Andhra Pradesh High Court – Amravati
Sri N Sanjay Ips vs The State Of Andhra Pradesh on 30 January, 2025
Author: K. Sreenivasa Reddy
Bench: K. Sreenivasa Reddy
THE HON'BLE SRI JUSTICE K. SREENIVASA REDDY
CRIMINAL PETITION No. 58 OF 2025
ORDER :
This Criminal Petition, under Section 482 of the
Bharatiya Nagarik Suraksha Sanhita, 2023 (for short,
„BNSS‟), is filed by petitioner/A.1, seeking anticipatory
bail in connection with FIR No.05/RCO-CIU-ACB of
2024, dated 24.12.2024 registered by the ACB, CIU,
Andhra Pradesh for the offences punishable under
Sections 409, 420, 477A read with 120B of the Indian
Penal Code, 1860 (for short, „IPC‟) and 13 (1) (a) read
with 13 (2) and 7 of the Prevention of Corruption Act,
1988 as amended in 2018 (for short, „the PC Act‟).
2. The Deputy Superintendent of Police, CIU,
ACB, Vijayawada prepared an occurrence report dated
24.12.2024, and based on the factual aspects mentioned
therein and on the orders of the Director General of ACB,
AP, Vijayawada dated 24.12.2024, the aforesaid crime
came to be registered against the petitioner herein and
others.
2
3. The Chief Secretary to the Government of
Andhra Pradesh forwarded Memo No.2592927/SC.D/
A1/2024-3, dated 03.12.2024 of General Administration
(SC-D) Department to the Director General of ACB along
with detailed enquiry reports of the Vigilance and
Enforcement Department bearing No.62 (C.No.4828/
V&E/Sec.II/D1/2024), dated 18.10.2024 and No.63
(C.No.4828/V&E/Sec-II/D1/2024) dated 30.10.2024
submitted by the Director General, Vigilance &
Enforcement vide letters dated 18.10.2024 and
30.10.2024 respectively, to the Government, regarding
certain allegations against petitioner, who worked as the
Director General, A.P. State Disaster Response and Fire
Services and the Additional Director General, Crime
Investigation Department, with a request to conduct
enquiry into the allegations of misappropriation of funds
by him. Thereafter, the Director General, ACB addressed
a letter dated 12.12.2024 to the Chief Secretary to the
Government to accord permission under Section 17A of
the PC Act to conduct a regular enquiry/investigation
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into the allegations against him. Pursuant to the same,
the Government accorded permission Vide Memo
No.2592927/SC.D/A1/2024, dated 20.12.2024 of
General Administration (SC-D) Department according
permission as required under Section 17A of the PC Act.
4. Thereafter, on the instructions of the Director
General of ACB, vide Memo dated 24.12.2024, to register
a RCO case and to investigate into the allegations
against the petitioner and on perusal of the aforesaid
Vigilance reports, the Deputy Superintendent of Police,
CIU, ACB, Vijayawada registered the present case
against the petitioner herein and others.
5. Occurrence Report dated 24.12.2024 has
been enclosed along with the First Information Report.
In the Occurrence Report, the observations and findings
of the Vigilance and Enforcement Department in the
enquiry reports No.62 (C.No.4828/V&E/Sec.II/
D1/2024), dated 18.10.2024 and No.63 (C.No.4828/V&E
/ Sec-II/D1/2024) dated 30.10.2024, are mentioned.
4
6. The observations and findings in enquiry
report of the Vigilance and Enforcement Department
No.62 (C.No.4828/V&E/Sec.II/ D1/2024), dated
18.10.2024, as mentioned in the Occurrence Report, are
as under:
(a) The petitioner/A.1, during his tenure as the
Director General of A.P. State Disaster Response and
Fire Services(APSDRFS), manipulated tender processes
for awarding contract work of Development and
Maintenance of AGNI-NOC (Automated Governance &
NOC integration) Web Portal, Mobile App and supply of
hardware, to M/s. Sauthrika Technologies & Infra
Private Limited (Accused No.2), in violation of the
procedures in vogue and dishonestly and fraudulently
facilitated payment of Rs.59,93,000/- to the said firm on
22.02.2023 i.e. within one week after entering into
agreement on 15.02.2023, though there was no much
progress in the development of AGNI-NOC portal. It is
further alleged that on the same day i.e. on 22.02.2023,
A.2 firm claimed Rs.26,00,000/- more, towards 50%
5development of AGNI Portal and Mobile App, and the
Technical Committee constituted by successor of
petitioner/A.1 on 20.04.2023 for assessing progress of
work, evaluated that A.2 firm executed only 14% of the
work till such date, and thereby the petitioner/A.1 acted
in haste, abused his power, breached the trust reposed
in him as a Public Servant and his acts caused
misappropriation of Government funds.
(b) It is further alleged that petitioner/A.1, while
working as D.G. of APSDRFS, procured 10 laptops from
the said firm viz. Accused No.2, at an exorbitant price of
Rs.17,89,784/- i.e. Rs.1,78,978/- per each laptop,
without calling for any tenders through e-procurement,
without submitting bills, besides not obtaining any
competitive quotations from different vendors or firms in
violation of G.O.Ms.No.258, Finance (TFR) Department,
dated 20.09.2013 which envisages that materials/stores
costing more than Rs.1.00 lakh shall be procured
through e-platform only.
