HON’BLE SRI JUSTICE RAJA ELANGO CRL.P.Nos.3461, 3465, 3466, 3467, 3579 of 2011 AND CRL.P.Nos.4446, 4447 and 4589 of 2011 COMMON ORDER Petitioners-accused Nos.1 to 9, 11 to 15, 17 and 20 filed Crl.P.Nos.3461, 3465, 3466, 3467, and 3579 of 2011 and petitioners- accused Nos.1 to 10, 12, 13, 15, 16 and 17 filed Crl.P.Nos.4446, 4447 and 4589 of 2011, under Section 482 of Cr.P.C., seeking to quash the proceedings initiated against them in F.I.R.No.13/ACB-CIU-HYD/2011 and F.I.R.No.17/ACB-CIU-HYD/2011 of P.S. CIU, ACB, Hyderabad, respectively. Since the parties to the proceedings are one and same and the point to be decided in the matters is also one and same, all the Criminal Petitions are being disposed of together by this common order. One C.Babu Rao Sagar of Hyderabad filed a private complaint against 22 accused including the petitioners in Crl.P.Nos.3461, 3465, 3466, 3467, and 3579 of 2011 before the I Addl. Special Judge for SPE & ACB Cases at Hyderabad for the offences punishable under Sections 11, 12, 13 (1) (d) (i), (ii) & (iii) of the Prevention of Corruption Act, 1988 (for short “the Act) and Sections 406, 409, 420 read with Section 34 of IPC. On hearing the counsel for the complainant and perusing the complaint, the learned Special Judge referred the complaint under Section 156(3) of Cr.P.C. to the Director General, Anti-Corruption Bureau, Hyderabad, A.P., for registration, investigation and report. Basing on the complaint, the Deputy Superintendent of Police, CIU, ACB, Hyderabad, registered Crime in F.I.R.No.13/ACB- CIU-HYD/2011. In the complaint, it is alleged briefly as under: The complainant is a member of the Hyderabad Cricket Association, Hyderabad (for short “the HCA”) and Secretary of Sagar Cricket Club, Hyderabad. The HCA is a member of BCCI and it is a recognized Association for promotion of Cricket within the State of Andhra Pradesh under the overall control of BCCI. The HCA received land at Uppal from the Government of Andhra Pradesh for construction of Rajiv Gandhi International Cricket Stadium (for short ‘the Stadium”) and it has also received funds from BCCI and others. The funds are exclusively meant for promotion and betterment of Cricket and cannot be misappropriated or use for the pecuniary advantage of its office bearers. Accused Nos.1 to 6 and 7 to 13 being the Office Bearers and Executive Committee Members of the HCA misappropriated the funds and accused Nos.7 and 14 being the former Treasurer and former Executive Member mismanaged the activities in the HCA. Having noticed their misdeeds and exhausted all remedies, the complainant lodged complaints with Uppal P.S. against the HCA and its Office Bearers and Committee Members and the same are registered as Crime Nos.381 of 2008 and 1051 of 2009 and the same are pending before the III Metropolitan Magistrate, Cyberabad, L.B. Nagar, Ranga Reddy. Accused No.16 is the successful bidder to construct the Stadium at Uppal and the quoted amount is Rs.30,26,55,587/- which includes fire fighting system. The report presented by the HCA reveals that the entire cost of construction of the Stadium is Rs.108 crores. Even after exorbitant enhancement of the construction amount, accused No.16 not provided fire fighting system. The other accused allowed accused No.16 to commit several irregularities by taking huge amounts as kick backs and bribes and caused heavy loss to the HCA. Accused No.15 has been appointed as Technical Advisor to the HCA for construction of the Stadium under an obligation to perform his duties diligently. While so, he deliberately manipulated tenders and approved tenders with high rates by showing favouritism in favour of accused No.16 in collusion with the Office Bearers and Executive Committee Members of the HCA. The accused have purchased generators from accused No.19 by paying Rs.1,75,00,000/- @ Rs.13 lakhs per generator. Whereas, the report and records reveals that the accused paid Rs.25 lakhs for each generator and made a profit of Rs.12 lakhs on each generator illegally. Accused No.19 and accused Nos.1 to 14 colluded together and not called for tenders and made a profit of Rs.84 lakhs and caused heavy loss to the HCA. Accused No.17 was appointed by the HCA and it is also one of the instrument to enhance the construction amount and it failed to see that fire fighting system is provided in the Stadium. Further, the Executive Committee of the HCA has purchased 6 acres of land at Nizamabad @ Rs.6 lakhs per acre, but the account shows that the Committee had paid an amount of Rs.91.50 lakhs. Being the Chartered Accountant to the HCA, A.18 should have performed his duties diligently, but he has not performed his duties properly and on the other hand, he