Andhra Pradesh High Court – Amravati
Y Vikranth Reddy vs State Of Andhra Pradesh on 7 March, 2025
Author: K Sreenivasa Reddy
Bench: K Sreenivasa Reddy
HONOURABLE SRI JUSTICE K SREENIVASA REDDY
CRIMINAL PETITION NO: 8912 OF 2024
ORDER:
This Criminal Petition, under Section 482 of the
Bharatiya Nagarik Suraksha Sanhita, 2023 (for short ‘the
BNSS’), has been filed on behalf of the petitioner/accused
No.1 to grant anticipatory bail in connection with Crime
No.30 of 2024 of CID PS., Mangalagiri.
2. A case has been registered against the
petitioner/accused No.1 and other accused for the
offences punishable under Sections 506, 384, 420, 109,
467, 120B read with 34 of the Indian Penal Code, 1860
(for short, ‘IPC‘) and Section 111 of the Bharatiya Nyaya
Sanhita, 2023 (for brevity ‘BNS’).
3. Pursuant to a report dated 02.12.2024 lodged
by 2nd respondent/defacto complainant, the subject crime
came to be registered. The allegations, in brief, are as
follows:
(a) M/s. Kakinada Seaports Limited (for short,
‘KSPL’) is a concessionaire from the Government of
Andhra Pradesh (for short, ‘GoAP’) vide Concession
2Agreement dated 19.03.1999, to carry on business of
Kakinada Deep Water Port (for short, ‘KDWP’). KSPL
made huge investments and developed KDWP. It became a
profit-making company. M/s. Kakinada SEZ Limited (for
short, ‘KSEZ’) acquired 8320 acres of land in various
villages around Kakinada for setting up of SEZ and the
Government of India also granted permission to set up
multiproduct SEZ. The shareholders in the said company
are M/s. Kakinada Infrastructure Holdings Private
Limited (for short, ‘KIHPL’), M/s. Veda Infra Products
(India) Private Limited and 2nd respondent/defacto
complainant in personal capacity, altogether holding
48.74% shares, and the rest of the shareholding was by
M/s. GMR SEZ and Ports Holdings Limited. KSEZ
borrowed about Rs.2,000 crores, by way of inter-corporate
deposits or sub-debts from GMR Group, for the purpose of
undertaking acquisition of land, development of
infrastructure, etc. As GMR Group has substantial
interest in addition to 51% of shareholding and to avoid
liabilities arising out of the debt and not been able to earn
any income from KSEZ, KVR Group desired to part with
3their shares, and after negotiations between GMG Group
and group of 2nd respondent/defacto complainant, it was
agreed that GMR would pay Rs.400 crores for acquisition
of his 48.74% of the shareholding and an agreement was
executed by the parties on 22.10.2019. KIHPL is a group
investment company, which holds 41.12% of shareholding
in KSPL and 48.74% (along with KVR Group), in KSEZ.
KIHPL is totally held by 2nd respondent and his family
members.
(b) After change of regime in GoAP in 2019 general
elections, KSPL was not receiving co-operation from the
Directors of the Port/AP Maritime Board in conduct of
operations. KSPL is paying 22% of gross earnings of the
company as revenue share to the State Government. The
company had been paying the revenue share to the GoAP
without any default. In addition to the calculations made
by the Company to arrive at the gross earnings, the GoAP
is also conducting audit of the revenues of the Company
for determining the gross revenue as per the Concession
Agreement. There was never substantial difference
between the figures arrived at and paid by the Company
4
and the determination by the audit authorities of the
GoAP.
(c) While so, the KSPL received a Letter, dated
13.11.2019 from the GoAP, appointing M/s. PKF Sridhar
& Santhanam LLP (for short, ‘PKF’) for conducting special
audits for PPP Ports, and the KSPL was called upon to
furnish the entire data for the Financial Years ending
31.03.2015 to 31.03.2019, and the audit company called
for records of the company, visited port office and started
conducting the special audit. The GoAP vide Letter, dated
04.12.2019 informed the Port Company that it had
appointed M/s. KROLL India, a Bombay based consulting
firm, for conducting forensic audit in respect of KSPL and
directed the company to furnish all the required
documents, to enable smooth conduct of forensic audit.
Accordingly, the Company furnished all the records. A
team of said KROLL India came to Kakinada and obtained
requisite documents and also gained remote access to all
the financial operations of the Company for the period in
question. M/s. KROLL India completed the forensic audit
as directed by the GoAP and it was learnt that they
5
submitted their report to the GoAP and subsequently it
was learnt that the GoAP had terminated the engagement
of M/s. KROLL India, Mumbai.
(d) It was learnt that they submitted a report to the
GoAP and at the time of closure of the audit operations,
the members of the audit party orally informed that they
found during the course of audit, huge accounting
irregularities by way of suppression of gross revenue and
thereby, the Government was deprived of revenue share to
the extent of about Rs.1,000.00 crores during the
Financial Year 2014-15 to 2018-19.
