B.SIVA SANKARA RAO,J. - (1.) This criminal petition is filed by the petitioner/A3-/V. Srinivasan, no other than the Vice-Chairman and Managing Director of A7-M/s. India Cements Limited, under Section 482 Cr.P.C., praying to quash the proceedings in CC No. 24 of 2013 on the file of the learned Principal Special Judge for C.B.I Cases, Hyderabad at Nampally, which is the outcome of FIR in RC No. 19(A)/2011, registered on 17.8.2011, for the offences punishable under Sections 120-B read with 420, 409, 477-A IPC and Section 13(1)(C&D) of the Prevention of Corruption Act, 1988, against more than 73 accused (where the petitioner-A3 was not named), pursuant to the directions in WP Nos. 794 and 6604 of 2011, and after investigation and final report submitted by the state through C.B.I, Hyderabad, the learned Special Judge for C.B.I. cases, Hyderabad has taken cognizance for the offences punishable under Sections 120-B read with 420 IPC and Section 12 of the Prevention of Corruption Act, 1988, in so far as against the petitioner/A3 concerned, leave about other 8 accused charged including A7-M/s. India Cements Limited, rep. by its Vice-Chairman and Managing Director(petitioner/A3-/V. Srinivasan).
(2.) Brief allegations in the charge-sheet insofar against the petitioner/A3 concerned are the following: 2(i) The petitioner/A3 herein being the Vice-Chairman and Managing Director of M/s. India Cements Limited (A7) is in charge of the day-to-day management and functions of the A7-Company. 2(ii) Allegations against M/s. India Cements Limited (A7): (a) During the year 1990 M/s. India Cements Limited acquired Coromandal Cement plant at Kadapa, Kadapa District; in the year 1997 they acquired Cement plant of Visakha Cement Industry Limited at Tandur, Ranga Reddy District; in the year 1998 they acquired cement plant of Cement Corporation of India at Yerraguntla, Kadapa District and in the year 1998 they acquired M/s. Raasi Cement Limited of Nalgonda District (of the erstwhile State of Andhra Pradesh). (b) It is averred that District Collector, Kadapa had submitted proposals for allotment of land on lease to an extent of Acs.2.60 cents at Chowdur Mandal, Kadapa District in favour of India Cements Limited (AT) for a period of 20 years from the date on which the Company was in possession from 1983 and the Chief Commissioner Land Acquisition (CCLA) Government of Andhra Pradesh after examining said proposals of the District Collector, issued orders vide G.O. Ms. No.53, dated 18.1.2001 awarding lease of said land in favour of India Cements Limited (A7) for 20 years with retrospective effect from 1983 to 2003 for construction of infiltration well with pump house for supply of water to the cement plant at Chilamkur Village with a condition of 10% annual lease on market value of Rs. 50,000/- per annum and with provision for 20% increase for every 5 years as per the provisions of the Revenue Board Sanding Order-24. Further, India Cements Limited (A7) submitted a requisition to the District Collector, Kadapa on 30.6.2003 after expiry of the lease period for renewal of the lease of said land as long as the operations of the cement plant continues in Chilamkur, stating that the infiltration well built in that land is the only source of water for their plant operations. On 6.2.2006 the District Collector, Kadapa through his Letter No.E 1/909/2000 submitted proposals to the Government through CCLA for extension of the lease of the land of Acs.2.60 cents in favour of India Cements Limited (A7) with a recommendation that the period as prescribed under G.O. Ms. No. 1484, dated 15.11.1977 on payment of rent at 10% of the market value of Rs. 2,50,000/- per acre per annum and the CCLA forwarded said proposals by accepting the recommendation of the District Collector, Kadapa. (c) The Assignment-IV Section of the Revenue Department put up the late amendment to the lease rules to Finance Department, which in turn returned the file to Revenue Department with remarks 1 take action as per G.O. Ms. No. 1484, date 15.11.1977 read with G.O. Ms. No.84 dated 14.10.1996. The District Collector proposed for payment of rent at 10% for the current market value of Rs. 2,50,/- C per acre per annum and the CCLA also recommended the proposal keeping in vie of the orders issued in G.O. Ms. No. 1481 read with G.O. Ms. No.840 in the yet 1996. As per the G.O. Ms. No.840, dated 14.10.1996 initial period of lease should be for only