The High Court · 2025

HON'BLE SRIJUSTTCE K. LAKSHMAN CRIMINAL PBTITTO N No. 15847 of2024 ORDER The present criminal petition is fired under section 52g of the Bharatiya Nagrik Suraksha Sanhita (hereinafter .BNSS,) s,:eking to quash the criminal proceedings arising out of Crime No. l2lRCO_ CIU-ACB/2024 dated 19.12.2024 registered by Respondent No. I (hereinafter 'ACB') under Section s 409 r/w 120B of the Indian penal Code (hereinafter .IpC') and Sections l3(l)(a) r/w l3(2r of the Prevention of Comrption Act, lggg (hereinafter.pCA,).

2. Heard Mr. Siddharth Dave, learned Senior A dvocate representing Mr. A. prabhakar Rao, leamed advocate appearing for the Petitioner. AIso, heard Mr. A. Sudarshan Reddy, learned ACvocate General representing Mr. T. Bala Mohan Reddy, reamed Standing Counsel for the ACB i.e., Respondent No. I and Mr. C.V. Mohan Reddy, learned Senior Advocate representing Mr. Tera Rajhikanth Reddy, leamed Additional Advocate General appearing for Respondent No. 2. 2 a FACTS OFTHE CASE:

3. The impugned criminal proceedings i'e'' Crime No' l2lRCO- CIU-ACBIIO}4 (hereinafter 'FIR') was registered based on the complaint lodged by Respondent No' 2 (hereinafter 'complainant')' It is relevant to note that the complainant herein is the current Principal Secretary to the Govemment of Telangana' Municipal Administration & Urban Development (hereinafter'MA & UD') department'

4. As per the complaint, the allegations leveled against the petitioner herein are as follows:- The Petitioner herein was the erstwhile Minister of the MA & UD department and on his initiative, the Government of Telangana decided to host a car racing event titled 'FIA Formula E' Championship' in Hyderabad city' Initially' a tripartite agreement dated 25.10.20 22 wasentered into between IWs Formula E Operations Ltd. (hereinafter 'FEO'), the MA & UD department' Govemment of Telangana and lws Ace Nxt Gen Private Ltd' (hereinafter 'ACE')' As per the terms of the said tripartite agreement' it was agreed that ACE would be the promoter of the event and would be obligated to make paymenls{o FEO as per Schedule IV of the agreement' The MA & 3 UD department was to act as a host and provide all the civic amenities. Fufther, the said tripartite agreement co rtemplated conducting foul events in Hyderabad i.e., one event each in Seasons 9, 10, ll and 12. The total fee agreed for Seasons 9 and l0 was f 90,00,000/- ((ninety lakh Great British pounds, hereinafter -efened to 'GBP'only).

5. Season 9 of the said car race was conducted su<;cessfully. However, as per the compraint and the office Note dated l 4.12.2023 referred to in the complaint, ACE backed out as the promotor and the name of Hyderabad did not feature in the list of cities hostin6; an event in Season 10. Therefore, it is alleged that the petitioner h,:rein had discussions with the officials of FEo to get the Govenrment of Telangana to act as a promoter/host and conduct an event fcr Season l0 in Hyderabad. In furtherance of these talks, allegedly, the Petitioner herein'telephonicafly' directed the Hyderabad Metr.opolitan Development Authority (hereinafter .HMDA,) to act as a l)romoter and host the event. As per the complaint, the Metropolitan Commissioner, HMDA had put a file before the petitioner h:rein on 27.09.2023 seeking approval of the draft agreement in which HMDA was shown as the promoter, administrative sanction for payrnent of ..r\-- .-\ /. 4 a f90,00,000/- (ninetv lakh GBP) in addition to Rs' 50'00'00'000/- (rupees fifty crores onty) was also sought along with the permission to pay the first installme nt of L22,50,0001 (wenty+wo lakhs GBP)' It is alleged that the Petitioner herein approved the said hle'

6. As the Petitioner approved the file' HMDA remitted the first installment of f 22,50,000/- (twenty-two lakhs fifty thousand GBP) on 03.10.2023 and a second installment of L 22'50'000/- (twenty-two lakhs lrfty thousand GBP) on ll'l}'2023 through Indian Overseas Bank, Himayat Nagar Branch' After the above-said payments were made, FEO addressed an email dated 27 '10'2023 terminating the initial tripartite agreement dated 25'10'2022' ln the said email' ACE was also informed that FEO and the MA & UD department will enter into anew agreement to host and conduct Seasons l0 to 12'

7. Accordingly, a new agreement dated 30'10'2023 was entered into between FEO and MA & LID department' The agreement was to conduct race events in Hyderabad city for Seasons l0 to 12' It is pertinent to note that HMDA was not a party to the said agreement' In this regard, it is alleged that the Model Code of Conduct was in operation owing to the State assembly elections' Therefore' the agreement dated 30'10'2023 could not have been entered into' 5

8. It is firrther alleged that HMDA was made to pay the huge sums of money even before the agreement dated 30. I0 2023 was entered into. Likewise, HMDA was made to make the said payments, however, it was not made a parly to the agreement dated 30.10.2023. The foreign remittances caused HMDA an additional tax burden of Rs. 8,06,75,4041- (rupees eight crores six lakh seventy_five thousand four hundred and four only). Further, the total amounts remitted to FEO came dou,n to Rs. 54,gg,g7,043/_ (rupees fifty_forrr crores eighty-eight lakhs eighty-seven thousand and forty_three only). HMDA cannot spend more than Rs. I0,00,00,000/_ (rupees .en crore only) without obtaining administrative sanction tiom the Go'ernment and the finance department. However, the petitioner, abu;ing his authority and without obtaining the necessary sanctions, directed HMDA to make such payments.