(e) In addition to the audits directed as against
KSPL, the PKF was also asked to verify the records and
transactions of various companies such as (i) United Port
Services Limited; (ii) Bothra Shipping Services Limited;
(iii) Sarat Chatarjee and Co. (Visakhapatnam) Private
Limited; (iv) Sembmarine Kakinada Limited and
(v) M/s.Belair Logistics Limited, and by a Letter, dated
03.03.2020, instructed KSPLs to enable a similar audit in
respect of the aforesaid companies, though the said
Companies have no contractual relationship with the
6
Government and except providing various services to
KSPL and its customers, they have no privity of contract
with GoAP. But, nonetheless, such verification was
ordered only to coerce the Company to come to its terms.
In the course of proceedings, the auditors approached the
said Companies, obtained various records without any
authority and started raising various issues with them,
which were duly answered by the said Companies.
(f) With a view to further threaten the respondent
No.2 herein/de facto complainant and the Company, vide
Letter, dated 20.05.2020, the CEO of AP Maritime Board
had informed that the Government by Memo dated
07.04.2020 accepted the request of the auditors to
conduct special audit of KSPL for the years 2008-09 to
2013-14 and also for the year 2019-20 and the Company
was asked to cooperate with the above audit party. The
Company raised a protest against such audit and since
share purchase was completed, no further action was
taken in the matter.
(g) In the month of May, 2020, V.Vijaysai Reddy,
Member of Parliament was alleged to have called the
7
respondent No.2 herein/de facto complainant and
informed that the petitioner herein/accused No.1 would
contact him in respect of KSPL, and he was asked to meet
him and explain the things; it was also informed that the
petitioner herein/accused No.1 son-in-law’s brother viz.
Sarath Chandra Reddy would also be present. In the
month end of May, 2020, as per the direction of the
petitioner herein/accused No.1 he went to the home of
petitioner herein/accused No.1 situated at Plot No.97,
Road No.10C, MLA, MPs Colony, Jubilee Hills, Hyderabad
and met the petitioner herein/accused No.1 and during
the course of conversation, he was informed that there
would be a demand of about Rs.1,000.00 crores from the
GoAP in respect of revenue share of the GoAP as per the
Special Audit Report. He was alleged to have tried to
explain that there were no irregularities and all this was
invented with the help of fabricating the record by the
auditors, who conducted the audit; it was further
informed that if a demand is raised by GoAP, the KSPL
would be in deep trouble and hence, he was asked to part
with 50% stake in KSPL and 48.74% in KSEZ, but he
8
informed that he holds only 41.12% shares in KSPL
through KIHPL and holds only 20 shares in his personal
capacity. He also informed that KSPL is a profit- making
company, through which they were all gaining by way of
dividend. It was further informed that KSEZ holds large
land bank, which is valuable and there is no need for him
to part with his share holdings. Then, the petitioner
herein/accused No.1 was alleged to have informed that it
is not him trying to acquire shares, but they are being
acquired by one Y.S.Jagan Mohan Reddy and if he does
not agree for transfer of shares, there would be a spate of
criminal cases and vigilance inquiries leading to his arrest
and other family members. He was also alleged to have
informed that they would pay him a nominal amount of
for transfer of his shareholdings.
(h) The petitioner herein/ accused No.1 was alleged
to have informed that he is making arrangements for
executing a share transfer, agreements and the
respondent No.2 herein/de facto complainant was asked
to cooperate. He was also informed that M/s.Varuna Law
Associates LLP were appointed to prepare the requisite
9
documentation and the said law firm made
correspondence with the office of the KSPL and KSEZ and
at that time, he learnt that they are also preparing a
Corporate Deposit Agreement, whereunder, they would
pay Rs.100.00 crores as deposit at the time of agreement.
At that time, he was not aware in whose favour the
agreements are being executed or who will pay the deposit
amount. During the course of preparation of the
agreements, they came to know that the shares in KSPL
and KSEZ are being sold to M/s. Aurobindo Realty and
Infrastructure Private limited (for short ‘Aurobindo’).
(i) On 24.06.2020, the respondent No.2 herein/de
facto complainant was alleged to have gone to the
residence of the petitioner herein/accused No.1 and at
that time, one Sarathchandra Reddy of Aurobino and
other persons were present along with counsels of Varuna
Law Firm. They were alleged to have given two agreements
i.e. (1) Share Purchase Agreement and (2) Deposit
Agreement. As per the Share Purchase Agreement, KIHPL
would transfer 41.12% of shares held by the aid Company
in KSPL in favour of Aurobindo. The Agreement does not
10
mention the sale consideration amount and the sale price
will be determined by the merchant banker, to be
appointed by the purchaser. The other agreement relates
to a deposit agreement, whereunder, Aurobindo would
lend a sum of Rs.100.00 crores as an inter-corporate
deposit to KIHPL. The agreements contemplate that KIHPL
would offer the shareholdings held by it in KSPL by
executing a Share Pledge Agreement.
