The Karnataka High Court has reserved its decision on petitions filed by Chief Minister Siddaramaiah's wife, Parvathi, and Urban Development Minister B.S. Suresh, seeking to annul the Enforcement Directorate's (ED) summons and the Enforcement Case Information Report (ECIR) issued against them concerning the Mysore Urban Development Authority (MUDA) land allotment case.
The controversy centers on the alleged irregular allocation of 14 housing sites by MUDA to Parvathi in 2021. These sites were reportedly allotted in exchange for 3.16 acres of land that Parvathi's brother had gifted to her. Following public scrutiny and legal challenges, Parvathi returned the 14 sites to MUDA in October 2024, asserting that she neither benefited from nor retained possession of the properties.
In September 2024, the Karnataka Lokayukta police registered a First Information Report (FIR) against Chief Minister Siddaramaiah, Parvathi, and others, based on allegations of corruption and misconduct in the land allotment process. Subsequently, the ED initiated its own investigation under the Prevention of Money Laundering Act (PMLA), issuing summons to Parvathi and Minister Suresh for questioning.
During the High Court proceedings, senior advocate Sandesh J. Chouta, representing Parvathi, contended that the ED's actions were unwarranted. He argued that since Parvathi had already relinquished the disputed sites, there were no "proceeds of crime" as defined under the PMLA. Chouta emphasized that for the PMLA to be applicable, there must be a scheduled offense, proceeds derived from that offense, and the individual's direct or indirect involvement in handling those proceeds. In this case, he asserted, these criteria were not met.
Chouta further criticized the ED's swift initiation of the ECIR, noting that it was registered shortly after the Lokayukta's FIR, suggesting a lack of thorough preliminary investigation. He maintained that the ED should not conduct a parallel probe into matters already under the jurisdiction of the Lokayukta, especially when the primary offense was still under investigation.
On the other hand, Additional Solicitor General Arvind Kamath, representing the ED, defended the agency's actions. He argued that the MUDA land allotment case indicated systemic violations and was not limited to the 14 sites in question. Kamath suggested that the rapid approval of Parvathi's request to surrender the sites raised suspicions and warranted a comprehensive investigation. He contended that returning the properties did not absolve individuals from potential money laundering charges if illicit activities had occurred prior to the return.
The High Court deliberated on whether the ED's investigation constituted an independent inquiry into potential money laundering or merely duplicated the Lokayukta's corruption probe, which had already been concluded with a B-report. The court questioned the existence of "proceeds of crime" in this scenario, given that the sites were exchanged for land usage rather than monetary transactions.
As the High Court has reserved its judgment, the legal community and public await the forthcoming decision, which will have significant implications for the involved parties and the interpretation of the PMLA in cases where alleged proceeds of crime have been relinquished.
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