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(c) It is further alleged that the petitioner/A.1, while
working as the D.G., APSDRFS, had not properly
monitored progress of AGNI NOC Portal, leading to
delays and incomplete work, and by the time of
constitution of the Committee by his successor to
monitor the project, significant damage had already
caused due to lack of early oversight, and that no formal
reviews or assessments were conducted to evaluate the
progress of the work allowing Accused No.2 to submit
exaggerated progress reports without any checks or
balances. It is further alleged that while working as
such, petitioner/A.1 abused his position to expedite
release of funds to Accused No.2 without proper
authorization or verification of work progress, inspite of
concerns raised by some department officials about the
lack of progress and thereby he contravened financial
protocols which require verification of work before funds
can be disbursed.
7. The observations and findings in enquiry
report of the Vigilance and Enforcement Department
7
No.63 (C.No.4828/V&E / Sec-II/D1/2024) dated
30.10.2024, as mentioned in the Occurrence Report, are
as under:
The petitioner/A.1, while working as Additional
Director General of CID in the year 2023, connived with
others and manipulated tender processes for awarding
contract work of conducting Awareness Meetings/
Workshops for SCs/STs on the SCs/STs (PoA) Act to
M/s. Kritvyap Technologies Private Limited (Accused
No.3) which was not existent and was not found in the
address i.e. Flat No.601, Lalithanjali Apartment,
Dwarakapuri Colony, Hyderabad, and though the said
firm was not at all involved in conducting the awareness
meetings/workshops for SCs/ STs, which were in realty
conducted by the officials of Regional CID offices,
petitioner/A.1 facilitated payment of Rs.1,19,03,600/- to
Accused No.3 dishonestly and fraudulently, causing
misappropriation of government funds. It is further
alleged that pre-qualification criterion for participating
bidders was not verified properly during the process and
8Accused No.2 was being operated at the address where
Accused No.3 company is ought to be operated and thus
the Accused Nos. 2 and 3 are one and the same. It is
further alleged that Awareness Programmes were shown
to be conducted on 27.01.2024, 28.01.2024 and
29.01.2024, even before entering of agreement with
Accused No.3 on 30.01.2024, and petitioner/A.1
sanctioned an amount of Rs.59,52,500/- and
Rs.59,51,100/- respectively towards SCs & STs
Awareness Workshops on the same date of the
agreement on 30.01.2024. It is further alleged that only
Rs.3,10,000/- was incurred against the agreement value
of Rs.1,19,03,600/- which indicates gross embezzlement
of government funds to a tune of Rs.1,15,93,600/-.
8. It is, therefore, alleged that the petitioner/A.1,
during his tenure as the Director General of APSDRFS,
actively connived with others in manipulating tender
processes for awarding contract work of Development
and Maintenance of AGNI-NOC (Automated Governance
& NOC integration) Web Portal, Mobile App and supply of
9hardware, to Accused No.2, in violation of the procedures
in vogue, leading to misappropriation of government
funds to a tune of Rs.59,93,000/-; that the
petitioner/A.1, while working as Additional Director
General, CID, awarded the contract of conducting
Awareness Meetings/ Workshops for SCs/STs on the
SCs/STs (PoA) Act to Accused No.3, which was non-
existent company, by showing undue favour to the firms
of his choice, leading to misappropriation of government
funds to a tune of Rs.1,15,93,600/-, and resorted to
corrupt and illegal means not adhering to the procedures
in vogue, and showed nonfeasance in initiating action
against Accused No.2 though they failed to show much
progress in development of AGNI-NOC portal and inspite
of facilitating payments to the said firm, causing
wrongful gain to others and loss to the government
exchequer, which tantamount to criminal misconduct,
criminal misappropriation, criminal breach of trust and
criminal conspiracy, and in the capacity of being a public
servant, entrusted with public property and having
10
domain over the same, committed breach of trust,
attracting the offences alleged.
9. Heard the learned senior counsel Sri
S.Sriram, appearing for Sri S.Dushyanth Reddy, learned
counsel for the petitioner, assisted by the learned
counsel Sri Sai Saran Chodisetty and the learned
Advocate General appearing for the respondent-State.
10. The learned senior counsel appearing on
behalf of the petitioner submitted that the present
complaint has been filed after lapse of one year and ten
months and there is absolutely no explanation
whatsoever for launching the prosecution with abnormal
delay; that the alleged payments were made in the month
of February, 2023 and the present prosecution has been
launched on 24.12.2024. The learned senior counsel
further submitted that except the offence punishable
under Section 409 IPC, the other offences alleged are
punishable with less than 7 years imprisonment. It is
his submission that the petitioner was the Head of the
11
Department and was only a Supervising Authority, and
in order to award a work or to make payment, there is a
procedure contemplated, whereunder a file has to be
processed by different offices at different stages, and the
petitioner issued orders after having been satisfied that
the entire procedure contemplated is followed.
The learned senior counsel further submitted that
the work order was issued on 25.10.2023 in view of the
pressure from the Government to launch the APP, and
the successful bidder started working on it and made it
available to the general public immediately after entering
into the agreement; that amounts were paid to the
company concerned up to the stage where the work was
completed. He further submitted that AGNI App was
successfully developed and launched by the then Home
Minister and the Principal Secretary to Home
Department in the prestigious investors‟ summit, and in
connection with that, an Award was given by the Kerala
Government for this App. He submitted that on
29.05.2023, a show-cause notice was issued by the
12
successor of the petitioner seeking explanation for the
delay and measures for expedition of the project, and
aggrieved by the same, A.2 approached this Court by
way of filing W.P.No.13793 of 2023, and by an Order
dated 21.06.2023, this Court directed the authority
concerned not to take any coercive steps and the said
interim order is still subsisting.
