Chandrababu Naidu was in 'command role' as CM when Skill Development scam took place: AP government to Supreme Court

New Delhi,: TDP supremo N Chandrababu Naidu was in a "command role" as Andhra Pradesh chief minister in 2015 when the Skill Development Corporation scam took place and decisions at his level led to a loss of more than Rs 300 crore to the exchequer, the state government told the Supreme Court on Friday.

He was arrested on September 9 for alleged misappropriation of funds and is currently under judicial remand and lodged at the Rajamahendravaram Central Prison.

Senior advocate Mukul Rohatgi, appearing for the Andhra Pradesh government, told a bench of justices Aniruddha Bose and Bela M Trivedi that Naidu was at the "helm of affairs" and decisions were taken at his level, which resulted in a more than Rs 300 crore loss to the state exchequer.

"He was in a command role as he was the chief minister of the state when the alleged offence took place. He was at the helm of affairs. If his attempt of quashing the FIR succeeds, then the investigation will be nipped in the bud," Rohatgi submitted during the hearing which continued for the fourth day.

The top court is hearing Naidu's plea challenging a high court order refusing to quash the FIR against him in the Skill Development Corporation scam case.

Giving details of the alleged scam, Rohatgi said the government had come up with a scheme to skill youths of the state and for that, it selected two companies without any tender to set up skill development centres there.

"Fact of the matter is that before anything was set up, Rs 370 crore was given away, which was then transferred by these two companies to certain shell companies that withdrew hundreds of crores in cash, which then went back (to Naidu). This is the nature of the scam. We may be right, we may be wrong, but this needs to be investigated," the senior lawyer submitted.

The bench asked Rohatgi how the state traces the money back to Naidu.

Rohatgi said the case is that nothing happened on the ground. No skill development centre was set up and the money went back to Naidu either fully or partially, and this needs to be investigated, he said.

"This is a public fund, how can we ignore this. We are bound to investigate. There is no political vendetta involved in it. We were not the only agency (state police) investigating this misappropriation of funds. SEBI was investigating, the Income Tax department found withdrawal of Rs 100 crore by shell companies linked to the two companies," he said.

Rohatgi said the former chief minister is claiming that he had nothing to do with the decisions on skill development as he was neither the minister of the department concerned nor had anything to do with the Skill Development Corporation.

"My question is then why are you invoking section 17A (of the PC Act), if there was nothing wrong done Section 17A does not provide an umbrella for corruption. The provision applies only when a public servant says I have taken the decision in official discharge of duty," he contended.

Section 17A was introduced by an amendment with effect from July 26, 2018, and the provision stipulates a mandatory requirement for a police officer to seek prior approval from the competent authority for conducting any enquiry or inquiry or investigation into any offence alleged to have been committed by a public servant under the Prevention of Corruption Act (PC Act).

Rohatgi said it is the state's stand that Naidu's petition for quashing of the FIR has been filed only to scuttle the investigation.

He showed two documents dated May 14, 2018 and June 5, 2018 to the bench and said inquiry in the case started much before July 2018 when section 17A was introduced in the PC Act.

Initially, a whistleblower wrote to the Central Bureau of Investigation about the misappropriation and the same was forwarded to the state by the central probe agency, he said.

"Section 17A was born in July 2018. The offences are from 2015 and 2016 and as such, no benefit of section 17A can be given because it was not on the statute book at that time. Alternatively, allegations according to the FIR are such that they can never be remotely considered to be a decision, recommendation or instructions in discharge of official duty by a public servant," he said.

The hearing remained inconclusive and would continue on October 17.

Naidu, 73, was arrested on September 9 for allegedly misappropriating funds from the Skill Development Corporation when he was the chief minister in 2015, causing a purported loss of Rs 371 crore to the state exchequer. His judicial remand has been extended by the trial court till October 5.

The CID, in its remand report, alleged that Naidu "indulged in a criminal conspiracy with the intention of fraudulent misappropriation or otherwise conversion of government funds for his own use, disposal of property which was under the control of a public servant, besides engaging in cheating, forging documents and destroying evidence".

While dismissing his petition, the Andhra Pradesh High Court on September 22, had said criminal proceedings ought not to be scuttled at the initial stage and quashing an FIR should be an exception rather than the rule.