 passed by the I
Additional Junior Civil Judge-cum-XII Additional Judicial
Magistrate of First Class, Medchal-Malkajgiri District at
Kukatpally. The revision arose out of Crime No.43 of 2024,
which was re-registered based on a report lodged by Smt. P.
Rajeshwari, Director of Girija Builders Pvt. Ltd., against the
accused, her sister’s son. She alleged that the accused misused
his position as Managing Director of the company without the
consent of other directors by forging signatures,
misappropriating funds, illegally executing sale deeds in favor of
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his daughters, and transferring company assets for personal
use. Initially registered as Crime No.1005 of 2024 at Kukatpally
Police Station, the case was transferred to the EOW Police
Station, Cyberabad. During the investigation, the accused was
arrested on 09.12.2024 and produced before the trial Court on
10.12.2024 for judicial custody. However, the Magistrate
refused to accept the remand, citing lack of jurisdiction under
the Companies Act as per the Central Government Notification
vide S.O.945(E), dated 23.03.2017, which designated the
Special Court for Economic Offences in Hyderabad as the
competent Court.
3. On the other hand, the respondent/accused opposed the
revision petition, contending that it was not maintainable as the
impugned order of the Magistrate was interlocutory in nature
and barred under Section 438(2) of the BNS, 2023 (analogous to
Section 397(2) Cr.P.C.), as laid down by the Hon’ble Supreme
Court in Gautam Navlakha v. National Investigation
Agency 1. The respondent argued that the FIR was a
continuation of the earlier FIR No.921 of 2022 registered on a
complaint by another director, P. Subba Rao, and that the
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(2022) 13 SCC 542
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present FIR was filed by P. Rajeshwari, representing the same
company, based on similar allegations. He further submitted
that the entire dispute pertained to company affairs and was
already pending before the NCLT in Company Petition No.48 of
2022, where interim status quo orders were passed. The
respondent asserted that the proceedings were an abuse of
process of law, amounting to re-litigation of the same subject
matter, and that the matter fell within the purview of the
Companies Act, requiring prosecution by the Serious Fraud
Investigation Office with approval from the Central Government
and triable only by the designated Special Court under Sections
435 and 436 of the Companies Act, 2013.
4. The trial Court, after hearing both parties, held that the
rejection of the remand was an interlocutory order passed under
Section 167 Cr.P.C. and hence, not revisable under Section 438
of the BNS, 2023. The trial Court relied upon the judgment of
the Hon’ble Supreme Court in Gautam Navlakha (cited supra)
to conclude that the remand order was purely interlocutory in
nature and not appealable or revisable. The trial Court rejected
the complainant’s reliance on a Delhi High Court decision,
holding it inapplicable and not binding in view of the law laid
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down by the Hon’ble Supreme Court. Without delving into the
merits of the allegations, the trial court dismissed the revision
petition on the ground of non-maintainability. Aggrieved
thereby, the petitioner/state filed the present criminal petition.
5. Heard Sri M. Vivekananda Reddy, learned Assistant
Public Prosecutor appearing on behalf of the petitioner-State as
well as Sri S. Sambasiva Rao, learned counsel appearing on
behalf of respondent No.1-accused and Sri Dharmesh D.K.
Jaiswal, learned counsel appearing on behalf of respondent
No.2.
6. Learned Assistant Public Prosecutor submitted that the
order dated 10.12.2024 passed by the learned XII Additional
Metropolitan Magistrate, Medchal-Malkajgiri at Kukatpally,
rejecting the remand of the accused in Crime No.43 of 2024 of
EOW Police Station, was illegal, perverse, contrary to law, and
liable to be set aside and that the Magistrate had erred in
holding that the Court lacked jurisdiction to accept the remand
based on Central Government Notification No.S.O.945(E) dated
23.03.2017, which designates the VIII Additional Metropolitan
Sessions Judge, Hyderabad as the Special Court for the trial of
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economic offences. He argued that the said notification had no
bearing on the present case.
