Karnataka High Court Orders Release Of ₹53.46 Lakh Cash Seized From DK Shivakumar's Associate

A single bench of Justice John Michael Cunha while allowing the petition filed by Wellworth Software Pvt Ltd and Sachin Narayan said "In the absence of any prima facie material to show that the seized amount has any nexus with the alleged disproportionate assets investigated by the respondent police, in my view, the petitioners are entitled for the interim custody of the seized cash."

Case Background:

During the course of investigation into the FIR registered against  D.K. Shivakumar under Section 13(2) read with Section 13(1)(e) of PC Act, 1988, respondent-CBI police conducted a search in the company premises of M/s. Wellworth Software Private Limited and in the residence of one Sachin Narayan and cash of Rs.47,98,000 and another bundle of cash of Rs.5,48,000, were seized and the same was produced before the learned Special Judge.

The special judge had by its order dated November 20, 2020 had rejected the application filed by the petitioners, following which they moved the High Court.

Contentions of the Petitioner:

Wellworth Software Private Limited as well as Sachin Narayan, claiming interim custody of the seized cash. contended that the seized amount has no connection with the matter under investigation by the police and therefore, the retention of the said property is not necessary either for the purpose of investigation or for the purpose of eventual trial.

CBI Opposed the petitions.

Special Public Prosecutor for CBI, contended that Narayan who has been running the aforesaid company, is a business partner of the wife of D.K. Shivakumar, who is accused in the crime. The investigation into the source of her funds is in progress. Under the said circumstances, the petitioners are not entitled for the release of the funds.

Further, referring to the bank extracts relating the company run by the petitioners, the learned SPP contends that in all other cases the amounts collected by the local cable operators were directly deposited into the bank account of the petitioners and therefore the explanation offered by the petitioners that the seized amount was collected from the local cable operators in cash cannot be believed.

Court findings:

The bench went through the documents produced by the petitioners which pointed that as per the business practice of the Company, the amount was regularly collected from the various cable operators and a receipt was issued in acknowledgement thereof. That regularly the amount was credited to the bank account of the company and thereafter the same was passed on to the broadcasters.

It accordingly said "There is no prima facie material to show that the cash seized from the registered office of the company or the residence of the petitioner is anyway related to the proceeds of the crime alleged against Sri. D.K. Shivakumar or his wife."

It added "Having regard to the documents produced by the petitioners, explaining the source of the funds seized from their possession, it has to be held that the petitioners are the rightful owners of the seized amount and are legally entitled for the interim custody of the seized cash. Even otherwise, the interim release of the seized property does not preclude the respondent from investigating into the source of the said funds of the public servant. Petitioners are not accused of abetting the offence by the public servant. In the said circumstances, there is no justification to retain the cash belonging to the petitioners."

The bench also took into account the order passed by the Supreme Court in the case of Sunderbhai Ambalal Desai vs. State of Gujarat with C.M. Mudaliar vs. State of Gujarat reported in (2002) 10 Supreme Court Cases 283, in which it has laid down the guidelines for release of the properties seized during investigation. Also the fact that a coordinate bench of this court in an identical situation, in Crl. RP. No.636/2018, dated 30.08.2018, has allowed the petition.

The bench accordingly, set aside the order of the Additional City Civil and Sessions judge and allowed the petitions. Subject to executing an indemnity bond for the equal amount and surety for the likesum to the satisfaction of the trial court