Delhi High Court sought Centre’s response on plea by D K Shivakumar challenging anti money laundering framework. Bench of Navin Chawla and Ravinder Dudeja continued interim protection.
The Delhi High Court asked the Centre to state its position on a petition filed by Karnataka Deputy Chief Minister D K Shivakumar challenging parts of the anti-money laundering framework and seeking relief against the Enforcement Directorate (ED)’s probe. The court, however, also made it clear that the interim protection already granted to Shivakumar from coercive action would remain in effect.
A Bench of Justices Navin Chawla and Ravinder Dudeja permitted the Union of India to be impleaded in the case. The petition was filed in 2022, on the request of Congress leader Shivakumar’s senior counsel Kapil Sibal, after the Additional Solicitor General (ASG) argued that a challenge to a Central law could not be entertained without the Union of India being made a party.
ASG S V Raju, appearing for the ED, told the court that Shivakumar should withdraw the petition or, alternatively, that it should be dismissed on the ground of maintainability.
The Bench did not accept the objection and allowed the Centre to join the proceedings. It gave the government four weeks to file its reply, noting that the petition has been pending since 2022 and that the maintainability objection was being raised for the first time at this stage.
The court also observed that the issues requiring determination had already been identified in 2022, and that the case was listed for final hearing after written submissions were to be filed.
The court ordered,
“Let the amended memo of parties be filed. Notice be issued to the Union of India. Counter affidavit, if any, be filed in four weeks of receipt of notice,”
Since the court directed that the interim protection from coercive action for Shivakumar would continue, ASG Raju said he was withdrawing his earlier assurance that no steps would be taken against the senior politician.
The Bench, though, emphasised that the ED was already bound by the earlier court order not to take coercive steps in the matter.
The Bench clarified,
“Look at the manner in which the order has been passed. It does not say your statement. (It says) till further orders, the respondent will be bound. Not that you are saying,”
The Bench scheduled the matter for hearing on July 23.
Shivakumar had approached the High Court in 2022 seeking quashing of the entire investigation, including summons issued to him in the Enforcement Case Information Record (ECIR) registered by the agency in 2020, which followed an alleged disproportionate assets case.
In his petition, Shivakumar challenged the ED’s money laundering investigation on multiple grounds, including that the ED was allegedly re-examining the same offence it had already investigated earlier in a case registered by it in 2018.
Through counsel Mayank Jain, Parmatma Singh and Madhur Jain, Shivakumar argued that the present investigation amounted to a second set of proceedings against him, and that it was an abuse of legal process and a malafide exercise of power.
The petition also argued that the inclusion of Section 13 (Criminal misconduct by a public servant) of the Prevention of Corruption Act in the Schedule of the Prevention of Money Laundering Act is unconstitutional. Shivakumar’s position was that Section 13 operates as a complete code and already covers laundered proceeds in the form of assets acquired by a public servant, and that it therefore cannot be subjected to a further laundering exercise again.
Earlier, on May 2, 2023, the High Court had ordered that the ED would be “bound” by its stand that no coercive action would be taken against Shivakumar in the case.
The ED opposed the petition, arguing that the two ECIRs registered by the agency relate to different cases, despite some factual overlap, and therefore cannot be characterised as a re-investigation. The ED submitted that the scheduled offences in the two matters are different and that the amount of proceeds of crime involved is also different.
The ED stated that in the first ECIR, the scheduled offence is linked to Section 120B of the IPC, with proceeds of crime quantified at Rs 8.59 crore. It said the present ECIR instead relates to disproportionate assets worth Rs 74.93 crore, arising from a separate FIR lodged by the CBI in Bangalore on October 3, 2020 under the Prevention of Corruption Act.
According to the ED, based on a preliminary enquiry conducted by the CBI’s Anti-Corruption Bureau in Bangalore, it found that Shivakumar and his family were allegedly in possession of disproportionate assets from known sources of income during the period April 1, 2013 to April 30, 2018.
The agency further argued that it is too early, at the investigation stage, to invoke the plea of double jeopardy. It also maintained that it would be impermissible for the court, in a petition challenging the constitutional validity of provisions of the special law, to grant interim relief comparable to final anticipatory bail.
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