9. It is also alleged that the agreement dated 30. 10.202i makes a financial commitmenr of Rs. 600,00,00,000/_ (rupees six lLundred crores only) arong with additionar recurring expenditure for trre next three years. This according to the complaint is in violation of Secretariat Business Rules, the Telangana State Finance Corle and Article 299 of the Constitution of India. Allegedly, the tripartite i I i i I 6 a agreement dated 25'10.2022 andthe new agreement dated 30'10'2023 were entered into without any sanction from the Govemor authorizing the then Special Chief Secretary to enter into such agreements'

10. After the assembly elections, a new Govemment came to be formed in the State of Telangana and they were served with an arbitration notice by FEO alleging breach of the agreement dated 30.10.2023. Apparently, it is then, that the new Govemment noticed the irregularities and the alteged loss caused to the State exchequer' ll. It is further alleged that the Petitioner herein and the other accused i.e., Mr. Arvind Kumar, the then Special Chief Secretary' MA & UD department and Mr' B'L'N' Reddy' the then Chief Engineer' HMDA have conspired to cause loss to the State and a consequential gain to third Parties.

12. With the said allegations, 2nd' respondent requested lt' respondent to take action against the petitioner and other accused'

13. Based on the abovementioned complaint of 2nd respondent, ls respondent registered the impugned FIR against the petitioner herein and other accused for the aforesaid offences punishable under Sections 409 rlw 1208 of the IPC and Sections 13(l[a) r/w 13(2) of the PCA. 7 CONTENT IONS OF THE PETITIONER

14. The Petitioner contended that none of the ingreCi :nts of the alleged offences are made out. In relation to Section 409 of rhe lpc, it was specifically argued that, there is no .entrustment, of .public money' in an elected legislator like the petitioner. Therr:fore, the complaint lacks the primary ingredient of criminal breach of trust. In this regard, reliance was placed on the decision in Common Cause v. Union of Indiar, State of Gujarat v. JaswantlalNathalal2, N. Raghavender v. State of Andhra pradesh3 and HDFC Bank v. State of Bihara.

15. It was also contended that there are no altegetions of dishonest intention and misappropriation as required under Section 409 of the IpC. The petitioner relied on Lala RaojiMarhale v. Emperor5, S.W. patnitkar v. State of Bihar6, Onkar Nath Mishra v. State (NCT of Delhi)7, Asoke Basak v. State of Mahar;tshtraE, Deepak Gabha r.'. State of U.p.e, Usha Chakraborfy v. fitate of r(1999) 6 scc 667 '?t967 sCC ooLine SC 58 1202 t ) t8 scc 70 12024 )1928 SCC OnLine sc 2995 SCC OnLine Bom 102 'tZOOZt t SCC ua r (zoorj z scc sor 8i2o tg,pro scc s+z '(fzt t -i scc +z-; 8 West Bengalro and Delhi Race Club (1940) Ltd' v' State of Uttar Pradeshtr.

16. It was contended that the allegations' even if accepted' at bbst constitute irregular exercise of power de hors the dishonest intention. The same cannot constitute an offence' The Petitioner relied on Sudhir Shanti Lal Mehta v' Central Bureau of Investigationr2 and C.K. Jaffer Sharief v' Staters'

17. According to the Petitioner' the uncontroverted allegations in the impugned FIR do not constitute any of the alleged offences' Further, the FIR is politically motivated' malicious and constitutes abuse of process' ln such cases' the trite law is to quash such an FIR' Reliance was placed on State of llaryana v' Bhajan Lalra' Ramesh Rajagopal v. Devi Polymers Pvt' Ltd'rs' Arnab Manoranjan Goswami v. State of Maharashtrar6 and Neeharika Infrastructure Pvt. Ltd. v. State of MaharashtrarT'

18. Further, the Petitioner contends that the altegation that third parties received benehts cannot be accepted as none of them have 'o(zo2l) t5 scc I ls "(2024) lo scc 690 r12oo9) lo scc 660 '120I 3) I scc 205 'ri992 supp (l) scc a35 u i2616y69€C 310 ft()o2t\'2 scc 427 ''(2021) l9 scc 40l I 9 been named in the FIR. Further, the Govemment has failed ro take any action seeking recovery of the alleged losses.

19. No preliminary inquiry was conducted before lc,dging the FIR CONTENTIoNSOFTHE RESPONDENTS

20. According to the Respondents, the FIR is still at the stage of investigation and the same cannot be interfered with at tiris stage. Further, the powers under 52g of the BNSS have to be :xercised rarely and not ro scuttle a legitimate investigation. Relience was placed on Neeharika Infrastructure (supra).

21. Also, it was contended by the Respondents that the FIR need not disclose all the ingredients of the alleged offences anl that an FIR is not an encyclopedia. Reliance was placed on Rajesh Bajaj v. State NCT of Delhi18 and Superintendent of police, CBI v, Tapan Kumar Singhre.

