ED Moves Karnataka High Court Against Closure Of MUDA 'Scam' Case Involving Chief Minister Siddaramaiah And Family

The Enforcement Directorate has moved the Karnataka High Court challenging the acceptance of 'B' report filed by the Lokayukta Police in the Mysuru Urban Development Authority (MUDA) land grab scam involving Karnataka CM Siddaramaiah and his family.

Earlier, RTI activist Snehamayi Krishna had also approached the High Court against Lokayukta's 'B' report in the case, in which the High Court issued notice on March 26.

The Directorate of Enforcement (ED) has now approached the High Court challenging the order passed by the LXXXI Additional City Civil and Sessions Judge, Bengaluru (Special Court for cases against sitting and former MPs/MLAs) on January 26 in P.C.R. No. 28/2024, accepting the aforesaid 'B' Report filed by the Lokayukta Police.

The MUDA land allotment case involves Chief Minister Siddaramaiah, his wife Smt. Parvathi B.M., brother in-law Mallikarjuna Swamy, land owner Devaraju and Ex-Muda Commissioner G.T Dinesh Kumar.

Snehamayi Krishna, the private complainant, had earlier alleged that there had been illegal allotment of 14 land sites by Mysore Urban Development Authority to favour Ms. Parvati, wife of CM Siddaramaiah.

The complaint consisted of allegations pertaining to the denotification of over 3 acres of land in Kesar village and its subsequent conversion as 'agricultural land' in favour of Ms. Parvati in 2010. In 2021, the CM's wife was allegedly granted 14 compensatory parcels of land by MUDA.

The purchase of the property in question was on an offset price of Rs 300 in the year 1935. The determined compensation amount in favour of the owner was at Rs 3,56,000 in the year 1997. In 2021, this amount escalated to Rs 56 crores.

In September, 2024, the trial court directed the Karnataka Lokayukta police to register a case and investigate into the matter, as a result of which, FIR No. 11/2024 was registered against the CM and his family for offences including criminal conspiracy, cheating, forgery, corruption under the Prevention of Corruption Act, benami transactions, and land grabbing etc.

Noting the presence of scheduled offences under Prevention of Money Laundering Act, ED initiated its investigation by registering ECIR No. BGZO/25/2024 in October, 2024.

Meanwhile the High Court, on February 7, 2025 had refused to transfer the investigation by the Lokayukta police into the alleged "scam" which is stated to involve Chief Minister Siddaramaiah and his family to the tune of approximately 56 crores to the CBI.

Submissions Made By ED In Their Petition

According to the criminal revision plea filed before the High Court, ED had made a slew of findings over the course of its investigation into the predicate offences. It included satellite imagery showing developmental work undertaken by L& T in 2003, prior to its alleged purchase as 'agricultural land' by Ms. Parvati. The ED also mentions about WhatsApp communications by one Dinesh Kumar, claiming to be a close aide of Siddaramaiah, who wielded undue influence over the officials in MUDA.

According to the ED, the ex-MUDA commissioner G.T Dinesh Kumar has also admitted to going above and beyond the MUDA Board's agenda for the CM's wife. Consequently, under Section 66(2) of PMLA [ED to share investigation-related information with other law enforcement agencies], ED had shared five categories of evidence pertaining to the foul play in MUDA scam to the Lokayukta police last year as well as in the beginning of this year.

The non-consideration of such evidence by the police as well as the trial court has violated the ratio in Mohinder Singh Gill v. Chief Election Commissioner(1978) for non-application of mind, states the ED in its plea.

The ED, in their plea, challenges the Lokayukta's action of filing a 'B' Report despite categorical evidence shared with them under Section 66(2) of the PMLA Act. While the closure report favoured the respondents in the criminal revision and effectively exonerated them, Lokayukta went on to acknowledge that MUDA has illegally allocated almost 1045 sites under the '50:50' scheme as the rationale behind continued investigation against the MUDA officials and Ex-Commissioner, says the ED.

Subsequently, the ED filed a protest petition against the B report. However, the trial court absolved the CM and his family members from further proceedings based on the 'B' Report while allowing continued proceedings against MUDA officials.

Additionally, ED states that the trial court accepting the B report affects the foundation of ED's case against the CM and his family as well as its jurisdiction since the proceeds of crime are directly correlated to the criminal activity in the predicate offence allegedly committed. The ED relies on Vijay Madanlal Chaudhary v. Union of India to assert the same.

Though the trial court could decipher strong suspicion about the commission of offence, it has ventured out on an exercise of finding trial court stage alike proof while considering the B report, ED adds in its plea. The ED also objects to the weightage given to the Section 161 statements given by MUDA officials who denied the existence of any undue influence being exerted on them.

The ED argues that investigating the 'givers' (MUDA officials) while exonerating the 'takers' (the beneficiaries of 14 land parcels) is impermissible. Relying on CBI v. V. Vijay Sai Reddy (2013), the ED contends that 'investigating the giver while exonerating the taker is impermissible' in cases of criminal conspiracy.

ED has hence prayed for quashing the trial court order accepting the B Report and the B Report in question so that Lokayukta can be directed to continue its investigation against the CM, his family members and the original land owner.

The matter is likely to be taken up by the High Court in the coming weeks.

Case Title: Directorate of Enforcement v. Snehamayi Krishna & Ors