(j) There is no due diligence of the KSPL and the
purchaser was not aware of the financial strength of the
company and the respondent No.2 herein/de facto
complainant does not know the net asset value of the
Company and liabilities to determine the share purchase
price; that he was simply asked to sign the Share
Purchase Agreement and Deposit Agreement, on behalf of
KIHPL agreeing to sell the shares for an unspecified sum
and he has no other option and that itself demonstrates
that the said Share Purchase Agreement is nothing but a
product of fraud, cheating, extortion by use of fabricated
document; that later the deposit amount of Rs.100.00
crores was remitted by RTGS on 10.07.2020 in favour of
11
KIHPL. He protested against the valuation since the same
does not represent true value of the shares, and the
valuation procedure adopted is only to comply with the
Income Tax Rules rather than arriving at the true value
based on the net assets value, the profits earned by the
company in the preceding years and the future earning
capacity of the company, and the value would be not less
than Rs.2,500 crores for 41.12% of shares. On that, A.1
stated that even payment of Rs.494 crores is only to
enable legitimate transfer of shares and reminded him of
the consequences of refusal i.e. arrest of him and his
family members, besides stalling his other business.
Hence, he had no other option except to sign the
agreement in the manner suggested by them. On
03.09.2020, an Addendum to the Share Purchase
Agreement was executed, signed by him, whereunder he
agreed to transfer 41.12% of shares in KSPL for a
consideration of Rs.494 crores, @ Rs.229.42 ps, per share
of Rs.10/-, and the purchaser paid Rs.100 crores already
as purchase consideration under deposit agreement, but
not as sale consideration of purchase of shares.
12
Thereafter, petitioner/A.1 and Sarathchandra Reddy took
him to the Chief Minister, who did not listen to his protest
and asked to follow that is said by petitioner/A.1. The
balance amount of Rs.394 crores was paid to KIHPL on
09.02.2021 and thereupon necessary share transfer
documents were executed and accordingly shares were
transferred in favour of Aurobindo, which became
shareholder in place of KIHPL. The same is done in
harried manner, without obtaining approval of the lenders
i.e. Axis Bank and Bank of India Limited, and the lenders
objected the same and red-flagged the company, which
debars it from approaching any banker for credit facilities.
At the instance of petitioner/A.1, GoAP issued
G.O.Ms.No.17, Infrastructure and Investments (Ports)
Department, dated 24.12.2020, approving for transfer of
shares in favour of Aurobindo. The bargain was not
limited to KSPL, but also in respect of shareholding of
KSEZ. He was called again to sign agreement in respect
of KSEZ on 12.10.2020 and the consideration was fixed at
Rs.12 crores, which was paid by way of cheque dated
31.03.2021, and on 03.07.2021, transfer of shares was
13
completed and Aurobindo became shareholder in KSEZ to
the extent of 48.74% shares for just Rs.12.00 crores. The
shareholding of 48.74% was offered for sale to GMR for a
sum of Rs.400 crores, but he was paid only Rs.12.00
crores. Later, Aurobindo acquired the balance of stake of
GMR group and thereby it became 100% share holder in
KSEZ. By virtue of transfer of KSEZ, M/s. Kakinada
Gateway Ports Limited, which is subsidiary of KSEZ, also
stood transferred to Aurobindo by virtue of its acquisition
of KSEZ. The share sale and purchase agreement
between his group and Aurobindo is a part of fraud,
coercion based on fabricated document and employed by
petitioner/A.1 in collusion with Aurobindo. Hence, the
report.
4. Learned senior counsel Sri T.Niranjan Reddy,
appearing on behalf of Sri G.Venkat Reddy, learned
counsel for the petitioner submitted that the petitioner is
nothing to do with the alleged offences, and he, being son
of a sitting Member of Parliament (Rajya Sabha), and a
close relative of the then Chief Minister of Andhra
14
Pradesh, has been falsely implicated in the present case
with an ulterior motive. The learned senior counsel
further submitted that there is inordinate delay of four
years and six months in lodging the present report from
the alleged period of offence, and the delay raises any
amount of doubt and the report is an after-thought,
influenced by extraneous considerations, including
political motives.
