TaxTMI 
TaxTMI 
2023 (11) TMI 1261
X X X X Extracts X X X X
X X X X Extracts X X X X
.... i. Based on a report dated 07.09.2021 filed by the Andhra Pradesh State Skill Development Corporation's (APSSDC) Chairman, Crime No. 29 of 2021 was registered by the CID. The report asserts that APSSDC, established on 13.12.2014 by G.O.Ms. No. 47 (HE) (EC.A2) Department, collaborated with SIEMENS on a project to impart Hi-end technology to trainers. APSSDC sent a team to evaluate existing SIEMENS Centres of Excellence in Gujarat. Negotiations resulted in the agreement to establish SIEMENS Centre of Excellence, Technical Skill Development Institutions, and Skill Development Centres in clusters. ii. Six clusters were formed at the inception for Rs. 546,84,18,908/-, with SIEMENS and Design Tech providing a grant-in-aid of 90%, i.e., Rs. 491,84,18,908/-, and the Government's share thereof 10%, i.e., Rs. 55,00,00,000/-. A Memorandum of Agreement (MoA) was signed between APSSDC and SIEMENS under G.O.Ms. No. 4, dated 30.06.2017. Subsequently, a tax investigation by the Additional Director General, GST, Pune, regarding CENVAT credit claims by M/s. Design Tech Systems Private Limited and M/s. Skillar Enterprises India Private Limited exposed a significant financial scam b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appreciating the petitioner's case. ii. The petitioner, a former Chief Minister of Andhra Pradesh and the current Leader of the Opposition, aged about 73, and National President of the Telugu Desam Party (TDP), was not initially named in the FIR during its registration. Several accused individuals, including those specifically implicated (Nos. 6, 8, and 10), were granted anticipatory and regular bail, with none presently in custody. The petitioner contends that his addition as an accused was malicious and politically motivated, executed through a memo on 08.09.2023, utilizing Sections 34 and 37 of the IPC. The petitioner asserts that his sudden, strategically timed arrest is aimed at obstructing him and his party from campaigning for the upcoming State Elections, with the State resorting to this arrest to derail his public outreach efforts. iii. The petitioner, a senior citizen aged about 73, has a medical history of long-standing diabetes and hypertension. His arrest allegedly violated the procedures outlined in Section 50 of the Cr.P.C. Notably, the petitioner has a medical record of Hypertrophic Cardiomyopathy, Diabetes Mellitus, and Vitiligo. Regular chec....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and the project in question. ii. The scam, totalling more than Rs. 370 Crores, came to light in 2018 through a letter from the Director General of Goods and Services Tax Intelligence to the government. However, no action was taken by the then government. Subsequently, an inquiry was ordered by DG, ACB, AP, in response to a whistleblower petition dated 05.06.2018, entrusted to Mr. N. Venkateswara Rao, DSP, ACB, AP. Unfortunately, the inquiry was not conducted until the petitioner's regime ended. Continuing the inquiry, letters dated 09.02.2021 and 22.02.2021 were sent to APSSDC within ACB, A.P. Based on the Forensic Audit Report and the MD of APSSDC's request, the Principal Secretary on 11.07.2021 directed ADGP, CID, AP to investigate. ACB officials, including Mr N. Venkateswara Rao, DSP, and Mr Giribabu, Inspector of Police, examined and collected documents from APSSDC. iii. The present complaint revolves around the misappropriation and transfer of Rs. 370 Crores into various shell companies, from which the petitioner and other accused withdrew the funds in cash. Notably, the Securities and Exchange Board of India (SEBI) conducted an independent investiga....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ft agreement, the Project team was required to provide bank guarantees as security. However, an internal SISW email dated 26.05.2015 suggests the Project team considered approaching the petitioner to remove the bank guarantee clause. The petitioner, demonstrating knowledge, intent, oversight, and control, facilitated the removal of the bank guarantee clause from the final agreement. APSSDC allowed this at the petitioner's instruction. Once funds were disbursed to Design Tech, they were promptly transferred to shell companies, such as PVSP IT Skills/Skillar Enterprises Pvt. Ltd., Allied Computers International (Asia) Ltd., M/s. Patrick Info Services Pvt. Ltd., M/s. IT Smith Solutions Pvt. Ltd., M/s. Inweb Services Pvt. Ltd., M/s. Knowledge Podium, M/s. Talent Edge, who had raised bogus invoices upon SISW/Design Tech, issued bogus invoices to SISW/Design Tech. viii. The petitioner's claim of lacking prior approval for investigation under Section 17-A of the PC Act is to be dismissed as misconceived. The penal provisions are prospective, and Article 20 of the Constitution prohibits retrospective criminal laws. Section 17-A of the PC Act does not protect the petitioner....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... either misconceived or inapplicable to the specific facts of this case. 6. An additional counter filed by the Respondent-State alleges that the petitioner/A.37 indirectly influenced witnesses through co-accused and party members by filing false complaints and making press/media statements against the witnesses. Following the petitioner's arrest on 09.09.2023, co-accused Mr Sumon Bose (A.6) and Mr Vikas Khanvelker (A.8) sought to derail the investigation by addressing the media and making false allegations. Bail cancellation petitions were filed against Mr Vikas Khanvelker (A.8). The investigation revealed significant cash deposits into TDP party accounts during the period corresponding to the offence timeline, involving misappropriation of APSSDC funds and their diversion to various accused, including Hawala transactions. 