A court here on Thursday dismissed the bail applications of former Karnataka Minister Gali Janardhan Reddy and managing director of Obulapuram Mining Company (OMC) B.V. Srinivas Reddy for the third time since their arrest on September 5.

In doing so, the special court for Central Bureau of Investigation (CBI) cases upheld the contention of the agency that the accused attracted Section 409 of IPC which spoke about criminal breach of trust by public servants, agents and others.

The court observed that Mr. Janardhan Reddy and Mr. Srinivas Reddy were agents of the Central government as directors of OMC. The government and the company entered into a lease agreement as owner of land and lessee respectively. As such, the directors of OMC were supposed to abide by the conditions of the agreement. However, they sold mineral extracted from the leased land to third parties which amounted to violation of the agreement.

By way of dealing with the third party, the accused were alleged to have committed several irregularities. Therefore, prima facie they attracted Section 409 of IPC.

The court refused to be drawn into the merits of the case which was questioned by defence since it was not warranted at this stage. A deeper examination of sections of law registered against the accused was not required when bail applications were taken up. The court also noted that the bail could not be granted because investigation in the case was at a crucial stage.