Angadi Satyanarayana v. The Anti Corruption Bureau of A.P., rep., by its Director General, Hyderabad & Ors.

Order

Since common arguments have been advanced, and facts and contentions are similar, these writ petitions are being disposed of by this common order. These writ petitions have been filed to issue a writ of Certiorari or any other appropriate relief and quash FIR Nos.3/RCO-RJY/2012, dated 15.4.2012; 4/RCO-VJA/2012 & 05/RCO-VJA/2012, dated

11.4.2012 on the file of the 3rd respondent. For the sake of convenience, the facts in WP No.13603 of 2012 are referred to hereunder: The 1st petitioner filed the affidavit on behalf of other petitioners. The petitioners’ brief case is that all of the petitioners are licensees of retail wine shops (A4 licenses) duly obtained licences under the provisions of the A.P. Excise Act, 1968 (herein after referred to as “the Act”) for the excise year 2010-2012. The excise year is coming to an end by 30th June, 2012. The petitioners have been conducting the business of sale of liquor. According to them, they have been conducting the business of sale of liquor in accordance with the terms and conditions of the license and provisions of the Act and the Rules made thereunder. Their further case is that there is no compliant against them with regard to grant of license and they have participated in the auction procedure and were granted licenses for running retail wine shops. Further case of the petitioners is that the ACB of A.P. one of the wings of the State Police is entrusted with the power to investigate the cases under the Prevention of Corruption Act, 1988 and under the said Act, the investigation by the Special Police like ACB is confined to the offences under the Act and the abetment of such offences etc., and that they are authorized to investigate into the offences, which are not covered by the Provisions of the Prevention of Corruption Act, 1988. Further case of the petitioners is that the gist of the contents in the F.I.R under challenge would reveal that there are no details about the allegations and the contents thereof are only a figment of imagination. Their main submission is that the respondents cannot continue their investigation on the surmises and conjectures and that the registration of the case against them is a direct attack on their constitutional right guaranteed under Article 21 of the Constitution of India. The 4th respondent in W.P.No.13603 of 2012 filed counter on behalf of 1st and 3rd respondents. The sum and substance of the counter of these respondents is that there is a prima facie case regarding conspiracy to commit forgery, fabrication of false documents and using them as genuine one in order to obtain licenses of wine shops against the Rules prescribed for the grant of licenses under the Act and Rules prescribed thereunder by bribing the excise officials. It is further submitted that on 05.03.2012, searches were conducted at Excise Superintendents’ Offices in East Godavari district and records pertaining to auction of A4 wine shops for the excise lease period 2010-2012 were seized under a cover of panchanama Cr.No.2/RCO-ACB-RJY/2012 of Rajahmundry range, that on the scrutiny of records related to A4 wine shops auction files, it disclosed several irregularities in the auction process in East Godavari District while investigating in Cr.No.2/RCO-ACB-RJY/2012, and during the process, tenders of Benami persons i.e. 1) Angadi Satyanarayana, (1st petitioner) 2) Chikkala Satyanarayana (2nd petitioner), 3) Sunkara Nagendra (3rd petitioner) 4) Kola Satya Sankara Rao (4th petitioner) and 5) Veldurthi Kondayya were accepted, which is against the Excise Rules which were got filed by the influential persons, who are financially sound, to have control over the wine shops during the auction conducted in June, 2010 and that Joint Collectors, East Godavari District, West Godavari District and Yanam (U.T), have furnished information that, out of 555 license holders of A4 shops in East Godavari District, 365 license holders are possessing Ration Cards under B.P.L., out of which, 314 are White Ration Cards, 7 license holders are possessing ration cards under Antyodaya scheme while 8 license holders are possessing temporary ration card, 35 license holders are possessing Rachabanda Ration Cards and 1 Red ration card under BPL at Yanam whose income does not exceed Rs.75,000/- per annum. It is further submitted that they obtained the above licenses violating the rules prescribed for issuance of licenses and in fact all the petitioners are not having any financial capacity to invest bid amounts ranging from Rs.26,47,150/- to Rs.3,06,99,999/- and that all the petitioners are possessing White Ration Cards issued by the Revenue Department and availing benefits provided by the Government and they are categorized as citizens of below poverty line. It is their further case that in fact the bid amount was invested by some other person/persons who wanted to have control over major portion of the liquor business in the entire district and they projected the petitioners by getting them participated in the auction for acquiring wine shop licenses as the relevant rules does not permit one person to