7. Learned Assistant Public Prosecutor contended that the
offences alleged against the accused were registered exclusively
under the Indian Penal Code, and not under the Companies Act,
2013. Therefore, the Magistrate was competent to entertain the
remand. He emphasized that in the absence of any offence
punishable under the Companies Act, the Special Court for
Economic Offences had neither the territorial nor the pecuniary
jurisdiction to deal with the case. As such, the learned
Magistrate ought to have accepted the remand and proceeded in
accordance with law, since the alleged offences fell squarely
within the jurisdiction of a Judicial Magistrate of First Class and
not the Special Court constituted under the Companies Act.
Therefore, he prayed the Court to set aside the order of the trial
Court by allowing this criminal petition.
8. On the other hand, learned counsel for
respondentNo.1/accused submitted that the present Criminal
Petition is not maintainable either in law or on facts and is
liable to be dismissed as being a clear abuse of process and
suppression of material facts and that the entire dispute arises
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out of a civil and company law matter relating to the internal
affairs of M/s. Girija Builders Pvt. Ltd., in which the accused is
a promoter-shareholder holding 9,130 equity shares,
constituting around 30.43% of the shareholding. The de-facto
complainant and her family members hold the remaining shares
and are currently in control of the company. The dispute
pertains to the status of the accused’s shareholding and his role
in the company, which is already the subject matter of
adjudication before the National Company Law Tribunal,
Hyderabad in C.P.No.48 of 2022, wherein status quo orders
have been passed with respect to shareholding and assets. He
submitted that the criminal complaints, including FIR No.921 of
2022 and the present FIR No.43 of 2024, have been filed with
the sole intention to harass the accused, that too only after the
filing of the said Company Petition, clearly demonstrating mala
fide intent and retaliation.
9. Learned counsel further submitted that both FIRs are
based on the same set of allegations and facts, and lodging
successive FIRs on the same cause of action amounts to double
jeopardy and is impermissible in law and that in the counter
filed before the NCLT, the de-facto complainant herself admitted
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that the shares in question were allotted to the accused
following due process, which directly contradicts the allegations
made in the FIRs. Thus, the police action and registration of a
second FIR is not only malicious but also an abuse of process.
Moreover, he submitted that the offences alleged, if any, pertain
to Sections 435 and 436 of the Companies Act, 2013 and
therefore fall within the exclusive jurisdiction of the Special
Court designated under the said Act. The learned Magistrate
had rightly declined remand by holding that it lacked
jurisdiction, and the same cannot be faulted.
10. Learned counsel for respondent No.1 contended that the
police failed to consider the detailed reply submitted by the
accused in response to the Section 41-A CrPC notice, and
proceeded mechanically to file a charge sheet without
application of mind, while disregarding the pendency of the
NCLT proceedings. The accused was illegally apprehended by
the EOW police without following the mandatory safeguards
under Section 41 CrPC as laid down by the Hon’ble Supreme
Court. The remand report was filed belatedly and without
justification, despite the earlier rejection of remand by the
learned Magistrate. Further, he argued that the accused had
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acted in his official capacity as Director of the company and in
the absence of any allegation directly against the company itself,
the complaint is legally not maintainable and that the entire
criminal proceedings were initiated with the sole purpose of
coercing the accused into withdrawing the Company Petition
and to force an unlawful settlement. Therefore, he prayed the
Court to dismiss the criminal petition.
11. Learned counsel for respondent No.2/de facto
complainant submitted that the de facto complainant had
lodged a complaint dated 10.08.2024 at Kukatpally Police
Station, based on which FIR No.1005 of 2024 was registered
against respondent No.1/accused for offences punishable under
Sections 420, 406, 467, 468, and 471 of the IPC. He further
submitted that based on instructions issued by the
Commissioner of Police, Cyberabad, vide Memo
No.137/C10/CD-File/Cyb/2024 dated 30.08.2024, the case file
was transferred from Kukatpally Police Station to the Economic
Offences Wing (EOW), Cyberabad, on 02.09.2024.
Subsequently, EOW re-registered the case as FIR No.43 of 2024
against the Respondent No.1 for the same offences.
