The Karnataka High Court has dismissed the proceedings related to an FIR filed against former BJP state president Naleen Kumar Kateel, which alleged extortion involving electoral bonds.

The complaint accused Kateel, Union Finance Minister Nirmala Sitharaman, BJP National President JP Nadda, BJP Karnataka President BY Vijayendra, and Enforcement Directorate (ED) officials of coercing companies into purchasing electoral bonds in exchange for favorable treatment.

The bench of Justice M. Nagaprasanna, while delivering the judgment, noted that the complainant, Adarsh Iyer, “is an alien to the transaction and an alien cannot complain of extortion.” Highlighting the absence of any direct involvement or injury to the complainant, the court remarked, “What the complainant projects is a huge hocus-pocus, but alas, he has no locus.”

The court further concluded that the complaint did not establish the necessary elements of the alleged offence of extortion under Section 384 of the Indian Penal Code (IPC).

An FIR was filed by Bengaluru police after the Additional Chief Judicial Magistrate took cognizance of a private complaint lodged by activist Adarsh R. Iyer, associated with the NGO Janaadhikaara Sangharsha Parishath. The complaint accused ruling party leaders, including Finance Minister Nirmala Sitharaman, of extortion and criminal conspiracy under Sections 384, 120B, and 34 of the IPC.

Iyer alleged that raids conducted by the Enforcement Directorate (ED) on corporations such as Vedanta and Aurobindo Pharma were exploited to extort over ₹8,000 crore, compelling companies to purchase electoral bonds, which were later encashed by BJP leaders. The complaint pointed to Aurobindo Pharma's ₹52 crore bond contribution following the arrest of its director, suggesting a link between the funds and the BJP as well as other parties. However, the High Court overturned the Magistrate’s decision and had previously stayed the investigation.

The court dissected the elements of extortion under Section 383 of the IPC, noting, “For offence of extortion, element of consent by putting the victim in fear of injury is imperative.” It further clarified that the complainant had neither been placed under fear nor had he delivered any property to the accused. “If a victim had complained that he had purchased electoral bonds it would have been an altogether different circumstance,” observed the court.

Addressing the allegation of criminal conspiracy under Section 120-B of IPC, the court stated : “If the offence under Section 383 as made penal under Section 384 itself is not made out, it can hardly be said that further investigation must be permitted only for offence under Section120-B of the IPC. Therefore, the offence of 120-B of the IPC gets subsumed on the reasons rendered to hold that the offence under Section 384 is not met in the case at hand.”

The court also criticized the Magistrate’s decision to allow the investigation, noting that “Merely because the complainant has registered a complaint which projects alleged extortion, the learned Magistrate cannot become a rubber stamp Presiding Officer to the complaint, to refer the matter for investigation, without application of mind to the relevant statutory provisions.”

In light of these findings, the court ruled that the complaint lacked legal merit and dismissed the allegations as speculative. As a result, the FIR against Kateel was quashed.

Cause Title: Naleen Kumar Kateel v State of Karnataka [CRIMINAL PETITION No.10321 OF 2024]