The learned senior counsel further submitted that a
Tender was called for, for supply of Laptops, and the
i-pods and surface laptops are now being utilized by the
Department. He further emphasized that awareness
camps for SCs/STs were successfully conducted and
after giving certificate for satisfactory by the officer
concerned, amounts were released therefor.
The learned senior counsel further submitted that
there is absolutely no accusation against the petitioner
attracting the offence punishable under Section 409 IPC.
It is his further submission that the petitioner was
suspended from service immediately when the former
opposition party came into power in June, 2024 and he
13
was directed to attend the office of the Director General
of Police without assigning any work and without
payment of any salary, and as such, the question of the
petitioner tampering with the evidence or material would
not arise. He submits that the petitioner is an IPS officer
and entered into service in the year 1996 and he is a
cardiac patient diagnosed with coronary artery disease
(triple vessel disease) and underwent a coronary artery
bypass graft in July, 2023. Hence, he prays to consider
the request of the petitioner for anticipatory bail.
In support of his contention, the learned senior
counsel relied on the following decisions.
(i) in N.Raghavender v. State of Andhra Pradesh,
CBI1, wherein it is held thus: (paragraphs 45 to 48)
“Ingredients necessary to prove a charge under
Section 409IPC
45. Section 409IPC pertains to criminal breach of
trust by a public servant or a banker, in respect of
the property entrusted to him. The onus is on the
prosecution to prove that the accused, a public
servant or a banker was entrusted with the property
1
(2021) 18 SCC 70
14
which he is duly bound to account for and that he
has committed criminal breach of trust.
(See Sadhupati Nageswara Rao v. State of
A.P. [Sadhupati Nageswara Rao v. State of A.P.,
(2012) 8 SCC 547 : (2012) 3 SCC (Cri) 979 : (2012) 2
SCC (L&S) 638] )
46. The entrustment of public property and
dishonest misappropriation or use thereof in the
manner illustrated under Section 405 are a sine qua
non for making an offence punishable under Section
409IPC. The expression “criminal breach of trust” is
defined under Section 405IPC which provides, inter
alia, that whoever being in any manner entrusted
with property or with any dominion over a property,
dishonestly misappropriates or converts to his own
use that property, or dishonestly uses or disposes of
that property contrary to law, or in violation of any
law prescribing the mode in which such trust is to
be discharged, or contravenes any legal contract,
express or implied, etc. shall be held to have
committed criminal breach of trust. Hence, to
attract Section 405IPC, the following ingredients
must be satisfied:
46.1. Entrusting any person with property or with
any dominion over property.
46.2. That person has dishonestly misappropriated
or converted that property to his own use.
1546.3. Or that person is dishonestly using or
disposing of that property or wilfully suffering any
other person so to do in violation of any direction of
law or a legal contract.
47. It ought to be noted that the crucial word used
in Section 405IPC is “dishonestly” and therefore, it
pre-supposes the existence of mens rea. In other
words, mere retention of property entrusted to a
person without any misappropriation cannot fall
within the ambit of criminal breach of trust. Unless
there is some actual use by the accused in violation
of law or contract, coupled with dishonest intention,
there is no criminal breach of trust. The second
significant expression is “misappropriates” which
means improperly setting apart for ones use and to
the exclusion of the owner.
48. No sooner are the two fundamental ingredients
of “criminal breach of trust” within the meaning of
Section 405IPC proved, and if such criminal breach
is caused by a public servant or a banker, merchant
or agent, the said offence of criminal breach of trust
is punishable under Section 409IPC, for which it is
essential to prove that:
(i) The accused must be a public servant or a
banker, merchant or agent;
(ii) He/She must have been entrusted, in such
capacity, with property; and
16
(iii) He/She must have committed breach of trust in
respect of such property.”
(ii) in Common Cause, a registered society v. Union of
India & others2, wherein it is held thus: (paragraphs 167
to 173)
“167. This brings us to the definition of the offence
of “Criminal Breach of Trust” as defined in Section
405 of the Penal Code, 1860 which, minus the
Explanation, provides as under:
“405. Criminal breach of trust.–Whoever, being in
any manner entrusted with property, or with any
dominion over property, dishonestly
misappropriates or converts to his own use that
property, or dishonestly uses or disposes of that
property in violation of any direction of law
prescribing the mode in which such trust is to be
discharged, or of any legal contract, express or
implied, which he has made touching the discharge
of such trust, or wilfully suffers any other person so
to do, commits „criminal breach of trust‟.”
168. A trust contemplated by Section 405 would
arise only when there is an entrustment of property
or dominion over property. There has, therefore, to
be a property belonging to someone which is
entrusted to the person accused of the offence
2
(1999) 6 SCC 667
17
under Section 405. The entrustment of property
creates a trust which is only an obligation annexed
to the ownership of the property and arises out of a
confidence reposed and accepted by the owner. This
is what has been laid in State of
Gujarat v. Jaswantlal Nathalal [AIR 1968 SC 700 :
(1968) 2 SCR 408] . In Rashmi Kumar v. Mahesh
Kumar Bhada [(1997) 2 SCC 397 : 1997 SCC (Cri)
415] the essential ingredients for establishing the
offence of criminal breach of trust, as defined in
Section 405, have been spelt out as follows: (SCC
pp. 406-07, para 13)
“(i) entrusting any person with property or with any
dominion over property; (ii) the person entrusted
dishonestly misappropriating or converting to his
own use that property; or dishonestly using or
disposing of that property or wilfully suffering any
other person so to do in violation of any direction of
law prescribing the mode in which such trust is to
be discharged, or of any legal contract made
touching the discharge of such trust.”
