IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH

AT HYDERABAD
MONDAY, THE TWENTY FOURTH DAY OF FEBRUARY
TWO THOUSAND AND FOURTEEN

:PRESENT:
THE HON'BLE DR. JUSTICE K.G.SHANKAR

CRL.P. NO:1154 of 2014

Between:
Mr.C.N.Srinivasan, S/o. (late) Mr.C.R.Narayana Rao,
M/s. CR.Narayana Rao, R/o. 10, Karpagambal Nagar, Mylapore,
Chennai 600 004.
..... Petitioner/Accused
AND

Central Bureau of Investigation, ACB, Hyderabad, 3rd Floor, Block

No.6, Kendriya Sadan, Sultan Buzar, Koti Hyderabad - 500 195.

.....Respondent/Complainant

Petition under Section 438 of Cr.P.C., praying that in

the circumstances stated in the petition and the grounds filed herein,
the High Court may be pleased to grant anticipatory bail to the
petitioner and direct the respondent herein to enlarge the petitioner
on bail in the event of the Petitioner's arrest in RC.No.3 (A)/2013-
Hyderabad..

The petition coming on for hearing, upon perusing the

petition and the grounds filed herein and upon hearing the arguments
of Sri N.Naveen Kumar, Advocate for the Petitioner and of Sri
P.keshava Rao, Standing counsel for the ACB Cases, for the
Respondent, the Court made the following.

ORDER:

“The petitioner is said to be one of the partners of M/s. C.R.

Narayana Rao, which is the second accused. He seeks for grant

of anticipatory bail. Before approaching this Court, he filed a

petition under Section 438 Cr.P.C. before the High Court of

Madras in Criminal Original Petition No.20380 of 2013. A learned

single Judge passed orders on 23.09.2013 granting anticipatory

bail for a period of three weeks. The period has expired long

ago.

2. Exhaustive arguments are advanced by the learned

senior counsel for the petitioner as well as learned standing

counsel for the Central Bureau of Investigation (CBI).

3. The facts which lead to the filing of the present

Criminal Petition as can be culled out from the First Information

Report (FIR) are as follows:

a) Professor (Dr.) Yadiapalli Venkateshwara Rao @ Y.V.

Rao was a Director, National Institute of Technology (NIT),

Warangal from 2005 to 2010. Dr. Y.V. Rao is A.1 in this case. It is
the case of the prosecution that A.1 committed grave

irregularities in inviting, short listing and awarding contract to

A.2-M/s. C.R. Narayana Rao as Project Management Consultant

(PMC) and to the Project Contractors regarding the construction

of hostel at NIT, Warangal to accommodate 1600 students.

b) It was also alleged that there were large scale

violations against the Rules, Regulations and Guidelines of

Central Public Works Department (CPWD) and Central Vigilance

Commission (CVC) in the execution of the work. It was alleged

that A.1 ignored the instructions of the Ministry of Human

Resources Development of the Government of India in carrying
out the construction of “Students’ Halls of Residence”

knowingly.
c) M/s. C.R. Narayan Rao firm is Architects and Engineers,

Chennai. It is arrayed as A.2. The present petitioner is one of

the partners of A.2.

4. It is contended by Sri A. Ramesh, learned senior

counsel for the petitioner that NIT issued an advertisement in the

Hindu on 24.02.2007 inviting “Expression of Interest for Service

Providers for construction of Hall of Residence for a capacity of

1600 Students”. A.2 submitted proposals for construction of

Mega Hostel. It is submitted by the senior counsel for the

petitioner that the design of A.2 was selected.

A former agreement dated 16.10.2007 was entered into between
NIT, Warangal and A.2. It is contended by the learned senior
counsel for the petitioner that the job of A.2 was to supervise the
constructions, obtain measurements when bills are prepared

and verify the details regarding the construction. He submitted

that A.2 charged 1.2% of the cost of construction as its fee and

1.4% as the fee for PMC.

5. On 15.12.2007, A.2 submitted designs and estimates

at a cost of Rs.58.10 crores on the basis of Delhi Schedule

Rates, 2007 (DSR-2007). As the Government of India released

DSR-2008, the estimate was revised to Rs.62.20 crores under

DSR-2008. NIT called for tenders and ultimately selected A.3-

Nagarjuna Constructions Company Limited (NCC Ltd.) on

18.08.2008 on the ground that A.3 was the lowest bidder. A.3

submitted tender at 89.36 crores, which was 49% excess of the

estimated rate of Rs.58.11 crores. As against the completion

date of 17.02.2010, A.3 admittedly completed the awarded project

on 05.02.2010. In all, 707 rooms were constructed in 9th floor.

6. In the meanwhile, NIT required additional works such

as fire fighting road, storage tank for recycling water and

providing DI pipes etc. The additional works were to be

completed on or before 10.06.2010. When the designing and

supervising firm submitted its bills, part of the bills was cleared.
An amount of Rs.52 lakhs alone is due to the designers.

7. While things stood thus, CBI allegedly registered a

case against the then Director of NIT as A.1, as well as against

M/s. C.R. Narayan Rao, PMC as A.2, NCC Ltd. as A.3 and against

unknown public servants and private persons for awarding the

contract, short listing and other activity. The prosecution

ultimately registered a case on 28.02.2013 under Sections 409,

420 and 120-B IPC as well as under Sections 13 (2) r/w Sec.13 (1)

(c) and 13 (1)(d) of the Prevention of Corruption Act, 1988

against A.1, Director of NIT, against A.2-M/s. C.R. Narayan Rao

and A.3-NCC Ltd. The petitioner apprehends that he would be

arrested as he is a partner of A.2-firm. Consequently, he moved

for grant of anticipatory bail.

