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Judgment
These five Criminal Petitions are being heard and disposed of by way of this common order, as they arise out of different crimes; however, the petitioner(s) and the representative company are one and the same.
Criminal Petition No.4166 of 2026 has been filed under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for brevity, ‘the BNSS’) by the petitioners/Accused seeking pre-arrest bail in connection with Crime No.44 of 2026 of Pulivendula Police Station, YSR Kadapa District, registered for the alleged offences punishable under Sections 316(2), 316(4), 318(4) read with Section 3(5) of the Bharatiya Nyaya Sanhita, 2023 (for brevity, ‘the BNS’).
Criminal Petition No.4169 of 2026 has been filed under Section 482 of ‘the BNSS’ by the petitioner/Accused seeking pre-arrest bail in connection with Crime No.156 of 2026 of Modikonduru Police Station, Guntur District, registered for the alleged offence punishable under Section 318(4) of ‘the BNS’.
Criminal Petition No.4174 of 2026 has been filed under Section 482 of ‘the BNSS’ by the petitioners/Accused seeking pre-arrest bail in connection with Crime No.115 of 2026 of Nunna Police Station, NTR District, registered for the alleged offences punishable under Sections 61(2), 316(5) and 318(4) of ‘the BNS’.
Criminal Petition No.4175 of 2026 has been filed under Section 482 of ‘the BNSS’ by the petitioner/Accused seeking pre-arrest bail in connection with Crime No.103 of 2026 of Anantapur Rural Police Station, Anantapuram District, registered for the alleged offences punishable under Sections 316(5) and 318(4) of ‘the BNS’.
Criminal Petition No.4176 of 2026 has been filed under Section 482 of ‘the BNSS’ by the petitioners/Accused seeking pre-arrest bail in connection with Crime No.124 of 2026 of Duvvada Police Station, Visakhapatnam District, registered for the alleged offences punishable under Sections 316(2) and 318(4) of ‘the BNS’.
The case of the prosecution, in brief, is that the Government sanctioned houses under various PMAY(U) BLC schemes for eligible beneficiaries in different layouts, and M/s Rockcrete Infrastructure and Logistics Pvt. Ltd., represented by its Directors/authorised persons, was entrusted with the construction of the said houses. It is alleged that, despite receiving substantial amounts towards the construction works, the accused company stopped the construction midway and left several houses incomplete. It is further alleged that the accused company raised and received excess payments by showing stages of construction disproportionate to the actual work executed, thereby allegedly causing wrongful loss to the Government and hardship to the beneficiaries. On the basis of the complaints lodged by the concerned housing officials and the reports of the Vigilance and Enforcement authorities, separate crimes were registered at different Police Stations in respect of the respective layouts, alleging commission of offences including criminal breach of trust and cheating. The prosecution further alleges that the investigation is required to ascertain the actual extent of work executed, the excess amounts allegedly paid, the resultant loss to the Government and the role of the petitioner(s) and the accused company in the alleged irregularities.
Sri S. Sriram, learned Senior Counsel, representing Mr. Sai Saran Chodisetty, learned counsel for the petitioner, submits that the petitioner has been falsely implicated in the present case and that there are no specific allegations or substantive material connecting him with the alleged offences. It is further submitted that the allegations arise out of the execution of construction works under the PMAY scheme and that the petitioner’s company entered into agreements with the beneficiaries for carrying out the construction works.
The learned Senior Counsel further submits that the alleged excess payments were released by the concerned authorities only after verification of the progress of the construction works and that the petitioner had no role in sanctioning or releasing such payments. It is further submitted that the ingredients of criminal breach of trust are not attracted in the absence of entrustment of any property to the petitioner and that the dispute, if any, is essentially contractual and civil in nature. Learned Senior Counsel further submits that the petitioner is ready to cooperate with the investigation, abide by any conditions imposed by this Court and, therefore, prays that the petitioner may be granted pre-arrest bail.
Per contra, Sri M.Lakshmi Narayana, the learned Public Prosecutor, submits that the allegations against the petitioner are serious in nature and arise out of the execution of construction works under the PMAY(U) BLC scheme. It is submitted that the petitioner, being the Director/authorised person of M/s Rockcrete Infrastructure and Logistics Pvt. Ltd., was responsible for the execution and supervision of the construction works, but the company allegedly stopped the works midway despite receiving substantial amounts towards the same.