7. Moreover, the nature of cash deposits, primarily in Rs. 500 and Rs. 1000 between November 2016 and January 2017, raised suspicions, especially considering the demonetization of these denominations announced on 08.11.2016. Notices under Sections 160 & 91 of Cr.P.C. were sent to the General Secretary-cum-Treasurer, TDP on 31.10.2023 and 04.11.2023 and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y and enabling transparency in decision-making. However, fortification of social and moral fabric must be an integral component of long-term policy for nation building to accomplish corruption free society." 11. He further relied on a decision reported in State of Bihar & Anr v. Amit Kumar Alias Bachcha Rai (2017) 13 SCC 751, wherein the Hon'ble Supreme Court held that: "11. Although there is no quarrel with respect to the legal propositions canvassed by the learned counsel, it should be noted that there is no straitjacket formula for consideration of grant of bail to an accused. It all depends upon the facts and circumstances of each case. The Government's interest in preventing crime by arrestees is both legitimate and compelling. So also is the cherished right of personal liberty envisaged under Article 21 of the Constitution. Section 439 of the Code of Criminal Procedure, 1973, which is the bail provision, places responsibility upon the courts to uphold procedural fairness before a person's liberty is abridged. Although "bail is the rule and jail is an exception" is well established in our jurisprudence, we have to measure competing forces present in fac....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... liberty is involved. 23. In Kalyan Chandra Sarkar v. Rajesh Ranjan [Kalyan Chandra Sarkar v. Rajesh Ranjan, (2004) 7 SCC 528: 2004 SCC (Cri) 1977], it was held as under : (SCC pp. 535-36, para 11) "11. The law in regard to grant or refusal of bail is very well-settled. The court granting bail should exercise its discretion in a judicious manner and not as a matter of course. Though at the stage of granting bail a detailed examination of evidence and elaborate documentation of the merit of the case need not be undertaken, there is a need to indicate in such orders reasons for prima facie concluding why bail was being granted particularly where the accused is charged of having committed a serious offence. Any order devoid of such reasons would suffer from non-application of mind. It is also necessary for the court granting bail to consider among other circumstances, the following factors also before granting bail; they are: (a) The nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence. (b) Reasonable apprehension of tampering with the witness or apprehension of threat to the complainant. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....No. 1108 of 2023, seeking Police Custody of the petitioner for five days. 17. On 12.09.2023, the petitioner filed Criminal Petition No. 6942 of 2023 before this Court, seeking the quashing of FIR in Crime No. 29 of 2021 and all consequential proceedings, citing lack of sanction under Section 17-A of the PC Act. Simultaneously, the petitioner sought the suspension of his remand as interim relief. On 14.09.2023, the petitioner filed Crl. M.P. No. 1167 of 2023 before the Special Judge, seeking regular and interim bail. On 22.09.2023, this Court dismissed Criminal Petition No. 6942 of 2023. Subsequently, the petitioner filed SLP (Crl) No. 12289 of 2023 before the Hon'ble Supreme Court. On 22.09.2023, the Special Judge granted police custody of the petitioner for two days until 24.09.2023 through Crl. M.P. No. 1108 of 2021. On 25.09.2023, the respondent filed another application, seeking an additional 15 days of police custody for the petitioner, but this request was rejected on 09.10.2023. Furthermore, the Special Judge dismissed the application for regular bail filed by the petitioner on the same day, 09.10.2023. 18. To better understand the case and weigh the arguments made....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... matter to Mr N. Venkateswara Rao, D.S.P., A.C.B., A.P. However, the enquiry was not conducted till the petitioner's regime was ended due to the influences of the petitioner. Continuing the enquiry on the above petition within the A.C.B., A.P. Letters dated 09.02.2021 and 22.02.2021 were addressed to the APSSDC. Based on the Forensic Audit Report by M/s. Sarath & Associates, and on the request of the M.D. of APSSDC to entrust the case to the C.I.D., A.P., the Principal Secretary dated 11.07.2021, ADGP, C.I.D., A.P. was directed to investigate the matter. 