Bengaluru, Apr 2 (UNI) The Karnataka High Court on Wednesday refused to grant a stay on the single judge’s order quashing the Enforcement Directorate’s (ED) summons issued to DB Natesha, former Commissioner of Mysore Urban Development Authority (MUDA).

However, the court clarified that the order would not impede the ongoing investigation into the alleged illegal allotment of land to Chief Minister Siddaramaiah’s wife, Parvathi.

A division bench comprising Chief Justice NV Anjaria and Justice KV Aravind, while delivering its order, stated, "The prayer for stay as such is not accepted. However, we have found in favour of this judgment, which is not in rem and cannot stall investigation against other persons involved in the case. We have permitted investigations to continue."

The court also affirmed that the ED is free to utilise all evidence, documents, and statements obtained from the petitioner in the course of its investigation.

The detailed copy of the order is awaited.

On March 27, the division bench had reserved its verdict on the ED’s plea seeking a stay on the single judge’s order. The single judge had ruled that the search and seizure operations conducted at Dr Natesha’s residence, as well as his statements recorded under Section 17(1)(f) of the Prevention of Money Laundering Act (PMLA), were invalid due to the absence of 'reason to believe, a mandatory requirement under the law. The summons issued under Section 50 of the PMLA was also quashed.

Following this, the ED filed an appeal challenging the order and requested a stay, arguing that the judgment effectively halted the investigation.

During the hearings, Additional Solicitor Generals SV Raju and Aravind Kamath, representing the ED, contended that the single judge’s ruling was "perverse" and prevented the agency from conducting further searches. They maintained that the absence of a stay would set a precedent affecting future investigations.

Senior Advocate Dushyant Dave, appearing for Natesha, argued that the case lacked any element of money laundering as the allotment of plots was a government policy decision. "It may be a wrong decision, but there is no money derived from criminal activity. Therefore, there are no proceeds of crime," he submitted.

He further contended that the ED had failed to establish "reason to believe" as required under PMLA, citing Supreme Court precedents that defined it as a higher standard than mere suspicion. Referring to the ongoing ED inquiries in opposition-ruled states, Dave asserted, "Across the country, this is happening. This is a way of destabilising governments. Why has it not happened in a single BJP-ruled state?"

Countering these claims, ASG Kamath argued that there was a prima facie case and that the proceeds of crime were generated through criminal activity by influential persons who directed the commissioner to allot 14 sites in violation of legal norms. "A past commissioner knows exactly what documents he has issued," he stated. UNI BDN SSP