Proceedings against DKS: SC notice to ED, I-T

The Supreme Court has issued a notice to the Enforcement Directorate and the Income Tax authorities on a plea by former minister D K Shivakumar to quash the proceedings initiated against him in a money laundering case.

A bench of Justices Rohinton F Nariman and S Ravindra Bhat restrained both the agencies from taking any coercive action against the senior Congress leader.

The court sought a response from both the agencies on a special leave petition filed by the seven-time MLA against the Karnataka High Court’s order of August 29, 2019, that had declined to grant any relief to him.

On Friday, the court had dismissed the ED’s plea against the bail granted to Shivakumar by the Delhi High Court on October 23. The court also expressed strong displeasure after it was pointed out that the ED had lifted paragraphs from its petition filed against P Chidamabaram, and described Shivakumar as former Union Home and Finance Minister.

“Issue notice. No coercive action shall be taken against the petitioner in the meanwhile,” the court ordered, admitting his petition for consideration. The court decided to take up Shivakumar’s matter along with a petition filed by Bengaluru-based businessman and co-accused Sunil Kumar Sharma. He had already been granted protection from arrest or any other coercive action on October 16, 2019, by a bench led by Justice Nariman.

Shivakumar was arrested on September 3, 2019, in a case registered on August 29, 2018, on allegations of laundering money to the sum of Rs 143 crore. He remained in ED custody for 15 days and in Tihar Jail thereafter, before his bail on October 23.

In his plea, Shivakumar contended the entire proceedings initiated against him was an offshoot of the searches conducted by the I-T department sleuths at New Delhi and other places on August 2, 2017. His plea stated that the action under the Prevention of Money Laundering Act cannot continue on the basis of the penal provision of Section 120B (criminal conspiracy) of the IPC and the provisions of the I-T Act.

The charges of “money laundering” can get attracted, only when the “proceeds of crime” were attempted to be ploughed into the mainstream of the economy. His petition further maintained Section 120B of IPC cannot be invoked in the absence of predicate offence under the law and further the offences under I-T Act were not to be treated as scheduled offences.