Vijayawada: In a major setback to the state government, the Andhra Pradesh High Court on Tuesday quashed the prosecution launched by the Criminal Investigation Department (CID) against some individuals in the sensational “insider trading” case.The case involved purchase of lands in the new capital area of Amaravati at cheap rates, by allegedly concealing the capital status that the area was about to get then. The Jagan Mohan Reddy government had registered cases against these individuals based on a complaint that close aides of Telugu Desam chief Chandrababu Naidu and his son Lokesh, who were privy to confidential information about the setting up of the new capital in Amaravati, purchased lands at cheap rates from farmers.One of the accused was Kilaru Srihasa, wife of Lokesh’s close aide Rajesh.Dealing with petitions filed by the accused seeking quashing of the case, Justice Ch Manavendranath Roy said, “The prosecution of the petitioners is wholly unjustifiable and clearly opposed to all cannons and basic tenets of criminal law.

This  amounts to a sheer abuse of the process of law, warranting intervention of this court.” The verdict gained major significance as the state government registered an FIR also against former Advocate General D Srinivas and kin of a Supreme Court judge.Aggrieved by the order, the state government decided to file a Special Leave Petition in the Supreme Court.Maintaining that acquiring property is a fundamental right, Justice Roy said private sale transactions carried out with the willingness of the sellers cannot be seen as a criminal act.

No criminal liability can be attributed to the accused in the FIR, the court ruled.The insider trading is essentially an offence in the field of stock market.

This is “totally alien to the Indian Penal Code and unknown to our criminal jurisprudence under the IPC,” the court stressed. Disagreeing with action of the state in charging the accused with “dishonest concealment” of information regarding the setting up of the capital from the sellers, the court observed that a buyer had no legal obligation to disclose any information relating to latent advantages in the purchase of land.“No offence of conspiracy to do any illegal act or commit an offence is made out from the facts of the case,” the court ruled.

 FACT-SHEETThose who purchased such lands include the Lalitha Super Speciality Hospital, Thottempudi Venkateswara Rao, CD Murali Mohan and BVR Sarma, Gayathri Realtors Ltd, Kilaru Srihasa w/o Rajesh, a close associate of former CM Chandrababu Naidu, Good Life Estates and others. CID registered the case citing offences punishable under sections 420, 409, 406 and 120B of IPC.