SC dismisses AP’s SLPs on insider trading in Amaravati lands

Vijayawada: In a major setback to the Andhra Pradesh government, the Supreme Court on Monday dismissed Special Leave Petitions (SLPs) filed by it against the quashing of criminal cases on alleged ‘insider trading’ in land transactions in Amaravati.

A bench of Justices Vineet Saran and Dinesh Maheswari heard the SLPs filed by the AP government against the high court judgment on January 19. It observed that private sale transactions could not be criminalised and the concept of the offence of ‘insider trading’ was essentially an offence found in the stock market, related to selling and buying of securities and bonds. “It cannot be applied to the offences booked under IPC and also cannot be read into section 420 or any provisions of it,” the apex court said.

However, the bench observed, “IPC Section 418 will not attract in the present case. No loss was caused to any person or to the sellers and there was no cheating by the buyers. Neither by a law nor by a legal contract were the buyers obliged to disclose any facts. In any case, such an issue was neither argued before the high court nor were there any pleadings in this regard in this petition. Nor has this ground been taken.”

So this argument is noted only to be rejected. There was no relationship between the buyer and the seller for which the buyer was bound to protect the seller.”

The court also observed that the high court need not have gone into the facts of the matter and should have left it to the investigating agency. “It was the responsibility of the trail court to find out whether any criminal act was involved in such land deals.”

The apex court said, “As regards the submission that the high court ought not to have gone into the facts of the case and arrived at factual findings, we find that without considering the facts of the case, the question whether any criminal case is made out could not have been decided.”

Then, in no case can the court go into the question as to whether the FIR is to be quashed or not. Even considering the law laid down in Bhajan Lal, in a petition for question, the court has to see the averments in the FIR to determine if a criminal case is made out or not. There is no perversity or illegality in the findings recorded by the high court.”

The AP government filed five sets of SLPs against the buyers of properties, challenging the judgments of the high court.

The buyers purchased land from third parties during 2014-15. The FIRs were registered on 16, 2020 based on a complaint dated September 7, 2020. The main allegation was that the buyers were having the knowledge that the capital city would be developed at the location where the land was purchased, resulting in its value to go up; and they purchased the land without disclosing it.

AP government’s senior counsel Dushyant Dave argued that the IPC section 418 read with section 55 (5) dealing with transfer of property act would be attracted in the case as the AP HC overlooked it. He submitted that the value of the lands is 20 times more than what was paid. As poor farmers were involved in this, their interests needed to be protected, he said.