No Insider Trading In Amaravati Land Deals

The Andhra Pradesh High Court quashed criminal case registered by the Crime Investigation Department (CID) alleging insider trading in purchase of lands  by former Chief Minister and TDP president N. Chandrababu Naidu, his family members and a few others close to the party.

The state government also named the family members of a sitting Supreme Court judge, a former Advocate General of the state, accusing them of insider trading.

Lands sold willingly

The High Court held that the land was sold willingly and that there was no criminality or insider trading involved.  Further, it clarified that the concept of insider trading is an offence in stock market relating to selling and buying securities and bonds and that it cannot be applied to offences under the Indian Penal Code.  It cannot  be read into Section 420 IPC or into any provisions in the IPC. Hence, it cannot be contextually or relatively applied to the facts of the case to prosecute the petitioners, the court said.

The CID registered the FIR in the Mangalagiri police station and it accused several individuals, including Kilaru Rajesh, a close aide of TDP general secretary  N. Lokesh and Northface Holdings Private Limited director Tottempudi Venkateswara Rao.

The FIR accused those close to Naidu, his family members and the party of having prior knowledge that the capital would be set up at Amaravati and buying large area of land at cheap rates.  The FIR accused these persons of buying the land before the Capital Region Development Authority Act declaring 24 villages adjacent to River Krishna as the capital region in December 2014. The FIR accused officials of leaking information to those who purchased the lands from farmers.

Location of Capital

A preliminary investigation by the police found that land parcels were sold to Good Life Estates Private Limited, Vertex Homes Private Limited and others between June and December 2014.

However, the respondents in the case argued that the news relating to the location of the capital was in the public domain and was widely reported in news reports.

 Justice Ch. Manavendranath Roy, who heard the writ petitions, in his 87-page verdict said the sellers did not suffer any loss due to the said sale of land. The court also stated that the lands purchased by the petitioners got valid registration documents. Purchase of lands with proper registration cannot be considered as a crime under Section 420 of IPC. There is no probe by the police concluding that the petitioners committed a crime.

No element of fraud

The court observed that there were reports in the media about the location of State capital even before former Chief Minister N Chandrababu Naidu was sworn in on June 9, 2014 and it could not be said that the petitioners purchased the lands concealing the facts.

“When the petitioners acquired the land lawfully by paying the amount to the sellers under registered sale deeds, it cannot be said that any element of fraud or deception is involved in the transaction,” the court said.