22. The Respondents reiterated the allegations in the cornplaint. They contended that the petitioner herein conspired with the other accused to cause huge losses to the State exchequer which resrrlted in gains to third parties. Further, argued that the actions of the pe:itioner r8( I999) 3 scc 259 r'(2003) 6 scc I75 10 were contrary to the Business Rules and were without the sanction of the State Cabinet and against Article 299 of the Constitution of India' Retying on M.R.F. Ltd. v' Manohar Parrikar20' it was contended that the compliance of Business Rules and Article 299 is mandatory and any decision contrary to the same is non-est'

23. Sri Siddharth Dave, leamed Senior Counsel appearing for the petitioner and Sri A.Sudharshan Reddy' leamed Advocate General representing Sri T.Bala Mohan Reddy, learned Standing Counsel for the 1" respondent and Sri C'V'Mohan Reddy' Ieamed Senior Counsel representing Mr. Tera Rajinikanth Reddy' leamed Additional Advocate General made their submissions extensively' FINDTNGS OF THE COURT

24.Fromthefactsofthecase,itisclearthattheallegations against the Petitioner pertain to dishonest abuse of powers' acting contrary to the applicable procedures and business rules' misappropriating HMDA's money' causing loss to the State exchequer and causing gain to third parties' The alleged offences against the Petitioner are Section 409 of the IPC and Sections I 3(1)(a) & l3(2) of the PCA. '1zo toy t t scc az+

25. Before discussing whether the impugned FIR deserves to be quashed, it is ltertinent to mention that the power to quash an FIR under Section _528 of the BNSS (which corresponds with the earlier Section 482 of the Code of Criminal procedure) is limited end should be exercised rarely and only in cases where continuation of the investigation would result in abuse of process or misczLrriage of justice' It is equatry welr settred that the investigating powlrs of the State cannot be usurped and this Court cannot scuttle investigation. Further, this Court cannot go into the correctness of the allegations and conduct a mini-trial while exercising its inherent power under Section 528 of BNSS 26 ln this regard, the following paragraphs of Bhajan Lal (supra) may be referred to: I02. In the backdrop of the interprqtation of the various relevant provisions of the Code under Chapter XIV ana of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the exbaordinarv power under Article 226 or the inherent po*".. urdo Section 482 o[ the Code which we hur" "**u"r"a una reproduced above, we give the following categories of cases b1, way of illustration wherein such power-could be exercised either to prevent abuse of the process of anv court or otherwise to secure the ends ofjustice, though it .:, be possible to lay down any precise, clJarly T? defined and sufficiently channelised and inaexible guidelines or rigid formulae and to give - "*t uu.tir" ti., I / I t2 o of myriad kinds of cases wherein such power should be exercised. (1) Where the al tions made in the first information report or the comnlain t. even if they are taken at their face value and acceoted in their entiretv do not orima facie constitu te anv offence or make out a case a thc accused. (2) Where the allegations in the first'information report and other niaterials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police offrcers under Section 156(l) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) Where the uncontroverted alleeations made in the FIR or comolaint and the evidence collected in sunoort of the same do not disclose the commis sron of anv offence and make out a case asainst the accused. (4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizahle offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused' (6) Where there is an express legal bar engtafted in any of the provisions of the Code or the concemed Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concemed Act' providing efficacious redress for the grievance of the aggrieved PartY. (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. t3 e I03. We aIso give a note of cautio n to the effe ct er of exerc ised that th a crimin al uashin roceedin should sparl nslv and wirh clrcu msDection and that too in the rarest of rare caser that the court will not be qstificd in emba rkins uPo an enqurrv as to the reliabilifv or gen ulneness o othenv lse of the all tions madeln the FIR or th com laint and that the extra ordina inherenf DOWers do not confer an arbitrary iurisdictioh on th, court to act accordins to its whim or caD rIce. n r

27. The decision in Bhajan Lal (supra) has been c(,nsistently applied and was reiterated in Neeharika rnfrastructure (supra). The relevant paragraph is extracted below:_

13. From the aforesaid decisions of this Court, right from the decision of the privy Council in Khwaia UaZi, Ahmad lKing Enperor v. Khwaja Nazir Ahmad, 1944 SCC rC 29 : (t943_44)7t IAZO3: aR rq+5 pC r8f , lnl,ine the following principles of law emerge:

13.I. Police has the statutory right and duty under the relevant provisions of the Code of Criminai p.o""au.. contained in Chapter XIV ol the Code to investigate inio cognizable olfences.

13.2. Courts would not thwart any investigation into the cognizable offences. r f Co b

13.4. the power of quashing should be exercised :lTngly with circumspection, in the..rarest of rare cases,,. (The rarest of rare cases standard in its appticatio, fo. quashing under Section 4g2CrpC is not to be "onf.J with the norm which has been formulated in tt " "ort"*i the death penalty, as explained previously by thi, C.r.t; "- t4

13.5. While examining an FlR/complaint' quashing.of which is sought, the Court cannot embark upon an enqulry -;; ;" rjiability or genuineness or otherwise of the "r allegations 13.6. C the FlBJcomPlaint. made in riminal oroceedi nqs ousht not tq be scu ttled at the inirial st{se.