169. In this case, the earlier decision in Pratibha
Rani v. Suraj Kumar [(1985) 2 SCC 370 : 1985 SCC
(Cri) 180] was affirmed. The case essentially related
to the entrustment of “Stridhan”, but nevertheless,
it is important in the sense that the ingredients of
the offence are set out and discussed. In Chelloor
Mankkal Narayan Ittiravi Nambudiri v. State of
18
Travancore-Cochin [(1952) 2 SCC 392 : AIR 1953 SC
478 : 1954 Cri LJ 102] it was laid down that every
breach of trust in the absence of mens rea or
dishonest intention cannot legally justify a criminal
prosecution.
170. The expressions “entrusted with property” and
“with any dominion over property” used in Section
405 came to be considered by this Court
in CBI v. Duncans Agro Industries Ltd. [(1996) 5 SCC
591 : 1996 SCC (Cri) 1045 : AIR 1996 SC 2452] and
the view earlier expressed was reiterated. It was held
that the expression “entrusted” has wide and
different implication in different contexts and the
expression “trust” has been used to denote various
kinds of relationships like trustee and beneficiary,
bailor and bailee, master and servant, pledger and
pledgee.
171. Mr K. Parasaran contended that “power to allot
petrol pumps”, and that too under discretionary
quota, cannot be treated as “property” within the
meaning of Section 405 of the Penal Code, 1860. It
is pointed out by him that the Minister merely
makes an order of allotment. Subsequently, the
Indian Oil Corporation or the Bharat Petroleum
Corporation enters into a dealership agreement with
that person and the business is regulated by the
agreement between the allottee and the Corporation
19
(Indian Oil Corporation or Bharat Petroleum
Corporation). It is also pointed out that in
pursuance of the agreement, the allottee invests
money, constructs the building and sets up the
petrol pump. Mere exercise of “power to allot”, it is
rightly contended, cannot, therefore, be treated as
“property” within the meaning of Section 405,
capable of being misutilised or misappropriated.
172. The word “property”, used in Section 409 IPC
means the property which can be entrusted or over
which dominion may be exercised. This Court
in R.K. Dalmia v. Delhi Admn. [AIR 1962 SC 1821 :
(1963) 1 SCR 253] held that the word “property”,
used in Section 405 IPC, has to be interpreted in a
wider sense as it is not restricted by any
qualification under Section 405. It was held that
whether an offence defined in that section could be
said to have been committed would depend not on
the interpretation of the word “property” but on the
fact whether that particular kind of property could
be subject to the acts covered by that section. That
is to say, the word “property” would cover that kind
of property with respect to which the offence
contemplated in that section could be committed.
173. Having regard to the facts of the case
discussed above and the ingredients of the offence
constituting criminal breach of trust, as defined in
20
Section 405, or the offence as set out in Section 409
IPC, we are of the opinion that there was no case
made out against the petitioner for any case being
registered against him on the basis of the judgment
passed by this Court nor was there any occasion to
direct an investigation by CBI in that case.”
11. On the other hand, the learned Advocate
General appearing on behalf of respondent/State, while
reiterating the averments mentioned in the counter,
vehemently contended that there is deception
entertained by the petitioner, right from the beginning in
awarding the contract to A.2 and A.3. According to him,
in order to award the contract to the co-accused, the
petitioner is alleged to have committed manipulations
with a view to favour A.2 and A.3. He further submitted
that the petitioner released funds in favour of A.2 prior
to entering into the agreement with the State. The
learned Advocate General further emphasized that the
agreement was entered with A.2 on 15.02.2023 and
sanction of huge amount of Rs.59,93,000/- on
22.02.2023 i.e. within a week from the date of the
21
agreement, duly misrepresenting the department, is in
contravention of the agreed terms of the contract, and
the same has been done without verifying the progress of
work.
The learned Advocate General further emphasized
that a Tender for the works of the value over and above
Rs.50.00 lakhs, shall be published in one Telugu and
one English vernacular daily newspapers, but there were
no entries regarding the publishing of the Tender
Notifications in the newspapers and the same is in gross
violation of G.O.Ms.No.94, I & CAD (PW-COD)
Department, dated 01.07.2023. He further submitted
that A.3, despite being the successful bidder, failed to
conduct any awareness workshops for SCs/STs, and it is
the Regional CID officials of the respective regions, who
conducted 25 awareness workshops to SCs and STs with
active co-ordination of local Police, Revenue, MPDO,
Social Welfare Department officials, Colleges, SC/ST
leaders and Members of the District SC/ST Vigilance
monitoring committee in Government buildings, except
22
at one place i.e. Sneha Vinayaka Function Hall,
Kodumur, Kurnool district, and though A.3 has not
conducted any of the meetings, payment of
Rs.1,19,03,600/- was already sanctioned in favour of
A.3, purportedly for executing the work.
The learned Advocate General has also taken this
Court to the photographs to the effect that the
workshops were being organized by the APCID, but not
by A.3. The learned Advocate General submits that
though the works are not completed by A.3, certain
amounts were released on different dates. He submits
that this is not a case where anticipatory bail can be
granted, in view of the irregularities that have been
committed by the petitioner.
