Electoral Bonds Extortion: Karnataka High Court Quashes FIR Against Former State BJP President Naleen Kumar Kateel

The Karnataka High Court on Tuesday (December 3) quashed proceedings pertaining to an FIR registered against former BJP State president Naleen Kumar Kateel for allegedly extorting money under the guise of electoral bonds

The high court in its order said that the complainant in the case was alien to the alleged transaction and an alien cannot complain of extortion. It further said in its order that the complaint suffers from want of locus to register the complaint. The court further observed in its order that "not even a modicum" of ingredients of the alleged offence have made out even in its "prima facie sense", and what the complainant had projected is a "huge hocus-pocus", but he in fact has "no locus".

Earlier today the Justice M Nagaprasanna while pronouncing the order had said, "Petition allowed. Proceedings stand quashed qua the petitioner". The high court had on November 20, reserved its order on the petition filed by Kateel, seeking quashing of an FIR registered against him for allegedly extorting money under the guise of electoral bonds. Union Finance Minister Nirmala Sitharaman is also a co-accused in the case.

The complaint was filed by one Adarsh Iyer alleges that action by government agencies like ED was used to threaten companies and make them buy electoral bonds. Taking cognizance of the same the Magistrate court had directed registration of FIR. Earlier by way of interim order the court had stayed further investigation in the case.

In its order the high court while referring to IPC section 383 which pertains to extortion said, "For offence of extortion, element of consent by putting the victim in fear of injury is imperative."

Following which it said, "The petitioner or other accused should have put the complainant in fear for delivery of property. It is not the case of the complainant, even in the complaint, that he has been put to fear of injury and he has delivered any property to the accused. Therefore, meeting of ingredients, in the case at hand of Section 383 of the IPC, as elucidated by the Apex Court, is a figment of imagination, of the complainant."

It added that iff a "victim had complained" that he had purchased electoral bonds it would have been an "altogether different circumstance". The court said that offence of extortion was not made out in the present case with respect to the petitioner.

It said, "If the offence under Section 383 as made penal under Section 384 itself is not made out, it can hardly be said that further investigation must be permitted only for offence under Section120-B of the IPC. Therefore, the offence of 120-B of the IPC gets subsumed on the reasons rendered to hold that the offence under Section 384 is not met in the case at hand."

Dealing with the contention of whether the complainant, could be considered to be an aggrieved person, the court noted that the complainant is Co-President of Janaadhikaara Sangharsha Parishath and admittedly is "not the victim".

The court noted that it was not the complainant's case that he has been put into fear for delivery of any property and the property has been delivered by him to the accused. It said, "Therefore, he is alien to the alleged transaction or the observations made by the Apex Court."

Stating that Section 39 of Criminal Procedure Code, clearly demarcates what are the offences that can be complained of by the public and person aggrieved, it said, "Any person can set the criminal law in motion only insofar as offences enumerated in Section 39 and notwithstanding the enumeration under Section 39, if the officer in-charge of the Police Station would not register the crime, it would not lead to incongruity".

The high court observed that Section 33 of the Bharatiya Nagarik Suraksha Sanhita, 2023 is the corresponding provision of Section 39 of the Cr.P.C. It said that there is again no change, addition or deletion of offences enumerated in Section 39 of the Cr.P.C., in Section 33 of the BNSS.

The court thus held "I have no hesitation to hold that the complaint suffers from want of locus to register the complaint even for offence punishable under Section 384 of the IPC for extortion. The learned Magistrate who has referred the matter for investigation in terms of his order supra does not advert to this issue. Merely because thecomplainant has registered a complaint which projects alleged extortion, the learned Magistrate cannot become a rubber stampPresiding Officer to the complaint, to refer the matter for investigation, without application of mind to the relevant statutory provisions".

It added "He (Complainant) is an alien to the transaction and an alien cannot complain of extortion."

Allowing the quashing petition the court said, "In the case on hand, there is not even a modicum of ingredients of the offence made out even to its prima facie sense, what the complainant projects is a huge hocus-pocus, but alas, he has no locus. Therefore, I deem it appropriate to exercise my jurisdiction under Section 482 of the Cr.P.C., and annihilate the crime so registered against the petitioner/accused."