13.7. Quashing of a comPlaint/FlR should be an exception and a rarity than an ordinary rule

13.8. Ordinaril usurDlns the iurisd iction of the oli o the courts are barred frolr! since the two nsofthe State oDerate in two sDecl fic spheres of activities. The inherent Power of the court is, however, recognised to secure the ends of justice or Prevent the above of the Process bY Section 482CrPC.

13.9. The functions of the judiciary and the police are complementary' not overlapPing' exceD tional l3.l 0. Save cases where non- of iustice. the interfere nce would result in miscarrla Court and the iudicial Drocess should not in the stase of tnv tion of offences. L3.ll. Extraordinary and inherent powers of the Court do not confer an arbitrary jurisdiction on the Court to act according to its whims or caPrice' is no

13. tP,t Til i! 'it accordance with the known nroced ure. r EI l5

13.13. The power under Section 4g2CrpC is very wid:, but conferment of wide power requires the Court to t,e cautious. It casts an onerous and more diligent duty on tte Court. -regard I3.14. However, at the same time, the Court, if it thinks fi! being had to rhe parameters olquashing and th: selfl-restraint imposed by law, more particuliarly th: parameters laid down by this Court in R. p. Kapur [R.F. Kapur v. State of punjab, 1960 SCC Online SC 2l :;lI: 1960 SC 8661 and Bhajan Lal [Srate of Haryana v. Bhajatr Lal, 1992 Supp (l) SCC 335 : 1992 SCC (Cri) 4261 ,ia:; the jurisdiction to quash the FlR/complaint. 7il q I C rt when er under Section 482CrPC onl has to consider whether ornot the all tions in the FIR disclose the commis ston of a cosnizable offence and is not required to consider on merits whether the alle tions make out izable offen ceor not and the court has to ermit the investigatins agency/oolice to lnves tisate the allegations in the FIR.

28. Keeping the above law in mind, it is to be noted that the main thrust of the petitioner's case is that section 40g of the Ipc is not made out against him. For the sake of convenience, Section 409 of the IPC is extracted below;

409. Criminal breach of tr banker, merchanr,.,rJ;.lil,ilT*, 1:#1."",11 manner entrusted with property. or with any dominion over property in his capacity ofa public servant or in the wav of his business as a banker, merchant, factor, broker, uUo-"y or agent, oommits criminal breach of trust in respect of that property, shall be punished with imprisonment for life], or with imprisonment of either description fo, u t"._ *hiJ may extend to ten years, and shall also be liable to fine. 16

29. According to M-r' Siddharth Dave' learned Senior Counsel' the essential ingredients of criminal breach of trust are entrustment of property or entrustment of dominion of property' dishonest intention and misappropriation of the said property' He contended that Ministers dealing with State largesse / public funds do not act as .entrustment' of public money in elected ,trustees, and that there is no legislators. Theretbre, according to him' a Minister like the present Petitioner cannot be charged with criminal breach of trust' He relies on the following paragraphs of the decision in Common Cause (supra):

159. o o o t of the n FI t El f t" I w a offence set out in the Penal Code to which we would advert a little later. 160. The Court also appears to h"* Y"l"O: t" "D;;"; of Public Trusti which is a doctrine of law under which the natural resources such ;;;r; ;";"st, lakes' rivers and wildlife are public il";;;;, to the Govemment for their safe and ;;;;;i'"".*st"d" proper use and proper protection' Public Trust Law recognises that some types of natural resources are held in 'as t7 trust by the Govemment for the benefit of the public. The "Doctrine of Public Trust,, has been evolved ,n u, to p..rr.nt unfair dealing with or dissipation of all natural resourct,s. This doctrine is an ancient and somewhat obscure creation of Romal and British law which has been discovered recentlv by environmental lawyers in search of a theor.y broadly applicable to environmental Iitigation. 16l.This doctrine was considered by this Court in i_s judgment in M.C. Mehta v. Kamal Nath (1997) I SCC 38til to which one of us (S. Saghir Ahmad, J.) was a party. Justice Kuldip Singh, who authored the erudite judgment and has also otherwise contributed immensely to the development cl envirorunental law, relying upon ancient Roman .,Doctrin: of Public Trust". as also the work of Joseph L. Sax, Professor of Law, University of Michigan and other foreign decisions, wrote out that all natural resources are hetd ir "trust" by the Govemment. The doctrine enioin s upon thr) Governme nttoD rotec t the resources for th e eniovmenl of the gen eral public rather thantooermit their use for private ownersh rD or commercial pu doctrin e cannot be invoked in fixins the criminal liabilih and the wholc matter will have to be decided on the one of which is that the crim inal liabilify has to be strictly construed and offence can be said to have been committed onlv when all the insredients of that offenc eas defined in the sta tute are found tohave been satisfied. lcs of criminal urrs ruden es. But p

162.'I-he matter may be examined from another angle 163. Electio n to the State L sla ture or the House of the Peo !e are held under the Consti tution on the basis of adult suffrase.on beinp elected as AM ember of Parlia ment the etitioner was ind ucted as Minister of State. The De rtment of Petrol eum and Natural Gas was allocated (o him. Under th e allocation of business President of India. the distribution of etroleum roducts inter ali came to be allocated to the petitioner. This allocation of business under the Constitutionrs better administra tion and for more conveniena transactionof rma de bv the done for smooth 18 h i" o th of India. or as m r r did he become a ('trustee " in that sense.