The learned Advocate General relied on the
following decisions.
(i) in P.Chidambaram v. Directorate of Enforcement3,
wherein it is held thus: (paragraph 78)
3
(2019) 9 SCC 24
23
“78. Power under Section 438 CrPC being an
extraordinary remedy, has to be exercised sparingly;
more so, in cases of economic offences. Economic
offences stand as a different class as they affect the
economic fabric of the society. In Directorate of
Enforcement v. Ashok Kumar Jain [Directorate of
Enforcement v. Ashok Kumar Jain, (1998) 2 SCC 105
: 1998 SCC (Cri) 510] , it was held that in economic
offences, the accused is not entitled to anticipatory
bail.”
(ii) in Jaya Prakash Singh v. State of Bihar &
another,4 wherein it is held thus: (paragraphs 13 and 22)
“13. There is no substantial difference between
Sections 438 and 439 CrPC so far as appreciation of
the case as to whether or not a bail is to be granted,
is concerned. However, neither anticipatory bail nor
regular bail can be granted as a matter of rule. The
anticipatory bail being an extraordinary privilege
should be granted only in exceptional cases. The
judicial discretion conferred upon the court has to
be properly exercised after proper application of
mind to decide whether it is a fit case for grant of
anticipatory bail.
22. In the facts and circumstances of this case, we
are of the considered opinion that it was not a fit
case for grant of anticipatory bail. The High Court
4
(2012) 4 SCC 379
24
ought to have exercised its extraordinary
jurisdiction following the parameters laid down by
this Court in the abovereferred to judicial
pronouncements, considering the nature and gravity
of the offence and as the FIR had been lodged
spontaneously, its veracity is reliable. The High
Court has very lightly brushed aside the fact that
the FIR had been lodged spontaneously and further
did not record any reason as to how the prerequisite
conditions incorporated in the statutory provision
itself stood fulfilled. Nor did the court consider as to
whether custodial interrogation was required. The
court may not exercise its discretion in derogation of
established principles of law, rather it has to be in
strict adherence to them. Discretion has to be
guided by law, duly governed by rule and cannot be
arbitrary, fanciful or vague. The court must not
yield to spasmodic sentiment to unregulated
benevolence. The order dehors the grounds provided
in Section 438 CrPC itself suffers from non-
application of mind and therefore, cannot be
sustained in the eye of the law.”
(iii) In State, rep. by the CBI v. Anil Sharma5,
wherein it is held thus: (paragraph 6)
“6. We find force in the submission of the CBI that
custodial interrogation is qualitatively more
5
(1997) 7 SCC 187
25
elicitation-oriented than questioning a suspect who
is well ensconced with a favourable order under
Section 438 of the Code. In a case like this effective
interrogation of a suspected person is of tremendous
advantage in disinterring many useful informations
and also materials which would have been
concealed. Success in such interrogation would
elude if the suspected person knows that he is well
protected and insulated by a pre-arrest bail order
during the time he is interrogated. Very often
interrogation in such a condition would reduce to a
mere ritual. The argument that the custodial
interrogation is fraught with the danger of the
person being subjected to third-degree methods
need not be countenanced, for, such an argument
can be advanced by all accused in all criminal
cases. The Court has to presume that responsible
police officers would conduct themselves in a
responsible manner and that those entrusted with
the task of disinterring offences would not conduct
themselves as offenders.”
(iv) in Nimmagadda Prasad v. Central Bureal of
Investigation6, wherein it is held thus (paragraphs 23 to
26)
6
(2013) 7 SCC 466
26
“23. 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. Incontrovertibly,
economic offences have serious repercussions on
the development of the country as a whole. In State
of Gujarat v. Mohanlal Jitamalji Porwal [(1987) 2
SCC 364 : 1987 SCC (Cri) 364] this Court, while
considering a request of the prosecution for
adducing additional evidence, inter alia, observed as
under: (SCC p. 371, para 5)
“5. … The entire community is aggrieved if the
economic offenders who ruin the economy of the
State are not brought to book. A murder may be
committed in the heat of moment upon passions
being aroused. An economic offence is committed
with cool calculation and deliberate design with an
eye on personal profit regardless of the consequence
to the community. A disregard for the interest of the
community can be manifested only at the cost of
forfeiting the trust and faith of the community in the
system to administer justice in an even-handed
manner without fear of criticism from the quarters
which view white-collar crimes with a permissive eye
unmindful of the damage done to the national
economy and national interest.”
24. While granting bail, the court has to keep in
mind the nature of accusations, the nature of
27
evidence in support thereof, the severity of the
punishment which conviction will entail, the
character of the accused, circumstances which are
peculiar to the accused, reasonable possibility of
securing the presence of the accused at the trial,
reasonable apprehension of the witnesses being
tampered with, the larger interests of the
public/State and other similar considerations. It
has also to be kept in mind that for the purpose of
granting bail, the legislature has used the words
“reasonable grounds for believing” instead of “the
evidence” which means the court dealing with the
grant of bail can only satisfy itself as to whether
there is a genuine case against the accused and that
the prosecution will be able to produce prima facie
evidence in support of the charge. It is not expected,
at this stage, to have the evidence establishing the
guilt of the accused beyond reasonable doubt.
25. Economic offences constitute a class apart and
need to be visited with a different approach in the
matter of bail. The economic offence having deep-
rooted conspiracies and involving huge loss of
public funds needs to be viewed seriously and
considered as a grave offence affecting the economy
of the country as a whole and thereby posing
serious threat to the financial health of the country.
