The Karnataka High Court ruled that the ED’s search of former MUDA Commissioner Natesh D B’s residence was unlawful, lacking prima facie evidence. The court emphasized the need for procedural fairness under the PMLA, protecting civil liberties. Natesh can pursue legal action against the officials involved, affirming the importance of adhering to legal protocols.
Bengaluru: The Karnataka High Court has ruled that the Enforcement Directorate’s (ED) search and seizure at the residence of former Mysuru Urban Development Authority (MUDA) Commissioner, Natesh D B, was unlawful and an abuse of legal procedures. The court also granted Natesh the right to take legal action against those involved in the search operation.
The case is linked to allegations of illegal site allotment to Parvathy B M, wife of Karnataka Chief Minister Siddaramaiah. The ED had conducted the search on October 28-29, 2024, as part of its probe into alleged irregularities in MUDA site allotments.
Delivering the verdict, Justice Hemant Chandangoudar stated that the ED must ensure fairness in its investigations, as it is a crucial agency responsible for tackling money laundering. The court found that the search was conducted without prima facie evidence to invoke Section 3 of the Prevention of Money Laundering Act (PMLA), making it baseless and illegal.
The judgment stressed that arbitrary searches infringe upon the fundamental right to liberty and privacy guaranteed under Article 21 of the Constitution.
“The ED cannot disregard procedural fairness outlined in the PMLA. Civil liberties cannot be compromised without adhering to due process,”
the judgment noted.
The High Court ruled in favor of Natesh, nullifying the search operation carried out on October 28-29, 2024. Additionally, the court:
- Invalidated his statements recorded under Section 17(1)(f) of the PMLA
- Quashed the summons issued on October 29 and November 6, 2024, under Section 50 of the Act
The court emphasized that mere possession of a site allegedly allocated unlawfully does not automatically constitute an offence under the PMLA, unless all necessary conditions under Section 3 of the Act are met.
While acknowledging that the case revolved around the illegal allotment of sites during Natesh’s tenure as MUDA Commissioner, the court found no evidence that he personally benefited from the transactions. As a result, he could not be held liable for possessing, concealing, or using proceeds of crime under Section 3 of the PMLA.
In a significant ruling, the court granted Natesh the right to initiate legal action under Section 62 of the PMLA against the officials involved in the search operation. The court stated that whether the operation was vexatious would need to be determined through trial.
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Background of the Case
The ED had registered an Enforcement Case Information Report (ECIR) on October 1, 2024, following an FIR filed by the Lokayukta regarding alleged irregularities in MUDA site allotments.
With authorization from the ED’s Joint Director, an Assistant Director conducted the search under Section 17 of the PMLA. During the operation:
- Natesh’s mobile phone was seized
- His data was transferred to a hard disk
- He was questioned under oath as part of the probe
This ruling serves as a strong reminder that investigative agencies must strictly adhere to legal procedures. The Karnataka High Court’s decision reinforces the protection of fundamental rights, ensuring that searches and seizures do not infringe upon individual liberties without just cause.
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