The learned senior counsel further submitted that
on a perusal of the report, it goes to show that Auditors,
including M/s. PKF Sridhar & Santhanam LLP (for short,
‘PKF’) and M/s. KROLL India, were accused of fabricating
reports by alleging revenue suppression, however, 2nd
respondent/defacto complainant acknowledges that the
final audit findings, reducing the revenue short fall to
Rs.9.03 crores, were accepted by KSPL; that there is
contradiction in validating their conclusions and on the
other hand accusing the auditors would certainly affect
the credibility of accusations. The learned senior counsel
further submitted that GMR group initially agreed to
purchase the shares at a much higher valuation, but it
15
does not explain as to why the said agreement was not
pursued; that it is further not clarified whether the
agreement with GMR was abandoned due to the alleged
coercion, and this aspect would create any amount of
ambiguity as to the defacto complainant’s assertion that
the transaction with Aurobindo was forced upon him.
The learned senior counsel further submits that the
allegation is that the defacto complainant had consistently
paid revenue share to the GoAP without any discrepancies
as verified by regular auditors, and at the same time, it is
alleged that the accused threatened him by citing
fabrication of documents and demanded Rs.1,000 crores
for revenue shortfalls. According to him, these two
assertions are self-contradictory. The learned senior
counsel further submits that the defacto complainant
claims that his shares were worth Rs.2500 crores, yet he
also acknowledges that under an agreement with GMR,
the valuation of 48.74% shares was only Rs.400 crores,
and these two inconsistencies in the valuation figures lack
logical or factual basis. According to the learned senior
counsel, if really the worth of the shares was Rs.2500
16
crores, there is no reason as to why the defacto
complainant negotiated with GMR at a much lower
valuation. According to him, the glaring inconsistency
demonstrates lack of coherence in the report.
The learned senior counsel further submitted that
an offence punishable under Section 111 BNS would not
be applicable to the petitioner herein. According to him,
the said Section addresses serious and repeat offences
that threaten public safety and order. He relied on a
decision in Ali Akbar v. State of Kerala rep. by Public
Prosecutor & another1.
The learned senior counsel also relied on decisions –
(i) in Siddharam Satlingappa Mhetre v. State of
Maharashtra & others,2 wherein it is held thus:
(paragraph 8)
“8. Section 438 of the Code of Criminal Procedure,
1973 reads as under:
“438. Direction for grant of bail to person
apprehending arrest.–(1) Where any person has
reason to believe that he may be arrested on
accusation of having committed a non-bailable
offence, he may apply to the High Court or the
Court of Session for a direction under this section1
2024 SCC OnLine Ker 4689
2
(2011) 1 SCC 694
17that in the event of such arrest he shall be released
on bail; and that court may, after taking into
consideration, inter alia, the following factors,
namely:
(i) the nature and gravity of the accusation;
(ii) the antecedents of the applicant including the
fact as to whether he 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; and
(iv) where the accusation has been made with the
object of injuring or humiliating the applicant by
having him so arrested,either reject the application forthwith or issue an
interim order for the grant of anticipatory bail:
Provided that, where the High Court or, as the case
may be, the Court of Session, has not passed any
interim order under this sub-section or has
rejected the application for grant of anticipatory
bail, it shall be open to an officer in charge of a
police station to arrest, without warrant the
applicant on the basis of the accusation
apprehended in such application.
(1-A) Where the court grants an interim order
under sub-section (1), it shall forthwith cause a
notice being not less than seven days notice,
together with a copy of such order to be served on
the Public Prosecutor and the Superintendent of
Police, with a view to give the Public Prosecutor a
reasonable opportunity of being heard when the
application shall be finally heard by the court.
(1-B) The presence of the applicant seeking
anticipatory bail shall be obligatory at the time of
final hearing of the application and passing of final
order by the court, if on an application made to it
18by the Public Prosecutor, the court considers such
presence necessary in the interest of justice.
(2) When the High Court or the Court of Session
makes a direction under sub-section (1), it may
include such conditions in such directions in the
light of the facts of the particular case, as it may
think fit, including–
(i) a condition that the person shall make himself
available for interrogation by a police officer as and
when required;
(ii) a condition that the person shall not, directly or
indirectly, make any inducement, threat or
promise to any person acquainted with the facts of
the case so as to dissuade him from disclosing
such facts to the court or to any police officer;
(iii) a condition that the person shall not leave
India without the previous permission of the court;
(iv) such other condition as may be imposed under
sub-section (3) of Section 437, as if the bail were
granted under that section.
(3) If such person is thereafter arrested without
warrant by an officer in charge of a police station
on such accusation, and is prepared either at the
time of arrest or at any time while in the custody of
such officer to give bail, he shall be released on
bail; and if a Magistrate taking cognizance of such
offence decides that a warrant should issue in the
first instance against that person, he shall issue a
bailable warrant in conformity with the direction of
the court under sub-section (1).”
19
and (ii) in Shri Gurbaksh Singh Sibbia & others v.
