In a relief to Karnataka Deputy Chief Minister D K Shivakumar, the Supreme Court on Tuesday quashed proceedings against him and his aide Anjaneya Hanumanthaiah in an alleged 2018 money laundering case.
A bench of justice Surya Kant and Justice K V Viswanathan quashed the proceedings under the provisions of the Prevention of Money Laundering Act, allowing his appeal against the 2019 Karnataka High Court order, refusing to quash the summons issued to him by the Enforcement Directorate to appear before it for investigation.
The Directorate of Enforcement had issued summons to Shivakumar in February 2019 to appear before it.
Prior to the Directorate of Enforcement summoning Shivakumar, the Income Tax authorities had in 2017 conducted searches at various premises in Delhi. During the raids an alleged cash of Rs seven crore was seized. The Income Tax Department has registered a complaint.
Thereafter, the Directorate of Enforcement swung into action and summoned the Deputy Chief minister and others for alleged money laundering.
Shivakumar claimed that he was facing illegal proceedings without jurisdiction, and matter has been erroneously registered for investigating offence punishable under Section 3 of the Prevention of Money Laundering Act, 2002. He said, “the admitted basis of commencing investigations under PMLA is a Criminal Complaint filed by the Income Tax Authorities which alleges criminal conspiracy’ punishable under Section 120B of IPC, only for alleged commission of such offences punishable under the Income Tax Act and Indian Penal Code, which are not amongst “Scheduled Offences” in PMLA.”
“In absence of any conspiracy for commission of any “Scheduled Offence”, no “proceeds of crime” as defined in Section 2(u) can be said to exist. Consequently, Section 3 of PMLA cannot apply,” the petition said.
Shivakumar in his plea said the High Court despite recording the admitted position, erroneously declined to entertain, and dismissed the petition.
“In the instant case, the alleged conspiracy is to commit offences under Income Tax Act or Indian Penal Code, which are not amongst Scheduled Offences. If alleged commission of these offences would not render any property, purportedly obtained or derived as a result thereof, as “proceeds of crime” as defined in Section 2(1)(u), conspiracy to commit these offences would not render any such property “proceeds of crime”, the petitioner said.