164.InTito v. Waddell Q"lo.2)l(rs77) 3 Alt ER 1291 the question oF the Crown's status as a trustee was considered and it was [aid down: "l propose to tum at once to the position ofthe Crownas mea:t bl trustee, leauing on one side any question ofwhat i: the Crown for this purpose; and I must also consider what is ."*i O, 'trust'. The word is in corrunon use in the English language, and whatever may be the position in this Court' it *tt, U" recognised that the word is often used in a sense differentfromthatofanequitableobtigationenforceableas such by the courts' Many a man may be in a position of trust *itnort U"ing a trustee in the equitable sense; and terms such as 'brains trust', 'anti-trust" and 'trust territories" used, are not understood as relating to a inourt, rust as enforced in a court of equity' At the same tim€' be disputed that a trust may be created without "- t ,ring ttt" *ora 'trust' In every case one has to look to see whether in the circumstances of the case' and on the true construction of what was said and written' a sufficient intention to create a true trust has been manifested' "orn-o"ly ".afy "Oligations When it is alteged that the Crown is a trustee' an element which is of speciat importance consists of the govemmental of the Crown; for these readily O"*".t *n Ir"tio" ,"1-o,aiation which is an altemative to a trust' If money or other property ts vested in the Crown and is used for the benefit of others, one explanation 1n be t]rat Crown holds on a true trust for those othets' Another explanation can be that, without holding the property on a the Crown is nevertheless administering that i.* *", in the exercise of the crown's governmental ;;;* furrctions. This latter possible explanation' which does not in the case of an ordinary individual' makes it "*i* .*"rr..y to scrutinise with geater care the words and which are alleged to impose a trust'" "ir"r-.*"". 165. Many earlier decisions were relied upon and with reference to an earlier decision reported it Kinlochv' Secy' -the , / \ ,*,.ot t9 of State for India [(1880) l5 Ch D I] it was observed as under: ''In the Court of Appeal, this decision was unanimou;ly reversr:d. The court held that no trust, .in the sense of a trlst enlorceable and cognizable in a court of law., has bcen created, despite the use of the word 'trust' in the Roval Warrant: see per James, L.J. Furthermore, the Secretaryof State for India in Council, though by statute made capable of suing and being sued in that name, had not been made body <:orporate .All that had been done had been Drovi de that the Secretarv of State for the time beir should be the a ent of the Crown for the distributi Onr the pro DEra. James, L.J. regarded the conseque nces ( holding that there was a trust enforceable in the courts as .s monstrous that persons would probably be srartled ar rh idea'. { a o r e e t TM t T I ! a ; TM I a trust' He also emphasised the words at the end of the Roya Warrant as showing clearly that questions were to bt determined. not by the courts, but by the Secretary of State with an ultimate appeal to the Treasury, as advising the Queen. Baggallay and Bramwel [, L.JJ. delivered concurring judgments, with the latter emphasising the monstrous lnconven tence ' artd 'enormous expense of I itigation' if there were a tmst enforceable by the courts,-so that .one would be reluctant, even if the words were much stronger than they are, to hold that there is a trust,. House of Lords (Kinloch v. Secy. of State for lrutia) --_ fhe (1882) 7 App Cas 6t9 : 47 LT 133 (HL)l _*i_orriy affirmed the Court of Appeal. tn ttre teaaing ,0"""t, fo.a Selbome, L.C. attached some weight to the words in the Royal Warrant being .the Secretary of State for India in Council', and .for the time being,, instead ol his beino described by his personal name, ; indicating ,h";" ;;: not intended to be a trustee in the ordinary sens", but wa. i:rtelded t') acr as a high officer of State. en". ai."u.ri,.,g the Order in Council, Lord Selbomc, L.C. quoted the part of 20 the Royal Warrant which contained the words 'in trust for the use of, and said: t take 'Now the words "in trust fortt are quite cotrsistent with. and indeed are the DroDer manner of expressrnqi a trust not onlv as reEa rds those every sDecres of trust matters which are the proDer subiects foraneq uitable resDects hisher lurNdictiontoa dminis ter, but as lace between the Crown matters. such as m under the directions of and oublic officers discha to th9 the Crown. duties or functions Dreroqative and to the authoriw of the Crown. In the are ma tters within the urisdiction o lower sense th courts of e ul in the hisher sense theY are not. What their sense is here. uestion to be determined lookin at the whole is the instru ment and at its nature and effec t.' " dtobea dminis tered the ordina em hasis of this Court

166. les laid down abov oetitioner does not. on becomlnetheM inister of State for assume the role of a Petro leum and Natural Ga ('trust" co me rnto (trustee" in the real sense nor does a rties. rtrment existence ln res ect of the on of the offence of 167. This brings us to the dehniti in Section 405 of the "Criminal Breach of Trust" as defined planation, Provides as Penal Code, 1860 which, minus the Ex under: -Whoever' "405. Criminal breach of trusl 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 mes or disposes of that property in violation of any direction of law prescnbing 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 wilfutly suffers any other person so to do, commits 'criminal breach of trust''"