28
26. Taking note of all these aspects, without
expressing any opinion on the merits of the case
and also with regard to the claim of CBI and the
defence, we are of the opinion that the appellant
cannot be released at this stage, however, we direct
CBI to complete the investigation and file charge-
sheet(s) as early as possible preferably within a
period of four months from today. Thereafter, the
appellant is free to renew his prayer for bail before
the trial court and if any such petition is filed, the
trial court is free to consider the prayer for bail
independently on its own merits without being
influenced by dismissal of the present appeal.”
12. Heard and perused the record.
13. A perusal of the record goes to show that the
Chief Secretary to the Government of Andhra Pradesh
forwarded Memo No.2592927/SC.D/ A1/2024-3, dated
03.12.2024 issued by the General Administration (SC-D)
Department to the Director General of ACB along with
detailed enquiry reports of the Vigilance and
Enforcement Department bearing No.62 (C.No.4828/
V&E/Sec.II/D1/2024), dated 18.10.2024 and No.63
(C.No.4828/V&E/Sec-II/D1/2024) dated 30.10.2024
29
submitted by the Director General, Vigilance &
Enforcement vide letters dated 18.10.2024 and
30.10.2024 respectively, to the Government regarding
certain allegations against petitioner, who worked as the
Director General, A.P. State Disaster Response and Fire
Services and the Additional Director General, Crime
Investigation Department, with a request to conduct
enquiry into the allegations of misappropriation of funds
by him. Thereafter, pursuant to letter dated 12.12.2024
addressed by the Director General, ACB to the Chief
Secretary to the Government, the Government accorded
permission Vide Memo No.2592927/SC.D/A1/2024,
dated 20.12.2024 of General Administration (SC-D)
Department according permission as required under
Section 17A of the PC Act.
14. Thereafter, on the instructions of the Director
General of ACB, vide Memo dated 24.12.2024, to register
a RCO case and to investigate into the allegations
against the petitioner, the Deputy Superintendent of
30
Police, CIU, ACB, Vijayawada, on a perusal of the reports
submitted by the Vigilance and Enforcement
Department, prepared an occurrence report dated
24.12.2024, and based on the factual aspects mentioned
therein and on the orders of the Director General of ACB,
AP, Vijayawada dated 24.12.2024, the aforesaid crime
came to be registered against the petitioner herein and
others.
15. The accusation as against the petitioner is
that he is alleged to have actively connived with others in
manipulating tender processes for awarding the contract
work of Development and Maintenance of AGNI-NOC
(Automated governance & NOC Integration) Web portal,
Mobile App and supply of hardware to A.2 in violation of
the procedure in vogue leading to misappropriation of
Government funds to a tune of about Rs.59,93,000/-
and the contract of conducting awareness meetings/
workshops for SCs/STs on the SC/ST PoA Act to A.3 by
showing undue favour to the firms of his choice. It is
31
further alleged that A.3 is a non-existent company
leading to misappropriation of Government funds to a
tune of about Rs.1,53,93,600/-, resorting to corrupt and
illegal means not adhering to the procedures in vogue,
nonfeasance in initiating action against A.2, though they
failed to show much of progress in the development of
AGNI-NOC portal.
16. A perusal of the material placed on record
goes to show that when a Tender Notification vide RC
No.3776/Planning/2015/NOC, dated 06.01.2023 was
issued for Development and Maintenance of AGNI-NOC
Web portal for a period of five years and mobile app and
supply of hardware for APSDRFS, A.2 and others are
said to have participated in the tender process and A.2
was declared as successful bidder for an amount of
Rs.2,29,61,000/-. The price bid was opened on
25.01.2023 and the Committee constituted for Tender
Finalization was met on 25.01.2023, and the tender was
accepted on negotiations. Thereafter, the said fact was
32
informed to the successful bidder with a request to enter
into agreement within a period of 7 days. The allegation
is that the petitioner, in violation of the procedures in
vogue and dishonestly and fraudulently facilitated
payment of Rs.59,93,000/- to the said firm on
22.02.2023 i.e. within one week after entering into
agreement on 15.02.2023, though there was no much
progress in the development of AGNI-NOC portal.
17. It is pertinent to mention here that the
petitioner worked as the Director General of APSDRFS,
and he, being the Head of the Institution, a Supervising
Authority, is said to have accepted the entire process as
suggested by the officers concerned. A plain reading of
the material on record with regard to the disbursement
of amounts, it is alleged that there appear to be some
procedural violations. Merely because there are certain
procedural violations, the petitioner cannot be made
liable therefor. In connection with the said averment,
the petitioner followed the procedure as contemplated.
33
Merely because the amounts have been released in
favour of companies for the works completed by them, it
would not come within the purview of the offence
punishable under Section 409 IPC.
18. In respect of another Tender Notification
No.9707/D1/CID/2024, dated 11.01.2024, it was issued
for conducting awareness programmes for SCs/STs,
which include providing refreshments/venues/VC halls
and workshop material. A.3 is said to have declared as
lowest bidder, and after complying with all the
formalities, A.3 was declared as the successful bidder
vide proceedings dated 19.01.2024 for a sum of
Rs.59,52,500/- and Rs.59,51,100/- respectively towards
SCs awareness workshops and STs awareness
workshops. In connection with that, an agreement was
entered into, for carrying out the workshops.