The learned Public Prosecutor further submits that the Vigilance and Enforcement reports disclose alleged excess payments for works not actually executed, resulting in substantial financial loss to the Government and hardship to the beneficiaries. It is further submitted that the exact extent of the alleged wrongful loss, excess payments and the role of the petitioner are matters of investigation and that custodial interrogation may be required for a proper investigation. Hence, the learned Public Prosecutor opposes the grant of pre-arrest bail and seeks dismissal of the petitions.
Heard the learned Senior Counsel appearing for the petitioner and the learned Public Prosecutor. Perused the record.
As seen from the record, the Deputy Executive Engineer, Andhra Pradesh State Housing Corporation Limited, submitted a complaint on 25.04.2026 to the Station House Officer, Anantapuramu Rural Police Station, against the petitioner, alleging that an agreement, contract and Memorandum of Understanding were executed between the petitioner, representing M/s Rockcrete Infrastructure and Logistics Pvt. Ltd., and the Government for construction of houses. Similarly, four more complaints were lodged by the complainant before various Police Stations in Guntur, Krishna, YSR Kadapa and Visakhapatnam Districts, alleging that the construction work with regard to the said houses was not carried out as per the Memorandum of Understanding, but huge amounts were claimed as if the work had been completed. It is alleged that, altogether, an amount of Rs.24.25 crores has been misappropriated by the petitioner.
Except the allegation in Crime No.103 of 2026 on the file of Anantapuramu Rural Police Station, the offences alleged in the other four FIRs are punishable with imprisonment of less than seven years. In Crime No.103 of 2026 of Anantapuramu Rural Police Station, Section 316(5) of ‘the BNS’ has been added, which is punishable with imprisonment of more than seven years. Thus, there are five cases registered in various Districts. As per the Memorandum of Understanding entered into between M/s Rockcrete Infrastructure and Logistics Pvt. Ltd. and the Government agency, the petitioner was required to construct 7,621 houses.
The construction contracts entered into between the Government and the private contractor contain an arbitration clause. If there are any disputes arising out of the contractual obligations, as per the arbitration clause, the Government is at liberty to proceed in accordance with law, including by invoking arbitration or pursuing appropriate civil remedies. The learned Senior Counsel submits that the petitioner is a Class-I contractor.
The learned Public Prosecutor submits that, though the petitioner claims that 1,946 houses have been completed, in fact, the said houses were not completed to the extent claimed, but the amounts were claimed and withdrawn by the petitioner with the connivance and aid of some of the employees working in the Engineering Department. Based on the Vigilance report, the de-facto complainant lodged a complaint with the police and, now, the matter has been taken up by the CID for further investigation.
It is an important aspect that the petitioner has filed W.P. No.18462 of 2024 before this Court challenging the Vigilance report, and the said writ petition is pending consideration. The petitioner has also filed W.P. No.20631 of 2026 seeking revision of the payment schedules and release of the pending amounts. The said writ petition is also pending consideration.
Indeed, these are matters relating to contractual obligations and the performance of mutual duties, verification of the work done by the petitioner through the Measurement Books and other relevant documents. Further, physical verification of the work is also required to ascertain the extent to which the work was completed by the petitioner and the amounts, if any, excessively withdrawn by the petitioner, as per the Memorandum of Understanding or the agreement entered into between the petitioner and the concerned Government agency. If there are any discrepancies with regard to the performance of the work or withdrawal of amounts, there are certain safeguard clauses in the agreement to take care of such contingencies.
The learned Senior Counsel for the petitioner submits that the surname of the Class-I contractor is similar to the surname of a local politician who is inimical towards the company at the local level. It is submitted that, owing to the Vigilance action initiated, the petitioner and his company have been falsely implicated in the present cases. It is further submitted that the work is required to be verified based on the Measurement Books, physical verification and other relevant records. It is also submitted that the nature of the obligations between the petitioner and the Government agency is civil in nature.
