Manas Dasgupta
NEW DELHI, Aug 29: In a major relief to the Karnataka Deputy Chief Minister and the state Congress chief D K Shivakumar, the Karnataka High Court on Thursday dismissed as “non-maintainable” a CBI plea against a state government decision to withdraw consent to investigate a disproportionate assets case against him since the state had withdrawn permission for the federal agency to operate in its jurisdiction.
A bench comprising Justices K Somashekhar and Umesh Adiga dismissed the CBI challenge to a November 28, 2023, decision of the Congress government to withdraw consent to investigate alleged illegal assets of Shivakumar, and a December 26, 2023, order to refer the matter to the Lokayukta for an inquiry.
The court has said in a 67-page judgement that the matters raised in the pleas have to be addressed by the Supreme Court, which is seized of similar issues in other petitions. Chief Minister Siddaramaiah’s government had revoked permission under Section 21 of the General Clauses Act, which allows government to amend or cancel earlier orders. The court, simultaneously, also rejected a similar petition by the BJP’s Basanagouda Yatnal.
The CBI has been given liberty to approach the Supreme Court but cannot, at this time, investigate corruption charges against the Deputy Chief Minister. The case has been given to the Lokayukta. Mr Shivakumar has declared he will accept any ruling by the top court as “God’s decision”.
“I believe in the courts… and I believe in God. I will accept the court’s decision as God’s…” he told reporters this morning while inspecting an infrastructure project in Karnataka’s Sakleshpur. Speaking earlier this month too, the Congress leader had said, “I am aware of (the CBI’s probe)…let them. I am ready to face the consequences,” he said, claiming a conspiracy to arrest him and warning his rivals he would “start revealing scams committed (by them)…”
Mr Shivakumar, who is also the ruling Congress’ state unit boss, appeared before a Lokayukta panel last week, as summoned, to cooperate with its inquiry into the illegal assets case against him. In November last year the Congress withdrew consent for the CBI’s investigation, which began back in September 2020. The CBI claims Mr Shivakumar amassed assets disproportionate to known sources of income from 2013 to 2018; he was a minister in the Congress government of the time. The amount in question is believed to be ₹ 74 crores.
That consent – declared “illegal” – had been granted by the previous government – run by fierce rivals BJP. The move triggered a predictable political row, with the BJP and its ally, the Janata Dal (Secular) up in arms; they accused the Congress of an “immoral” decision to protect Mr Shivakumar. Ex Chief Minister BS Yediyurappa, whose government summoned the CBI, hit back saying it was the Enforcement Directorate (another federal agency) that claimed DKS had violated anti-corruption laws.
He also pointed out the High Court, in a separate plea in October last year, before consent was withdrawn, refused to quash the case against Mr Shivakumar, pointing to submitted evidence. The spat worsened in December after the case was given to the Karnataka Lokayukta.
The CBI plea, along with a similar petition against Shivakumar filed by BJP MLA Basanagouda Patil Yatnal, was referred earlier this year to the division bench by a single judge due to the involvement of serious legal issues. The CBI and the BJP MLA referred to Supreme Court orders where CBI investigations had been allowed to continue after the withdrawal of state consent.
They 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 inquiry would not affect cases. Shivakumar’s counsel argued that the original, September 25, 2019, government order—issued when the BJP was in power—granting the CBI sanction for investigation “reeks of mala fide”.
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 counsel argued. While the Khazi Dorji case involved general consent, Shivakumar’s case involved specific consent for a CBI investigation, it was argued.
The CBI registered a disproportionate assets case against Shivakumar on October 3, 2020, based on consent given by the then BJP government following a reference by the Enforcement Directorate to investigate corruption charges that emerged in an Income Tax Department probe.
The Congress government, which came to power 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, disproportionate to his 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 inquiry 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 BJP government in 2019 to look at the possibility of corruption in the money-laundering case against Shivakumar by ordering a CBI inquiry. The BJP government under B S Yediyurappa granted consent to the CBI to investigate corruption charges.
On March 5, the Supreme Court quashed the ED proceedings against Shivakumar by citing its judgment of November 29, 2023, in the Pavana Dibbur case, where it ruled that money-laundering proceedings can be initiated only in the event of the laundered funds being linked to a major/scheduled crime.
In the November 2023 order, the apex court ruled that charges under the Prevention of Money Laundering Act require the involvement of a serious predicate offence and that PMLA charges cannot be brought with no serious crime linked to the funds 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 his 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, “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 the proceedings in 2018 after income tax searches carried out between August 2, 2017, and August 5, 2017, on some 70 premises linked to Shivakumar when he was the state energy minister. Shivakumar was sheltering 42 Gujarat Congress MLAs ahead of a Rajya Sabha polls to prevent poaching by the BJP when the income tax searches happened.
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 to become the chief minister during the current Congress tenure.