168. A trust contemPlated bY Section 405 would only when there is an entrustment ol property or dom over propedy. There has. therefore' to be a propertv to someone whi ch is entrusted to the ..-/.......:'F-- 2t accused of the offence under Section 405 1',he e tr-l e in Stote n arrses out of a con fidence reposed and acce Dted bvt otvncr. This is what has been laid Gujarat v. JaswantlalNarhalal [AlR l96g SC 700: (1968, scR 4081 InRashmi Kumar v. Mahesh Kum Bhada[(1997) 2 SCC 397 1997 SCC (Cri) 4lsl t essential ingredients for establi shing the offence of crimin breach of trust as defined in Section 405, have been sp( out as follows: (SCC pp. 406_07, para 13\ . "(i) entrusting any person with property or with ar dominion over property; (ir) the person entrusied dishonestt misappropriating or converting to his own use that propertl or dishonestly using or disposing of that prope.ty o, *iin tt suffering any other person so to do in violation ol an direction of law prescribing the mode in which ,u"h t*rt i to be discharged, or of any legal contract made touching th, discharge of such trust.,, 2 1r It v v '; v { j

169. In this case, the earlier decision in pratibhtr Rani v Suraj Kumar [(t985) 2 SCC 370: 1985 SCC (Cri l80l rvas affirmed. The case essentially related to thr entrustment of ..Stridhan,,, but nevertheless, it is important in the sense that the ingredients of the off"n"" u." I"t ort and discussed. In Che oorMankkal Narayan lttiravi Nombudiri v. State of Travancore_Cochin [(1952) 2 SCC 392 : AIR 1953 SC 478 : 1954 CriLl 102lit was iaid down that every breach of trust in the absence of ."n, ."i o. dishonest intention cannot legally justify a criminal prosecution.

170. I'he expressions ..entrusted with property,, and "with an], dominion over property,,used in Section 405 came to be considered by this Court inCBIv. DuncansAgro Industries Ltd. [(1996) 5 SCC 591 : 1996 SCC (Cri) 1045 : AIR 1996 SC 24521 and the view earlier expressed was reiterated. It was held that the expression ..entrusted,, 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. ? i 22 a l7l. Mr K. Parasaran contended that *Dower to ellot etrol um stt and that too under discretio na rty" within the meanln of cannot be treated as *D Section 405 of the Penal Code. 1860. Itisp ointed out by him that the Minister merelv makes an order of uently, the India n Oil Corpo ration or allotment. Sub into a the Bharat Petroleum Conroration enters ent with that erson and the business dealersh is resulated bv the agreement between the allottee and the Corporation (Indian oil Conr oration or Bharat Petroleum Corooration). It is also pointed out that in ursuance of the a constructs the buildins and sets up the petrol D umD. Mere erercise of cannot. therefore. be treated as "oroDerty" within the meaning of Section 405. capable of beins misut ilised or mrsaDDTOD riated. er to allot" it is ri htl contende the allottee invests mon

172. The word ttDroDe rtv". used in Section 409 IPC means the Drooertv which can be entrusted or over which dominion mav be exercised. This Court in R.K IAIR 1962 SC 1821 : (1963)r Dalmia v. Delhi tulmn. SCR 253I held that the word "Dro perty ". used in Scction 405 IPC. has to be interpreted tna wider sense as it is not restricted bv anY oualification under Section 405. It was held that whether an offence defined in that section could tre said to have been committed would deoend not on the internretation of the word tt Dro DerWtt but on the fact whether that Darticular kind of property could be sub ect to the acts covered b that section. That is to sa the word *DTOD " would cover that kind of nrooerty with respect to which the offence contemolated 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 tmst, as defined in 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 czrse 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' L)

30. This Court cannot agree with the argument advan<:ed by Mr. Dave and his reliance on Common Cause (supra). Thr: Hon,ble Supreme court's reasoning in the said decision was that ir minister appointed to distribute govemment property acts as an agr:nt of the govemment. Such a minister acts in furtherance of a duty inrposed on him to ensure smooth functioning and better administration. Therefore, there is no trust created in him to deal with public money.

31. Likewise, the English decisions relied upon by lhe Apex Court show that 'monstrous inconvenience' and .enormous e;lpense of litigation' were the reasons to hold that general public cannct sue the govemment for breach of trust. Another relevant fact in the r;aid case was that the Court therein dealt with a case where the accused_ minister therein misused the .power to allot petrol pumps, under a discretionary quota. On examination of the facts of the said r:ase, the Apex Court held that 'power to allot petrol pumps, cannot constitute property that can be misappropriated.

32. The decision in Common Cause (supra) is inappli:able to the facts of the present case. The petitioner herein is alleged to abuse his authority to misappropriate HMDA,s money. Therefore, it cannot 24 F I be said that the Petitioner was using public money of which there can benoentrustment.HMDAisabodycorporatewhichcanown property, enter into contracts, sue and be sued' The allegations in the FIR clearly state that it was HMDA's money which was misused' It is not in dispute that HMDA is under the control of MA & UD Department. The petitioner, being the Minister of MA & UD Department, has control over the HMDA, he has approved note before signing of the agreement' Therefore' prima facie' the funds belongs to HMDA were entrusted with the petitioner'

33. Also, in the present case' it is not a general member of the public who has filed a complaint alleging criminal breach of trust against the petitioner and other accused' He is a responsible officer of the Govemment who alleges that HMDA's money was misappropriated by the Petitioner in conspiracy with the other accused. Therefore, this court cannot accept the contention that there was no 'entrustment'' The other allegations pertaining to dishonest intention and misappropriation are matter of investigation'

34. At this stage, it is apt to point out that the correctness of Common Cause (supra) was doubted by a Three Judge Bench of 25 Hon'ble Supreme Court in Sheila Kaul v. Shiv Sagar Tiwari2r. However, in the said case, the Court left the correctness of the same to be decided by a Constitution Bench in an appropriate case. The relevant paragraph of the said judgment is extracted below:..