five years and the maximum period of lease shall in no case exceed twenty five years. On receipt of the proposal a circulation note was put by the then Joint Secretary (Sri N. Venkata Subbaia Revenue Department endorsed that "proposals at Para 43 may kindly lx; considered for approval, regarding the it is submitted that the present lease granted has been expired by 30.6.2003, extensin of lease for further period 5 years 1.7.2003 may be considered for approval" (d) Sri M. Samuel, IAS (A4) the Principal Secretary, Revenue Department Government of Andhra Pradesh, at the initial stage got the above note circulated for extension of lease of land for a period of five years from 1.7.2003 to 1.7.2008 giving his assent. Said note was routed through Principal Secretary (Finance) was approved by the Minister for Revenue-Sri Dharmana Prasada Rao and it was finally approved by the then Chief Minister Late Dr. Y.S. Rajasekhara Reddy placing before the Council of Ministers. The file was re-circulated to the then Chief Minister for obtaining specific orders to be placed before the Council of Ministers. The then Chief Minister has given his assent on 16.6.2008 for placing the matter before the Council of Ministers. Sri M. Samuel (A4), the then Principal Secretary, in furtherance of criminal conspiracy with dishonest intention did not mention the fact that the then Chief Minister had approved the lease for a period of five years only, instead he put up a draft memorandum for the Council of Ministers as to the period-"as prescribed under G.O. Ms. No. 1484, dated 15.11.1977 read with G.O. Ms. No.840, wherein the maximum period lease for a Period of five years only, instead he put up a draft memorandum for the Council of Ministers as to the period-"as prescribed under G.O. Ms. No. 1484, Dated 15.1.1977 read with G.O. Ms No. 840, wherein the maximum period lease shall in no case exceed 25 years". proposal placed before the Cabinet in its meeting held on 30.6.2008 was approved for five years period from 1.7.2003 and would expire on 1.7.2008 vide its Resolution No.241/2008, dated 1.7.2008. Sri M. Samuel (A4)-Principal Secretary, in furtherance of the criminal conspiracy with other accused persons, by abusing his office as a public servant issued orders vide G.O. Ms. No.865, dated 11.7.2008 extending the lease of land in Sy.No.657/2, Acs.2-60 cents of Chowduru Village of Proddatur Mandal in favour of India Cements Limited (A7), Chilamkur for a period as prescribed under G.O. Ms. No.1484, dated 15.11.1977 read with G.O. Ms. No.840, dated 14.10.1996, thereby giving the lease for 25 years instead of only five years and M/s. India Cements Limited (A7) was unduly favoured through this. A7, in furtherance of the above said criminal conspiracy and in quid-pro-quo for favours received, had paid illegal gratification to the tune of Rs. 140.00/- crores in total, in the guise of investment, in the companies viz., M/s. Raghuram Cements Limited (Rs.95.00 crores), M/s. Jagati Publications Limited (Rs.40.00 crores) and M/s. Carmel Asia Holdings Private Limited (Rs.5.00 crores), owned by Sri Y.S. Jagan Mohan Reddy (Al), who was the ultimate beneficiary to the illegal gratification. (e) M/s. Visaka Cement Industries Limited was given permission to draw 10 mcft of water vide G.O. Ms. No.244 dated 19.12.1996, that the Government's order did not mention the period of permission and the rate of water royalty to be fixed by the Government. The violation of any condition mentioned in the G.O. Ms. No.244, shall entail the cancellation of the permission granted for drawl of water without any notice. M/s. Visaka Cements got amalgamated later with India Cements Limited (A7) in the year 2007 and on 10.3.2008, India Cements Limited (A7) filed an application with Superintending Engineer, Irrigation Circle, Hyderabad requesting for additional allocation of 13 Mcft water from River Kagna in addition to the already allocated 10 Mcft water to M/s. Visaka Cements. The Chief Engineer, Minor Irrigation forwarded the request of India Cements Limited (A7) to the Irrigation Department for obtaining Government Orders for utilization of 13 Mcft water by India Cements Limited (A7) in addition to the existing utilization of 10 Mcft water accorded by G.O. Ms. No.244, I&C Department, dated 19.12.1996. Sri N. Bhaskar Rao, Superintending Engineer having the knowledge about the payment of royalty, intentionally ignored and did not