The Andhra Pradesh High Court, on 19th January 2021, quashed the First Information Report filed against the Petitioners in relation to “Amravati Land Scam”. While pronouncing its judgment, a single Bench of Justice Cheekati Manavendranath Roy, observed that private sale transactions cannot be criminalized and that “insider trading concept”, which is generally used in connection to Stock Market selling and buying of securities and bonds cannot be applied to offences under the Indian Penal Code 1857 (hereinafter referred to as ‘IPC’), i.e. under Section 420, or any other provisions in the scheme of IPC.

The State had filed criminal cases on the Petitioners of the current matter alleging that they had been apprised of sensitive information by the then Chandrababu Naidu government that the Amravati area would be chosen to be developed as the new State Capital after the bifurcation of the State of Andhra Pradesh in 2014.

The Court, however, in its judgment, noted as follows, “right to acquire property is a constitutional right and legal right of the petitioners as citizens of this country. As they purchased the lands, in exercise of the said constitutional and legal right and acquired property from the sellers who willingly and voluntarily sold them to the petitioners for a valid sale consideration under registered sale deeds, the said private sale transactions cannot be criminalized and no criminal liability can be attributed to the petitioners in the facts and circumstances of the case to prosecute them for any offences much less for the offences punishable under Sections 420, 406, 409 and 120-B of IPC”. (Section 420 of IPC talks about ‘Cheating’; Section 406 of IPC talks about ‘Punishment of Criminal Breach of Trust’; Section 409 of IPC talks about ‘Criminal Breach of Trust by public servant, banker, merchant or agent’; Section 120-B of IPC talks about ‘Punishment of Criminal Conspiracy’).

It was also remarked by the High Court that, “The petitioners have no legal obligation to disclose the information relating to latent advantages in purchasing the land to the sellers at the time of buying the said land. Therefore, it does not amount to dishonest concealment of fact as contemplated under the Explanation appended to Section 415 IPC. It does not amount to any deception under Section 420 IPC read with Section 415 IPC. The sellers did not sustain any loss on account of the said sale transactions. No element of criminality is involved in the sale transaction.”

Hence, bearing in mind the aforementioned observations, the High Court invoked its inherent powers under Section 482 of the Code of Criminal Procedure 1973 to quash the FIR.

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