State of Punjab3, wherein it is held thus: (paragraphs 26
and 31)
“26. We find a great deal of substance in Mr
Tarkunde’s submission that since denial of bail
amounts to deprivation of personal liberty, the
court should lean against the imposition of
unnecessary restrictions on the scope of Section
438, especially when no such restrictions have
been imposed by the legislature in the terms of
that section. Section 438 is a procedural provision
which is concerned with the personal liberty of the
individual, who is entitled to the benefit of the
presumption of innocence since he is not, on the
date of his application for anticipatory bail,
convicted of the offence in respect of which he
seeks bail. An over-generous infusion of
constraints and conditions which are not to be
found in Section 438 can make its provisions
constitutionally vulnerable since the right to
personal freedom cannot be made to depend on
compliance with unreasonable restrictions. The
beneficent provision contained in Section 438 must
be saved, not jettisoned. No doubt can linger after
the decision in Maneka Gandhi [Maneka Gandhi v.
Union of India, (1978) 1 SCC 248] , that in order to
meet the challenge of Article 21 of the
Constitution, the procedure established by law for
depriving a person of his liberty must be fair, just
and reasonable. Section 438, in the form in which
it is conceived by the legislature, is open to no
exception on the ground that it prescribes a
procedure which is unjust or unfair. We ought, at
all costs, to avoid throwing it open to a
Constitutional challenge by reading words in it
which are not to be found therein.
31. In regard to anticipatory bail, if the proposed
accusation appears to stem not from motives of
3
(1980) 2 SCC 565
20
furthering the ends of justice but from some
ulterior motive, the object being to injure and
humiliate the applicant by having him arrested, a
direction for the release of the applicant on bail in
the event of his arrest would generally be made. On
the other hand, if it appears likely, considering the
antecedents of the applicant, that taking advantage
of the order of anticipatory bail he will flee from
justice, such an order would not be made. But the
converse of these propositions is not necessarily
true. That is to say, it cannot be laid down as an
inexorable rule that anticipatory bail cannot be
granted unless the proposed accusation appears to
be actuated by mala fides; and, equally, that
anticipatory bail must be granted if there is no fear
that the applicant will abscond. There are several
other considerations, too numerous to enumerate,
the combined effect of which must weigh with the
court while granting or rejecting anticipatory bail.
The nature and seriousness of the proposed
charges, the context of the events likely to lead to
the making of the charges, a reasonable possibility
of the applicant’s presence not being secured at the
trial, a reasonable apprehension that witnesses will
be tampered with and “the larger interests of the
public or the State” are some of the considerations
which the court has to keep in mind while deciding
an application for anticipatory bail. The relevance
of these considerations was pointed out in State v.
Captain Jagjit Singh [AIR 1962 SC 253 : (1962) 3
SCR 622 : (1962) 1 Cri LJ 216] , which, though,
was a case under the old Section 498 which
corresponds to the present Section 439 of the
Code. It is of paramount consideration to
remember that the freedom of the individual is as
necessary for the survival of the society as it is for
the egoistic purposes of the individual. A person
seeking anticipatory bail is still a free man entitled
to the presumption of innocence. He is willing to
submit to restraints on his freedom, by the
acceptance of conditions which the court may
think fit to impose, in consideration of the
assurance that if arrested, he shall be enlarged on
bail.”
21
Hence, he prays to grant anticipatory bail to the
petitioner/A.1.
5. On the other hand, learned Advocate General
appearing on behalf of the respondent-State contended
that the petitioner herein played a pivotal role and entered
into conspiracy with co-accused in undervalued transfer
of shares from KSPL and KSEZ to A.5. According to the
learned Advocate General, it is the petitioner, who
summoned the defacto complainant, to his house, and by
producing fabricated document whereby liability against
KSPL to a tune of Rs.1,000 crores, was identified in
government special audits, the petitioner pressurized the
defacto complainant to relinquish his 41.12% shares in
KSPL and 48.74% shares in KSEZ by threatening that he
would take legal action, initiate criminal cases and cause
personal harm if he refuses to transfer the shares as
demanded by him.
The learned Advocate General further submitted that
the accused presented fabricated report dated 30.03.2019
to the Government that KSPL caused loss to the
22
Government to the tune of Rs.965.65 crores, and later,
the defacto complainant agreed to sell the shares to A.5
because of the immense pressure, and after receiving the
entire shares, A.5 again presented a revised report by
using the government mechanism dated 20.07.2023 to
the Government which shows the drastic reduction of loss
to the Government to a tune of Rs.9.03 crores. The
learned Advocate General, after taking this Court to the
accusations contained in the report, submitted that in
view of the gravity of the offences, it is essential that
custodial interrogation of the petitioner is necessary.
Hence, he prayed to dismiss the present petition.
6. Learned senior counsel Sri Posani
Venkateswarlu, appearing on behalf of Sri Javvadi Sarath
Chandra, learned counsel for 2nd respondent/defacto
complainant, concurred with the submissions made by
the learned Advocate General and further submitted that
a prima facie case is made as against the petitioner herein
as he, in collusion and conspiracy with A.4, brought into
existence a fabricated document, and by virtue of the
23
same, it can be safely inferred that an offence punishable
under Section 467 IPC would attract as against the
petitioner.