prepared annual audit report as per the dictates of accused Nos.1 to 14. A.1 to A.14 have given contract work for construction of canopies at entrances of the HCA to accused No.20 without calling for tenders and they gave the entire cost of construction even before starting of the work by receiving kick backs and bribes. Further, inspite of the orders of the Collector, R.R. District, dated 15.10.2007, A.1 to A.14 have committed several irregularities in selling of tickets. Apart from that, during the match held in between India Vs. Australia, A.1 and A.2 have taken their quota of complementary tickets and also taken sellable tickets to the public and converted them into complimentary tickets worth about Rs.34 lakhs and thereby caused loss to the HCA by misusing their powers. The HCA represented by accused Nos.1 to 14, has not paid sales tax to the Commercial Tax Department and as such they raided the office of the HCA and imposed a fine of Rs.44 lakhs, that itself goes to show that accused Nos.1 to 14 are not performing their duties diligently. Without calling for tenders, the said accused invested more than an amount of Rs.83 lakhs on three play grounds i.e., Qutubullahpur, Mathrushree Engineer College and Osmania University and misappropriated the said amount. Accused Nos.1 to 14 allotted work for erection of flood lights in the Stadium to a tune of Rs.6,32,75,982/- and released an amount of Rs.3,50,00,000/- in advance prior to starting of work, which is against the rules of the HCA and on the other hand they have not allotted the work to the lowest tenderer and allotted the work to accused No.21 by receiving kick backs and bribes. Accused No.1 and others unilaterally decided to purchase land at Nandigama Village, Patancheru Mandal, Medak, to an extent of 50 acres @ Rs.20 lakhs per acre amounting to Rs.10 crores and accused No.2 paid Rs.1 crore as advance. Whereas, the original market price is below Rs.10 lakhs per acre. All the accused persons colluded together and allotted canopy contract work to accused No.22 for Rs.21 crores without following the rules and regulations of the HCA only for North and South Blocks but not for entire Stadium. Thus all the accused committed several irregularities and with an intention to cheat the HCA and public in general they have misappropriated the amounts of the HCA to a tune of crores of rupees. M/s. Roshan Ara Recreation Club, Secunderabad, represented by Sri D.Manikyam, also filed a private complaint against 18 accused including the petitioners in Crl.P.Nos.4446, 4447 and 4589 of 2011 before the Principal Special Judge for SPE & ACB Cases at Hyderabad for the offences punishable under Sections 13 (1)(c) & (d) of the Prevention of Corruption Act, 1988) and Sections 409, 420, 468, 471, 477 and 120-B of IPC. On hearing the counsel for the complainant and perusing the complaint, the learned Special Judge referred the complaint under Section 156(3) of Cr.P.C. to the Director General, Anti-Corruption Bureau, Hyderabad, A.P., for registration, investigation and report. Basing on the complaint, the Deputy Superintendent of Police, CIU, ACB, Hyderabad, registered Crime in F.I.R.No.17/ACB-CIU-HYD/2011. In the complaint, it is alleged briefly as under: The complainant Association is an associated club with the HCA. The HCA was formed with an intention, zeal and commitment to promote, organise, manage and conduct the game of Cricket in the area covered by it. Accused Nos.1 to 17 are the Office Bearers of the HCA. Accused No.18 is the auditor. More than 50 members submitted a complaint dated 29.05.2010 to the President, HCA, Minister of Sports & Youth Affairs, Government of Andhra Pradesh, Minister of Finance, Government of Andhra Pradesh, Collectors of, Hyderabad and Ranga Reddy Districts, Director, CBI, Director, Vigilance and Enforcement stating that the Executive Committee of the HCA has misappropriated the funds in the payment of construction of the Stadium, purchase of flood lights, general flood lights, Voltas Refrigerators, generators, DG sets, bowling machines and land at Nizamabad, payment of amount to S.S. consultants for designing/structure of the project at 4% commission on the total amount of the project, spending of money on development of ground and club house, purchase of Chief Engineer Car, Furniture, TVs, LCDs, Air Conditioners, sale of 2007 World Cup Tickets, purchase of chairs, elevators, etc. As most of the allegations in the complaint are similar to that of the allegations in the aforesaid complaint, there is no need to reproduce the same. Learned counsel for the petitioners has mainly contended that the petitioners are not public servants and that since the petitioners are not public