Formula-E Race "Scam": Telangana High Court Preserves BRS's KT Rama Rao From Arrest Until December 30

In a FIR about alleged irregularities in the conduct of the Formula-E race in Hyderabad during the BRS's tenure in power, the Telangana High Court issued an interim order on Friday, December 20, granting BRS MLA KT Rama Rao protection from arrest until December 30.

While dictating the interim order, Justice N V Shravan Kumar stated, "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." He also asked the state to respond to the notice. Nonetheless, the court stated that the inquiry would go forward and that the petitioner would assist IO by providing all necessary documentation.

"Allow a thorough counter to be filed. The court posted the subject before the regular roster and stated that there will be interim orders until December 30th.

Rama Rao has been charged under the Indian Penal Code for a number of offenses, including criminal conspiracy under Section 120(B) and criminal breach of trust by a public worker under Section 409, as well as Sections 13(1)(a) and 13(2) of the Prevention of Corruption Act. The BRS leader petitioned the high court to have the FIR quashed.

Senior Advocate CA Sundaram, who spoke on behalf of the BRS leader, contended that the government at the time had only replaced the sponsor, who had subsequently withdrawn, in order to protect the event. He argued that the contract for holding the race was already in effect and that there had been a criminal violation of trust or misappropriation was not made out.

"The charge is that you did not obtain approvals prior to making a choice.The following installment is not paid by the new government after a change of power. An arbitration is still under progress.I might have made the incorrect choice. Perhaps the new administration made the right choice.However, does Section 13(1)(a) of the PC Act apply here?" he asked.

Sundaram went on to say that no explanation was provided for the 14-month delay in filing the FIR.

Sundaram said that this was a "political vendetta" against Rama Rao, saying, "I wonder where the corruption is. You may argue that it was a foolish choice, but is there evidence of corruption involved? Not a shred of personal interest exists against him.

According to Sundaram, a formal complaint was filed on December 19 after an information was received by the Anti Corruption Bureau office in Hyderabad at 5:50 p.m. on December 18. He said that the FIR was filed within a day without any preliminary investigation, out of political vengeance, and without any indication that the petitioner would receive any financial benefits. He argued that no ingredients have been identified that would lead to these offenses, and that a formal complaint had been filed under the Prevention of Corruption Act.

According to the case, ACE Next Generation Pvt. Ltd., the Telangana government's municipal administration and urban development department, and Formula E operations entered into a tripartite agreement to conduct e-formula races in Hyderabad starting on October 25, 2022, and ending the following year. On October 30, 2023, a second agreement was later signed.

Sundaram argued that because the agreement had ended, the then-government had to step in and continue the event in order to fulfill its commitments under its terms, and as a result, money had been paid.

According to Sundaram, this was merely a civil matter, and the petitioner cannot be held accountable for the policy decision regarding whether the race contract should have been renewed or terminated. According to the lawsuit, money was paid to the third-party organizer, who has not been named as an accused party, he added.

"The State is concerned about what will happen to the arbitration that has already been started if they declare the organizer an accused party. This case has a lot of flaws," he stated.

"There was an inquiry on which Governor after giving his due consideration granted permission for prosecution," asserted Advocate General A Sudarshan Reddy, who was representing the State. The sanction paper was also presented to the court.

"More people might be included as the inquiry progresses. FIR is not an encyclopedia, as I already stated.Any sum exceeding Rs 10 crore requires government approval. In this case, Rs 54 crores were disbursed without authorization. The finance department's concurrence was not acquired.Since A1 (Rama Rao) gave his approval, no official authorization was sought," he stated.

He stated that quashing at this point in the FIR cannot be allowed and that he was bringing the irregularities that the petitioner was attempting to have rectified before the court today.

The prosecution has claimed that Rama Rao failed to obtain approvals for the event's conduct while serving as minister of the Department of Municipal Administration and Urban Development (MAUD) and that the approvals had significant flaws that violated the applicable business regulations. It was contended that the fact that the FIR was filed is prima facie evidence that the petitioner has completely broken the terms of the agreement and failed to abide by the provisions that were intended.