7. Heard and perused the record.
8. KSPL is a company registered under the
provisions of the Companies Act and it is a concessionaire
from the GoAP, to carry on business of KDWP. The
company and the GoAP entered into a Concession
Agreement dated 19.03.1999. According to the defacto
complainant, the company made huge investments and
developed KDWP and became a profit-making company.
The total shareholdings of the company are 52,412,239
out of which the defacto complainant possesses 20
shares. The company is being managed by experts in the
field, on professional management lines. The company
made profits from FYs 2014-15 to 2019-2020.
9. KSEZ is a company registered under the
provisions of the Companies Act in the year 2003. KSEZ
acquired 8320 acres of land in Ponnada, Mulapeta and
Ramannapeta villages around Kakinada for setting up of
24
SEZ and the Government of India also granted permission
to set up multiproduct SEZ. The shareholders in the said
company are M/s. Kakinada Infrastructure Holdings
Private Limited (for short, ‘KIHPL’), M/s. Veda Infra
Products (India) Private Limited and 2nd respondent/
defacto complainant in personal capacity, altogether
holding 48.74% shares, and the rest of the shareholding
was by M/s. GMR SEZ and Ports Holdings Limited. KSEZ
borrowed about Rs.2000 crores, by way of inter-corporate
deposits or sub-debts from GMR Group, for the purpose of
undertaking acquisition of land, development of
infrastructure, etc. As GMR Group has substantial
interest in addition to 51% of shareholding and to avoid
liabilities arising out of the debt and not been able to earn
any income from KSEZ, KVR Group desired to part with
their shares, and after negotiations between GMR Group
and group of 2nd respondent/defacto complainant, it was
agreed that GMR would pay Rs.400 crores for acquisition
of his 48.74% of the shareholding and an agreement was
executed by the parties on 22.10.2019.
25
10. In the year 2019, after the General Elections,
Sri Y.S.Jagan Mohan Reddy became the Chief Minister of
the State of Andhra Pradesh. KSPL was not receiving co-
operation from the Directors of the Port/AP Maritime
Board in conduct of operations. The accusation against
the petitioner/A.1 and others is that on 13.11.2019, the
GoAP appointed A.4 for conducting special audits for PPP
Ports, and the KSPL was called upon to furnish the entire
data for the Financial Years ending 31.03.2015 to
31.03.2019. On 04.12.2019, the GoAP hired M/s. KROLL
India, a Bombay based consulting firm, for conducting
forensic audit in respect of KSPL. According to A.4, huge
accounting irregularities were found by way of
suppression of gross revenue and thereby depriving the
government revenue share to a tune of Rs.1,000 crores
during the Financial Years 2014-15 to 2018-19. It is
further alleged that the petitioner, in collusion with other
accused, forcibly made the petitioner to transfer 41.12%
share in KSPL for Rs.494.00 crores and 48.74% share in
KSEZ for Rs.12.00 crores, to A.5. It is further alleged by
the defacto complainant that the true market value of the
26
same, being approximately Rs.2500 crores and Rs.1109
crores. The main accusation as against the petitioner is
that he acted as a principal intermediary, causing threats
on behalf of other accused. It is alleged that the petitioner
threatened the defacto complainant in such a way that
refusal to accept the demand would result in a spate of
criminal cases, vigilance inquiries, arrests and
harassment of him and his family.
11. According to the learned senior counsel Sri
T.Niranjan Reddy appearing for the petitioner, the
petitioner is nothing to do with the alleged transactions.
The only accusation that has been made as against the
petitioner is that he is alleged to have threatened the
defacto complainant about 4 ½ years prior to lodging the
report. Even according to the said accusation, no offence
would be made out as against the petitioner, as alleged by
the defacto complainant.
12. Insofar as KSPL is concerned, A.5 appears to
have purchased shares for a sum of Rs.494.00 crores in
the year 2021. According to defacto complainant, value of
27
the 41.12% shares would be not less than Rs.2500 crores.
In order to come to such a conclusion, there is absolutely
no evidence that is forthcoming, as to how the value could
be fixed at Rs.2500 crores. Irrespective of the said fact,
the transaction is between the defacto complainant and
A.5 and there is absolutely no accusation as against the
petitioner that by virtue of the said transaction, the
petitioner has been monetarily benefited. It is pertinent to
mention here that the defacto complainant came to the
conclusion, basing on the report submitted by one M/s.
Manohar Choudhary and Associates, Chartered
Accountants and the equity shares were valued on
31.03.2020. The defacto complainant is not disputing
the share value fixed, but is claiming that the value of the
shares would be around Rs.2500 crores.