21. The Prosecution contends that the funds amounting to Rs. 370 Crores were swindled/transferred into various shell companies from where different accused persons, including the petitioner herein, withdrew the amount in cash. No material is placed to substantiate the contention that the petitioner had withdrawn the amount in cash, as contended. On the other hand, it is the prosecution case that during the investigation, the bank account transactions statements of T.D.P. have been obtained from Union Bank of India, Jubilee Hills Branch, Hyderabad and bank accounts of Bank of Baroda, Jubilee Hills Branch, Hyderabad, for the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....used were granted bail, and in the event of parity is claimed, it is for the court to determine whether a case for the grant of bail on reasons of parity is made out. In support of his contention, he relied on the observations made in a decision reported in Ramesh Bhavan Rathod v. Vishanbhai Hirabhai Makwana (Koli) and Anr. (2021) 6 SCC 230., wherein the Hon'ble Apex Court referred a decision in Neeru Yadav v. State of U.P. [Neeru Yadav v. State of U.P., (2014) 16 SCC 508 : (2015) 3 SCC (Cri) 527], this Court has held that while applying the principle of parity, the High Court cannot exercise its powers in a capricious manner and has to consider the totality of circumstances before granting bail." 26. Regarding A.1, this Court observed in Crl.P. No. 7263 of 2021 that there are no prima facie-specific allegations against him, confirming interim bail granted on 20.12.2021. For A.2, in Crl.P. No. 7217 of 2021, the court noted that he gave an undertaking to cooperate with the investigating agency, suffers from old age ailments, and has already been granted bail. A.3, according to the order in Crl.P. No. 7258 of 2021, was granted pre-arrest bail as the allegations against him wer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....refer to the observations made by this Court in Crl.P. No. 2904 of 2023 filed under Sections 437 & 439 of Cr.P.C. seeking to grant regular bail to the petitioner/A.4 in Crime No. 29 of 2021 of CID PS, which reads as under: "13. In pursuance of the agreement, it is borne out of the record that 2,13,000 students were trained, and to that extent, certificates have been issued to all the students that they have been trained. The service certificates issued by the other companies would go to show that the monies are being spent on the training programmes." 32. The learned Additional Advocate General for the Respondent-State highlighted that a review of the chat transcript (SMS and WhatsApp messages) between Mr Bose and Mr Khanvelkar, owner of Design Tech, confirms multiple similar transactions executed from December 31, 2014, to January 2016. However, the chat transcript messages involving the exchange of currency note numbers as tokens do not establish the relevance of WhatsApp messages between Mr. Bose and Mr. Khanvelkar to the present transaction. The Memorandum of Agreement (MoA) was entered in between APSSDC and SIEMENS, dated 30.06.2017, under G.O.Ms. No. 4 of the Skil....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to S&A to conduct a forensic audit engagement letter dated August 6 2020. It should not be used, circulated, quoted or otherwise referred to for any other purpose, nor included or referred to in whole or in part in any document without our prior written consent (Except Regulatory Authorities). (j) S&A assumes no responsibility to any user of the report other than the Client. Any other persons who choose to rely on our report do so entirely at their own risk (Except Regulatory Authorities). (k) Information obtained during the search on the identified databases (internet) is included in this report without any further verification. Ascertaining the reasons or genuineness or completeness/correctness of such information was beyond the scope of this engagement." 36. The disclaimer provided by S&A emphasizes its significance. Nevertheless, it is crucial to underscore that the petitioner cannot be held accountable for the discrepancies highlighted in the report. It remains to be clarified how the differences outlined in the report can be deemed the fundamental cause for the alleged misappropriation of funds. 37. As per the material on record, the Authorized Signato....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for a period of one year only and the cost already included in the cost of the software as per the bills provide to us by SIEMENS." 40. It is pertinent to note that this Court has granted regular bail to Soumyadri Shekar Bose (A.6). It is not in dispute that the team, including Smt. K. Sunitha, Secretary to Govt., the Finance Department, visited L.D. College of Engineering, Ahmedabad, The representative of SIEMENS and Design Tech, has also participated in the discussions. The team submitted a report on the activities of SIEMENS and Design Tech in the State of Gujarat with the following observations: "SIEMENs is a reputed company working with Design Tech, and implementation of the Project in Gujarat is satisfactory. The training facilities proposed to be set up in Andhra Pradesh will immensely benefit the students/trainees by imparting employable skills to the students/trainees and making available the required skilled workforce in the State of Andhra Pradesh. These trainees can also avail themselves of global employment opportunities with the skills acquired in these facilities. Therefore, the entire amount of Rs. 270 Crores available in the P.D. Account of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of law but the question herein is whether public interest would be subserved by asking the State to proceed to make appointments. Whereas, on the one hand, an action on the part of the State to interfere with the good work done by the previous Government solely on the basis of change in the regime must be deprecated, there cannot however be any doubt whatsoever that the successor Government cannot blink over the illegalities committed by the previous Government. If illegalities have been committed, the same should be rectified. When there exists a reasonable apprehension in the mind of the State, having regard to the overall situation including the post-haste manner in which actions had been taken, to cause an inquiry to be made and suspend the process of making appointments till the result of such inquiry is obtained, such a decision on its part per se cannot be said to be an act of arbitrariness or unreasonableness." 