The Supreme Court has quashed criminal proceedings against an appellant accused of facilitating illegal financial transactions in a high-profile corruption case.

The Bench of Justice MM Sundresh and Justice Aravind Kumar observed, "The offences as charged, in our considered view are not made out against the appellant for want of requisite material."

The appellant was charged under Section 120B read with Section 420 of the Indian Penal Code (IPC) and Section 12 of the Prevention of Corruption Act, 1988, but the Court found no substantive evidence to continue the trial.

The case centered on allegations that the father of Accused No. 1, a public official, misused his position to grant illegal benefits to Accused No.3, who in turn ensured that ₹50 crore was transferred to Accused No.14 through shell companies. The case originated against the appellant from a public interest litigation that exposed irregularities by public officials, leading to multiple FIRs and chargesheets. The appellant's alleged role involved transferring funds between companies owned by other accused parties.

The prosecution argued that the appellant, a friend of Accused No. 3, facilitated the transaction through his company, M/s Cornerstone Property Investments Pvt. Ltd., though the company itself was not charged.

Despite claims of money transfers through multiple companies, including M/s Gilchrist Investments Pvt. Ltd., M/s Alpha Villas Pvt. Ltd., and M/s Alpha Avenues Pvt. Ltd., none of these entities were made accused. The Court noted the absence of substantial evidence implicating the appellant or the companies in question, highlighting that Accused No.3 had created the shell companies.

"The sum and substance of the case of the prosecution is that accused No.1’s father (since deceased), by virtue of misusing his official position, has facilitated certain illegal benefits in favour of accused No.3 who in turn, by way of a quid pro quo transaction made sure that a sum of Rs.50 crores reached the accounts of Accused No.14- which is alleged to be a bogus company created by him," the Court noted.

The Court ruled that proceeding against the appellant without implicating the involved companies or other key figures, such as Sri Nimmagadda Prasad, would amount to a miscarriage of justice.

"Suffice it is to state that in the absence of any further role attributed to the appellant in the transaction made by him, or in the absence of any material attributed to the appellant, especially, bringing him within the purview of Section 120B of the IPC, it will be very difficult to hold that the proceedings against him are liable to continue. There is also no material to hold that he was hand-in-glove with accused No.3," the Court said.

The Court clarified that its decision is limited to the appellant, with no bearing on the trial of other accused persons, and allowed the case against them to proceed. Pending applications were also disposed of.

"..the impugned order stands set aside and the proceedings initiated against the appellant alone, are quashed. We make it clear that our order will not have any bearing on the trial against the other accused and, therefore, there is no bar for the pending proceedings to go on," the Bench ordered.

Furthermore, the Court ordered, "There is also no allegation of any benefit being accrued to the appellant as the specific case against him is that he transferred the money which was received by his company and subsequently sent forward to the three other companies as stated above. For the aforesaid reasons, we are inclined to interfere with the judgment rendered by the High Court as it did not go into the submissions made on the point of law."

Accordingly, while setting aside the High Court judgment, the Court allowed the Appeal.

Cause Title: Byappanahalli Prabhakar Reddy Kumar Babu v. The State of Telengana [Criminal Appeal No. 2899 of 2024]

Appearance:-

Petitioner: Senior Advocates R. Basant, Shekhar G Devasa, Advocates Manish Tiwari, Thashmitha Muthanna, Sarath S Janardanan, Prashanth Dixit, Shashi Bhushan Nagar, Vishwanath Chaturvedi

Respondent: ASG Vikramjeet Banerjee, Senior Advocate Nachiketa Joshi, Advocates Mukesh Kumar Maroria (AOR), Prashant Rawat, Shivank Pratap Singh, Siddharth V Thakur, Neelu Mohan

Click here to read/download the Order


Justice MM SundreshJustice Aravind KumarPrevention of Corruption Act

Sukriti Mishra