have more licenses than one at a time and that in view of the above provision the person/persons who invested the bid amount by projecting some of the petitioners as bidders, got the license for more shops violating the rules for which false affidavits were given by the petitioners/benami holders and Excise officials were bribed in order to over look the above irregularities and in the above process the Excise officials resorted to corrupt practice and failed to initiate action for the above illegalities and violations. It is further submitted that act of the petitioners and the persons behind the petitioners who invested the amount and the Excise officials squarely attracts the offences punishable under section 13(1)(d) r/w 13(2) of Prevention of Corruption Act, 1988 as well as offences under Section 465, 468, 471, 120(b) r/w 34 & 109 of the Indian Penal Code. It is also submitted that the above group of persons or syndicates accomplished their object of gaining control over more than 65% of A4 shops in the district by the above mentioned methodology only with the active assistance and collusion of the officials of the Excise department right from the stage of auction and through all these months of running the business. It is further submitted that A1 and A3 Forms submitted in the names of license holders have been attested by the Excise officials. Even after the auction process, there were adequate opportunities during the process of inspection and monitoring the functioning of A4 shops and the officials of the said department could have confirmed that they were only benamis and accordingly initiated action in accordance with the law, but they did not take any such action till now. It is also submitted that the officials of excise department also have misused their officials positions by corrupt and illegal means and obtained pecuniary advantage for themselves and others without any public interest and have not taken prompt action as mandated in accordance with the law and rules and conditions of the license. It is also submitted that the license holders, public servants and others are therefore, liable for the offences of criminal conspiracy and common intention, abetment, criminal misconduct and also habitually committing the offences U/Secs.465, 468, 471, 120B, 34, 109 I.P.C. and Sec.13(2) R/w 13(1)(d) of P.C. Act, 1988. It is also submitted that since the scrutiny of seized record disclosed offences punishable under section 13(1)(d) r/w 13(2) of Prevention of Corruption Act, 1988 as well as offences under sections 465, 468, 471, 120(b) r/w 34 & 109 Indian Penal Code any officer authorized by the DG, ACB is empowered to investigate into the above offences. It is also the case of the respondents that A1 and A3 forms submitted that they have been attested by the excise officials. It is also their case that on physical verification of the records, most of the signatures of the petitioners on the application for grant of licenses and for go-down are not tallying with the signatures found on the requisition for release of bank guarantee and other documents. Further case of the respondents is that the investigation made so far discloses that the petitioners who are the BPL ration card holders are benamis to the persons who are controlling the A4 wine shops and this aspect is found clearly on verification of the files pertaining to the issuance of licenses for A4 wine shops in the District and that the files disclose that a number of irregularities such as the signatures in the applications for grant of A4 licenses, entry forms, A1 to A3 forms and bank guaranties are not tallying in one and other and as such further probe is necessary to ascertain genuineness of the documents filed by the petitioners while obtaining A4 wine shop licenses. It also the case of the respondents that the petitioners filed form A2 declaration declaring the certain properties in their names along with the location of property, extent and value of the property and when the declarations were verified with the revenue records, it revealed that majority of the petitioners have given false declarations. It is also the case of the respondents that the petitioners 6,7,13,25,26, 34, 35 and 41 availed benefit under the Indiramma Housing and other schemes, which are given to the persons belonging to economically weaker section. It is also the case of the respondents that except petitioner No.1, the other petitioners did not file income tax returns regularly. It is also the case of the respondents that some of the licensees who are having the BPL ration cards have no knowledge that A4-wine shop licenses were obtained in their names and liquor business is being conducted. It is also stated that the concerned excise officials have misused their official position by corrupt and illegal means and obtained pecuniary advantage for themselves and others without any public interest and have not