13. At this stage, the learned Advocate General
submitted that the petitioner, in collusion and conspiracy
with A.5, inflated the figures to a tune of Rs.1000 crores
and by virtue of the same, he is said to have threatened
the defacto complainant. To come to such a conclusion, it
28
is essential that there should be a consensus ad idem
between the petitioner and A.4. This Court perused the
contents of the police report. Nowhere it is alleged that
the petitioner had a meeting with A.4 or as to when they
met and no specific date has been mentioned. Apart
from the same, when the petitioner is not a beneficiary in
the aforesaid transactions, prima facie question of
petitioner inflating the figures, as alleged, in collusion
with A.4, does not arise.
14. In respect of KSEZ, it is alleged that there was
an agreement for selling 48.74% of shares of KSEZ to
GMR for Rs.400 crores, whereas the same has been
knocked away by A.5 for Rs.12.00 crores. The learned
senior counsel appearing on behalf of the petitioner
submits that the shares in KSEZ were sold along with
debt to GMR, and the total value, including the debt, was
determined at Rs.1684 crores. The learned senior counsel
further submitted that the petitioner is no way connected
with the entire transaction of the audit report. He further
stated that on 20.04.2021, a letter was addressed by the
29
Chief Financial Officer of the KSPL and the same would
clinchingly establish that the said letter was addressed by
the Chief Financial Officer for reduction of the
quantification from Rs.965 crores to Rs.9.03 crores.
15. This Court perused the entire record. The
accusation as against the petitioner that he is alleged to
have inflated the figures in the audit report in collusion
with A.4 and by virtue of the same, he is said to have
threatened the defacto complainant. Except the said
accusation, it is not a case of the prosecution that
because of the same, the petitioner has been benefited.
16. The learned Advocate General submitted that
the accusation is that the petitioner, along with A.4, is
alleged to have made a false document and the said
document has been prepared by A.4 in collusion with the
petitioner, which is punishable under Section 467 IPC.
According to him, the petitioner, along with A.4, inflated
the figures and by virtue of the same, the petitioner
threatened the defacto complainant to part with the
shares.
30
17. On this aspect, the learned senior counsel Sri
Posani Venkateswarlu, appearing on behalf of 2nd
respondent/defacto complainant relied on a decision in
Mohammed Ibrahim & others v. State of Bihar & another,4
wherein it is held thus: (paragraphs 13 and 14)
“13. The condition precedent for an offence under
Sections 467 and 471 is forgery. The condition
precedent for forgery is making a false document
(or false electronic record or part thereof). This case
does not relate to any false electronic record.
Therefore, the question is whether the first
accused, in executing and registering the two sale
deeds purporting to sell a property (even if it is
assumed that it did not belong to him), can be said
to have made and executed false documents, in
collusion with the other accused.
14. An analysis of Section 464 of the Penal Code
shows that it divides false documents into three
categories:
1. The first is where a person dishonestly or
fraudulently makes or executes a document with
the intention of causing it to be believed that such
document was made or executed by some other
person, or by the authority of some other person,
by whom or by whose authority he knows it was
not made or executed.
2. The second is where a person dishonestly or
fraudulently, by cancellation or otherwise, alters a
document in any material part, without lawful
authority, after it has been made or executed by
either himself or any other person.
3. The third is where a person dishonestly or
fraudulently causes any person to sign, execute or4
(2009) 8 SCC 751
31alter a document knowing that such person could
not by reason of (a) unsoundness of mind; or (b)
intoxication; or (c) deception practised upon him,
know the contents of the document or the nature
of the alteration.
In short, a person is said to have made a “false
document”, if (i) he made or executed a document
claiming to be someone else or authorized by
someone else; or (ii) he altered or tampered a
document; or (iii) he obtained a document by
practising deception, or from a person not in
control of his senses.”
The learned senior counsel submitted, by relying on
the provision Section 464 IPC, that a case would be made
out against the petitioner for the offence punishable under
Section 467 IPC.
18. Section 467 IPC deals with ‘forgery of valuable
security, will, etc.’. According to the said Section,
whoever forges a document which purports to be a
valuable security or a will, or an authority to adopt a son,
or which purports to give authority to any person to make
or transfer any valuable security, or to receive the
principal, interest or dividends thereon, or to receive or
deliver any money, movable property, or valuable security,
or any document purporting to be an acquittance or
32
receipt acknowledging the payment of money, or an
acquittance or receipt for the delivery of any movable
property or valuable security, shall be punished with the
sentence mentioned therein. Section 463 IPC defines
‘forgery’. Section 464 IPC deals with ‘making a false
document’. A person is said to have made a ‘false
document’, if he made or executed a document claiming to
be someone else or authorized by some else or he altered
or tampered a document, etc.