insist for payment of royalty by the entity before recommending for allocation of additional water and Sri B. Seetharamaiah, Chief Engineer merely forwarded the proposal received from Superintending Engineer to the Irrigation Department and on receipt of the proposal, Sri Alahari Subba Rao, the then Special Officer (Technical), Irrigation and Command Area Development (I&CAD) Department raised the following points to be ascertained: i. "As to the proposed enhancement regarding drawl of water (13 Mcft) will not affect Lower and Upper Riparian Rights and does not exceed the restriction of 6TMC. ii. No mention is there about the period of permission granted. iii Whether the former company had paid royalty charges up-to-date. iv. No remarks of CE, ISWR on the proposal." (f) Sri Adithyanath Das, IAS (A5), Secretary (AD), Irrigation Department, in furtherance of criminal conspiracy, by abusing his official position, had made observations regarding the need to refer the matter to Inter State Water Resources (ISWR), terms and conditions of drawl of water in the earlier G.O. Ms. No.244 namely period and royalty fixed. The issue was again clarified by Special Officer who reiterated to ascertain the period of supply, water royalty fixed by the Government payment of water royalty, dues pending from the firm and others. Sri Adithyanath Das (A5) in furtherance of the criminal conspiracy, by breaching the trust reposed in him and by abuse of his official position, did not refer the matter of allocation of water from Kagna River to Inter State Water Resources even though Sri Alahari Subba Rao, special Officer (Technical) had raised various issues for protecting the interest of the State including referring the note to Inter State Water Resources, which was mandatory in allocating any water from inter-state rivers or its subsidiaries. He has also raised the issue of royalty aspect. Sri Adithyanath Das (A5) in furtherance of criminal conspiracy, with dishonest intention, referred the file to Sri Lava Kusha Reddy, Advisor (Telangana) and got a favourable observation from him overlooking the queries raised by Special Officer (Technical). As per the Secretariat Business Rules there is no role defined for the advisers. Sri Lava Kusha Reddy, Advisor (Telangana) toed the line of the Secretary in giving a favourable noting but the concerned processing authority who has to ensure the pre-requisites for allocation of water was Special Officer (Technical). Sri Adithyanath Das (A5), Secretary, Irrigation Department having got fraudulently favourable noting from Adviser, overlooked the objections raised by the Special Officer (Technical) gave his assent for allocation of water M/s. India Cements Limited (A7). The proposal was put upto the Minister, keeping him in dark by ignoring the vital technical facts. Sri Adithyanath Das (A5) was in the knowledge of all the intricacies relating to this issue in furtherance of criminal conspiracy got final approval of the then Chief Minister. Accordingly, G.O. Ms. No.94, I&CAD dated 12.8.2009 was issued. India Cements Limited (A7) owed royalty to irrigation Department since May, 199 and it has not complied one of the condition' of the earlier G.O. Ms. No.244 of 1996. A5 was in the knowledge of the above fact raised by the Special Officer. The conditional clause No.9 of G.O. Ms. No.244 of 1996 warranted that violation of the any of the conditions mentioned in the G.O shall entail the cancellation of the permission granted to India Cements Limited (A7) for drawl of water without any notice. This fact was intentionally omitted by Sn Adithyanath Das (A5) in abuse of his official position as part of the criminal conspiracy for favouring India Cements Limited (A7). M/s. India Cements Limited (A7) was owing water royalty since May, 1997 which was later calculated in 201 after registration of the case by C.B.I, fa an amount of Rs. 17,87,864/- (without penalty) towards outstanding water cess. (g). M/s. India Cements Limited (A' acquired M/s. Raasi Cement Limited in the year 1998. M/s. Raasi Cement Factory Wazirabad was given permission to draw 3 lakh gallons of water from Krishna Riva subject to conditions vide G.O. Ms. No.408 dated 21.6.1979 issued by Irrigation Power (IRR.III) Department. On 20.9.200" Sri Y. Shekar Reddy, Executive Engineer, Irrigation and Command Area Development Nalgonda and Sri R.Nagi Reddy Senior Personal Manager of India Cements Limited (A7), Wazirabad entered into Article Agreement for permission to draw 3 lakh gallons of water per day from Krishna river for cement factory for the period from 20.9.2007 to 19.9.2008 for an amount if Rs. 1,62,000/- for 12 months. Prior to 2007, there is no record of India Cements limited (A7) paying any royalty and fulfilling conditions prescribed in G.O. Ms. No.408, dated 21.6.1979. The agreement was entered on 20.9.2007 for one year only, which paved the way for the company to seek permission for additional quantity If water. Based on said agreement, the Superintendent Engineer requested Chief Engineer to obtain and communicate necessary permission from the Government. The Executive Engineer, Nalgonda failed Is bring to the notice regarding the issue of entering of agreement with the firm to Superintending Engineer, as substantial period had lapsed from the date of issue the original G.O. Ms. No.408, dated 21.6.1979 and the agreement dated 20.9.2007. In order to accommodate the bequest of M/s. India Cements Limited (A7) for additional water allocation, Executive Engineer, Nalgonda and M/s. India Cements Limited created an agreement dated 20.9.2007 for a period of one year that too after a lapse of 28 years from the earlier G.O, projecting as if the conditions of earlier G.O are fulfilled. Sri P.R.K. Raju, Chief Manager of India Cements Limited (A7) vide letter dated 10.12.2007 addressed to the Executive Engineer, Irrigation Department, Nalgonda Ming that they had taken permission to Draw 3 lakh gallons of water per day from Krishna River earlier from Irrigation department, vide letter No.C/1, dated 12.10.1982 and that they were expanding Mr plant and require additional quantity if water to an extent of 7 lakhs gallons per day. Sri Y. Shekar Reddy, Executive Engineer, Nalgonda, recommended the request of India Cements Limited (A7) or enhancement of water to a tune of 10 lakh gallons per day vide his letter dated 23.2.2008. Sri Bhaskar Rao, Superintendent Engineer, Irrigation and Command Area Development, Irrigation Circle, Hyderabad vide letter No.DEEI/TS-2/7152, dated 12.3.2008 addressed to the Chief Engineer, Minor Irrigation, Hyderabad requesting the Chief Engineer to obtain and communicate necessary permission from the Government. Sri B. Seetha Ramaiah, Chief Engineer, Minor Irrigation addressed a letter No.DCE(MI)/OT3-T4/India Cements/2008, dated 28.3.2008 to the Principal Secretary, Irrigation and CAD, Department, Hyderabad stating that permission was accorded to India Cements Limited (A7) formerly M/s. Raasi Cement to draw water from Krishna River, downstream of Nagarjunasagar Dam near Wazirabad village at the rate of 3 lakh gallons per day as per G.O. Ms. No.408, Irrigation and Power (Irrigation-11) Department dated 21.6.1979. The letter also stated that an agreement had been entered with the firm and royalty is being paid by the firm. The letter also contained that the firm has represented for enhancement of water drawl from 3 lakh gallons to 10 lakh gallons per day in view of their expansion of cement plant. On receipt of letter from Chief Engineer, dated 28.3.2008 by the I&CAD (PW) Department, a circulation note was put up vide C.No. 10548/Reforms/ 2008 on 3.4.2008. In the note file Sri A. Subba Rao, Special Officer (Technical) made the following observation: a. That the period is not specified. b. The remarks of the E in C (irrigation) and the CE/ISWR on sparing of 10 lakh gallons per day to the company are to be obtained. c. The proposal to expand the cement plant requires confirmation from the Industries Department duly indicating the approval accorded by the department indicating the plan readiness and the expanded installed capacity and the date of commissioning. (h) A5, in furtherance of criminal conspiracy intentionally raised doubts on referring the file to the Chief Engineer, ISWR. Sri A. Subba Rao, Special Officer (Technical) clarified that as the drawl of water was from River Krishna at the rate of 10 lakh gallons per day and suggested for taking the views of the Chief Engineer, ISWR. A5 issued a memo vide No. 10548/ Reforms/2008, dated 29.4.2008 to the Engineer-in-Chief/Chief Engineer, Inter State Water Resources to offer their remarks on sparing 10 lakh gallons of water per day to India Cements Limited (A7) and send a report in the matter at the earliest. Dr. P. Rama Raju, Chief Engineer, Inter State Water Resources, Hyderabad, vide letter