It is also apposite to refer to the order passed by the learned Coordinate Bench of this Court, held as under:
Since the Accused in all these matters are one and the same, registry is directed to list these matters as a batch. Heard Sri Sai Saran Chodisetty, learned counsel for the Petitioners and Sri M.Lakshmi Narayana, learned Public Prosecutor for Respondent/State. Learned counsel for the Petitioners would submit that the Petitioners are falsely implicated in the present cases. It is further submitted that the registration of the present crimes is politically motivated. Per contra, learned Public Prosecutor would submit that vigilance enquiry was initiated, completed and report has also been filed against the Petitioners. It is further submitted that the investigation is at a nascent stage. Learned counsel representing both sides would submit that, since all these matters require comprehensive hearing, in view of the ensuing Summer Vacation, 2026, these matters may be listed after summer vacation. Considering the submissions made, list these matters on 24.06.2026 as a batch. However, in order to balance the liberty of the Petitioners and the prerogative of the Investigating Agency, Petitioners in these crimes are directed to appear before the investigating agency as and when directed and shall cooperate for the investigation.
The learned Public Prosecutor relied upon the judgment of the Hon’ble Apex Court in State of Orissa v. Ujjal Kumar Burdhan1, wherein, at paragraph No.12, it was held as under:
12.Further, the impugned order also notes that in view of the arbitration agreement between the agent and the Government, all the alleged violations fell within the purview of Arbitration and Conciliation Act, 1996 and therefore, the respondent could not be held liable for any criminal offence. This observation is against the well settled principle of law that the existence of an arbitration agreement cannot take the criminal acts out of the jurisdiction of the courts of law. On this aspect, in S.W. Palanitkar & Ors. v. State of Bihar & Anr., 2001(4) RCR (Criminal) 572: (2002) 1 SCC 241, this Court has echoed the following views: "22. Looking to the complaint and the grievances made by the complainant therein and having regard to the agreement, it is clear that the dispute and grievances arise out of the said agreement. Clause 29 of the agreement provides for reference to arbitration in case of disputes or controversy between the parties and the said clause is wide enough to cover almost all sorts of disputes arising out of the agreement. As a matter of fact, it is also brought to our notice that the complainant issued a notice dated 3-10-1997 to the appellants invoking this arbitration clause claiming Rs. 15 lakhs. It is thereafter the present complaint was filed. For the alleged breach of the agreement in relation to commercial transaction, it is open to the Respondent 2 to proceed against the appellants for his redressal for recovery of money by way of damages for the loss caused, if any. Merely because there is an arbitration clause in the agreement, that cannot prevent criminal prosecution against the accused if an act constituting a criminal offence is made out even prima facie."
The judgment in Ujjal Kumar Burdhan supra, relied upon by the learned Public Prosecutor, is distinguishable on the facts and circumstances of the instant case. The observations in Ujjal Kumar Burdhan supra were made while invoking jurisdiction under Section 482 of ‘the Cr.P.C’. In the instant case, it is only an application for grant of pre-arrest bail. Undoubtedly, the existence of an arbitration clause cannot take away the criminal acts from the jurisdiction of the Courts of law. However, there are two Writ Petitions filed by the petitioner challenging the vigilance report and other aspects.
The learned Senior Counsel for the petitioner submits that, pursuant to the direction given by the learned Coordinate Bench of this Court on 07.05.2026, the petitioner has not been called by the Investigating Officer to render his cooperation in the further course of investigation.
Having regard to the entire facts and circumstances of the cases, the gravity and nature of the allegations levelled against the petitioner, and the nature of the transactions entered into between the petitioner and the Government agency and the relevant contractual agreements, this Court is of the view that these five Criminal Petitions deserve to be allowed, subject to certain stringent conditions.
In the result, these five Criminal Petitions are allowed with the following conditions:
In the event of his arrest, petitioner/Accused No.1 shall be enlarged on bail subject to his executing a bond for a sum of Rs.5,00,000/- (Rupees Five Lakhs only) with two sureties for the like sum each to the satisfaction of the arresting police officials;
The petitioner/Accused No.1 shall appear before the Investigating Officer concerned as and when required and cooperate with the Investigating Officer till completion of the investigation.
The petitioner/Accused No.1 shall not leave the limits of the State without the express permission from the Investigating Officer concerned.
The petitioner/Accused No.1 shall not, directly or indirectly, make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him/her from disclosing such facts to the Court.
The petitioner/Accused No.1 shall surrender his passport, if any, to the Investigating Officer. If he claims that he does not have passport, he shall submit affidavit to that effect to the Investigating Officer.
Footnotes
- 1.2012 (2) SCR 512