44. Learned Additional Advocate General for the Respondent-State, relied on a decision reported in Ramveer Upadhyay & Anr. V. State of U.P 2022 SCC Online 484, wherein the Hon'ble Supreme Court held that: "30. The fact that the complaint may have b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urt maintains its stance on the maintainability of the bail application during the pendency of S.L.P. (Crl). No. 12289 of 2023 before the Hon'ble Apex Court, as previously expressed while disposing of I.A. Nos. 1 and 3 of the 2023 interim bail application. 47. The Prosecution placed the statement of Shujayath Khan, S/o. Basheer Khan, before the Deputy Superintendent of Police, EOW-II, C.I.D., AP, Mangalagiri and Shri Mathew Thomas, Managing Director of M/s. SIEMENS Industry Software (India) Pvt. Ltd. before Assistant Director of Enforcement, Hyderabad Zone, Hyderabad. Those statements do not show prima facie the complicity of the petitioner in the commission of the offence. At this stage, it is not necessary to go into the correctness or otherwise of the statements made by those persons, which were recorded subsequent to the registration of the crime against the officials of M/s.SIEMENS Industry Software (India) Pvt. Ltd. This Court views that while considering an application seeking bail, it cannot enter into an in-depth analysis of the case so as to hold a mini-trial of the case. It is also unnecessary to give lengthy reasons at the time of granting bail. This is a matter ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....attaining finality. The said documents are expected to be in the custody of Respondent-State. The petitioner is provided with Z+ Security of the National Security Guard (N.S.G.) by the Central Government. The said fact goes to show that there is no flight risk, and there is no possibility of tampering with the evidence or influencing/intimidating the witnesses. The petitioner is aged about 73 years. Considering the petitioner's age, this Court finds that it is quite probable to suffer from old age ailments. This Court was pleased to grant interim bail to the petitioner in this crime, based on his health reports, as per Orders of this Court in I.A. No. 1 of 2023 and I.A. No. 3 of 2023 from 31.10.2023 to 28.11.2023. All these facts are an indication that there is no apprehension that the petitioner/A.37 would abscond or would hamper the trial. 51. The learned Senior Counsel for the petitioner contends that under Section 439 of Cr.P.C., the Court can impose conditions while granting bail, but such conditions must balance the liberty of the accused and not result the arbitrary deprivation of the right to carry out normal activities. In support of his contention, he relied on a d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n reported in M. Hasan and another Versus Government of Andhra Pradesh and others 1997 SCC Online AP 653, wherein the composite High Court of Andhra Pradesh held that: "Article 19(1)(a) speaks about freedom of speech and expression but not included the freedom of press. But it is implied that freedom of speech and expression includes freedom of press also. In other words, freedom of speech and expression carries with it the right to publish and circulate or propagate one's ideas, opinions and views with complete freedom and by resorting to any available means of publication subject again to such restrictions as can be legitimately imposed under Art. 19(2). The success of democracy depends upon free, fair, honest and independent press." 53. Learned Senior Counsel for the petitioner further relied on a decision reported in Romesh Thappar v. State of Madras AIR 1950 SC 124, wherein the majority of the Judges of the Hon'ble Supreme Court on freedom of the press and its limitation held that: "Freedom of Speech and expression includes freedom of propagation of ideas, and that freedom is ensured by the freedom of circulation. The Constitution, in form....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cal grounds, this Court thought fit that the petitioner was not supposed to conduct public meetings and rallies. While disposing of regular bail application, placing such conditions will have an impact on the electoral prospectus of the petitioner's political party. This Court in its order, dated 31.10.2023 in I.A. No. 1 of 2023 in Crl.P. No. 8490 of 2023, which was filed by the petitioner herein seeking to grant interim anticipatory bail in respect of the Crime No. 18 of 2023 of CID Police Station, A.P., Amaravati, Mangalagiri, recorded the undertaking given by the learned Advocate General that Respondent-State has no intention to proceed against the petitioner, as apprehended by the petitioner, regarding his arrest until the objective of this Court order in I.A. Nos. 1 & 3 of 2023 in Crl.P. No. 7951 of 2023 is fulfilled. As the said undertaking was given based on the orders, as referred to above, it is needless to observe that it is binding on both parties. As such, this Court views that the said condition is to be relaxed from 29.11.2023 onwards. 56. This Court directed the petitioner, while disposing of interim bail application on medical grounds, to place the details ab....