servants, registration of cases for the offences under Sections 11, 12, 13 (1) (c) and (d) (i), (ii) & (iii) of the Act, is bad in law and the learned Special Judge should not have forwarded the complaints to the ACB for investigation, in view of the explanation under the Act. In contra, learned counsel for the respondents has submitted that the petitions are premature in nature. The petitioners cannot invoke the jurisdiction under Section 482 of Cr.P.C. and they cannot challenge the investigation at this stage. Further, the petitioners are public servants in view of Section 2(c), 8 and 12 of the Act. It is further submitted that there is nothing wrong in the order passed by the Special Judge for registration and investigation of the matter. This Court perused the entire records. Now, the points for consideration are: 1) Whether the petitioners are public servants? 2) Whether it is proper on the part of the Special Judge to forward the complaints to ACB for investigation and whether the investigation can be proceeded further by the ACB officials? POINT NO.1: Learned counsel for the petitioners as well as the respondents relied on the judgments of the Apex Court and the various High Courts with regard to the point, whether the petitioners are public servants or not. For better appreciation and adjudication of the matter, it is relevant to refer to Section 2(c) of the Act, which runs as follows: “Public Servant” means:- (i) any person in the service or pay of the Government or remunerated by the Government by fees or commission for the performance of any public duty; (ii) any person in the service or pay of a local authority; (iii) any person in the service or pay of a corporation established by or under a Central, Provincial or State Act, or an authority or a body owned or controlled or aided by the Government or a Government company as defined in Section 617 of the Companies Act, 1956 (1 of 1956); (iv) any Judge, including any person empowered by law to discharge, whether by himself or as a member of any body of persons, any adjudicatory functions; (v) any person authorised by a court of justice to perform any duty, in connection with the administration of justice, including a liquidator, receiver or commissioner appointed by such court; (vi) any arbitrator or other person to whom any cause or matter has been referred for decision or report by a court of justice or by a competent public authority; (vii) any person who holds an office by virtue of which he is empowered to prepare, publish, maintain or revise an electoral roll or to conduct an election or part of an election; (viii) any person who holds an office by virtue of which he is authorised or required to perform any public duty; (ix) any person who is the president, secretary or other office-bearer of a registered co-operative society engaged in agriculture, industry, trade or banking, receiving or having received any financial aid from the Central Government or a State government or from any corporation established by or under a Central, Provincial or State Act; or any authority or body owned or controlled or aided by the Government or a Government company as defined in Section 617 of the Companies Act, 1956 (1 of 1956); (x) any person who is a chairman, member or employee of any Service Commission or Board, by whatever name called, or a member of any selection committee appointed by such Commission or Board for the conduct of any examination or making any selection on behalf of such Commission or Board; (xi) any person who is a Vice-Chancellor or member of any governing body, professor, reader, lecturer or any other teacher or employee, by whatever designation called, of any University and any person whose services have been availed of by a University or any other public authority in connection with holding or conducting examinations; (xii) any person who is an office-bearer or an employee of an educational, scientific, social, cultural or other institution, in whatever manner established, receiving or having received any financial assistance from the Central Government or any State Government, or local or other public authority. Explanation 1: Persons falling under any of the above sub-clauses are public servants, whether appointed by the Government or not. Learned counsel for the respondents relied on Section 2(c)(viii) and (xii) of the Act. The petitioners’ counsel also relied on the same provisions, but interpreted the Section in a different manner. Learned counsel for the petitioners submitted that the provisions of the Act and its jurisdiction cannot be extended beyond the intent of the legislature and, in any event, the office-bearers of the HCA will not come under the