8. The learned senior counsel for the petitioner

contended that the petitioner is 73 years old and is a permanent

resident of Chennai. He also submitted on merits of the case

that prima facie, no case is made out against A.2.

9. Sri P. Kesava Rao, learned Special Standing Counsel for

CBI stiffly opposed the petition. He contended that award of

PMC to A.2 is the first stage of the project and pointed out that

the very appointment of A.2 as PMC is illegal. He contended that

nine concerns competed for PMC “expressing interest” and

three firms including A.2 were short listing.

He submitted that A.2 was chosen as PMC even without opening

the financial bids of the other two short listed firms, which was

on account of the manipulation by A.2. This is submitted to be

one of the great and fundamental irregularities.

10. The learned standing counsel also submitted that

Clauses 25 to 27 of the agreement envisages that it is the duty of

A.2 to check the measurements of work at site and verify the

calculations of the measurement books and bills and to

coordinate with the engineers of the employer. He admitted that

the officials of CPWD are to check the measurements and that it

is not the primary duty of A.2. He, however, contended that A.2,

who initially estimated the cost at Rs.58 crores enhanced the

same to Rs.84.98 crores and contended that as the variation was

more than 10%, A.2 ought to have rejected the bid as violative of

Clause 19.4.3.2 of CPWD Work Manuel and also in view of

Clause-46 of the tender agreement. It may be noticed that the

tender of A.3 at Rs.89.36 crores was accepted which was later

altered to Rs.102.60 crores. The learned standing counsel for

CBI submitted that a preliminary enquiry was conducted by CBI

on the basis of source information and a regular case was

subsequently registered.

11. As already noticed, several allegations are made

against A.1 to A.3. It is contended by the learned standing

counsel that proper soil testing was not done and expressed
anguish over the fate of 1600 students in a 9-storied huge

structure when such a construction was made without soil

testing. He further submitted that A.2 was responsible for lapses

of soil testing, incorrect clearances to the bills and other

mistakes in the process of which the institute (NIT) suffered

finally. The learned standing counsel ultimately placed reliance

[1]
u p o n Gurbaksh Singh Sibbia v. State of Punjab and

contended that where economic offences involving blatant

corruption at higher rungs of the executive and political power is

involved, it is not justified to invoke the provisions u/s.438

Cr.P.C. It would appear that in this decision, the Court, on the

other hand, pointed out that it would be improper to refuse to

invoke the provisions of Sec.438 Cr.P.C. on the ground that the

case is a serious case like an economic offence involving blatant

corruption at high rungs of the executive and political power. At

any rate, the learned senior counsel for the petitioner placed
reliance upon a recent decision in Siddharam Satlingappa

[2]
Mhetre v. State of Maharashtra where Gurbaksh Singh Sibbia

(supra) was referred to. The Court noted in para 89 as follows:

“The discretion must be exercised on the basis fo
the available material and the facts of the particular
case. In cases where the court is of the considered
view that the accused has joined investigation and
he is fully cooperating with the investigating agency
and is not likely to abscond, in that event, custodial
interrogation should be avoided.”

12. The learned senior counsel for the petitioner submitted

that the petitioner has been meticulously cooperating with the
investigation and that it would be totally unjust to attempt to
arrest the petitioner.

13. One of the grounds on which this application for

grant of anticipatory bail is resisted can be found in the counter

of CBI filed before the trial Court that the presence of the
petitioner may be required for custodial interrogation. In

answering to this contention, the learned senior counsel for the

petitioner placed reliance upon the above cited decision. At any
rate, where the petitioner has not been arrested, custodial

interrogation cannot be a ground to reject the anticipatory bail.

Further, anticipatory bail may be granted in such circumstances

conditionally that the accused should make himself available for

interrogation as and when sought for by the investigating
agency.

14. Indeed, allegations against the petitioner/A.2 are

quite serious. The allegations against A.1 in fact are profound.

At any rate, where the petitioner is available and where it is not

the case of anybody that the petitioner has been making himself
unavailable and where it appears that the petitioner has been

cooperating with the investigation by answering the queries

raised by the investigating agency, in view of the advanced age
of the petitioner, I consider it appropriate to enlarge the

petitioner on anticipatory bail. To safeguard the interest of the

prosecution, I deem it appropriate to impose conditions while

granting anticipatory bail to the petitioner.

15. Accordingly, the Criminal Petition is allowed. The

petitioner is granted anticipatory bail. The petitioner shall

surrender before the Principal Special Judge for CBI Cases,
Hyderabad within two weeks from today. On such surrender, the

learned Principal Special Judge for CBI Cases shall enlarge the
petitioner on bail on a bond of Rs.1,00,000/- (Rupees one lakh
only) with two sureties in a like sum to the satisfaction of the trial

Court.
The petitioner is granted anticipatory bail on the conditions that

i) the petitioner shall surrender his passport to the Court of the

Principal Special Judge for CBI Cases at the time of obtaining
the bail, ii) the petitioner shall not leave the Chennai City except

to attend hearing of the present case and to attend interrogation

in connection with this case and iii) the petitioner shall cooperate
with the investigation and permit himself to be interrogated by

the investigating agency.”

ASSISTANT REGISTRAR
//TRUE COPY//
For ASSISTANT REGISTRAR
To
1. The Principal Special Judge for CBI Cases, Hyderabad.
2. The Station House Officer, CBI ACB Cases, hyderabad.
3. Two CCs to Public Prosecutor, High Court of A.P., Hyderabad
(OUT)
4. one CC to Sri N.Naveen Kumar, Advocate (OPUC)
5. One Spare Copy

HIGH COURT

DR.KGSJ

DATE: 24-2-2014
 ORDER

CRL.P. NO. 1154 OF 2014

DIRECTION

[1]
(1980) 2 SCC 565
[2]
(2011) 1 SCC 694