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12. Learned counsel for respondent No.1 further submitted
that the accused was arrested and produced before the learned
XII Additional Metropolitan Magistrate, Medchal-Malkajgiri
District at Kukatpally on 10.12.2024, along with a remand case
diary. However, the learned Magistrate rejected the remand
request by referring to Notification No.S.O.945(E) dated
23.03.2017 and holding that the Court lacked jurisdiction. He
argued that such rejection was erroneous, as the said
notification pertains only to offences punishable under the
Companies Act, 2013, for offences carrying punishment of two
years or more. He clarified that the offences alleged in the
present FIR are exclusively under the IPC and not under any
provision of the Companies Act.
13. Learned counsel for respondent No.2 contended that the
petitioner had filed Criminal Revision Petition No.57 of 2024
before the learned Principal District and Sessions Judge,
Medchal-Malkajgiri, challenging the order dated 10.12.2024.
However, the revision was dismissed by order dated 23.12.2024
on the ground of maintainability without addressing the merits
of the case. He further submitted that, as per G.O.Rt.No.195,
LAW (LA\&J-Home-Courts A2) Department dated 03.03.2025,
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the Government of Telangana designated the Court of the
Principal Junior Civil Judge-cum-Metropolitan Magistrate,
Ranga Reddy District at L.B. Nagar, as the appropriate court for
trying cases registered at EOW Police Station, Cyberabad
Commissionerate. Therefore, he further contended that the
proper course of action would have been to produce the accused
before the said designated Court for remand, and prayed the
Court to pass appropriate orders.
14. In the light of the submissions made by both parties and
upon perusal of the material available on record, it is observed
that the learned Magistrate rejected the remand on the ground
that the concerned Court had no jurisdiction to entertain the
remand, by referring to Notification No.S.O.945(E) dated
23.03.2017 and holding that the Court lacked jurisdiction.
However, the proceedings of the Principal Senior Civil Judge-
cum-Chief Judicial Magistrate, Medchal-Malkajgiri District at
Kukatpally, dated 10.10.2024, clearly show that the Court of I
Additional Junior Civil Judge-cum-XII Additional Judicial
Magistrate of First Class, Medchal-Malkajgiri District at
Kukatpally, has been declared as the Court for trying Economic
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Offences Wing cases under Section 2(g) of the Cr.P.C., and is
thus competent to deal with such cases.
15. The police in the present case produced the accused
before the I Additional Junior Civil Judge-cum-XII Additional
Judicial Magistrate of First Class, Medchal-Malkajgiri District at
Kukatpally. In view of the above proceedings, the said Court
had jurisdiction to entertain the remand. Even assuming that
the said Court had no jurisdiction under Section 167 of the
Cr.P.C. to authorise further detention for trial purposes, the
accused nevertheless had to be produced before the Magistrate
having jurisdiction over the police station concerned.
16. Therefore, rejecting the remand solely on the ground of
lack of jurisdiction was unsustainable in law. In view of the
circular dated 10.10.2024 and the Government notification
subsequently issued, the said Court was the appropriate forum
to deal with such matters. Accordingly, the order of the learned
Magistrate rejecting the remand is liable to be set aside. The
investigating agency is at liberty to take further steps in
accordance with law, including producing the accused before
the Court having jurisdiction for consideration of remand and
conducting further investigation.
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17. In view of the foregoing, this Criminal Petition is allowed,
and the order dated 23.12.2024 passed in Crl.R.P.No.57 of 2024
by the learned Principal District and Sessions Judge-cum-
Family Court, Medchal-Malkajgiri District at Malkajgiri, is
hereby set aside. Further, at the time of pronouncement,
learned counsel for respondent No.1/accused requested this
Court to suspend the operation of the present order until
18.08.2025. Considering the request, it is directed that the
present order shall come into force on 18.08.2025.
As a sequel, miscellaneous petitions pending, if any, shall
stand closed.
______________
K. SUJANA, J
Date: 11.08.2025
SAI
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THE HONOURABLE SMT. JUSTICE K. SUJANA
CRIMINAL PETITION No.4527 of 2025
Date: 11.08.2025
SAI