Formula-E Race "Scam": Telangana HC Grants Interim Protection From Arrest To BRS's KT Rama Rao Till December 30

The Telangana High Court in an interim order on Friday (December 20) has granted protection from arrest to BRS MLA KT Rama Rao till December 30, in an FIR over alleged irregularities in the conduct of Formula-E race in Hyderabad when BRS was in power. 

Issuing notice to the state and asking them to file their response, Justice N V Shravan Kumar while dictating the interim order said, "For the reasons alike and that prima facie the FIR lacks certain ingredients, in view of the reason that the reasons in the FIR emanates from contracts entered by the government wherein matter requires examination". The court however said that the investigation shall continue, adding that the petitioner shall cooperate with IO by furnishing all the documents.

"Let a detailed counter be filed. Interim orders upto 30th (December)", the court said and posted the matter before the regular roster.

Rama Rao has been booked for provisions of the IPC including criminal breach of trust by public servant under Sections 409 and criminal conspiracy under Section 120(B) as well as Section 13(1)(a) and 13(2) of Prevention of Corruption Act. The BRS leader moved the high court in plea for quashing of the FIR. 

Appearing for the BRS leader, Senior Advocate CA Sundaram argued that the government at the time had just stepped into the shoes of the sponsor who had then backed out to safeguard the event. He submitted that agreement for conducting the race was already continuing and that criminal breach of trust or misappropriation was not made out. 

"Charge is before you took a decision you did not get approvals…When there was a change in government the new government refuses to pay the next instalment. There is an arbitration pending.Mine may have been a wrong decision. The new government may have made a wise decision…but is it a case for Section 13(1)(a) PC Act?," he said. 

Sundaram further argued that there is no reason given for delay in registration of FIR which was 14 months later. 

Arguing that this was a case of "political vendetta" against Rama Rao, Sundaram said, "I ask myself where is the corruption. Okay you can say its a stupid decision but is it a case of corruption? There is Not even a whisper of a personal interest against him". 

Sundaram argued that an information was received with Anti Corruption Bureau office Hyderabad on December 18 at 5:50pm and immediately FIR was lodged on December 19. He said that within a period of one day without making any preliminary inquiry and in view of political vendetta, without any whisper of any pecuniary benefit to the petitioner, the FIR was lodged. He submitted that FIR has been made under offences in connection to Prevention of Corruption Act and no ingredients have been made out which will attract these offences. 

As per the case a tripartite agreement was entered between Formula E operations and municipal administration and urban development department, government of Telangana and another party ACE Next Generation Pvt. Ltd for conducting e formula races in Hyderabad initially on 25-10-2022 and later it was terminated next year. Later a second agreement was entered on 30-10-2023.

Sundaram submitted since the agreement was terminated and in order to keep up the obligations as per the terms of the agreement the then government had to take up to continuing the event and in such a situation amounts have been paid. 

Sundaram said this was nothing but a civil issue and whether contract for race should have been continued or terminated is a policy decision for which the petitioner cannot be held liable. He said that the complaint states that money was paid to the third party-organiser, who has not been made an accused.

"They (State) are worried if they make organiser an accused then what will happen to the arbitration which has been initiated. There are many holes in this case," he said. 

Meanwhile Advocate General A Sudarshan Reddy appearing for the State argued that "there was an inquiry on which Governor after giving his due consideration granted permission for prosecution". The court was shown the sanction document as well. 

"During the course of the investigation new people may be added. As I said FIR is not an encyclopedia...Any amount over Rs 10 Crore needs a govt sanction. Here Rs 54 crores were given without any sanction. Concurrence from finance department was not obtained.no permission was taken from government because A1 (Rama Rao) approved it," he said. 

He argued that today he was bringing before the court the irregularities which the petitioner sought to quash, adding that quashing at this stage of the FIR cannot be permitted. 

The prosecution has alleged that when Rama Rao was the minister for Department of Municipal Administration and Urban Development (MAUD) he did not take approvals regarding the conducting of the event and that there is serious flaw in the approvals which is not in accordance with the relevant business rules. It was argued that the FIR has been lodged which is prima facie proves that petitioner has totally deviated from the terms of the conditions of the agreement and not follow the provisions as contemplated.

Case title: KT Rama Rao v/s State of Telangana (ACB) 

Crlp 15847 of 2024