The Telangana High Court, on December 20, 2024, granted interim protection to Kalvakuntla Taraka Ram Rao (KTR), the Working President of the Bharat Rashtra Samithi (BRS) and a Member of the Legislative Assembly, in connection with allegations of financial irregularities pertaining to the Formula E race conducted in Hyderabad. The High Court directed the Anti-Corruption Bureau (ACB) not to arrest KTR until December 30, 2024, while permitting the investigation to continue. Justice N.V. Shravan Kumar while considering the matter, granted the interim relief directing respondents to submit their respective counter affidavits by December 27, 2024.

The allegations against KTR involve accusations of procedural violations and unauthorized financial disbursements, which purportedly caused a ₹55 crore loss to the state exchequer.

The case arose from an FIR registered on December 19, 2024 (Crime No. 12/RCO-CIU/ACB-2024), which accused KTR of violating provisions under Sections 13(1)(a) read with 13(2) of the Prevention of Corruption Act, 1988, and Sections 409 and 120B of the Indian Penal Code. The FIR alleged that payments were made to the organizers of the Formula E race without requisite approvals, and during a period when the Model Code of Conduct was in force due to assembly elections.

The FIR details the execution of a tripartite agreement dated October 25, 2022, between Formula E Operations Limited (FEO), the Municipal Administration and Urban Development Department (MAUD), and Ace Nxt Gen Private Limited (Sponsor) for organizing the Formula E race. While the event was held on February 11, 2023, disputes between FEO and the Sponsor led to the latter withdrawing from subsequent events. The FIR alleged that in the absence of a valid agreement, the Hyderabad Metropolitan Development Authority (HMDA) undertook financial obligations without statutory approvals, incurring substantial tax liabilities.

Senior Advocate Aryama Sundaram, appearing for KTR, contended that the FIR lacked prima facie evidence and was politically motivated. He argued, “The FIR fails to establish any direct pecuniary benefit to the petitioner. The entire case is based on conjecture and devoid of substantive evidence linking KTR to any financial impropriety.”

Sundaram emphasized that no preliminary inquiry was conducted before filing the FIR, in contravention of the guidelines laid down in Lalita Kumari v. Government of Uttar Pradesh. He stated, “The Model Code of Conduct allegations fall under the jurisdiction of the Election Commission and not criminal law. Additionally, payments were made to meet contractual obligations and were duly approved by competent authorities.”

He further submitted that the FIR lacked the requisite elements to constitute offenses under the Prevention of Corruption Act or the Indian Penal Code. Sundaram highlighted, “This FIR is an attempt to malign the petitioner’s reputation without any substantive legal basis.”

On the other hand, Advocate General A. Sudarshan Reddy, representing the state, opposed the quashing of the FIR, asserting that the allegations warranted thorough investigation. He argued, “There is clear evidence of procedural violations, including unauthorized financial disbursements and non-adherence to established norms for foreign remittances. The FIR demonstrates a prima facie case of corruption and breach of public trust.”

Reddy also pointed to the Governor’s sanction for prosecuting KTR, stating, “The approval of the competent authority lends credibility to the allegations, and the investigation must proceed unhindered.” He further contended that KTR should have sought pre-arrest bail instead of filing a petition to quash the FIR.

Justice N.V. Shravan Kumar, while granting interim protection, noted that the allegations required detailed examination. The court stated, “The FIR does not specifically demonstrate any pecuniary gain accrued to the petitioner, and the allegations lack substantive evidence at this stage.”

The court directed the ACB to refrain from arresting KTR until December 30, 2024, while allowing the investigation to continue. It further instructed the petitioner to fully cooperate with the investigating authorities by providing necessary documents and information. Justice Kumar remarked, “This court shall examine the matter comprehensively in the upcoming hearing scheduled for December 27, 2024.”

Case Title: Kalvakuntla Taraka Ram Rao v. State ACB, CIU, Hyderabad & Anr.
Case No.: CRLP No. 15847 of 2024
Bench: Justice N.V. Shravan Kumar