SC Dismisses DK Shivakumar's Petition Challenging HC Order on Disproportionate Assets Case

SC Dismisses DK Shivakumar's Petition Challenging HC Order on Disproportionate Assets Case

Today, the Supreme Court dismissed Karnataka Deputy Chief Minister DK Shivakumar's petition challenging a High Court order. The High Court had previously rejected his plea to quash the Central Bureau of Investigation's disproportionate assets case under the Prevention of Corruption Act.

The matter was heard by a bench comprising Justices Bela M Trivedi and Satish Chandra Sharma.

Senior Advocate Mukul Rohatgi, representing Shivakumar, argued that the investigation had begun without obtaining sanction under Section 17A of the Prevention of Corruption Act. He also raised the contention that the applicability of Section 17A to offenses allegedly committed before the 2018 amendment (which introduced Section 17A) has been referred to a larger bench, citing the Chandrababu Naidu case.

In response, Justice Trivedi emphasized that proceedings cannot be quashed solely on the basis of a split verdict. Rohatgi clarified that he was simply requesting for the issuance of notice on the petition.

Justice Trivedi specifically mentioned the allegation that Rs. 41 lakhs were recovered from Shivakumar. Rohatgi clarified that this allegation was made in proceedings under the Income Tax Act.

Rohatgi argued that there shouldn't be a CBI FIR on the same issue. Justice Trivedi disagreed, stating that the case pertained to a distinct offense under the Prevention of Corruption Act. The judge clarified that the Income Tax authorities do not prosecute under the PC Act.

Notably, the bench also expressed its disapproval of the High Court's order for staying the sanction accorded to CBI. "How can High Court stay sanction? This is unheard of...", Justice Trivedi said. On this aspect, counsels for Shivakumar informed that the Karnataka government has withdrawn the consent accorded to CBI.

To recap, in August 2017, the Income Tax department conducted raids at multiple premises belonging to Shivakumar in New Delhi and other locations. During these raids, a total of Rs. 8,59,69,100 was collected, with Rs. 41 lakhs allegedly recovered from Shivakumar's premises.

Subsequently, a case was registered against Shivakumar under provisions of the Income Tax Act, 1961, before the Special Court for Economic Offences. Following this income tax case, the Enforcement Directorate (ED) also registered a case. Shivakumar was subsequently arrested on September 3, 2019.

On September 9, 2019, the Enforcement Directorate (ED) issued a letter to the Karnataka government under Section 66(2) of the Prevention of Money Laundering Act (PMLA). Subsequently, sanction against Shivakumar was granted, and the matter was referred to the Central Bureau of Investigation (CBI) for investigation.

Shivakumar moved the Karnataka High Court to challenge the sanction and proceedings against him. Initially, a single judge bench dismissed his petition in April. However, during the proceedings, the bench granted temporary relief to Shivakumar, staying the CBI probe on multiple occasions. Following the dismissal by the single judge, Shivakumar filed an appeal before a division bench of the High Court.

In July, the Supreme Court declined to entertain the CBI's special leave petition challenging the interim orders as they were considered 'purely interlocutory'. Later, in October, the Supreme Court issued a notice on a plea by CBI challenging the Karnataka High Court's June 2023 order that had stayed the investigation against Shivakumar in the disproportionate assets case. This plea was eventually dismissed on November 10th. However, the High Court was urged to expedite the consideration of CBI's application to lift the stay and the pending appeal within two weeks.

Following these events, the Karnataka government withdrew its consent granted to the CBI, and subsequently, the High Court allowed Shivakumar to withdraw his petition challenging the consent for his prosecution.

Counsels for DK Shivakumar: Senior Advocates Mukul Rohatgi & Vipin Sanghi; Advocates Mayank Jain, Madhur Jain, Parmatama Singh, Arpit Goel and Aakriti Dhawan

Case Title: D. K. SHIVAKUMAR VS. CENTRAL BUREAU OF INVESTIGATION, DIARY NO. - 47121/2023

 
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