19. It is pertinent to mention here that it is the
case of the defacto complainant that the said report was
prepared by the Auditor himself. In such a case, whether
the report has been brought into existence as authorized
by someone else, is not the accusation that has been
made as against the petitioner herein. Prima facie, the
aforesaid provision would not be applicable to the
petitioner herein because of the reason that there is no
allegation of either tampering or altering of the Auditor’s
report nor the said report has been obtained by deception.
When once the defacto complainant categorically stated in
33
the report that it is the Auditor, who prepared the report,
the question of forgery would not arise. In order to
attract the offence under Section 464 IPC, it is imperative
that a false document is made and it is the accused
person who is the maker of the same. It is not the case of
either the prosecution or the defacto complainant that the
said document has been forged. In the absence of it, it
can safely be inferred that prima facie the petitioner is not
liable for the offence of forgery or preparing a false
document. In view of the said reasons, the aforesaid
contention raised by the learned senior counsel is not
sustainable.
20. It is the further submission of the learned
senior counsel appearing for 2nd respondent/defacto
complainant that a preliminary inquiry was conducted by
police basing on the report given by 2nd respondent/
defacto complainant during September, 2024. A perusal
of the First Information Report and the report lodged by
2nd respondent/defacto complainant, would clearly
establish that the report was lodged to police on
34
02.12.2024. Prior to 2.12.2024, no complaint was
pending with the police. It is not known as to how the
police would conduct a preliminary inquiry without there
being any complaint. This Court is of the opinion that
when once the report was lodged to police at a belated
stage i.e. after lapse of 4 ½ years, police are supposed to
conduct a preliminary inquiry. As rightly contended by
the learned senior counsel appearing on behalf of the
petitioner, without there being a report before police,
police conducting a preliminary inquiry, as contended on
behalf of 2nd respondent/defacto complainant, throws any
amount of doubt with regard to the way the investigation
has been carried on.
21. To sum up, right from Shri Gurbaksh Singh
Sibbia & others v. State of Punjab case (3 supra) to
Satender Kumar Antil v. CBI 5 case, the Hon’ble Supreme
Court categorically held that the beneficial provision
contained in Section 438 CrPC must be saved but not
jettisoned. It is of paramount consideration to remember
that the freedom of the individual is as necessary for the
5
(2024) 9 SCC 198
35
survival of the society as it is for the egoistic purposes of
the individual.
22. The only accusation that has been made as
against the petitioner is that he is alleged to have
threatened the defacto complainant and by virtue of the
same, shares have been transferred to A.5 at a throw
away price. The present report has been filed after lapse
of 4 ½ years of the alleged threat.
23. Learned senior counsel appearing on behalf of
the petitioner submitted that he has reliably learnt
through papers that A.5 transferred the said shares in
favour of the defacto complainant. The learned senior
counsel Sri Posani Venkateswarlu, appearing on behalf of
2nd respondent/defacto complainant concurred with the
said submission made by the learned senior counsel
appearing on behalf of the petitioner. Apart from the
same, quite surprisingly, A.5 has not filed any
anticipatory bail application before this Court. In respect
of A.4, a quash petition has been filed by A.4 before this
Court and this Court was given to understand that an
order has been passed by this Court directing not to take
36
any coercive steps as against A.4. The alleged accusation
relates to an incident occurred 4 ½ years back and there
is no plausible explanation offered, as to why so much of
delay had occurred. The explanation offered for the delay
in lodging the report is that because of threat perception
to the defacto complainant, he could not file the report
within reasonable time, and now, as regime has changed,
he preferred the present report on 02.12.2024. This
argument cannot be accepted for the reason that the
defacto complainant is also one of the top notch business
persons, and if he is threatened, there is no reason as to
why he has not filed any private complaint before the
Court. There is absolutely no explanation for the same.
The petitioner is son of a Member of Parliament (Rajya
Sabha). There is no flight risk. The question of the
petitioner absconding does not arise as he has fixed
abode. In view of the aforesaid facts and circumstances,
this Court is inclined to provide pre-arrest protection to
the petitioner, however, on certain conditions.
37
24. Therefore, in the event of his arrest in the
aforesaid crime, the petitioner shall be released on bail in
his executing a personal bond for a sum of Rs.25,000/-
with two sureties each for the like sum, to the satisfaction
of the arresting officials.
The petitioner shall not, directly or indirectly, make
any inducement, threat or promise to any person
acquainted with the facts of the case so as to dissuade
him from disclosing such facts to the Court or to any
police officer.
The petitioner shall co-operate with the investigating
agency and attend before it whenever called.
25. Accordingly, the Criminal Petition is allowed.
As a sequel, miscellaneous petitions pending, if any,
shall stand closed.
___________________________ __
JUSTICE K. SREENIVASA REDDY
07.03.2025.
DRK
38
HONOURABLE SRI JUSTICE K SREENIVASA REDDY
CRIMINAL PETITION NO: 8912 OF 2024
07.03.2025
DRK