2. On exa mrnrn the im pu ed reviewed ud ment rep orted in 96). we. aw. but Pma facie do not a ree with severa I conclu srotrs onl since that ud ment has been rendered bva Three Judet we cann ot so in to the ques tion except referrin the ma tter to a Constit ution Bench. But, having regard to the peculiar fi rcts and crrcumstances of Smt. Kaut, who is stated to be old and ailing and the gross hardship of the case, we think it appropriate to quash the damages part of the impugned judgment which was Smt. Kaul. We m ake it clear that the corre ctlless awarded agatnst , Bench. of the re viewed be consldered tt96 can a 7:1999 SCC Crl in an ro riatel AD DroDriate ca se by a Con stitution Bench We further make it clear that the direction to launch criminal prosecution on the birsis of investigation b1 CBI is not being altered in any manner and if any criminal proceeding has already been instituted, that must take ib own course on the material produced. This petition stands dir;posed accordingly.

35. The other offence alleged against the petitioner is Section l3(l)(a) olrhe PCA. The same is extracted below: '' 12ooz; Io scc ooz 26

13. Criminal misconduct by a public servant--'(1) e puUii. ."*unt is said to commit the offence of criminal misconduct,- 1,) if he dishonestly or fraudulently misappropriates or t"' i",i,,J'.'"*"n' r"' ttit own use any prope(y entrusted to him or any property under his control as a public servant or allows any other person so to do; or (6) if he intentionally enriches himself illicitly during the period of his office' Explanation 1'-A person shall be presumed to have int*tilo.,utty enriched himself illicitly if he or any person on his behalf, is in possession ofor has' at any time during in"- p"a"A of his offrce' been in possession of pccuniary resources or property disproportionate to his known ,o*"", of income which the public servant cannot satisfactorilY account for' Explanation 2 '-The expression "known^ sources of income" means income received from any lau4ul sources' (2) Any public servant who commits criminal misconductshallbepunishablewithimprisonmentfora term which shall be not less than four years but which may to ten years and shall also be liable to fine' "*t"na

36. As can be seen from the above provision, Section 13 of the PCA deals with criminal misconduct by a public servant' The essential ingredients of criminal misconduct are fraudulent or dishonest misappropriation or converting the property to one's own use' Further' such property needs to be entrusted to the public servant or such property should be in the public servaflt's control' From the facts' it isprima facieclear that HMDA's funds were under the control of the Petitioner. Whether the Petitioner dishonestly misappropriated' W 27 I i same or not is a factual aspect to be investigated. Therefor e, a prima facie case is made out against the petitioner. 3 7. At this stage, this Court would like to adverl tc, another reason why the allegations in the impugned FIR nee,i to be investigated. Even if the contentions of the petitioner are accepted and this court reaches a concrusion that neither Section 409 of the Ipc nor Section l3(l)(a) of the pCA are made out, the impugned FllL cannot be quashed. It is relevant to note that the FIR need not disc,ose any specific offence. The FIR should indicate that prima /,acie an allegation of commission of an offence exists and such an allegation requires an investigation. In other words, the unconhoverted allegations in the IrIR should make out a prima facie case warranting an investigation. Further, allegations in the FIR may constitute offences which are not mentioned in the FIR. Where ingredient; of the alleged offences are not satisfied, but the allegations constitut: other offences, this Court cannot quash an FIR. For instance, in a givr:n case the FIR may mention Section 405 of the IpC as the alleged olfence. However, the allegations may not satisfi the requirements of Slection 405, but may very rvell make out a primafacie case ofSection 420 of the IPC or any otht:r offence. In such cases, the Court cannot quash 28 the FIR. The Court under Section 528 of the BNSS is not required to see which particular offence is made out' it has to see whether the gravamen of altegations disclose commission of an offence' [n this regard, the following paragraphs of Somjeet Mallick v' State of Jharkha nd22 are relevant: s

15. Before we oroceed to test the correctn ess of the lmDUgned order.we must bear ln mlnd that at the tase of decidtn whether a cnmtn alproceeding or FIR. as istobe quas hed at the thres hold or the case mavtr not. the allega tio ns in theFIRo r the police reDort or e matenals collected du rrng he comnlain t, ln t invest isation or rnq urry as the case mavbe. are to be taken at their face value so as to determin e whethera tion or Droceeding asainst Drrma facie case for lnves is made out. The the accus ed. as the case may be, correctness of the allegations is not to be tested at this cludin stage.

16. To commit an offence, unless the Penal statute provides otherwise, mens rea is one of the essential Ingr"ai"n,r. Existence of mens rea is a question of fact *[i"n .uy be inferred from the act in question as well as the surrounding circumstances and conduct ofthe accused' As a sequitur, when a party alleges that the T""t:d' O"rri,","'nir* possession of the truck on hire' has failed to 0", nn" chulges for months together' while making. false p.rnir", for its payment, a prima facie case' reflective of iirhon".t intention on the part of the accused' is made out *t r"n .", require investigation' In such circumstances' if tf,e ftn i qu^n"a at the very inception' it would be nothing short of an act which thwarts a legitimate investigation' 17. tt is t 2'(zozq to scc szl 29 discloses commission of a cosn izable offence what is to be looked at is not anv omis ston in the accus ations bu( the srava men of the accusations contained therein to find out n,hether. ori ma facie. some cosniz able offence has been committed or not. At this sra rhe court is not rco uired to ascertain as to which sDecific offence has been committed.

