CM Siddaramaiah Was At Helm Of Affairs, Prima Facie "Rules Bent To Favour His Family": Karnataka HC While Upholding Sanction In MUDA Case

The Karnataka High Court today said it is difficult to accept that CM Siddaramaiah was not “behind the curtain” during the entire transaction of MUDA land, in which his family allegedly benefitted approximately ₹56 crores.

The observation was made while upholding sanction granted by the Governor under Section 17A of the Prevention of Corruption Act and Section 218 of the Bharatiya Nagarik Suraksha Sanhita for investigation/ prosecution against the Chief Minister in the alleged Mysore Urban Development Authority (MUDA) scam.

Siddaramaiah was the CM in 2013 when his wife submitted a representation to MUDA, contending that it had acquired and formed sites in her lands in 2001 and therefore she is entitled to compensatory sites in the ratio of 50:50. The rule that was then existing was 60:40 but soon thereafter, in 2015, the Rule was amended to grant sites at 50:50 ratio. Interestingly, Siddaramaiah's son participated in the meeting where a resolution to this effect was passed by MUDA.

Taking into account all these factors, single judge bench of Justice M Nagaprasanna said,

"It is rather difficult to accept that the beneficiary of the entire transaction to which compensation is determined at Rs 3.56 lakhs to become Rs 56/- crores is not the family of the petitioner...How and why the Rule was bent in favour of the family of the Chief Minister is what is required to be investigated into. If this does not require investigation, I fail to understand what other case can merit investigation, as the beneficiary is the family of the petitioner and the benefit is by leaps and bounds, it is in fact a windfall. If the beneficiary were to be a stranger, this Court would have shown the complainants their door of exit, while it is not."

From 1996 to 1999 and in 2004 and 2005, Siddaramaiah was the Deputy CM of Karnataka. He came to power as the head of State in 2013-2018. He is currently serving as the CM since 2023. His son was an MLA between 2018 and 2023.

The purchase of the property in question was on an offset price of Rs 300 in the year 1935. The determined compensation amount in favour of the owner was at Rs 3,56,000 in the year 1997. In 2021, this amount escalated to Rs 56 crores.

Court said had Siddaramaiah not been at the "helm of affairs", the benefit with such magnitude would not have flown. “It is unheard of for a common man to get these benefits in such quick succession, bending the rule from time to time.”

Interestingly, after the 14 sale deeds were registered in favour of the CM's wife, the Urban Development Department issued directions to the MUDA Commissioner to stop allocation of compensatory sites till guidelines are formulated. “Therefore, the law was completely towards prima facie illegality only to favour the wife of the petitioner as the very allotment of sites as compensation is said to be contrary to the Compensation for Land Acquired Rules 2009 and Incentive Scheme of Voluntary Surrender of Land Rules,1991,” Court added.

It said there are certain dots which need to be connected in the chain of events and the same would require inquiry, which the sanction facilitates.

It also rejected the CM's contention that he made no recommendation nor signed any document to the transaction. It said, “It is too bleak a contention meriting any acceptance albeit prima facie that the petitioner was not behind everything standing just behind the curtain. It is not behind the smoke screen but behind the curtain even.”

In parting, the Court remarked that Siddaramaiah cannot plead complete ignorance about what is happening in his wife's life.

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Case title: Siddaramaiah AND State of Karnataka & Others.

Case No: WRIT PETITION No.22356 OF 2024

Citation No: 2024 LiveLaw (Kar) 413

Click Here To Read/Download Judgment