VIJAYAWADA: The Supreme Court on Monday, July 19, 2021, dismissed the Jagan Mohan Reddy government’s special leave petitions (SLPs) challenging the quashing of criminal cases, filed against alleged “insider trading” in land transactions at Amaravati, by the Andhra Pradesh High Court.
A bench of Justices Vineet Saran and Dinesh Maheshwari upheld the High Court order delivered on January 19, agreeing with the latter that private sale transactions cannot be criminalised and that insider trading, which is essentially an offence in the stock market, cannot be covered under the Indian Penal Code (IPC) nor read into Section 420 of the IPC or any provisions in the scheme of the IPC.
The High Court order was issued in the case of the State of Andhra Pradesh vs C Murali Mohan & others. The Andhra Pradesh government had filed criminal cases alleging that the respondents had purchased lands in Amaravati as they had prior information from the then TDP government that the new capital would come up in the region, much before the announcement of the location in 2014. During the hearing, senior advocate Dushyant Dave, representing the State government, argued that provisions of Section 418 of the IPC read with Section 55(5) of the Transfer of Property Act would be attracted in the instant case, which has been overlooked by the High Court.
But, the bench said, “As regards Section 418, we may observe that the said provision would not be attracted in the facts of the present case. There is no question of any loss being caused to any person or to the sellers or of any cheating by the buyers. Neither by law nor by a legal contract were the buyers obliged to disclose any facts. In any case, the said question was neither argued before the High Court nor are there any pleadings in this regard in this petition. So this argument is noted only to be rejected. There was no such relationship between the buyer and seller for which the buyer was bound to protect the seller.” It also did not accept the submission that the High Court ought not to have gone into the facts of the case and arrived at factual findings. “After considering the law laid down by this court in the Bhajan Lal and other cases, the High Court found that it was a fit case for quashing the FIR,” the bench said.