Andhra Pradesh High Court Quashes Criminal Proceedings Against Hotel Boy Named as Accused No. 5 in Guntur Hotel Fraud Case
Justice K. Sreenivasa Reddy quashes proceedings against a hotel boy arrayed as Accused No. 5 in a Rs. 50 lakh fraud case, finding only a vague bald averment against him and no specific overt act in the charge sheet or witness statements.
The High Court of Andhra Pradesh at Amaravati has quashed criminal proceedings against a hotel boy who was arrayed as Accused No. 5 in a case involving alleged misappropriation of over Rs. 50 lakhs from Sindhuri Hotel, Brodipet, Guntur. Justice K. Sreenivasa Reddy, sitting singly, found that neither the charge sheet nor the statements of material witnesses disclosed any specific role or overt act against the petitioner. The court held that continuing the trial against him on the basis of a single vague and bald averment amounted to an abuse of the process of the court.
The Fraud Alleged and How the Petitioner Was Drawn In
The second respondent, Veluri Velugonda Reddy, the Managing Director of Sindhuri Hotel at 4th Lane, Brodipet Main Road, Guntur, lodged a police report on 8 August 2013. The report alleged that employees working in various positions at the hotel colluded with each other, prepared duplicate receipts, collected money from customers, and failed to deposit those amounts in the hotel account. The total fraud was alleged to be Rs. 50,93,792.
Crime No. 552 of 2013 was initially registered at Arundalpet Police Station against Accused Nos. 1 to 3. After investigation, police filed a charge sheet against eight persons, which was taken on file as C.C. No. 830 of 2018 before the V Additional Junior Civil Judge, Guntur. The petitioner, Guduru Uma Maheswara Rao, aged 29 years, a resident of Vasantharayapuram, Guntur Town, was arrayed as Accused No. 5. He was charged under Section 408 IPC (criminal breach of trust by clerk or servant) and Section 120B IPC (criminal conspiracy).
According to his counsel, Sri Srinivasa Rao Narra, the petitioner worked merely as a boy in the hotel and had no connection with the collection of amounts from customers or with the financial affairs of the establishment.
What the Witness Statements Actually Said
The court examined the police report, the charge sheet, and the statements of witnesses recorded under Section 161 CrPC in detail.
The statement of the defacto complainant (L.W.1), who is the Managing Director, specifically named Accused Nos. 1 to 4. It described how A.1, the General Manager, wrote advance receipt bills without carbon paper and misappropriated approximately Rs. 2 lakhs. It described how a chartered accountant's audit revealed that A.2 and A.3, working as receptionists, and A.4, the Front Office Manager, were also involved. The statement described how A.1, during leave from 1 August 2013 to 7 August 2013, had A.2 acting as in-charge General Manager, and how A.1 and A.4 conspired to get advance receipt books printed unauthorisedly at Siri Screen Printers owned by one Ganapathi Reddy. All the specific acts of collection and non-deposit of funds were attributed to A.1 through A.4.
L.W.2, N. Koteswara Rao, the Operation Manager, and L.W.3, Vasa Jali Reddy, the hotel Accountant, gave statements on the same lines, identifying the roles of A.1 to A.4. L.W.4, I. Ganapathi Reddy, owned Siri Screen Printers where the unauthorised bill books were printed. L.W.6 and L.W.7 assisted in investigation on technical aspects.
L.W.5, K. Siva Sankara Reddy, a partner at M. Bhaskar Reddy & Co., Chartered Accountants, made a statement that contained what the court described as a “bald and vague averment” that A.1 to A.4, in conspiracy with A.5 to A.8, did the acts alleged. This single sentence was the entirety of the material against the petitioner.
In the statements of L.W.1, L.W.2, and L.W.3 — the three principal material witnesses — the petitioner's name did not appear, and no specific act was attributed to him at all.
The Legal Framework Applied
The court began by setting out the well-established position that the inherent power under Section 482 CrPC is to be exercised sparingly, in the rarest of rare cases, and that a court is not justified in examining the reliability or genuineness of allegations at the quashing stage. It referred at length to State of Haryana v. Ch. Bhajanlal and Ors., AIR 1992 SC 604, where the Supreme Court laid down categories of cases in which the inherent power could be exercised to prevent abuse of process or to secure the ends of justice.
The court noted the seven categories set out in Bhajanlal, and identified the present case as falling squarely within Category 3: “where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.”
The court then examined whether the ingredients of the two offences charged were met in the petitioner's case. Section 408 IPC requires that the accused be a clerk or servant, entrusted in that capacity with property or dominion over property, who dishonestly misappropriates or converts the property in violation of a legal obligation. Section 120B IPC requires an agreement between at least two individuals to commit an illegal act, with a common intent.
The court noted the respondent's counsel, Sri Sravan Kumar Mannava, conceded that except for the vague allegation in L.W.5's statement, no other material existed against the petitioner. The prosecution's fallback argument was that the truth or otherwise of the accusations must be decided at trial, and no grounds to quash existed at this stage. The Assistant Public Prosecutor for the State concurred with this position.
The Court's Reasoning on Absence of Prima Facie Material
The court rejected the submission that the matter should simply proceed to trial. It found that on a reading of the charge sheet and witness statements, not a single specific overt act was attributed to the petitioner. The General Manager and others had been shown to have collected money, but nowhere was it alleged that the petitioner collected money from any customer. The court observed that the petitioner was working as a boy at the hotel and that there was no allegation of any entrustment of property or money to him in that capacity.
The court observed that basing criminal proceedings solely on the bald averment in L.W.5's statement, without any corroborating material, and compelling the petitioner to face the entire ordeal of trial, was nothing but an abuse of the process of the court.
The court also drew a clear line between the roles of A.1 to A.4 — the General Manager, receptionists, and Front Office Manager who were entrusted with financial responsibilities — and the petitioner, against whom no financial entrustment, no specific act of collection, and no conspiracy role was established by any material witness. The allegations of conspiracy in the charge sheet against A.5 to A.8 were built entirely on the one vague line from the chartered accountant's statement, which the court found insufficient to constitute even a prima facie case.
Outcome
Justice K. Sreenivasa Reddy allowed Criminal Petition No. 5730 of 2020. The proceedings in C.C. No. 830 of 2018 on the file of the V Additional Junior Civil Judge, Guntur — arising from Cr. No. 552 of 2013 registered at Arundalpet Police Station under Sections 408 and 120B IPC — stand quashed in respect of the petitioner, Guduru Uma Maheswara Rao, Accused No. 5. Any miscellaneous applications pending in the criminal petition also stand closed as a consequence.