19. It is alleged that Awareness Programmes were
shown to be conducted on 27.01.2024, 28.01.2024 and
29.01.2024, even before entering of agreement with A.3
34
on 30.01.2024, and petitioner sanctioned an amount of
Rs.59,52,500/- and Rs.59,51,100/- respectively towards
SCs & STs Awareness Workshops on the same date of
the agreement on 30.01.2024, and that only
Rs.3,10,000/- was incurred against the agreement value
of Rs.1,19,03,600/- which indicates gross embezzlement
of government funds to a tune of Rs.1,15,93,600/-. The
learned senior counsel appearing for the petitioner
submitted that though the agreement was entered into at
a belated stage, it is agreed upon that the work would
commence from the date of the Purchase Order.
According to the learned senior counsel, work
commenced much earlier and the awareness camps for
SCs and STs were successfully conducted, and the
officer concerned has also given certificate of
satisfactory. As far as the Awareness workshops are
concerned, the same were managed by the Regional
Officers in the cadre of Superintendent or Additional
Superintendent of Police, and basing on their feed back
and on the recommendation of all the concerned, the
35
amounts were paid under the said Head. It is also
relevant to mention here that the petitioner is not a
Drawing and Disbursing Officer. It is submitted that
the Drawing and Disbursing Officer certified that the
work performed by the companies are found to be
satisfactory and thereafter the amounts were released.
20. It is further alleged that the petitioner/A.1,
while working as the Director General of APSDRFS,
violated G.O.Ms.No.258, Finance (TFR) Department,
dated 20.09.2013 with a mala fide intention and in
connivance with A.2 in procuring 10 Nos. laptops at an
exorbitant price of Rs.17,89,784/- i.e. Rs.1,78,978/- per
each laptop, without calling for tenders. It is further
alleged that the petitioner failed to discharge his
legitimate duties deliberately in sanctioning the
abovesaid amount. A perusal of the material on record
goes to show that the sanction of Rs.17,89,784/- to
procure 10 Nos. laptops was ratified by the Welfare
Committee of A.P. Fire Services (Petroleum Retail
36
Outlets), Krishna District in its meeting dated
10.02.2023. It goes to show that the said laptops were
supplied by A.2 for rate 5% less than the market value.
It is not the case of prosecution that the laptops were not
at all procured. But, it is the averment in the First
Information Report that the same has not been done
through tender process. It is not the case of the
prosecution that laptops are not being used by the
Department and the same are not in working conditions.
Being the Head of the Institution, the petitioner is said to
have taken a collective decision along with other senior
officials to procure the laptops at a rate less than 5% of
the market price. It appears that the said laptops are
necessary for effective development of the said
application by the superior officers of the Fire
Department and several other subordinates, since the
same were launched formally. It is the submission of
the learned senior counsel appearing for the petitioner
that various price quotations and queries in terms of
quick delivery were taken from different vendors by the
37
Department and as A.2 company quoted less price than
the price quoted by other vendors, the work of supplying
the said laptops was entrusted by the Department to A.2
company. On a perusal of the entire material on
record, this Court is of the opinion that there are certain
procedural violations in respect of monies that have been
released in favour of the companies by verifying the
progress of work done by the companies. It is for those
officers concerned to look into the aspects and submit a
report to the Head of the Institution. The Head of the
Institution, being the Supervisory Authority, would not
in any way go into each and every aspect in detail in
order to release funds in favour of the companies.
21. Section 409 IPC deals with the criminal
breach of trust by a public servant or a banker in respect
of the property entrusted to him. Under Section 405
IPC, whoever, being in any manner, entrusted with
property, or with any dominion over property,
dishonestly misappropriates or converts to his own use
38
that property, or dishonestly uses or disposes of that
property in violation of any direction of law prescribing
the mode in which such trust is to be discharged, or of
any legal contract, express or implied, which he has
made touching the discharge of such trust, or wilfully
suffers any person so to do, commits „criminal breach of
trust‟. In order to constitute the aforesaid offence, there
must be an entrustment of property or dominion over the
property, and the said person entrusted has to
dishonestly misappropriate or convert it to his own use.
The onus is on the prosecution to prove that the
accused, being a public servant or a banker, was
entrusted with the property which he is duty bound to
account for, and that he committed criminal breach of
trust.
22. Going by the averments contained in the First
Information Report, there is absolutely no doubt that the
petitioner is a public servant. In Common Cause’s case
(2 supra), a discussion has cropped up with regard to
39
„entrustment of property‟ and „with any dominion over
property‟, used in Section 405 IPC, which came to be
considered by the Hon‟ble Apex Court in CBI v. Duncans
Agro Industries Limited {(1996) 5 SCC 591}, wherein it is
held that the expression „entrusted‟ has wide and
different implication in different contexts and the express
„trust‟ has been used to denote various kinds of
relationships like trustee and beneficiary, bailor and
bailee, master and servant, pledger and pledgee, and it
was held that mere exercise of „power to allot‟ cannot be
treated as „property‟ within the meaning of Section 405
IPC, capable of being mis-utilized or misappropriated.
23. In the case on hand too, the work has been
allotted to A.2 and A.3 after following due procedure
contemplated as per Rules. Merely because certain
procedural violations alleged have taken place with
regard to disbursement of amounts in favour of the
companies, prima facie, would not in any way come
within the purview of Section 409 IPC. In view of the
40
aforesaid judgment, it can be inferred that mere power to
allot the work to other companies, would not in any way
come within the purview of entrustment of property.