taken any prompt action under the Act and Rules. Sri Vedula Venkataramana, learned Senior Counsel argued on behalf of M/s. Bharadwaj Associates that the excise officials after verifying all the facts had granted licenses to the petitioners as per the existing rules. It is further submitted that the petitioners have participated in the auction conducted by the Excise officials and they became highest bidders. His further submission is that there is no violation of Rules at the time of obtaining licenses or while conducting the business and therefore, the respondents are not justified in registering the case against the petitioners. It is further argued that merely because certain signatures are not tallying, it cannot be a ground to initiate criminal proceedings against the petitioners. His main submission is that unless a cognizable offence is made out from the contents of F.I.R., the police have no power to register the case. It is further submitted that when there is no report or complaint or information with regard to the commission of offence, the question of registration of the case does not arise. It is also submitted that the complainant and the investigating officer is one and the same person. It is also his submission that reading of the FIR makes it clear that no offence is disclosed. His further submission is that the petitioners are not public servants and therefore, the impugned FIR is liable to be quashed. In support of his contentions, the learned Senior Counsel has relied on the judgments in State of West Bengal & others Vs. Swapan Kumar Guha and others [1] and Daljit Singh Grewal Vs. Ramesh Inder Singh [2] . Sri M.B. Thimma Reddy, the learned Standing Counsel for ACB cases submitted that a Public Interest Litigation in PIL No.70 of 2012 has been filed by O.M. Dabera requesting the High Court of A.P. to supervise the investigation conducted by the ACB on the ground that the persons involved in the liquor syndicate are highly influential and that the Division Bench of this Court has directed ACB to file the status reports from time to time and as on today, two status reports have been filed and that the 3rd status report in connection with the progress of the investigation is to be filed on 11.6.2012. His next submission is that most of the petitioners are from below poverty line families and none of them have any sufficient movable or immovable properties and it is clear that the liquor licenses have been obtained in the name of the petitioners by influential persons. He has also taken this Court through the statements showing the annual income shown in the BPL ration cards possessed by the petitioners and others. The main submission of the learned Standing Counsel for ACB is that since prima facie case has been made out, the ACB is not entitled to register a case and proceed with the investigation. In reply, Sri Vedule Venkata Ramana, learned Senior Counsel, submitted that the order passed by the Division Bench of this Court does not come in the way of this Court in quashing the FIR. Whether there are any grounds to allow the writ petitions? These writ petitions are liable to be dismissed on the sole ground that the petitioners have not referred to the pending Public Interest Litigation No.70 of 2012 and the orders passed by the Division Bench of this Court. It is not the case of the petitioners that they have no knowledge about the pendency of PIL No.70 of 2012 before the Hon’ble Division Bench of this Court consisting of Hon’ble The Chief Justice and my learned brother Hon’ble Sri Justice Sanjay Kumar. Be that as it may. The settled legal position appears to be that the police may investigate any case if they have information that cognizable offence has been committed. There is no need to have a written report. The learned Counsel for the petitioners has relied on judgment in State of West Bengal and others Vs. Swapan Kumar Guha and others. The Apex Court observed that the condition precedent to the commencement of investigation under Section 157 of the Cr.P.C. is that the F.I.R. must disclose, prima facie, that a cognizable offence has been committed. It is further held that if the F.I.R. does not disclose the commission of a cognizable offence, the Court would be justified in quashing the investigation on the basis of the information as laid or received. It is further observed that the legal position appears to be that if a cognizable offence is disclosed, the court will not normally interfere with an investigation the case and will permit investigation into the offence alleged, if, however, the materials do not disclose an offence no investigation should normally be permitted. Once an offence is disclosed, an investigation into the offence must necessarily follow in the interests of justice. If, however, no offence is disclosed, an investigation cannot be permitted, as any investigation, in the absence of any offence being disclosed, will result in unnecessary harassment to a party, whose liberty and property may be put to jeopardy for nothing. The liberty and property of