IN THE HIGH COURT OF ANDHRA PRADESH, AMARAVATI

****

CRIMINAL PETITION No. 7598 of 2013

Between:

P.Nageswara Rao,

S/o.Bikshamaiah, Aged about 49 years,

Working as Panchayat Secretary, Parimpudi,

C/o.M.Dayananda Rao, Near GDM Church,

Koyyalagudem Mandal, West Godavari District.

... Petitioner/A.1

And

1. The State of A.P., Represented by Public Prosecutor,

High Court of A.P., Amaravati.

2. K.Sai Baba, The Divisional Co-Operative Officer,

Jangareddygudem, West Godavari District. ... Respondents

DATE OF JUDGMENT PRONOUNCED : 11-09-2023

SUBMITTED FOR APPROVAL :

THE HON’BLE SRI JUSTICE DUPPALA VENKATA RAMANA

1. Whether Reporters of Local Newspapers

may be allowed to see the judgment? Yes/No

2. Whether the copies of judgment may be

marked to Law Reporters / Journals? Yes/No

3. Whether His Lordship wish to

see the fair copy of the Judgment? Yes/No

DUPPALA VENKATA RAMANA, J

2

* THE HON’BLE SRI JUSTICE DUPPALA VENKATA RAMANA

+ CRIMINAL PETITION No.7598 of 2013

% 11-09-2023

Between:

P.Nageswara Rao,

S/o.Bikshamaiah, Aged about 49 years,

Working as Panchayat Secretary, Parimpudi,

C/o.M.Dayananda Rao, Near GDM Church,

Koyyalagudem Mandal, West Godavari District.

... Petitioner/A.1

And

1. The State of A.P., Represented by Public Prosecutor,

High Court of A.P., Amaravati.

2. K.Sai Baba, The Divisional Co-Operative Officer,

Jangareddygudem, West Godavari District. ... Respondents

! Counsel for Petitioner : Sri V.Mallik

^ Counsel for Respondents : Asst.Public Prosecutor

< Gist:

> Head Note:

? Cases referred:

1. (2017) 9 SCC 641

2. (2018) 3 SCC 104

3. AIR 1992 SC 604

This Court made the following:

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HON’BLE SRI JUSTICE DUPPALA VENKATA RAMANA

CRIMINAL PETITION No. 7598 of 2013

ORDER:

In this Criminal Petition filed under Section 482 of the

Code of Criminal Procedure, 1973 (for short “Cr.P.C”) the

petitioner/A.1 seeks to quash the criminal proceedings in Crime

No.124 of 2013 of Jangareddygudem Police Station, West

Godavari District, registered for the offence under Sections 409,

420 and 109 read with 34 IPC, against him.

2. Heard the learned counsel for the petitioner and the

learned Assistant Public Prosecutor.

3. The facts in issue are that the 2

nd respondent is the de

facto complainant, who is the-then Divisional Panchayat Officer,

Jangareddygudem and he lodged a report with the Police

alleging that, during the year 2011-12 the Panchayat Raj funds

were misappropriated by the employees of Jangareddygudem

Panchayat and the Principal Secretary to the Government,

Panchayat Raj ordered for enquiry through the Vigilance and

Enforcement Authority and to submit a report. As per the said

report of the Vigilance and Enforcement Authority in respect of

misappropriation of funds in the year 2011-12 committed by the

Staff of Jangareddygudem Gram Panchayat and Nagara

Panchayat, the Principal Secretary to the Government of Andhra

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Pradesh, Panchayat Raj Department, issued a memo dated

25.04.2013 to the District Collector stating that there was

misappropriation of funds in the year 2011 -12 at

Jangareddygudem Gram Panchayat and Nagar Panchayat and

to initiate appropriate action against the concerned. In turn, the

District Collector issued proceedings dated 08.05.2013,

directing the 2

nd respondent/de facto complaint to file a criminal

case against the Surpanch and others. The allegations in the

complaint are that the petitioner/A.1 the-then Panchayat

Secretary of Jangareddygudem Gram Panchayat d uring the

above period opened a bank account making transactions of

panchayat in the banks other than the Treasury Account, by

violating the guidelines in G.O.Ms.No.124, Finance (IF)

Department, dated 23.04.2009 due to which A.2 the-then

Panchayat Secretary kept huge amount of Panchayat Revenue

on hand for long periods of time since 24.08.2011 for an amount

of Rs.99,77,604/- without remitting them to the Sub-Treasury,

soon after the expiry of the Panchayat tenure, kept an amount

of Rs.1,43,832/- with him without remitting to the Sub -

Treasury. A.3 the-then Divisional Panchayat Officer (retired)

failed to supervise the duties of the Panchayat on 27.06.2009

and 08.01.2010 and failed to submit comprehensive report

during his tenure and not to insist to deposit the amount of

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Rs.18,42,912/- in the Gram Panchayat funds and A.4 the-then

District Panchayat Officer (retired) directed the Divisional

Panchayat Officer to stop the enquiry on the representation of

M.Srinivasarao, ZPTC Member, Jangareddygudem. Based on the

said report, a case in Crime No.124 of 2013 was registered in

Jangareddygudem Police Station, West Godavari District for the

offence punishable under Sections 409, 420 and 109 read with

34 IPC. While the crime was under investigation by the

Investigating Officer, the petitioner/A.1 filed the present petition

to quash the proceedings against him in the above crime.

