Authority: High Court for the State of Telangana at Hyderabad

Order Date: 09.07.2026

Case Overview

  • Petitioners: In Crl.P. No.9072, Konda Venkanna and another (Managing Partner and Partner of Kanaka Mahalaxmi Para Boiled Rice Private Limited); in Crl.P. No.9073, Gattu Sravan and three others (Managing Partner and partners of Gouthami Para Boiled Rice Mill Private Limited).
  • Respondent: State of Telangana, represented by Public Prosecutor and SHO, Nalgonda II Town Police Station.
  • Offences alleged: Sections 316(2), 316(5), 318(3) of the Bharatiya Nyaya Sanhita, 2023 and Section 7 of the Essential Commodities Act, 1955, relating to criminal breach of trust and cheating.
  • Background: Both firms were entrusted with government paddy under Custom Milling Agreements for Rabi Season 2022‑23. Kanaka Mahalaxmi was allotted 12,856.200 MT; Gouthami was allotted 21,724.480 MT. The agreements required conversion to Custom Milled Rice (CMR) and delivery to Telangana State Civil Supplies Corporation Limited (TGSCSCL).
  • Alleged shortfalls: Shortage of 8,026.059 MT (Kanaka Mahalaxmi) and 15,980.392 MT (Gouthami) of paddy, leading to alleged losses of several crores of rupees.
  • Petitioners’ submissions: argued that the dispute is purely contractual, that no dishonest intention existed, that they performed substantial deliveries, that shortages arose from natural deterioration and policy‑driven “as‑is‑where‑is” disposal, and that partners cannot be held liable without specific personal allegations.
  • Prosecution’s submissions: contended that the partners, as custodians of government stock, misappropriated the missing paddy, causing multi‑crore loss, and that custodial interrogation is necessary to prevent tampering and ensure recovery.
  • Court’s legal observations: cited precedents (Indian Oil Corp. v. NEPC, S.W. Palanitkar, Gurbaksh Singh Sibbia, Sushila Aggarwal, Arnesh Kumar) emphasizing that contractual breach alone does not constitute criminal offence without dishonest intent, and that anticipatory bail must balance liberty with investigative necessity.
  • The court noted that the evidence is largely documentary, that custodial interrogation is not indispensable, and that the alleged liability of partners requires proof of individual participation and mens rea.

Final Outcome

  • The court allowed the criminal petitions and granted anticipatory bail to all petitioners except petitioner No.2/Accused No.2 in Crl.P. No.9073 (dismissed as not pressed).
  • Bail conditions:

(A) Surrender to respective SHO by 23.07.2026; if arrested, release on personal bond of Rs 50,000 each with two sureties of equal amount.

(B) No departure from India without prior court permission.

(C) Availability for interrogation and full cooperation with investigating officers.

(D) Compliance with Section 482(2) of BNSS.

(E) Provide complete residential and contact details and inform of any changes.

(F) Prohibit any inducement, threat, or tampering with evidence.

(G) Violation of conditions may lead to cancellation of bail and further proceedings.

  • The court clarified that its observations are limited to the anticipatory bail applications and do not express any view on the merits of the underlying criminal allegations.

Topics: Anticipatory Bail, Custom Milling Dispute