Formula E race case: SC refuses to entertain KT Rama Rao’s plea against FIR
The case against Rao is being investigated by the Telangana anti-corruption bureau for offences of criminal misconduct by a public servant.
The Supreme Court on Wednesday refused to entertain KT Rama Rao’s petition to quash criminal proceedings against him in connection with the hosting of the Formula E racing championship, and told the Bharat Rashtra Samithi (BRS) leader that the allegations of corruption against him need to be examined first.
Rao, who is the leader of opposition in the Telangana assembly, sought the SC to quash the proceedings alleging “political vendetta” behind the case, and told the top court that the allegations of payments made prior to the date of agreement during a time when the Model Code of Conduct was in place could be said to be a bad decision, but cannot invite criminality under the Prevention of Corruption (PC) Act.
“That cannot be a ground to quash the criminal case. All these allegations will have to be seen,” the bench, headed by justice Bela M Trivedi, said.
The BRS politician was represented by senior advocates CA Sundaram and Siddharth Dave, who submitted that the first information report (FIR) lodged on December 19, 2024, fails to make out a case.
“You do this because he is the leader of the opposition, and because there is a change in government. Maybe it was a bad policy to host the Formula E race that helped the government earn ₹300 crore. But how does corruption under PC Act come in?” Rao asked.
The bench, also comprising justice PB Varale, observed, “To ask whether a government officer is corrupt or not is like asking whether fish live in water... At this stage, we will not interfere.”
The Congress government in Telangana, represented by senior advocate Mukul Rohatgi, sought the dismissal of the petition pointing out that an investigation must be done as the FIR shows several inconsistencies in the manner in which the deal was signed.
The Hyderabad Metropolitan Development Authority (HMDA) was not party to the tripartite agreement executed in October 2022 by the state’s Municipal Administration and Urban Development department. Rao was the minister heading this department at that point in time.
Further, the FIR alleged that payments made in foreign currency to Formula E Operations Ltd. (FEO), a company registered in the United Kingdom, were in violation of rules relating to foreign remittances. Also, it was also alleged that the agreement was executed without the approval of the council of Ministers. Part payment was made at a time when the MCC was in place in 2023 in the run-up to the state elections, without approval from the Election Commission of India.
“These matters require investigation. We are unable to do so as he is getting orders of interim protection, one after the other,” Rohatgi said.
Earlier, the Telangana high court on January 7 had refused to entertain Rao’s petition forcing him to approach the top court. Sundaram then requested the court to withdraw the petition and approach the high court to pursue other legal remedies seeking discharge.
“The petition is allowed to be withdrawn,” the bench ordered without making any further observation on the remedies open to the petitioner.
The case against Rao is being investigated by the Telangana anti-corruption bureau (ACB) for offences of criminal misconduct by a public servant, punishable under sections 13(1)(a) and 13(2) of the PC Act, 1988, along with criminal breach of trust and conspiracy under sections 409 and 120-B of Indian Penal Code (IPC).
Rao’s lawyers informed the court that for any offence to be made out under the PC Act, the ingredients of the offences require entrustment of the tainted property to the accused and the accused should have a dishonest/fraudulent intention to misappropriate the property so entrusted – both of which are missing in the admitted facts stated in the FIR.
The tripartite agreement was signed between the state government, Formula E Operations Ltd, ACE Nxt Gen Private Ltd – the company responsible for conducting the race for seasons 9 to 12 in Hyderabad.
Rao claimed that the entire payments made to Formula E Operations Ltd were as per invoices raised through legal banking channel. The payment in Pound Sterling was done as per the agreement terms and the future seasons of the race never took place due to the failure of the successive government led by chief minister A Revanth Reddy to abide by the earlier agreement.
According to the petition filed by Rao, the first season of Formula E racing championship generated a massive revenue of USD 83 million for the state and the successive government breached the agreement by refusing to pay the balance amount and forfeiting the earlier payment made by HMAD.
