BY- Pratima Hakke
Recently a resident of Velagapudi, a village in Amaravati, Andhra Pradesh named S Suresh had complained about insider trading taking place in deals of lands in Amaravati. Allegations were made on some people of fraudulently purchasing lands from farmers as the said people had prior information about the location due to their connections with important names of the previous government. Based on this complaint the Crime Investigation Department of Andhra Pradesh filed an FIR under sections 420, 406, 409, and 120 B of the Indian Penal Code.
A petition was filed against the Crime Investigation Department by Kilaru Rajesh, who was one of the persons facing allegations of getting undue benefit through insider trading.
Upon hearing the arguments, the Andhra Pradesh High Court quashed the FIR filed by the Crime Investigation Department on Tuesday. “The right to acquire property is a constitutional and legal right of a person” was observed by Justice Cheekati Manavendranath. He further said that the transactions involved were private sale transactions as the sellers sold the land willingly and voluntarily, for a valid consideration to the petitioners. The sellers did not suffer any loss.
In the Court’s opinion, the concept of insider trading which is applicable to buying and selling of securities and bonds in the stock market cannot be applied to offences under sections 420, 406, 409, and 120 B of the Indian Penal Code as the said concept is foreign to the Code.
The Court was of the opinion that while purchasing the land the buyer is under no legal obligation to disclose to the seller any latent benefits that he might get due to the transaction. Hence, not disclosing such benefits does not amount to dishonest concealment of factor any deception under the Indian Penal Code.
Hence by considering the facts and circumstances of the case, the Andhra Pradesh High Court decided that no criminal activity is involved in the transactions, thus the transactions cannot be criminalized and no criminal liability can be imposed on the petitioners.