Case Note & Summary
The criminal petition was filed by the wife of the Chief Minister of Karnataka, who was accused No.2 in Crime No.11 of 2024 registered by the Karnataka Lokayukta Police. The predicate offence involved allegations of disproportionate assets and illegal compensation in the form of 14 residential sites from the Mysore Urban Development Authority (MUDA) for acquisition of her land. Prior to the registration of the predicate offence, approval under Section 17A of the Prevention of Corruption Act was obtained from the Governor, which was challenged and upheld by the High Court on 24-09-2024. Subsequently, the FIR was registered on 27-09-2024. On 01-10-2024, the petitioner surrendered the 14 sites to MUDA and a deed of cancellation was executed. On the same day, the Directorate of Enforcement registered an Enforcement Case Information Report (ECIR) against the petitioner under the Prevention of Money Laundering Act, 2002. Summons under Section 50 of the PMLA were issued on 03-01-2025 and 24-01-2025. The petitioner approached the High Court seeking to quash the ECIR and the summoned, arguing that she was no longer in possession of the alleged proceeds of crime and that parallel investigation by the Enforcement Directorate was impermissible. The respondent contended that the surrender after the registration of crime constituted an admission and that summons under Section 50 could be issued to any person. The court reserved the matter on 20.02.2025 and pronounced the order on 07.03.2025, but the operative part of the judgment was in Kannada and not transcribed in the available text.
Headnote
A) Money Laundering - Proceeds of Crime - Surrender of Property - Prevention of Money Laundering Act, 2002, Section 3 - Whether the 14 sites allotted as compensation for land acquisition constituted 'proceeds of crime' within the meaning of the Act, and whether surrender of those sites before registration of ECIR negates the basis for investigation under PMLA - Court considered the submission that the petitioner had unconditionally surrendered the sites and was no longer in possession, thus there were no proceeds of crime (Paras 5, 10, 11).
B) Criminal Procedure - Parallel Investigation - Enforcement Directorate - Prevention of Money Laundering Act, 2002 - Whether the Enforcement Directorate can conduct a parallel investigation under the PMLA without awaiting the outcome of the predicate offence, particularly when the predicate offence is at the stage of investigation - Court considered the contention that investigation under PMLA should await the decision in the predicate offence (Paras 5.1, 6).
C) Summons under PMLA - Section 50 - Power to Summon - Applicability to Persons Not Formally Accused - Prevention of Money Laundering Act, 2002, Section 50 - Whether summons under Section 50 of the PMLA can be issued to a person who is not in possession of proceeds of crime and who has not been arrayed as an accused in the predicate offence - Court considered the argument that summons can be issued to a witness and need not be only against an accused (Paras 6, 7).
Issue of Consideration
Whether the petitioner should be permitted to be investigated into on the impugned ECIR?
Case Details
2025 LawText (KAR) (03) 17
CRIMINAL PETITION No.1132 OF 2025
Sandesh Chouta, Karthik Natesha, Sanya Malli, Vikram Huilgol, Samrudh Hegde, Aravind Kamath, Madhukar Deshpande
Smt. Parvathi W/o Sri Siddaramaiah
Directorate of Enforcement, Represented by its Assistant Director, Bengaluru Zonal Office
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Nature of Litigation
Criminal petition under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking quashing of Enforcement Case Information Report (ECIR) and summons issued under the Prevention of Money Laundering Act, 2002.
Remedy Sought
The petitioner sought quashing of the ECIR bearing F.No.BGZO/25/2024 registered by the respondent and the summons dated 03.01.2025 and 24.01.2025 issued under Section 50 of the PMLA.
Filing Reason
The petitioner alleged that the ECIR was registered mala fide within four days of the predicate offence and that she had already surrendered the alleged proceeds of crime, thus no offence under Section 3 of the PMLA was made out.
Previous Decisions
The High Court had earlier dismissed Writ Petition No.22356/2024 on 24.09.2024, thereby upholding the Governor's approval under Section 17A of the Prevention of Corruption Act to investigate the predicate offence.
Issues
Whether the petitioner should be permitted to be investigated into on the impugned ECIR?
Submissions/Arguments
Petitioner argued that the ECIR was registered with mala fide intent within four days of the predicate offence and before its determination; that the 14 sites were surrendered unconditionally, so there were no proceeds of crime in her possession; and that parallel investigation by the Enforcement Directorate should not be permitted without awaiting the outcome of the predicate offence.
Respondent contended that the petitioner held the 14 sites and their surrender after registration of the predicate offence was an admission that they were proceeds of crime; that summons under Section 50 of the PMLA could be issued to any person, not necessarily an accused; and that the investigation was legally justified.
Judgment Excerpts
The petitioner/accused No.2 in Crime No.11 of 2024 is standing at the doors of this Court challenging registration of Enforcement Case Information Report (‘ECIR’ for short) against the petitioner arising out of predicate offence in Crime No.11 of 2024 registered by the Karnataka Lokayukta Police.
Four days after registration of crime, two events happen on the said day i.e., on 01-10-2024. On 01-10-2024 the present petitioner who was the recipient of fourteen sites from Mysore Urban Development Authority (‘MUDA’ for short) as compensation for acquisition of land belonging to the petitioner had returned those sites to MUDA and a deed of cancellation of allotment is executed on the same day. On the said day, the impugned ECIR comes to be registered by the Enforcement Directorate.
It is the submission of the learned senior counsel that as on the date of registration of ECIR, the petitioner was not even in possession of the alleged proceeds of crime.
The learned Additional Solicitor General would further contend that what is challenged is summons. Summons issued under Section 50 of the Act need not be issued only against an accused. It can be issued to summon a witness or any person related to ECIR.
Procedural History
Complaints were registered under Section 200 of the CrPC against five accused, including the Chief Minister and his wife. Approval under Section 17A of the Prevention of Corruption Act was sought from the Governor, granted, and upheld by the High Court on 24.09.2024 in W.P. No.22356/2024. The Court directed registration of FIR under Section 156(3) CrPC, leading to Crime No.11/2024 on 27.09.2024 by the Karnataka Lokayukta Police. On 01.10.2024, the petitioner surrendered 14 sites to MUDA and an ECIR was registered by the Enforcement Directorate. Summons under Section 50 of PMLA were issued on 03.01.2025 and 24.01.2025. The petitioner filed Criminal Petition No.1132/2025 under Section 528 BNSS seeking quashing of the ECIR and summons. Heard and reserved on 20.02.2025, pronounced on 07.03.2025.
Acts & Sections
- Bharatiya Nagarik Suraksha Sanhita, 2023: 528
- Prevention of Money Laundering Act, 2002: 3, 50
- Code of Criminal Procedure, 1973: 200, 156(3)
- Prevention of Corruption Act, 1988: 17A
