Formula-E case: Telangana High Court reserves judgement on KTR’s quash petition
Earlier, senior advocate Siddhartha Dave, appearing for Rama Rao, argued that there was no evidence of any misappropriation of funds in the case
Hyderabad: The Telangana High Court on Tuesday reserved its judgment on the quash petition filed by BRS working president KR Rama Rao in the Formula E race case lodged by the Anti-Corruption Bureau (ACB). The case alleges Rama Rao’s involvement in financial irregularities related to the Formula E event held in Hyderabad. While reserving the judgment, Justice K. Lakshman extended the protection from arrest previously granted to Rama Rao until the date of pronouncement of the final order. The ACB, however, was allowed to continue its ongoing investigation into the matter.
Rama Rao, who was the Minister for Municipal Administration and Urban Development (MA&UD) at the time of the race, had sought to quash the case, claiming the allegations against him were politically motivated and legally unfounded. The Anti-Corruption Bureau’s investigation involves claims of misappropriation and financial misconduct in connection with the payments made for the Formula E event in Hyderabad. During the hearing, Rama Rao’s legal team, led by Senior Advocate Siddharth Dave, argued that the charges against the Minister did not meet the required legal criteria to substantiate a case under criminal laws, including Section 409 of the Indian Penal Code (IPC) dealing with criminal breach of trust. Dave stressed that Rama Rao was not a trustee of government property in the strict sense and that there was no dishonest misappropriation of funds. He further clarified that the payments made to the Formula E Organization (FEO) were based on an existing contractual arrangement and that Rama Rao’s role was purely administrative.
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Dave emphasized that the allegations in the FIR were vague and baseless, failing to establish any cognisable offence. He particularly criticized the complaint filed by an IAS officer of Secretary rank, arguing that such a complaint should not be bereft of necessary details and material. “The complaint, coming from a senior and informed officer, lacks the essential substance that would make out a case against the petitioner,” Dave remarked.
He also took issue with the government’s approach, which suggested that the investigation would uncover evidence against Rama Rao, pointing out that such a speculative stance was legally unsound. Dave further highlighted the delay in lodging the complaint, with over 14 months having passed since the alleged financial transactions occurred. Dave referred specifically to an office note from December 14, 2023, which sought the initiation of an investigation. He argued that this delay and the absence of a preliminary inquiry before filing the FIR further weakened the case against Rama Rao.
Addressing the core allegations, Dave pointed out that the payments of Rs.50 crore made for the Formula E race were part of a formal agreement with the FEO, designed to include Hyderabad in the international calendar for Season 10 of the Formula E Championship. He refuted claims that the State government had conspired with public servants to defraud the exchequer, asserting that the funds were transferred in accordance with the terms of the agreement and were not misappropriated. He further asserted that the procedural issues raised in the case, including the alleged failure to follow specific business rules or seek approval from the Election Commission during the Model Code of Conduct (MCC), would not attract proceedings in a criminal case.
Dave argued that these concerns did not rise to the level of criminal misconduct, as the payments were made in line with the contractual obligations, and the government’s role was in the best interests of the state, given the failure of the previous private sponsor to fulfil its financial commitments. In response to the allegations of irregularities in the agreement and the payments, the defence underscored that the HMDA (Hyderabad Metropolitan Development Authority) acted under the direction of the State government, which had authorized the payments. The payments were part of the ongoing contractual arrangement from the previous season of the Formula E race, and there was no breach of trust or misappropriation, Dave contended.
The Advocate General (AG) for the ACB, A. Sudarshan Reddy, representing the State, argued that the tripartite agreement between the FEO, the Telangana government, and Ace Nxt Gen Private Limited (the event sponsor) was illegal. Reddy claimed that the agreement, which was executed on behalf of the State, should have been signed by the Governor of Telangana. He argued that the HMDA, though facilitating basic civic amenities for the event, had no authority to make payments to the FEO without State government approval. The AG pointed out that the payments were made even before the formal second agreement was executed, which he described as a violation of proper procedural norms.
The AG also raised concerns over the transfer of about Rs.50 crore from HMDA to the FEO without the requisite government approval, stressing that any contract worth more than Rs 10 crore should have received State sanction. The AG further suggested that the State might initiate recovery proceedings to recover the funds, should the investigation uncover any improper transfer of public money. Senior Advocate CV Mohan Reddy, representing the complainant HMDA, echoed similar concerns, arguing that the payments made by HMDA to the FEO violated the procedural rules.
In response, Dave sharply criticised the arguments presented by the AG and Mohan Reddy. He reiterated that the payments were made as part of an ongoing agreement for the Formula E race, and that there was no legal basis for the claims of misappropriation. Dave emphasized that the court should focus on the FIR itself and not entertain extraneous considerations or speculative arguments about the legality of the transactions. As the proceedings concluded, Justice Lakshman reserved judgment after a thorough hearing that lasted for about three hours.