purview of the Act. On the other hand, learned counsel for the respondents submitted that the petitioners are also performing the public duty i.e., selection of cricketers and conducting of various tournaments and in view of Section 2(c)(viii) of the Act, the petitioners will come under the purview of the Act and they should be termed as public servants. Section 2(c)(viii) of the Act speaks about “a person who is authorised or required to perform any public duty”, which means, a person is directed by the State to perform public duty. Hence, this provision is not applicable to the petitioners herein to include them as public servants. In the Act, the said provisions are unambiguous. The legislature intent to include the persons while defining the public servant under various categories. The legislature has also taken into consideration in Section 2(c)(xii) of the Act that an office-bearer of an institution, in whatever manner established, will come under the purview of the Act, but at the same time, the said Section clarifies the office-bearers of an institution which received “any financial assistance from the Central Government or any State Government, or local or other public authority”. It clearly indicates that the office-bearers of an association will come under the purview of the Act, if it is financially assisted by the Central or State Government or local or other public authority. Prima facie, this Court is of the view that the office-bearers of an association or institution not financially assisted by the authorities concerned will not come under the purview of the Act. It is an assertion by the petitioners’ counsel that the HCA was not assisted financially by any of the said authorities concerned. But at the same time, the respondents’ counsel submitted that the HCA was allotted 30 acres of land on lease basis by the Government of Andhra Pradesh for construction of the Stadium at a throw away price which clearly indicates that the HCA received financial assistance. But, this Court is of the view that the disputed fact, whether the HCA was assisted financially by the said authorities, is also a matter to be investigated. Prima facie, the office-bearers of an association, which is not financially assisted by the authorities concerned, will not come under the purview of the Act. But, if the investigation reveals that the authorities concerned financially assisted the association, necessarily they should be termed as public servants. The point is answered accordingly. POINT NO.2: This point can be answered, in view of the latest decision rendered by the Apex Court in Srinivas Gundluri and others Vs. Sepco Electric Power Construction Corporation and others[1] wherein it is held as under: “Section 156(3) occurs in Chapter XII, under the caption: ‘Information to the Police and their powers to investigate’: while Section 202 is in Chapter XV which bears the heading: “Of complaints to Magistrates”. The power to order police investigation under Section 156(3) is different from the power to direct investigation conferred by Section 202(1). The two operate in distinct spheres at different stages. The first is exercisable at the pre-cognizance stage, the second at the post-cognizance stage when the Magistrate is in seisin of the case. That is to say in the case of a complaint regarding the commission of a cognisable offence, the power under Section 156(3) can be invoked by the Magistrate before he takes cognizance of the offence under Section 190(1)(a). But if he once takes such cognizance and embarks upon the procedure embodied in Chapter XV, he is not competent to switch back to the pre- cognizance stage and avail of Section 156(3). It may be noted further that an order made under sub-section (3) of Section 156, is in the nature of a peremptory reminder or intimation to the police to exercise their plenary powers of investigation under Section 156(1). Such an investigation embraces the entire continuous process which begins with the collection of evidence under Section 156 and ends with a report or charge-sheet under Section 173. On the other hand, Section 202 comes in at a stage when some evidence has been collected by the Magistrate in proceedings under Chapter XV, but the same is deemed insufficient to take a decision as to the next step in the prescribed procedure. In such a situation, the Magistrate is empowered under Section 202 to direct, within the limits circumscribed by that section an investigation ‘for the purpose of deciding whether or not there is sufficient ground for proceeding’. Thus the object of an investigation under Section 202 is not to initiate a fresh case on police report but to assist the Magistrate in completing