Karnataka HC Stays Criminal Intimidation Case Against ED Officers Investigating Kolar-Chikkaballapur District Co-op Milk Producers Union Recruitment Scam

The Karnataka High Court on Friday stayed further investigation in a criminal intimidation case against the Enforcement Directorate (ED), its Deputy Director Manoj Mittal and Assistant Director Ajay Kumar Vaidya, lodged by a suspect who is allegedly involved in the recruitment scam at Kolar-Chikkaballapur District Cooperative Milk Producers Union.

It was alleged by the ED that they had found irregularities in the recruitment process upon completing a raid at MLA Nanje Gowda's premises. Upon discovering the lead, the ED conducted subsequent raids and collected vital evidence from the premises of YB Ashwathanarayana, Director of Kolar-Chikkaballapur District Cooperative Milk Producers Union. 

It was submitted that while Ashwathanarayana did not file any representation against the ED search, and had admitted to taking Rs 80 lakhs for 5 admissions, he subsequently filed a complaint against members of the raiding party u/s 506 (criminal intimidation), 34 (common intention), 323 (Punishment for voluntarily causing hurt) and 324 (Voluntarily causing hurt by dangerous weapons or means) of the IPC.

Upon hearing the plea, a single-judge bench of Justice K Natarajan granted interim relief on the petition filed by the central agency, by staying the proceedings.

The FIR is lodged at Wilson Garden police station under Sections 323, 324, and 506 read with Section 34 of IPC.

Additional Solicitor General appearing for ED submitted the petitioners are said to have used PVC pipes which is not a deadly weapon under Section 324 of IPC, and that the remaining offences are non-cognizable.

Following this the court said, “Considering the same, the further investigation against the petitioners in Crime No.16/2024 registered by Wilson Garden Police Station is hereby stayed till the next date of hearing.” The court also issued notice to the respondent, state government.

As per the plea, based on the ECIR dated 30.11.2023, the Enforcement Directorate, conducted search and seizure operations on 08.01.2024, in case of KY Nanje Gowda, MLA, Malur, Karnataka and others regarding the illegal allotment of Rs.150 crore worth of Government land to ineligible individuals.

During the search & seizure action, one more scam related to the ongoing recruitment at Kolar-Chikkaballapura District Co-operative Milk Producers Union Ltd. (KOMUL) was uncovered.

ED submitted that it was ascertained that the Recruitment Committee, under the leadership of KY Nanje Gowda and the other involved persons, were found to have manipulated the entire recruitment process held in September 2023.

It was argued that during the search proceedings in the instant case, the premises of respondent no.2 (Y. B. Ashwathnarayana) were also covered, from where incriminating documents which indicated that he had favoured certain candidates in lieu of money, were recovered and seized.

ED said that he was issued a summons dated 16.01.2024 and he appeared before the office on 23.01.2024, after which the impugned FIR was lodged with the respondent police.

The complaint and the FIR are vexatious and actuated by malice and therefore deserve to be quashed, submitted the ED.

Further, it is claimed that the proceedings under Section 50 of PMLA initiated by the petitioners under the PMLA, 2002, are deemed to be judicial and to wriggle out from the said proceedings, respondent No.2 had lodged a false complaint.

The plea further states that ordinarily, any complaint of this nature should be immediate and contemporaneous, but when the ED sent their initial representations, there was not an iota of whisper or complaint regarding the alleged coercion or threat, during search.

It is argued that the complaint was an afterthought and that if a basic preliminary inquiry had been made then it would be clear that the complaint had been filed only to derail the investigation and create obstruction in the public duties of the investigating officers, inquiring and Investigating into the serious offence of money laundering.

Case Title: Enforcement Directorate & Others AND State of Karnataka & ANR

Case No: Criminal Petition No 930/2024.