4. Learned counsel for the petitioner/A.1 would submit that

there has been no misappropriation of funds by the

petitioner/A.1 and except opening of account in the bank

instead of Treasury Account, the petitioner has not operated the

account either to remit or to withdraw the amount. Further, he

would submit that the petitioner/A.1 never misappropriated nor

converted the Panchayat funds for his own use. He would

further submit that to constitute an offence of criminal breach of

trust by a public servant it is essential that the prosecution

must prove first of all that the petitioner/A.1 was entrusted with

some property and further, the prosecution has to establish that

in respect of the property so entrusted, there was dishonest

misappropriation, dishonest conversion or dishonest use or

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dishonest disposal of or disposal in violation of a direction.

Further, he would submit that the petitioner/A.1 is nothing to

do with the commission of the offence. He would further submit

that the 2

nd respondent mechanically gave a report to the Police.

He would further submit that no useful purpose would be

served by continuance of criminal proceedings against the

petitioner/A.1. Therefore, he prays for quash of the criminal

proceedings against the petitioner/A.1.

5. Learned Assistant Public Prosecution vehemently opposed

the criminal petition. He would submit that, on the basis of the

complaint, the Government authorized the Vigilance and

Enforcement Authority to conduct enquiry and submit report for

the misappropriation of funds in Jangareddygudem Gram

Panchayat and Nagara Panchayat. Further, he would submit

that on the basis of the report of the Vigilance and Enforcement

Authority, the Principal Secretary to the Government informed

to the District Collector that there was a misappropriation of

funds during the year 2011 -12 at Jangareddygudem Gram

Panchayat and Nagara Panchayat and in turn the District

Collector directed the 2

nd respondent to initiate criminal action

as there was due misappropriation done by the petitioner/A.1

and A.2 to A.4 by violating the Orders in G.O.Ms.No.124,

Finance (IF) Department, dated 23.04.2009 and directed them to

7

keep the funds in Treasury account or P.D account. Further, he

would submit that the petitioner/A.1 and A.2 to A.4 have

committed illegality. As such, the matter requires investigation

to ascertain the truth or otherwise of the said allegations. He

would further submit that there is no merit in the contention of

the petitioner that there are no allegations against him with

regard to the commission of the offence. Therefore, he would

pray to dismiss the petition.

6. Having perused the relevant facts and contentions raised

by the learned counsels for both the petitioner and the

respondents, in my considered opinion, the for emost issue

which requires determination in the instant case is:

Whether the allegations made against the petitioner/A.1

would attract the accusation against him and whether

there are any merits in the criminal petition to allow?

POINT:

7. In Parbatbhai Aahir and others Vs. State of Gujarat and

another

1, the Hon’ble Apex Court held as follows:

16. The broad principles which emerge from the precedents

on the subject, may be summarised in the following

propositions:

16.1. Section 482 preserves the inherent powers of the High

Court to prevent an abuse of the process of any court or to

secure the ends of justice. The provision does not confer new

powers. It only recognises and preserves powers which inhere

in the High Court.

16.3. In forming an opinion whether a criminal proceeding or

complaint should be quashed in exercise of its jurisdiction under

1

(2017) 9 SCC 641

8

Section 482, the High Court must evaluate whether the ends of

justice would justify the exercise of the inherent power.

16.4. While the inherent power of the High Court has a wide

ambit and plenitude it has to be exercised (i) to secure the ends

of justice, or (ii) to prevent an abuse of the process of any court.

16.10. There is yet an exception to the principle set out in

propositions 16.8. and 16.9. above. Economic offences involving

the financial and economic well-being of the State have

implications which lie beyond the domain of a mere dispute

between private disputants. The High Court would be justified

in declining to quash where the offender is involved in an

activity akin to a financial or economic fraud or misdemeanour.

The consequences of the act complained of upon the financial or

economic system will weigh in the balance.”

8. In view of the principles laid down in the above judgment,

this Court is of the view that the petitioner/A.1 and A.2 to A.4

involved in economic offence and caus ed huge loss to the

Exchequer. Therefore, in view of the facts, allowing the Police

investigation to continue would not amount to an abuse of

process of the Court.