No.RCWR/DD(K)/7527/89, Vol.III, dated 23.5.2008 mentioned that as per requirement sought by the firm is relatively small, the proposal may be considered for giving permission duly accounting for the above quantity against the savings from the utilizations within the framework of the Bachawat Tribunal allocations. On 6.6.2008, Irrigation Department, sought clarifications from the Engineer-in-Chief, I&CAD Department with regard to sparing 10 lakh gallons of water per day to India Cements Limited (A7) from Krishna River by meeting the same from the savings from utilizations within the framework of the Bachawat Tribunal and that the same will not affect upper and lower riparian rights. (i) After the approval, the file had to be sent or circulated to Industries Department for remarks regarding the status and information about expansion of India Cements plant. But instead by abuse of official position, Sri Adityanath Das (A5), IAS, Secretary, Irrigation Department overruled the above aspect and made an endorsement that the Chief Engineer, ISWR has agreed to the proposal of the Chief Engineer, Minor and agreed to give additional 7 lakh gallons of water per day in addition to already 3 lakh gallon (total 10 lakh gallon in all) to India Cements Limited (A7). On 25.6.2008 the Minister (M&MI) Sri Ponnala Lakshmd agreed to the proposal and finally the then Chief Minister late Sri Y.S. Rajasekhara Reddy, in furtherance of criminal conspiracy accorded his assent on 3.7.2008, in pro-quo to the illegal gratification paid India Cements Limited (A7). The draft G.O was put up on 8.7.2008, the Special Officer (Technical) made an observation that terms and conditions must be specified and he also observed that the period of permission to be specified as five years as there was no mention of tire period in the earlier G.O. Ms. No.408, that G.O. No. 146 dated 22.7.2008 was issued according permission to India Cements Limited (A7) to draw 10 lakh gallons total quantity of water per day including 3 lakh gallons of water already permitted from Krishna River downstream of Nagarjunasagar Dam near Wazirabad for consumptive use of their expansion unit at Nalgonda. A5 by abusing his official position as a public servant issued G.O. Ms No. 146, dated 22.7.2008 according permission to draw 10 lakh gallons of total quantity of water per day including 3 lakh gallons of water already permitted Krishna River unduly favouring the firm by deceit and suppressing the fact pertaining to the terms and condition mentioned in the earlier G.O. Ms. No during the period 2007 to 2008 apart from India Cements Limited (A7) other companies viz., M/s. Deccan Cements Limited, Hyderabad, M/s. Madhucon Sugar and Power Industries, M/s. Maruti Ispat and Energy Private Limited had also applied for allocation of water. Their proposals from the concerned Chief Engineers were s to Secretary, Irrigation Department and they were kept pending on the instructions of the then Chief Minister by abusing official position made remarks on the file 'lie until further orders' whereas in case of India Cements Limited (A7), no such remark were made by the then Chief minister as there was illegal gratification in the guise of investment as quid-pro-quo by India Cements Limited (A7) into companies of Sri Y.S. Jagan Mohan Reddy. (j) India Cements Limited (A7) had rested 12,50,000 of preference shares at premium of Rs. 110/- for a sum of Rs. 15,00,00,000/-. Thereafter India Cements limited (A7) had invested a sum of Rs. 80.31/- crores at a premium of Rs. 1440/-. there was no explanation available in the minutes of the meeting or the statements recorded from the top management of the company with regard to the necessity to increase the premium from Rs. 110/- to Rs. 1440/- (sudden raise of almost 12 times within a small time span of 9 to 10 months), except a simple statement that it is a "bouquet of investments". The company which is having public funds with it, never brother to get the "due diligence on the required premium" neither from their own technical team nor from an outside agency thus, it is clearly construed as a quid pro 10 transaction between the India Cements railed (A7) and Sri Y.S. Jagan Mohan Reddy (A1). India Cements Limited (A7) sold the shares at Rs. 671/- to M/s. PARFICM, SAS, FRANCE on 14.4.2010 on the directions of Sri Y.S. Jagan Mohan Reddy undergoing a loss of Rs. 26,85,50,489/-. This clearly shows that the investment into