During the hearing earlier, advocate Prashant Bhushan appearing for the complainant had argued that the allegations made in the matter are a “classic case of extortion” as defined. He had said, “A person against whom extortion is done is also a beneficiary of the crime, because after paying raids of ED, IT stopped against him. So he did not report it. It is only ordinary citizens who are going to report the crime”.

He had submitted, "Lordships has stayed investigation of the main ground it seemed it required serious consideration and said complaints can be made only by aggrieved.The specific bar is created by CrPC for example, offence regarding marriages. Similarly, there is a specific bar for prosecution for defamation under the new code".

He had further said that there is no bar created for the offence of extortion and that there is a positive obligation created by the new code on the public to give information for certain offences.

"So far as this particular offence of extortion is concerned no bar created by the new CrPC. But the offence of extortion in this case is a kind of extortion where every member of the public is interested. This is an extortion to take money on behalf of a political party. SC in its judgment said such taking of money through EB is eschewing the election platform. Therefore, everybody is aggrieved," he said.

He had submitted that due to this level playing field in the election is affected and therefore every person is an aggrieved person. "SC said that a contribution if made with intend to alter public policy or to hide a crime..certainly then everybody would be interested," Bhushan added.

"When the ruling party is able to secure huge money through electoral bonds, then milord, its distorts the level playing field in electoral politics and every citizen is aggrieved. It is extortion to close a criminal offence," he said.

He further submitted that as per the Supreme Court's decision in Lalita Kumari, the magistrate has to go by allegations made in the complaint and that all the ingredients of extortion are made in the complaint. Referring to the provision on extortion Bhushan said that it says that a person has to be put under fear, adding that the fear herein are the proceedings under PMLA will continue and the concerned persons "may be put in jail and lose reputation". This, thereby induces that person to pay, he said.

Bhushan had then said, "ED is under Central Govt and Central Govt is a ruling party. ED functions as instrumentality of that govt and puts the company under fear. They give electoral bonds and then action ceases.As per Lalitha Kumari only the facts have to be looked into by the magistrate and further details will come out during investigation. It is clearly an allegation of extortion. No option for police or magistrate but to order FIR.In my submission, in such offence there is no requirement that only aggrieved person should move the court".

Bhushan further said that stopping or interdicting the investigation would lead to great harm to the public and sought that the quashing plea be dismissed.

Meanwhile senior advocate KG Raghavan appearing for the petitioner said that interpretation of Section 383 IPC (extortion) cannot change upon facts of each case, adding that the victim was not before the court and the complainant had not suffered.

He thereafter had referred to Section 39 (Public to give information of certain offences) CrPC, and said that it is a statute law. He thereafter read the section in regard to what are the cases where a person is required to give information to police and said that Sec 383 IPC (extortion) is not set out in the provision.

"If a person who is deprived of property does not want to make a grievance about it, then the third person cannot say you have been deprived of your property...can somebody else come and say NO we don't want thieves in the society to go Scot free. Therefore, I will lodge a complaint. This is taking the law to an absurd situation.If somebody assaults me and I don't want to complain. Then can somebody else complaint. Sec 39 of CrPC sets out the offence in which a person who is not aggrieved can file the complaint," Raghavan said.

He had submitted that there are several remedies available to the complainant, adding that the complainant is not the victim and neither have the accused benefitted anything. He further said that the victim is not complaining and if the victim makes the complaint the complexion of the complaint will change.

"However, bona fide the complaint and may be canvassed in public interest. But having regard to the state of the law, we are bound to go not by substantial provisions of penal code but also by provisions of Criminal code," he had added.

Case title: Naleen Kumar Kateel v State of Karnataka

Case No: Criminal Petition No: 10321 of 2024.

Counsel for Petitioner:Senior Advocate K G Raghavan for Advocate Suyog Herele E

Counsel for Respondent 2: Advocate Prashant Bhushan

Citation: 2024 LiveLaw (Kar) 493

Click Here To Read/Download Order