any individual are sacred and sacrosanct and the court zealously guards them and protects them. The Apex Court further observed that in considering whether an offence into which an investigation is made or to be made, is disclosed or not, the Court has mainly to take into consideration the complaint or the F.I.R. and the Court may in appropriate cases take into consideration the relevant facts and circumstances of the case. The learned Counsel for the petitioners has also relied on judgment of the Apex Court in Daljit Singh Grewal Vs. Ramesh Inder Singh. In the said judgment, it is observed that if an innocent person is falsely implicated, he not only suffers from loss of reputation but also mental tension and his personal liberty is seriously impaired. This matter has been finally referred to Constitutional Bench of atleast Five Judges of the Apex Court for an authoritative judgment. As far as the present case is concerned, the main question that arises for consideration is whether the contents of FIR disclose a cognizable offence. If the contents of the FIR disclose cognizable offence, the respondents are justified in proceeding with investigation. The learned Standing Counsel for ACB have also relied on the judgment of the Apex Court in State of Maharashtra Vs. Sayed Mohammed Masood and another . In the said judgment, the 1st [3] respondent is the Chairman-cum-Managing Director of a Company and it is alleged that he made changes on the document of agreement by showing false inducement about the big return in various financial schemes and transferring the motor vehicle in the name of investor and has accepted deposits of crores of rupees under various schemes. Thus, a complaint had been lodged. The 1st respondent-Director of the company filed a writ petition praying to quash the FIR. The Division Bench of the High Court quashed the FIR. The matter was carried to the Apex Court. The Apex Court came to conclusion that the High Court is not justified in quashing the proceedings. It is further observed that the allegations made in the F.I.R. and the material collected during investigation should be allowed to be taken to its logical end. In the present case, the F.I.R. reveals that on 5.3.2012, searches were conducted at Excise Superintendents’ Offices in East Godavari District and records pertaining to auction of A4 wine shops for the excise lease period 2010-2012 were seized under a cover of panchanama in Cr.No.2/RCO-ACB-RJY/2012 of Rajahmundry range. On scrutiny of records related to A4 wine shops auction files, it disclosed several irregularities in the auction process in East Godavari District. It is further alleged that the above group of persons or syndicates accomplished their object of gaining control over more than 65% of A4 shops in the district with the active assistance and conclusion of the official of the Excise Department right from the stage of auction and through all these months of running the business. It appears that the irregularities were intimated to the DG, ACB, AP, Hyderabad by the Range Inspector-I, ACB, Rajahmundry Range and in turn, the DG, ACB issued a memo vide Memo No.10/DG- ACB/2012, dated 14.4.2012 of the DG, ACB, AP Hyderabad authoritizing him to register a case and investigate into the above offence. As seen from the contents of the FIR, it is clear that several license holders who were possessing white ration cards have obtained licenses from the Excise officials to run liquor shops. Rule 9 of A.P. Excise (Lease of Right of Selling by Shop and Conditions of Licence) Rules, 2005, reads as follows: “No person shall submit tender on behalf of any other person unless he holds a power of attorney from such person.” Prima facie it appears that the persons who are below poverty line are said to have participated in the auction and deposited crores of rupees for getting licenses to run liquor shops. By no stretch of imagination, it can be said that poor persons would be in a position to deposit the bid amount. Thus, prima facie, it appears that Rule 9 of A.P. Excise (Lease of Right of Selling by Shop and Conditions of Licence) Rules, 2005, has been violated. Since the said binami transactions have been prohibited under the relevant rules, the matter requires a detailed and honest probe. All the persons who abated, conspired, forged, created documents or have played a role whether they are public servants or not have to be dealt with in accordance with law. Since a Division Bench of this Court consisting of Hon’ble The Chief Justice and my learned brother Hon’ble Sri Justice Sanjay Kumar has been dealing with the matter, I am not inclined to make further any observation in the matter. In view of the above discussion, I hold that there are no merits in these writ petitions. Accordingly, the writ petitions are dismissed. No order as to costs. Justice B. Chandra Kumar Dated: 23.5.2012 ________________________ Nn. HONOURABLE SRI JUSTICE B. CHANDRA KUMAR WRIT PETITION Nos:13603, 13616 & 13636 OF 2012

23.5.2012 NN [1] [2] [3] (1982) 1 SCC 561 (2012) 4 SCC 1 2010 Crl.L.J. 461