Order Quashing Summons To Ex-MUDA Commissioner Under Whom Land Was Allegedly Allotted To CM's Wife Has Stalled Probe: ED To Karnataka HC

Seeking stay of the order quashing summons issued to Dr Natesha DB, former MUDA Commissioner during whose tenure alleged illegal allotment of land was made to CM Siddaramiah's wife Paravathi, the Enforcement Directorate told the Karnataka High Court on Wednesday that due to the order the investigation has been effectively stalled.The ED further submitted that the order is completely perverse affecting all future searches. While allowing the former Commissioner of Mysore Urban Development Corporation's plea, the single judge had held that the search and seizure conducted at his residence by the ED and the subsequent statement recorded under Section 17(1)(f) of PMLA, is vitiated on the grounds of absence of 'reason to believe', and declared it to be invalid and illegal. It also quashed the summons issued to him under Section 50 of the Act.Further the single judge had said “The Enforcement Directorate cannot give the elements of procedural fairness contained in the PMLA a go-by in the course of its administration. It is pertinent that the right to liberty and privacy of individuals cannot be trampled upon and that any curtailment of civil liberties is subject to the due process of law.”Today a division bench of Chief Justice N V Anjaria and Justice KV Aravind was hearing ED's appeal challenging the single judge's order and by way of interim relief sought to stay the order, alternatively declare that it cannot be used as a precedent.During the hearing Additional Solicitor General (ASG) S V Raju appearing for the ED referred to Section 17 of the Prevention of Money Laundering Act (PMLA) and said “Reason to believe is different from reason to suspect. Suspicion is sufficient for issuing summons, if the first opinion is formed for reason to believe and it is formed based on information. But in the impugned order the search is declared illegal, it will have a cascading effect on other accused and they may get bail.”Referring to coordinate bench judgment wherein summons issued to B S Suresh and CM's wife Parvathy was quashed the ASG said “The apprehension is this order may benefit other accused.” To a query whether the directions in the impugned order are in-rem or qua the accused, Raju submitted,“As far as judgment of the single judge it is binding across the state. We will not be able to rely upon Section 50 statement for opposing bail of others, it is contrary to Supreme Court judgments. Today there is no prejudice caused to the respondent if it is stayed. The Order is binding on all courts, and it has wide ramifications.” Raju said, “The reason to believe is already there because a predicate offence is already registered. The fact that a predicate offence is registered there is obviously to be in proceeds of crime or records. Therefore the first three parts of Section 17 are satisfied.” He added “Supposing in case FIR is not registered, ED may not be able to form independent opinion. But once a predicate offence is registered it is fate accompli.” He further said, “Very influential people have been allotted plots circumventing the rules. This is a prima facie case of money laundering, the plot itself forms part of proceeds of crime. The respondent is not a stranger to the offence, he was commissioner of MUDA which allotted sites illegally and he personally inspected the sites.” He further argued,“(In) Present case effective investigation is stalled. Summons have been quashed so what investigation will I be able to do? The main accused Parvathy...summons have been quashed. We cannot record her statement our hands are tied, what investigation will be done by mylords.” To a query made by the court about whether a statement which is retracted can be relied upon in the case of other accused Raju said, “A confession statement can be used as evidence and it can be used even in adjudicating proceedings also even if not arrested. Suppose if I have to arrest somebody based on a statement I can do it under PMLA. If the statement is whitewashed I cannot do it.” He added “Retraction is generally done by a person who makes a statement, it is unheard of that statement is retracted by a third party (court). Statement even if obtained illegally it cannot be whitewashed.” Meanwhile senior advocate Dushyant Dave appearing for the respondent Dr DB Natesha, contended that the judgement is valid, legal and proper and is in consonance with the statute declared by Supreme Court from time to time. Both in facts and law, the single judge is justified in the view taken by him, Dave said. He said, “Citing examples of other judgements where this order is followed is unfortunate because the orders are not appealed. The present judgment is the law and it follows the law declared by the Supreme Court. Judgment of lordship court laying down law is a precedent and every accused is liable to benefit.” It was submitted that the Lokayukta Police has filed 'B summary' report before the court in the investigation done on the FIR registered against CM ...

Order Quashing Summons To Ex-MUDA Commissioner Under Whom Land Was Allegedly Allotted To CM's Wife Has Stalled Probe: ED To Karnataka HC

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