9. In Dineshbhai Chandubhai Patel Vs. State of Gujarat

and others

2, the Hon’ble Apex Court held as follows:

“25. The law on the question as to when a registration of the

FIR is challenged seeking its quashing by the accused under

Article 226 of the Constitution or Section 482 of the Code and

what are the powers of the High Court and how the High Court

should deal with such question is fairly well settled.

26. This Court in State of W.B. v. Swapan Kumar

Guha [State of W.B. v. Swapan Kumar Guha , (1982) 1 SCC 561

: 1982 SCC (Cri) 283 : AIR 1982 SC 949] had the occasion to

deal with this issue. Y.V. Chandrachud, the learned Chief

Justice speaking for three-Judge Bench laid down the following

principle: (SCC pp. 576-77 & 598, paras 21 & 66)

“21. … the condition precedent to the

commencement of investigation under Section 157 of

the Code is that the FIR must disclose, prima facie,

2

(2018) 3 SCC 104

9

that a cognizable offence has been committed. It is

wrong to suppose that the police have an unfettered

discretion to commence investigation under Section 157

of the Code. Their right of inquiry is conditioned by the

existence of reason to suspect the commission of a

cognizable offence and they cannot, reasonably, have

reason so to suspect unless the FIR, prima facie,

discloses the commission of such offence. If that

condition is satisfied, the investigation must go on. …

The court has then no power to stop the investigation,

for to do so would be to trench upon the lawful power

of the police to investigate into cognizable offences.

66. Whether an offence has been disclosed or not

must necessarily depend on the facts and

circumstances of each particular case. … If on a

consideration of the relevant materials, the court is

satisfied that an offence is disclosed, the court will

normally not interfere with the investigation into the

offence and will generally allow the investigation into

the offence to be completed for collecting materials for

proving the offence.”

27. Keeping in view the aforesaid principle of law, which

was consistently followed by this Court in later years and on

perusing the impugned judgment, we are constrained to observe

that the High Court without any justifiable reason devoted 89

pages judgment (see paper book) to examine the aforesaid

question and then came to a conclusion that some part of the

FIR in question is bad in law because it does not disclose any

cognizable offence against any of the accused persons whereas

only a part of the FIR is good which discloses a prima facie case

against the accused persons and hence it needs further

investigation to that extent in accordance with law.

28. In doing so, the High Court, in our view, virtually

decided all the issues arising out of the case like an

investigating authority or/and appellate authority decides, by

little realising that it was exercising its inherent jurisdiction

under Section 482 of the Code at this stage.

29. The High Court, in our view, failed to see the extent of its

jurisdiction, which it possesses to exercise while examining the

legality of any FIR complaining commission of several

cognizable offences by the accused persons. In order to examine

as to whether the factual contents of the FIR disclose any prima

facie cognizable offences or not, the High Court cannot act like

an investigating agency and nor can exercise the powers like an

appellate court. The question, in our opinion, was required to be

examined keeping in view the contents of the FIR and prima

facie material, if any, requiring no proof.

At this stage, the High Court could not appreciate the

evidence nor could draw its own inferences from the contents of

the FIR and the material relied on. It was more so when the

material relied on was disputed by the complainants and vice

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versa. In such a situation, it becomes the job of the investigating

authority at such stage to probe and then of the court to

examine the questions once the charge-sheet is filed along with

such material as to how far and to what extent reliance can be

placed on such material.

31. In our considered opinion, once the court finds that the

FIR does disclose prima facie commission of any cognizable

offence, it should stay its hand and allow the investigating

machinery to step in to initiate the probe to unearth the crime in

accordance with the procedure prescribed in the Code.

32. The very fact that the High Court in this case went into

the minutest details in relation to every aspect of the case and

devoted 89 pages judgment to quash the FIR in part led us to

draw a conclusion that the High Court had exceeded its powers

while exercising its inherent jurisdiction under Section 482 of

the Code. We cannot concur with such approach of the High

Court.

34. On perusal of the three complaints and the FIR

mentioned above, we are of the considered view that the

complaint and FIR, do disclose a prima facie commission of

various cognizable offences alleged by the complainants against

the accused persons and, therefore, the High Court instead of

dismissing the application filed by the accused persons in part

should have dismissed the application as a whole to uphold the

entire FIR in question.

37. In the light of the foregoing discussion, it is now

necessary that the matter, which is the subject-matter of the FIR

in question, needs to be investigated in detail by the

investigating authorities in accordance with the procedure

prescribed in the Code.

42. Since the FIR is pending for quite some time, we direct

the investigating authorities to complete the investigation of the

case without any bias and prejudices strictly in accordance with

law and proceed ahead expeditiously.”

10. In the light of the above decision, in this case

misappropriation of huge amount involved, this Court would not

be interfered with the investigation as disputed questions of fact

are involved, which this Court would not go into and that the

case be left to be investigated into by the Police and it is the

duty of the Investigating Officer to probe the crime and the High

Court is not to act as an Investigating Officer since the matter

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involved in economic offences with huge financial loss to the

Exchequer.