18. It is only a fter investigation. at the time of framin e when materiaIs collected. durin investi tion are hefore the court. the court has to draw an oDIn lonasfo for commission of which offen ce the accused should he tried. Prlor to that. if satisfied. the court may even discha e the accus ed. Thus ,wh en th FIR alleges a dishones t conduct on the part of the if suooorted bv materials. would 4ccused which. disclose commrssion of e le offen he w FIR. _ 19. No doubt, a petition to quash the FIR does not become infructuous on submission ofa police report under Section 173(2)CrpC, but when a police report has been submitted, pa(icularty when there is no stay on the investigation, the court must apply its mind to thematerials submitted in support of the police report before tukirg a call whether the FIR and consequential proceedings sholld be quashed or not. More so, when the FIR alleges an act which is reflective ofa dishonest conduct of the accused.

38. In the present case, the ailegations indicate that the Petitioner herein without any approval from the State Cabinet or the finance department directed the HMDA to pay huge sums of m()ney to a foreign company. Whether the petitioner directed the said paJ,ments with a dishonest inrention to cause gain to himself or third parties is required to be investigated. The allegations when read together make 30 out a prima facie case of wrong doing and misappropriation of funds of the HMDA. The same are enough to walrant an investigation'

39. Further, investigating agencies need to be given enough opportunity to investigate the allegations.

40. In State v. M. Maridoss23, the Supreme Court dealt with a case where a petition to quash an FIR was filed on the very next day of the registration of FIR. The Court held that the High Court therein erred in quashing the FIR without giving opportunity to the investigating agency. The relevant paragraphs are extracted below:

10. It is also required to be noticed that in the oresent case wi thout slvrng anv reasonable time to the investigatin agencv to investigate the allegations in the the Hi Court has. IN haste. quashed the criminal F on 9-12-2O21 roceedin . The FIR came to be lod immediately on the verv next date. the q uashins oetition was filed and within a oeriod of four davs i.e. t4-12-2021.thei lM. Maridoss v. State.202l SCC Online Mad 137031 has been oassed and the criminal proceedinqs are q uashed. ll. As per the settled oosition of law. it is the risht CY to conduct the conferred uoon the investigati nga tnvestisation and reasona hle time should be siven to cv to conduct the investigation the inves unless it is found that the allegations in the FIR do not disclose anv cosnizable offence at all or the complaint is barred bv any law. ent and order

12. Under the circumstances also, the impugned judgment and order fM. Maridoss v' State, 2021 SCC Online Mad 137031 passed by the High Court quashing "(2023) + scc alt a \ t and setting aside the criminal proceedings deserves to lrc quashed and set aside. 4l . In the present case too, the Complaint was lodged on

18.12.2024 and the FIR was registered on 19.12.2024. Inmediately and on the very next day i.e-, on20.12.2024, the petitioner herein filed the present crin.rinal petition. The investigating agency should have a reasonable opportunity to investigate and colrect evidence. Therefore, this court cannot haste and thwart the investigation in rre present case.

42. Once this Court holds that a prima facie case is made out, the other allegations pertaining to malice, absence of dishonest intention and misappropriation, failure to arraign the allel;ed third_ party beneficiaries, etc. becomes a subject matter of investigzLtion.

43. Needless to say, that the observations made in the order are only to decide the present petition.

44. In view of the aforesaid discussion, the present criminal petition is liable to be dismissed and is accordingly dismissed. The interim order dated 20.12.2024 stands vacated. I 32 a) As a sequel, the miscellaneous applications, if any, pending in the present Criminal Petition, shall stand closed. Sd/- P. PADMANABHA REDDY ASSISTANT REGISTRAR //TRUE COPY// SEC ION OFFICER One Fair Copy to the HON'BLE SRI JUSTICE K'LAKSHMAN iFor His LordshiP's kind Perusal) ' To,

1. The Principal Special Judge for SPE & ACB Cases, at Nampally' Hyderabad' 2. The Station House Officer, Police Station, ACB, CIU' Hyderabad' 3.TwoCCstothePublicProsecutor,HighCourtfortheStateofTelanganaat Hyderabad [OUT]

4. One CC to Mr. A. Prabhakar Rao, Advocate [OPUC] 5. One CC to Mr. T. Bala Mohan Reddy, SC for ACB [OPUC] 6.oneCCtoMr.TeraRajinikanthReddy,AdditionalAdvocateGeneral IoPUC

7. 11 LR CoPies 8. The Under Secretary, Union of lndia Ministry of Law, Justice and Company Affairs, New Delhi

9. The Secretary, Advocates Association Library' High Court for the State of -' Telangana, l-iigh Court Buildings at Hyderabad'

10. Two CD CoPies kan/gh ( c o '(\\g SrArE' os 7 j) + 'r' 0 ? Jfiil ?tTi I cE sj n,: HIGH COURT DATED:0710'112025 ORDER CRLP.No.15847 of 2024 # 14 4./t f DISMISSING OF THE CRIMINAL PETITION