In yet another judicial embarrassment to the YS Jaganmohan Reddy regime, Andhra Pradesh High Court quashed a batch of FIRs in the Amaravati insider trading case. The opposition TDP was quick to claim that the court verdict vindicated its stand that there was no such insider trading.
The allegations of insider trading were the first part of a political narrative to not only target the Chandrababu Naidu regime but also an attempt to justify YS Jagan’s move to shift capital from Amaravati. However, courts do not dwell into the aspects of political narrative, but would only adjudicate on the legality based on the material before it and the law related to it. Therefore, the high court verdict quashing the FIRs need not necessarily mean whether or not insider trading took place. But, the verdict essentially means that under the law insider trading in private land transactions cannot be established, and therefore criminalizing it does not come into question.
Let’s closely look at the court verdict to understand why the insider trading cases were quashed?
1 The concept of the offense of “insider trading”, which is essentially an offense in the field of stock market relating to selling and buying the securities and bonds, cannot be applied to the offenses under the Indian Penal Code and cannot be read into Section 420 IPC or into any provisions in the scheme of Indian Penal Code.
2 As the right to acquire and own property is a constitutional right, legal right, and human right, none can find fault with the said buyers in purchasing the lands as any citizen is entitled to acquire lands in the exercise of their constitutional and legal right. Therefore, private sale transactions cannot be criminalized
3 Information is very much in the public domain and when even the sellers are aware of the same, it cannot be legitimately contended that there has been concealment of material fact dishonestly as required under Explanation appended to Section 415 IPC to attribute any criminal liability of deception to the petitioners. 4 The buyers have no legal obligation to disclose the information relating to latent advantages in purchasing the land to the sellers at the time of buying the said land. Therefore, it does not amount to dishonest concealment of fact as contemplated under the Explanation appended to Section 415 IPC.
By Prof K Nageshwar