Bengaluru: The Karnataka High Court on Thursday reserved its order on a petition filed by Chief Minister Siddaramaiah’s wife, Parvathi B M, and Urban Development Minister Byrathi Suresh, seeking to quash the Enforcement Directorate (ED) summons issued in connection with the MUDA land allotment scam.
On January 27, the High Court stayed the ED’s notice directing Parvathi and Minister Suresh to appear for questioning in the site allotment case.
During the hearing, senior advocate Sandesh J Chouta, representing Parvathi, argued that she had already surrendered the sites in question and had never benefited from any alleged illegal proceeds.
He cited the Vijay Madanlal Choudhary vs Union of India case, emphasising that under the Prevention of Money Laundering Act (PMLA), an offence requires three essential components—the existence of a scheduled offence, the generation of proceeds of crime from that offence, and the accused’s direct or indirect involvement in using or handling those proceeds.
Chouta maintained that Parvathi returned the disputed properties on October 1, 2024, meaning she neither retained nor profited from them.
He also questioned the ED’s jurisdiction, arguing that the agency launched its investigation solely based on a hastily filed FIR by the Lokayukta.
Furthermore, he contended that the ED was overstepping its mandate by attempting to probe the predicate offence, which was already under investigation by the relevant anti-corruption authorities.
He challenged the ED’s claim that its probe extended beyond the 14 sites, calling it an attempt to expand the case beyond its original scope.
In response, Additional Solicitor General Arvind Kamath, representing the ED, defended the ongoing investigation arguing that the MUDA site allotment scam was not limited to a few transactions but indicated systemic violations.
Kamath claimed that the ED had uncovered a pattern of sites being allotted to relatives of politicians and key officials, often in violation of existing regulations.
“This case involves corruption under the Prevention of Corruption Act. The investigation is not just about 14 sites but a broader scheme where MUDA allotted properties in violation of the law,” Kamath stated.
He also questioned the unusually swift approval of Parvathi’s site surrender request, suggesting that it raised red flags.
“It was processed at lightning speed. If we accept the argument that a person must ‘enjoy’ the property for money laundering to apply, then anyone facing PMLA charges could simply return the asset and claim innocence,” Kamath argued.
During proceedings, the High Court examined whether the ED’s probe genuinely involved money laundering or was merely an extension of the initial corruption investigation, which had already been closed by the Lokayukta’s B-report.
“Where are the proceeds of crime in this case? The sites were allotted in exchange for land usage, not through purchase or sale. There is no evidence that proceeds of crime emerged from this process,” the court observed.
Kamath, however, maintained that the ED had the authority to conduct an independent investigation, even if the Lokayukta had closed its case.
He stressed that the closure of the predicate offence probe did not automatically nullify the ED’s inquiry into potential money laundering activities.
With the High Court reserving its verdict, the next hearing in the Lokayukta case is scheduled for February 24.
Siddaramaiah is facing allegations of illegalities in the allotment of 14 sites to his wife by MUDA.
He, along with his wife, brother-in-law B M Mallikarjun Swamy, and Devaraju—who had sold land to Swamy, which was later gifted to Parvathi—were named in the FIR registered by the Lokayukta police in Mysuru on September 27.
The FIR was based on a complaint filed by RTI activist Snehamayi Krishna, following an order from the Special Court that exclusively deals with criminal cases related to former and elected MPs/MLAs.
On September 30, the ED filed an Enforcement Case Information Report (ECIR) against the Chief Minister and others, taking cognisance of the Lokayukta FIR.