11. Further, in State of Haryana & Others Vs. Ch.Bhajanlal

and Others

3, the Hon’ble Apex Court held that in exercise of

extraordinary power conferred under Article 226 of Constitution

of India or the inherent powers under Section 482 Cr.P.C, the

following categories of cases are given by way of illustration,

wherein, such power could be exercised either to prevent abuse

of the process of any Court or otherwise to secure the ends of

justice, though it may not be possible to lay down any precise

clearly defined and sufficiently channelized and inflexible guide,

myriad kinds of cases wherein, such power should be exercised.

The relevant guidelines read as under:

“(1) where the allegations made in the First Information

Report or the complaint, even if they are taken at their face

value and accepted in their entirety do not prima facie

constitute any offence or make out a case against the

accused;

(2) where the allegations in the First Information Report and

other materials, if any, accompanying the F.I.R. do not

disclose a cognizable offence, justifying an investigation by

police officers under Section 156(1) of the Code except under

an order of a Magistrate within the purview of Section

155(2) of the Code;

(3) where the uncontroverted allegations made in the FIR or

'complaint and the evidence collected in support of the same

do not disclose the commission of any offence and make out

a case against the accused;

3

AIR 1992 SC 604

12

(4) where the allegations in the FIR do not constitute a

cognizable offence but constitute only a non -cognizable

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 engrafted in any of

the provisions of the Code or the concerned 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 concerned 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.”

We also give a note of caution to the effect that the

power of quashing a criminal proceeding should be exercised

very sparingly and with circumspection and that too in the

rarest of rare cases; that the court will not be justified in

embarking upon an enquiry as to the reliability or

genuineness or otherwise of the allegations made in the FIR

or the complaint and that the extraordinary or inherent

powers do not confer an arbitrary jurisdiction on the court to

act according to its whim or caprice.

12. In the light of the above judgments, this Court has to

consider whether the complaint discloses prima facie, offences

that were alleged against the petitioner/A.1 and the correctness

or otherwise of said allegations have to be investigated by the

investigation agency. It is not open to the Court to stifle

proceedings by entering into merits of the contentions made on

behalf of the petitioner/A.1 and the criminal proceedings cannot

be quashed at this stage since the ingredients of the offence

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alleged against the petitioner/A.1 are prima facie made out. As

such, the matter requires investigation to ascertain the truth or

otherwise of the said allegations.

13. In the present case, the petitioner/A.1 and A.2 to A.4 are

the public servants and they have not discharged their duties by

following the guidelines in G.O.Ms.No.124, Finance (IF)

Department, dated 23.04.2009 directing the Panchayat

Authorities etc., to remit the amount in Treasury or PD Account.

The petitioner/A.1 opened an account in bank other than the

Treasury Account and made transactions of Panchayat. It is a

clear case of misconduct committed by the petitioner/A.1 with

the connivance of other accused (A.2 to A.4) and

misappropriated the funds as stated in the complaint and

caused loss to the Exchequer. There are absolutely no valid legal

grounds emanating from the record warranting interference of

this Court under Section 482 Cr.P.C to quash the proceedings

against the petitioner/A.1 and that the question of abuse of

process of the Court in initiating criminal proceedings against

the petitioner/A.1, does not arise.

14. Considering the above judgments, this Court is of the view

that there are specific allegations against the petitioner/A.1,

which have to be investigated. Further, the F.I.R is not an

encyclopedia and need not be contained all the facts and hence,

14

it cannot be quashed at its threshold. This Court finds that the

F.I.R discloses prima facie commission of the cognizable offence

and as such, this Court cannot interfere with the investigation.

The investigation machinery has to step into investigation and

unearth the crime in accordance with the procedures prescribed

in the Code.

15. In view of the foregoing discussion, I find no merit in the

contentions of the learned counsel for the petitioner/A.1.

Consequently, the Criminal Petition is liable to be dismissed.

16. Resultantly, the Criminal Petition is dismissed. The

Station House Officer, Jangareddygudem Police Station, West

Godavari District, is directed to complete the investigation in

connection with Crime No.124 to 2013 and file a final report

before the concerned Court, in accordance with law , as

expeditiously as possible, preferably within a period of three

months from today.

As a sequel, the miscellaneous petitions, pending if any,

shall stand disposed of.

JUSTICE DUPPALA VENKATA RAMANA

11.09.2023

DNS/Mjl/*

L.R.Copy to be marked

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HON’BLE SRI JUSTICE DUPPALA VENKATA RAMANA

CRIMINAL PETITION No. 7598 OF 2013

11.09.2023

DNS

Mjl/*

L.R.Copy to be marked