IMPORTANT POINT
Criminal conspiracy.
Improper legal advice and wrong legal advice.

JUDGMENT

P. Sathasivam, J.-Leave granted.

2. This appeal is directed against the final judgment and order dated 09.07.2010 passed by the High Court of Judicature, Andhra Pradesh at Hyderabad in Criminal Petition No. 2347 of 2008 whereby the High Court allowed the petition filed by the respondent herein under Section 482 of the Code of Criminal Procedure, 1973 (in short “the Code”) and quashed the criminal proceedings pending against him in CC No. 44 of 2007 (Crime No. 36 of 2005) on the file of the Special Judge for CBI cases, Hyderabad.

3. Brief facts:

(a) According to the prosecution, basing on an information, on 30.11.2005, the CBI, Hyderabad registered an FIR being RC 32(A)/2005 against Shri P. Radha Gopal Reddy (A-1) and Shri Udaya Sankar (A-2), the then Branch Manager and the Assistant Manager, respectively of the Vijaya Bank, Narayanaguda Branch, Hyderabad, for the commission of offence punishable under Sections 120-B, 419, 420, 467, 468 471 read with Section 109 of the Indian Penal Code, 1860 (in short ‘the IPC’) and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 for abusing their official position as public servants and for having conspired with private individuals, viz., Shri P.Y. Kondala Rao – the builder (A-3) and Shri N.S. Sanjeeva Rao (A-4) and other unknown persons for defrauding the bank by sanctioning and disbursement of housing loans to 22 borrowers in violation of the Bank’s rules and guidelines and thereby caused wrongful loss of Rs. 1.27 crores to the Bank and corresponding gain for themselves. In furtherance of the said conspiracy, A-2 conducted the pre-sanction inspection in respect of 22 housing loans and A-1 sanctioned the same.

(b) After completion of the investigation, the CBI filed charge sheet along with the list of witnesses and the list of documents against all the accused persons. In the said charge sheet, Shri K. Narayana Rao, the respondent herein, who is a legal practitioner and a panel advocate for the Vijaya Bank, was also arrayed as A-6. The duty of the respondent herein as a panel advocate was to verify the documents and to give legal opinion. The allegation against him is that he gave false legal opinion in respect of 10 housing loans. It has been specifically alleged in the charge sheet that the respondent herein (A-6) and Mr. K.C. Ramdas (A-7)-the valuer have failed to point out the actual ownership of the properties and to bring out the ownership details and name of the apartments in their reports and also the falsity in the permissions for construction issued by the Municipal Authorities.

(c) Being aggrieved, the respondent herein (A-6) filed a petition being Criminal Petition No. 2347 of 2008 under Section 482 of the Code before the High Court of Andhra Pradesh at Hyderabad for quashing of the criminal proceedings in CC No. 44 of 2007 on the file of the Special Judge for CBI Cases, Hyderabad. By impugned judgment and order dated 09.07.2010, the High Court quashed the proceedings insofar as the respondent herein (A-6) is concerned.

(d) Being aggrieved, the CBI, Hyderabad filed this appeal by way of special leave.

4. Heard Mr. H.P. Raval, learned Additional Solicitor General for the appellant-CBI and Mr. R. Venkataramani, learned senior counsel for the respondent (A-6).

5. After taking us through the allegations in the charge sheet presented before the special Court and all other relevant materials, the learned ASG has raised the following contentions:

(i) The High Court while entertaining the petition under Section 482 of the Code has exceeded its jurisdiction. The powers under Section 482 are inherent which are to be exercised in exceptional and extraordinary circumstances. The power being extraordinary has to be exercised sparingly, cautiously and in exceptional circumstances;

(ii) The High Court has committed an error in holding that no material had been gathered by the investigating agency against the respondent herein (A-6) that he had con