Case Law Details
Annam Leela Sundaram Vs State of Telangana (Telangana High Court)
The Telangana High Court considered a criminal petition filed under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023 seeking anticipatory bail in connection with FIR No.54 of 2026 registered at Central Crime Station Police Station, Hyderabad. The offences alleged were under Sections 316(5), 336(3), 340(2), 344 read with 61(2) of the Bharatiya Nyaya Sanhita, 2023.
According to the complaint, the defacto complainant and his wife established M/s Vannsh Life Sciences Private Limited in 2016 at Visakhapatnam for manufacturing cancer-related medicines and began operations in December 2018. The complainant acted as Managing Director, while a Chartered Accountant was appointed as Statutory Auditor and another individual as Finance Officer to manage the company’s financial and statutory affairs. A Japanese company later acquired 30% shareholding, while the complainant and his wife retained 70% shares.
The complainant later discovered that his and his wife’s shareholding had reduced from 70% to 51%, while 9.5% shares each had allegedly been transferred in favour of the Finance Officer and another individual without his consent or knowledge. It was alleged that share certificates were split and transferred on 20.04.2022 without authorization and that a Company Secretary, who was appointed only on 10.01.2023, had authenticated the documents despite not holding office at the relevant time. The complainant alleged fraudulent transfer of 19% shareholding without consideration, consent, or valid documentation, amounting to offences including cheating, criminal breach of trust, forgery, falsification of records, and criminal conspiracy.
The petitioner, who was arrayed as A-4 and worked as a practicing Chartered Accountant, argued that he was not involved in the day-to-day financial or administrative affairs of client companies and generally visited only for account finalization or specific assignments such as GST audits. He contended that he neither handled nor controlled the complainant’s funds, records, or assets and that Section 316(5) of the BNS was not applicable to him. The petitioner also submitted that no specific allegations were made against him except reference to a due diligence report issued by the Company Secretary, which could not legally implicate a Chartered Accountant.
The petitioner further argued that the alleged share transactions were between the complainant, A-1, and A-2 and that he had no role in them. He also stated that he was a law-abiding citizen suffering from health issues and expressed willingness to cooperate with the investigation and comply with conditions imposed by the Court.
The State opposed the anticipatory bail plea, contending that the allegations were serious in nature.
After considering the submissions and the material on record, the High Court observed that the petitioner was a Chartered Accountant and that the allegations against him related to his alleged role in alteration and transfer of shares. The Court noted that A-1 had already been arrested and released on bail and that the evidence in the case was primarily documentary in nature.
The Court relied on an earlier judgment in Nagraj v. State of Telangana, where it had been held that Chartered Accountants or auditors could not ordinarily be questioned regarding improper payments or high salaries paid by a company and that custodial interrogation may not be necessary considering the nature of their professional duties.
Considering the facts and circumstances, the nature of allegations, and the earlier judgment, the High Court held that the petitioner was entitled to anticipatory bail. The Court directed the petitioner to surrender before the concerned Station House Officer within two weeks and ordered that he be released on bail upon execution of a personal bond of Rs.25,000 with two sureties. The Court also directed the petitioner to appear before the investigating officer every Monday for eight weeks or until filing of the charge sheet, whichever was earlier, and to cooperate with the investigation while complying with the conditions under Section 482(2) of the BNSS. Accordingly, the criminal petition was allowed.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
This Criminal Petition is filed under Section 482 of Bharatiya Nagarik Suraksha Sanhita, 2023 seeking the Court to grant anticipatory bail to the petitioner/A.4in the event of hisarrest in connection with FIR No.54 of 2026 of Central Crime Station Police Station, Hyderabad. The offences alleged against the petitioner are under Sections 316(5), 336(3), 340(2), 344 r/w.61(2) of Bharatiya Nyaya Sanhita, 2023 (for short ‘BNS’).
2. The facts of the case are that the defacto complainant- Sandadi Venkateshwar Reddy, lodged a complaint before police stating that he along with his wife Smt. Sridevi Sandadi, established M/s Vannsh Life Sciences Private Limited in 2016 over an extent of 5.5 acres at Visakhapatnam, and commenced manufacturing cancer-related medicines in December 2018, with a corporate office in Banjara Hills, Hyderabad; he serves as the Managing Director. To handle financial and statutory matters, they appointed Mr.Leela Sundaram as Statutory Auditor and Mr. N.V. Ramana Rao as Finance Officer, who managed the company’s day-to-day affairs. Subsequently, a Japanese company, A.R. Brown Co. Ltd., invested in the company and acquired 30% shareholding, while the complainant and his wife retained 70%, with all communications handled by the said Finance Officer and Auditor. Recently, upon verifying the share holding pattern, the complainant discovered that his and his wife’s share had reduced to 51%, while 9.5% shares each were shown in the names of Mr. N.V. Ramana Rao and Mr. S. Shiva kumar, without his knowledge or consent. On questioning them, they failed to provide any explanation and allegedly threatened him; the Auditor also failed to clarify. Further inquiry revealed that share certificates had been split and transferred on 20.04.2022 in favour of the said individuals without authorization, and that Ms.Nemalikanty Anuradha, who was appointed as Company Secretary only on 10.01.2023, had signed and authenticated those documents despite not holding any position at the relevant time, indicating collusion. The complainant alleges that 19% of his original shareholding was fraudulently transferred without consideration, consent, or valid documentation, constituting offences such as cheating, criminal breach of trust, forgery, falsification of records, and criminal conspiracy. Hence, the complainant requested legal action against the accused persons. Basing on the said complaint, the police registered the case against the accused for the above offences.
