Karnataka HC verdict on CBI plea to allow corruption probe against D K Shivakumar on August 29

Shivakumar, who is also the state Congress chief, had appeared before the Karnataka Lokayukta police on August 22 to cooperate with the probe in the illegal assets case. He accused the CBI and the Lokayukta police of harassing him by subjecting to long periods of questioning.

The CBI plea to allow investigation of the corruption charges against Shivakumar, along with a similar petition filed by BJP MLA Basanagouda Patil Yatnal, were referred earlier this year to the division bench by a single judge due to the involvement of serious legal issues.

Shivakumar has been represented by senior Congress leaders and advocates Kapil Sibal and Abhishek Manu Singhvi in the arguments of the case.

The CBI and the BJP MLA have approached the Karnataka High Court over the move of the Congress government to withdraw consent and have referred to the Supreme Court orders where CBI investigations have been allowed to continue after withdrawal of state consent.

The CBI and the BJP MLA have cited the Supreme Court ruling in the Khazi Lhendup Dorji vs CBI case from 1994 where the apex court ruled that the revocation of consent for a CBI probe would not affect cases where investigations are already underway.

The counsels for Shivakumar have argued that the original September 25, 2019 order of the state government – during the tenure of the BJP – for granting CBI sanction for investigation “reeks of malafide”.

The entry of the CBI into the state based on a void consent order would be a violation of federalism which is part of the basic structure of the Constitution, the counsels argued. While the Khazi Dorji case of 1994 involved a general consent, the case of Shivakumar involved specific consent for a CBI investigation, it was argued.

The CBI registered a DA case against Shivakumar on October 3, 2020 based on consent given by the previous BJP government on September 25, 2019, following a reference by the Enforcement Directorate to probe corruption charges that emerged in an Income Tax probe.

The Congress government, which replaced the BJP in Karnataka in May 2023, withdrew the consent given in 2019 to the CBI to investigate disproportionate assets allegations against Shivakumar after a cabinet decision on November 23, 2023. The Congress has stated that the case was referred to the CBI in 2019 even before an FIR was registered in 2020.

The CBI has alleged that Shivakumar amassed Rs 74.93 crore of wealth disproportionate to known sources of income from April 2013 to April 2018, when he was the energy minister in a previous Congress government in the state.

Shivakumar was arrested by the ED in September 2019 on the basis of money laundering charges that emerged from an Income Tax department probe against the Congress leader between 2017 and 2019. He was released on bail in the ED case in October 2019.

The ED wrote to the Karnataka BJP government in 2019 to look at the possibility of corruption in the money laundering case against Shivakumar by ordering a CBI probe. The BJP government under B S Yediyurappa granted consent to the CBI to probe corruption charges.

On March 5, this year the Supreme Court quashed the ED proceedings against Shivakumar by citing its own judgement of November 29, 2023 in the Pavana Dibbur case where it ruled that money laundering proceedings can be initiated by the ED only in the event of the laundered funds being linked to a major/scheduled crime.

The Supreme Court in November 2023 had ruled in the Pavana Dibbur case from Karnataka that PMLA charges require involvement of a serious predicate offence and that PMLA charges cannot be brought with no serious crime linked to the funds that are alleged to be laundered.

The PMLA charge against Shivakumar for which he spent a month in the Tihar jail in 2019 was brought by the ED on the basis of an allegation that the Congress leader and associates were part of a criminal conspiracy to evade Income Tax on their earnings which is not a scheduled offence for triggering PMLA proceedings.

The Supreme Court ruled in the Pavana Dibbur case that “The offence punishable under Section 120 B of the IPC (criminal conspiracy) will become a scheduled offence only if the conspiracy alleged is of committing an offence which is specifically included in the Schedule”.

The ED launched proceedings in a money laundering case against Shivakumar in 2018 after IT searches carried out between August 2, 2017, and August 5, 2017, at around 70 premises linked to him, who was then the energy minister in the Congress government in Karnataka.

Shivakumar was sheltering 42 Gujarat Congress MLAs ahead of a Rajya Sabha poll to prevent poaching by the BJP when the IT searches took place.

The cancellation of multiple cases filed against Shivakumar – especially for corruption and money laundering – are considered key steps that would facilitate the Congress leader’s aspirations of becoming the Karnataka chief minister during the current Congress tenure.