24. Apart from the same, it is also essential that
the property which has been entrusted must have been
misappropriated and the same has been converted for
personal use. In the case on hand, there is absolutely no
material to show that the property or any monies has
been misappropriated and the same has been converted
for the personal use of the petitioner. In the absence of
the said ingredients, there is any amount of ambiguity
whether the offence punishable under Section 409 IPC
would attract or not.
25. The learned Advocate General, by placing
reliance on the decision in State, rep. by the CBI v. Anil
Sharma (5 supra), strenuously contended that in order to
prove that the funds have been misappropriated and the
same were converted for the personal use of the
petitioner, custodial interrogation is essential, and that
41
custodial interrogation is qualitatively more elicitation-
oriented than questioning a suspect who is well
ensconced with a favourable order under Section 438
CrPC. He further emphasized that in a case of this
nature, effective interrogation of the suspected person is
of tremendous advantage in disinterring useful
information and also materials which would have been
concealed.
26. In the case on hand, the petitioner is an IPS
officer, entered into service in the year 1996. He has
been suspended from service in June, 2024. Entire
material that is borne out of record, has been seized by
the Vigilance and Enforcement Department and the
same has been furnished to ACB officials. The petitioner
is under suspension since June, 2024 and question of
tampering with the evidence by him would not arise at
all. When the entire material pertaining to the alleged
transactions has been seized, question of custodial
interrogation to elicit more information, would not arise.
42
It is pertinent to mention here that if the petitioner is
arrested and if the prosecution is not able to prove the
accusation of misappropriation and funds that were
converted for his personal use, as alleged, reputation of
the petitioner will be mollified.
27. The Hon‟ble Apex Court, in Siddharam
Satlingappa Mhetre case reported in (2011) 1 SCC 694,
laid down certain factors and parameters to be
considered while considering an application for
anticipatory bail, which read as under :
“112. The following factors and parameters can be
taken into consideration while dealing with the
anticipatory bail:
(i) the nature and gravity of the accusation and the
exact role of the accused must be properly
comprehended before arrest is made;
(ii) the antecedents of the applicant including the
fact as to whether the accused has previously
undergone imprisonment on conviction by a court in
respect of any cognizable offence;
(iii) the possibility of the applicant to flee from
justice;
43
(iv) the possibility of the accused’s likelihood to
repeat similar or [the] other offences;
(v) where the accusations have been made only with
the object of injuring or humiliating the applicant by
arresting him or her;
(vi) impact of grant of anticipatory bail particularly
in cases of large magnitude affecting a very large
number of people;
(vii) the courts must evaluate the entire available
material against the accused very carefully. The
court must also clearly comprehend the exact role of
the accused in the case. The cases in which the
accused is implicated with the help of Sections 34
and 149 of the Penal Code, 1860 the court should
consider with even greater care and caution because
overimplication in the cases is a matter of common
knowledge and concern;
(viii) while considering the prayer for grant of
anticipatory bail, a balance has to be struck
between two factors, namely, no prejudice should be
caused to the free, fair and full investigation and
there should be prevention of harassment,
humiliation and unjustified detention of the
accused;
(ix) the court to consider reasonable apprehension of
tampering of the witness or apprehension of threat
to the complainant;
44
(x) frivolity in prosecution should always be
considered and it is only the element of genuineness
that shall have to be considered in the matter of
grant of bail and in the event of there being some
doubt as to the genuineness of the prosecution, in
the normal course of events, the accused is entitled
to an order of bail.
113. Arrest should be the last option and it should
be restricted to those exceptional cases where
arresting the accused is imperative in the facts and
circumstances of that case. The court must carefully
examine the entire available record and particularly
the allegations which have been directly attributed
to the accused and these allegations are
corroborated by other material and circumstances
on record.”
28. This Court is of the view that the petitioner,
being an IPS officer, worked in the capacities as the
Director General, A.P. State Disaster Response and Fire
Services and the Additional Director General, Crime
Investigation Department, question of he fleeing away is
remote. There is absolutely no flight risk. He has got
fixed abode. He is aged about 57 years. The material
filed along with the petition shows that petitioner is a
45
cardiac patient, diagnosed with coronary artery disease,
specifically triple vessel disease, and he underwent a
coronary artery bypass graft (CABG) in July, 2023, and
considering the severity, he requires continuous follow
up with his physician to monitor his recovery and overall
health. Considering the aforesaid facts and
circumstances of the case, this Court feels that the
request of the petitioner for anticipatory bail can be
considered, however, on certain conditions.
29. Accordingly, in the event of his arrest in the
aforesaid crime, the petitioner shall be released on bail
on his executing a personal bond for a sum of
Rs.25,000/- with two sureties for the like sum to the
satisfaction of the arresting officials. The petitioner shall
co-operate with the investigating agency and attend
before it as and when required. The petitioner shall not,
directly or indirectly, make any inducement, threat or
promise to any person acquainted with the facts of the
46
case so as to dissuade him from disclosing such facts to
the Court or to any police officer.
30. Accordingly, the Criminal Petition is allowed.
Miscellaneous petitions pending, if any, in the
Criminal Petition shall stand closed.
___________________________________
JUSTICE K. SREENIVASA REDDY
30.01.2025
DRK
47
THE HON’BLE SRI JUSTICE K. SREENIVASA REDDY
CRIMINAL PETITION No. 58 OF 2025
30.1.2025
DRK
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