3. Heard Ms Sultana Basha, learned counsel appearing for the petitioner and Sri M. Ramachandra Reddy, learned Additional Public Prosecutor appearing for the respondent – State.
4. The learned counsel for the petitioner submits that the petitioner, a practicing Chartered Accountant, is not involved in the day-to-day financial or administrative affairs of his client companies and usually visits them only once or twice a year for finalization of accounts or for discussions with the Managing Director, unless specifically requested for limited purposes such as GST audit or meetings. It is contended that the petitioner is innocent and has not committed any offence, and that Section 316(5) of BNS is not applicable to him as he neither handled nor was entrusted with the complainant’s funds, financial records, or assets, nor he dishonestly used or converted any such property for personal gain; the case has been falsely filed to harass him. It is further submitted that, as per the remand report dated 13.04.2026 relating to A-1, no specific allegations are made against the petitioner except a due diligence report issued by the Company Secretary, which is not legally tenable against a Chartered Accountant, as auditors function in accordance with the norms prescribed by the Income Tax authorities and the Institute of Chartered Accountants of India (ICAI), and not under the framework governing Company Secretaries or the Registrar of Companies. The counsel also submits that the petitioner is a law-abiding citizen with no connection to the alleged offence, and that the share transactions were solely between the complainant, A-1 and A-2, with no role attributed to the petitioner. It is further contended that there is apprehension of arrest, and that the petitioner, being a honest professional and also suffering from health issues, would face hardship if arrested and he undertakes to abide by any conditions imposed by this Court. Hence, prayed this Court to grant anticipatory bail to the petitioner.
5. On the other hand, learned Additional Public Prosecutor opposed bail contending that the allegations against the petitioner are serious in nature. Hence, petitioner is not entitled to bail and prayed to dismiss this petition.
6. Considering the submissions made by the respective counsel and the material placed on record, the petitioner herein is arrayed as A-4 and he is a Chartered Accountant. The allegation against him is that he is instrumental in alteration of shares, fraudulently transferred 19% of the original 70% of shares and registered in the name of N.V.Ramana Rao-A.1. Further A.1 was already arrested and released on bail and the evidence is basing on the documents. In support of his contention learned counsel relied on the judgment of this Court in Nagraj V State of Telangana1, wherein it was observed that Chartered Accountant or Auditors cannot question for having made any improper payments or as to why huge salaries were being paid. Further in para 13 of the said judgment it was held as follows :
“Taking into consideration the nature of the allegations, the status of the Chartered Accountant, his duties and responsibilities towards the Company and the surrounding facts and circumstances of the case, I am of the opinion that it is not a fit case where the custodial interrogation of the petitioner/A.5 will be required. However, as and when directed by the Investigating officer, the petitioner/A.5 shall make himself available and furnish all the detailed information for effective and smooth investigation into the crime. Subject to certain directions, therefore, the petitioner/A.5 is entitled to the relief. It is needless to say that the observations, touching upon the merits of the case, made in the above order are only for the purpose of deciding the present application which shall not, in any way, influence any other proceedings.”
7. In view of the facts and circumstances of the case, the nature of allegations against the petitioner and in view of the above judgment, this Court deems it appropriate to grant anticipatory bail to the petitioner subject to the following conditions :
i. The petitioner shall surrender before the Station House Officer/ACP of EOW Team-VII, Central Crime Station (CCS), DD,, Hyderabad within two weeks from today, and on such surrender, the said Station House Officer shall release the petitioner on bail on his executing a personal bond for Rs.25,000/- (Rupees Twenty Five Thousand only) with two sureties, for the like sum each.
ii. The petitioner shall appear before the concerned SHO between 09.00 am and 05.00 p.m., on every Monday for a period of eight (8) weeks, for the purpose of investigation or till filing of charge sheet whichever is earlier and thereafter, as and when required.
iii. The petitioner shall abide by the other conditions stipulated in Section 482 (2) of BNSS and co-operate with the Investigating Officer in investigating the case.
8. Accordingly, the Criminal Petition is allowed.
Miscellaneous applications, if any pending, shall stand closed.
Note:
1 2015(2) ALD (crl)1022
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