M/s. Raghuram Cements Limited, M/s. Bharathi Cement limited Cement Corporation Limited by the M/S. India Cements Limited (A7) was thing but a quid-pro-quo investment. In Aril, 2010 M/s. Pani and Associates, Bangalore evaluated the share price of M/s. Raghuram Cement Corporation Private limited and arrived at the value of share Rs. 221.17/- Ps. That the Board Resolution India Cements Limited (A7) dated 4.2010 resolved to invest upto Rs. 125/- crores by way of Inter Corporate Loans/ advance/Investment in M/s. Bharathi Cements Group whereas on the same day India Cements Limited (A7) had sold their stake 1803973 shares of Rs. 10/- each in M/s. Bharathi Cements Corporation Limited at a total price of Rs. 121.00/- crores to M/s. PARFICIM, SAS, FRANCE. 2(iii) There is no averment from the above of any role of the petitioner/A3-Srinivasan to make him liable. It is however averred in the charge-sheet as if therefrom, it is clearly establishing that Sri N. Srinivasan (A3) representing (A7) India Cements Ltd proposed to give back the entire amount received by selling shares to PARFICIM, bark to Sri Y.S. fagan Mohan Reddy (Al) which was invested as a quid-pro-quo. 2(iv) It is averred in the charge-sheet further that during June, 2007 India Cements Limited (A7) gave inter corporate deposits to M/s. Sandur Power Company Limited amounts aggregating to Rs. 8.50/- crores. During November, 2007 India Cements Limited (A7) placed inter corporate deposit with M/s. RR Global Enterprises Private Limited amounting to Rs. 13.00/- crores. For above said inter corporate deposits, there was no approval of the Board of the Directors and there were no written agreements between India Cements Limited (A7) and M/s. Sandur Power Company Limited and M/s. RR Global Enterprises Private Limited, none of these companies have any business dealing with India Cements Limited (Al) and others. Inter corporate deposits made by India Cements Limited represented by N. Srinivasan (A3) without any Board Resolution clearly indicates connivance of N. Srinivasan (A3) with Sri Y.S. fagan Mohan Reddy (A1). An amount of Rs. 1.35/- crores were given by India Cements Limited (A7) as a loan to Sri Y.S. Jagan Mohan Reddy (A1), vide cheque Nos.315471, 315472 and 315473 drawn on Punjab National Bank dated 11.3.2005 which was repaid with interest clearly establishes an undue interest and connivance between them. 2(v). It is also averred in the charge-sheet that M/s. Carmel Asia Holdings Private Limited (A9) was valuated by M/ s.Jagadisan and Co. represented by Sri J. Prabhakar and the valuation ranged from Rs.294/- Crores to Rs.309/- crores and the valuation was based on the projections provided by Sri V. Vijaya Sai Reddy (A2). Although the valuation report was completed by January, 2007, the report was ante-dated as 1.11.2006 at the instance of Sri V. Vijaya Sai Reddy (A2). The purchase of shares of M/s. Carmel Asia Holdings Private Limited (A9) by Sri N. Srinivasan (A3) at a value of Rs. 252/- in January, 2007 is only to cover the quid pro quo amount paid to Sri Y.S. Jagan Mohan Reddy (A1) for the undue benefits received by Sri N. Srinivasan (A3) was based on the projections of M/s. Indira Television Private Limited, M/s. jagati Publications Private Limited and M/s. Janani Infrastructure Private Limited which did not commence their operations at that time. , 2(vi) It is also averred in the charge-sheet that this clearly establishes that the valuation report of M/s. Deloitte Touche Tohmatsu India Private Limited was antedated as 16.11.2007 on the directions of Sri V. Vijaya Sai Reddy (A2) in conspiracy with Sri Y.S. Jagan Mohan Reddy (A1) to justify the investments already solicited from India Cements Limited (A7) at the rate of Rs. 350/- per share.
(3.) From the above there is no specific role of petitioner/A3 to attribute, but for if at all he represented the India Cements Limited (A7) being its Vice-Chairman-cum-Managing Director. It discloses that the investigation proceeded on accusing the petitioner/A3 from his status to the India Cements Limited (A7) being its Vice-Chairman-cum-Managing Director and beyond that there is nothing of how personally and if not at least by what provision or fiction of law by virtue of his status vicariously liable to charge for n of the offences. However, it is averred /fat in brief the charge-sheet filed by 2m respondent reveals the role of petitioner/AM Sri N. Srinivasan as follows:;