proceedings already instituted upon a complaint before him.” By applying the said proposition laid down by the Apex Court, the Special Judge forwarded the complaints in pre-cognizance stage and he has not taken cognizance of the offence and decided to proceed further. Even if it is admitted that the petitioners are not public servants, the investigation by the ACB cannot be quashed on the ground that the said authority has no jurisdiction to investigate the case. The investigation cannot be questioned on the basis of jurisdiction. Further, it is pertinent to note that the ACB is also a Wing of the State police and it will function as a separate department independent of the Police Department and is under the direct control of the Chief Secretary to Government in the General Administration Department. The Investigating Officer can also decide, after collection of material, whether the petitioners can be termed as public servants or not, in view of Section 2(c)(xii) of the Act. Further, even assuming for a moment, investigation by an Agency not having jurisdiction will not cause any prejudice to the petitioners herein. If the investigation reveals that the petitioners will not come under the purview of the Act, the Investigating Agency is at liberty either to transfer the case to other Agency or to file a final report before the Court concerned which is having jurisdiction to take cognizance of the offence. It is well within the prerogative of the Investigating Agency to investigate the matter, which means, the Investigating Agency can collect evidence as to whether any cognizable offences are committed by the petitioners and also whether the petitioners would come under the purview of ‘public servants’. The Investigating Agency is at liberty to decide the issue on the basis of the outcome of the investigation. Further, the investigation includes collection of material not only from the complainant but also the other officers concerned. The accused persons also have a right to produce the relevant material to establish their innocence before the officer concerned. The Investigating Agency empowered to investigate the matter has every right to file a final report arraying the petitioners as accused or refer the matter as ‘mistake of fact’ or ‘mistake of law’. Since because the case is under investigation, the same cannot be understood that it should be for the purpose of filing final report against the petitioners herein. The Investigating Agency can also file a final report either way, if the petitioners established their innocence during the course of investigation. Further, if charge sheet is filed against the petitioners, the Special Judge is empowered to take cognizance of the offence. Even if charge sheet is filed against the petitioners, the Special Judge can decide whether to proceed further on the basis of the material, since because that is a stage for him to take cognizance of the offence. If a final report is filed and the Special Judge takes cognizance of the offence, the petitioners are at liberty to challenge same. The Special Judge is at liberty, if the final report does not reveal anything to proceed under the provisions of the Act, to direct the Investigating Agency to file the case before the competent Court to take cognizance of the offences under the Indian Penal Code. In the present case, the respondents alleged not only the offences under the Act, but also the offences under the Indian Penal Code. This Court also perused the Status Report filed by the Investigating Agency. Further, the members of the association also lodged a complaint alleging misappropriation and breach of trust by invoking the other provisions of the Indian Penal Code. As rightly pointed by the learned counsel appearing for the petitioners, the office- bearers of the association are answerable to the members. When the members filed a complaint before the authorities concerned, the same has to be necessarily investigated. Hence, this Court is of the view that the act of the Special Judge is not contrary to the provisions of the Code of Criminal Procedure, since it is in pre-cognizance stage. Further, the investigation cannot be questioned on the basis of jurisdiction and this Court cannot stall the investigation at this stage. The point is answered accordingly. In the result, all the Criminal Petitions are dismissed and miscellaneous petitions, if any, filed along with the criminal petitions shall stand closed. _____________ RAJA ELANGO, J 15th November, 2011 cbs HON’BLE SRI JUSTICE RAJA ELANGO Crl.P.Nos.3461, 3465, 3466, 3467, 3579 of 2011 and Crl.P.Nos. 4446, 4447 and 4589 of 2011 15th November, 2011 cbs [1] (2010) 8 Supreme court Cases 206