Vijayawada :YSRC government suffered a major blow on Tuesday when Andhra Pradesh High Court quashed all proceedings in an insider trading case against the private persons.
Crime Investigation Department (CID) had registered a criminal case against private persons for making alleged shady land deals, what came to be known as insider trading.
The court observed that it is really beyond the comprehension as to how private sale transactions can be criminalized on the flimsy grounds and liability can be attributed to the buyers of the land to prosecute them under criminal law.
The judgment delivered by Justice Cheekati Manavendranath Roy is expected to have far-reaching consequences as the state government has been pursuing some other cases on similar charges in which some bigwigs were allegedly involved.
It may be recalled that the YSRC government had accused former Chief Minister and TDP chief N Chandrababu Naidu, his kin, and some leaders of being involved in insider trading.
A Cabinet sub-committee constituted by the incumbent government named Chandrababu Naidu and several others as being involved in insider trading and carrying out land transactions in the Amaravati region for monetary gains.
The YSRC government had alleged that there has been a conspiracy between the petitioners who purchased the lands and the top government officials working in the TDP government at that time and the political leaders relating to unauthorized disclosure of the information relating to the location of the capital.
The court also observed that even if the petitioners really got any information regarding the location of the capital where the lands are purchased, the mere non-disclosure of the said information to the sellers at the time of purchasing the said lands cannot be construed as a dishonest concealment of fact for the purpose of fastening criminal liability to the petitioners for the offence under Section 420 of IPC
Insider trading is essentially an offence relating to trading of public company stocks or other securities such as bonds or stock options based on material, non-public information about the company. The court said that it was legally impermissible to prosecute the petitioners for the offences under Sections 420, 406, 409, and 120-B of IPC by applying the said concept of insider trading and in the guise of the said concept of insider trading.
When the petitioners have acquired the property lawfully by paying valid sale consideration 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 pointed out.