The Karnataka High Court is deliberating on a petition from Parvathi B M and Minister Byrathi Suresh, challenging ED summons in the MUDA land allotment case, with the next hearing set for February 24.
Bengaluru: The Karnataka High Court has reserved its order on a petition filed by Chief Minister Siddaramaiah’s wife, Parvathi B M, and Urban Development Minister Byrathi Suresh, challenging the Enforcement Directorate (ED) summons in the MUDA land allotment case.
On January 27, the High Court stayed the ED’s notice directing Parvathi and Minister Suresh to appear for questioning.
During the hearing, senior advocate Sandesh J Chouta, representing Parvathi, argued that she had already surrendered the disputed sites and never benefited from any alleged illegal proceeds.
Chouta cited the Vijay Madanlal Choudhary vs Union of India case, emphasizing that under the Prevention of Money Laundering Act (PMLA), an offence requires:
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- A scheduled offence
- Generation of proceeds of crime
- Direct or indirect involvement of the accused
He maintained that Parvathi returned the 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 probe solely based on a hurried FIR filed by the Lokayukta. He contended that the ED was overstepping its mandate by trying to investigate a predicate offence already under the anti-corruption authorities.
On the other hand, Additional Solicitor General Arvind Kamath, representing the ED, defended the probe, arguing that the MUDA site allotment scam extended beyond just a few transactions and exposed systemic corruption.
“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.
Kamath also claimed that the ED had uncovered a pattern of sites being allotted to relatives of politicians and key officials, often violating regulations.
He questioned the swift approval of Parvathi’s site surrender request, calling it a red flag.
“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.
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, asserted that the ED had the authority to conduct an independent probe, even if the Lokayukta had closed the case.
“The closure of the predicate offence probe does not automatically nullify the ED’s inquiry into potential money laundering activities,”
he argued.
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- The Lokayukta police in Mysuru registered an FIR on September 27, naming CM Siddaramaiah, his wife Parvathi, brother-in-law B M Mallikarjun Swamy, and Devaraju, who sold land to Swamy, which was later gifted to Parvathi.
- The FIR was based on a complaint by RTI activist Snehamayi Krishna, following a Special Court order dealing with criminal cases against elected MPs/MLAs.
- On September 30, the ED filed an Enforcement Case Information Report (ECIR) against the CM and others, taking cognizance of the Lokayukta FIR.
With the High Court reserving its verdict, the next hearing in the Lokayukta case is scheduled for February 24.
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