Karnataka High Court
Karnataka High CourtFile Photo

Karnataka High Court declares ED raid on ex-MUDA chief illegal

The court said ED cannot give the elements of procedural fairness contained in PMLA a go by in the course of its administration.
Published on

BENGALURU: The High Court of Karnataka on Wednesday declared that the Enforcement Directorate’s (ED) raid on the residence of Natesha DB, former MUDA commissioner, in connection with the alleged irregularities in allotment of 14 sites to BM Parvathy, wife of CM Siddaramaiah, during his tenure, as illegal, unwarranted and abuse of law.

Interestingly, the court said mere possession of a site that was allegedly illegally allotted to an accused in a criminal case cannot be considered an offence under the Prevention of Money Laundering Act, 2002 (PMLA), unless it attracts the provisions of Section 3 of the Act.

HC: Search on former MUDA commissioner an abuse of law

The high court said the search conducted on the premises of Natesha in the guise of investigation when there is no prima facie evidence to establish the offence under Section 3 of PMLA, is an abuse of process of law.

The court said ED cannot give the elements of procedural fairness contained in PMLA a go by in the course of its administration. The right to liberty and privacy of individuals cannot be trampled upon and any curtailment of civil liberties is subject to the due process of law.

Allowing Natesha’s petition challenging ED’s proceedings, Justice Hemant Chandangoudar said the impugned search and seizure conducted at the residence of the petitioner on October 28 to 29, 2024, and the subsequent statement recorded under Section 17(1)(f) of PMLA are vitiated on the grounds of absence of ‘reason to believe’ and is hereby declared invalid and illegal.

The judge said the statement recorded under Section 17(1)(f) of PMLA is ordered to be retracted and the impugned summons of October 29, 2024, and November 6, 2024, issued under Section 50 of PMLA, and the statement recorded under Section 50 of the Act are quashed.

Referring to the reasons adduced by ED in the sealed cover, the court said they indicate no specific allegation against Natesha, except that of improper allotment of sites in favour of Parvathy, and that he is close to realtors. The reasons recorded do not in any manner, whatsoever, indicate the involvement of the petitioner in any act of money laundering or to be in possession of proceeds of crime involved in money-laundering, or to be in possession of any records or property related to money laundering or crime, respectively.

The court reserved the liberty with the petitioner to initiate action under Section 62 of PMLA against the officer concerned before an appropriate forum for the impugned search and seizure operation.

X
The New Indian Express
www.newindianexpress.com