Karnataka High Court Directs Trial Court To Defer All Proceedings Against CM Siddaramaiah In MUDA Case Till Challenge To Governor's Sanction Is Heard

The Karnataka High Court has taken up a challenge by CM Siddaramaiah seeking to quash an order issued by Governor Thaawarchand Gehlot granting sanction to prosecute him in the alleged multi-crore scam relating to Mysore Urban Development Authority (MUDA). The Court directed the trial court to defer all proceedings against Siddaramaiah, based on the governor's sanction, till the next date of hearing before the High Court.

The High Court also stated that no precipitative action should be taken against the CM based on the complaints.

A single bench of Justice M Nagaprasanna stated:

"I have bestowed by consideration to the prima facie submission. It was argued that the proceedings before the trial court are up for orders on whether a sanction should be granted to prosecute the CM. Any order permitting action to proceed further against the CM, would frustrate the proceedings before this court. Since the proceedings are pending before this Court, the trial court shall defer its proceedings till the next date of hearing. There shall be no precipitative action qua these complaints..." the Court held.

The matter will be next heard on August 29.

The petition challenged the order issued by the Governor on August 17 granting approval for investigation as per Section 17A of the Prevention of Corruption Act and sanction for prosecution as per Section 218 of the Bharatiya Nagarik Suraksha Sanhita.

The petition filed by Siddaramiah has claimed that the sanction order was issued without due application of mind, in violation of statutory mandates, and contrary to constitutional principles, including the advice of the Council of Ministers, which is binding under Article 163 of the Constitution of India.

It is claimed that the impugned order of sanction is tainted with mala fides and is part of a concerted effort to destabilize the duly elected government of Karnataka for political reasons.

Senior Advocate Abhishek Manu Singhvi appearing for the CM submitted that the Governor is bound by a Cabinet decision in such cases, but instead, he issued sanction in a short two-page order without considering the merits of the case.

It was argued that the Governor picked out the present complaint out of multiple pending ones, without any specific reasons.

"You do not need any provision of the Constitution to destabilize the government's milords if a sanction is given like [this]," Singhvi argued.

It was submitted that the two condition precedents for s.17 of the PC Act were missing from the present case.

Singhvi argued that CM Siddaramaiah had no role in the alleged scam since it occurred in the earlier government. It was argued that the sanction was without application of mind and bound to be set aside.

Singhvi questioned the actions of the governor as falling afoul of the Supreme Court's decision in the case of Nabam Rebia.

It was submitted that the complaint which was taken cognizance of was one by 'Abraham'. It was submitted that Abraham's complaint was taken up and show-cause was issued on the very same day, even though there were other pending complaints, where investigation was completed, with the governor.

"He [governor] selectively plucked out this complaint. He said he was not bound by the sanction of the cabinet. I have not even received the complaints yet, which have become part of the governor's order..." Singhvi submitted.

Singhvi pointed to the refusal of the Governor to consider the cabinet's denial to grant sanction on the basis of them being appointed by the CM. It was submitted that instead of considering the well-reasoned denial of the cabinet, the governor chose to override their decision with an order which was not reasoned.

"What has he (Governor) decided? He has decided nothing. The day the meeting of cabinet was held [to consider sanction], Siddaramiah did not attend the meeting. Governor says he has independently examined the petitions. Half-truth is more dangerous than a lie. He has not decided the matter at all," it was argued.

Singhvi submitted that even if the Governor decided that he was not bound by the cabinet, his order granting sanction should have been a reasoned one, which was not the case in this instance.

Singhvi referred to BS Yediyurappa's case, submitting that a division bench of the Karnataka High Court in that case, had held that due to the "uneasy relations" between the then Governor and CM, sanctions granted by the Governor must be viewed in a circumspect manner.

It was submitted that the list of events in the case was as follows: In September 1992, there was a land acquisition notice, which was de-notified in June 1998. In 2004, there was a sale deed in favour of Siddaramaiah's brother-in-law. Then the land was converted in 2005. In 2010, the land was gifted to Siddaramaiah's wife. In 2014, there was compensation claimed for a portion of the land. In 2020 a resolution was passed for getting a portion of the developed land, and a sale deed was issued in 2022 in lieu of compensation for acquisition.

Singhvi submitted that the CM was not in power on these dates, and these transactions did not involve him at all.

It was argued that after 2022, some complainants came along in 2024 and selected only Siddaramaiah to file a private complaint against, despite there being hundreds of other government servants who benefitted from the same parcel of land.

It was argued that the complainant had suppressed certain facts while filing the private complaint against Siddaramaiah.

In referring to Section 17A of the PC Act, Singhvi submitted that the Governor had no power to accord sanction in such fashion under section 17A. He further referred to judgements passed by the Karnataka HC, as well as circulars issued by the High Court.

It was submitted that Section 218 of the BNSS was offence-specific and case-specific, but in this case, there was no reason assigned for taking cognizance under Section 218. 

In hearing the arguments the Bench noted, that in this case, it was appropriate for the Governor to grant sanction on his own, although the same would have needed to be well-reasoned and detailed.

Singhvi reiterated that this sanction was an attempt to destabilise and undermine the state government.

Solicitor General Tushar Mehta, appearing for the Governor, submitted that the cabinet decision denying sanction to prosecute Siddaraimaiah was similar to his petition filed before the High Court.

It was argued that in such cases there only needs to be an apprehension or suspicion of reasonable bias by the cabinet in favour of the Minister against whom sanction is sought.

It was submitted that although the Governor was bound to act on the advice of the cabinet, an exception may be made in the case of a Chief Minister or in cases where the Governor would have to grant sanction by himself.

It was submitted that a reasonable order was passed on record by a constitutional functionary, and an injunction by another constitutional body may be avoided.

In hearing the arguments, the Court stated that the proceedings before the special court, scheduled to be held tomorrow, shall not go ahead while the matter of interim relief was not decided by the High Court.

However, in response to the same, the SG stated that the petitioners and the complainants could seek an adjournment before the special court.

Senor Advocate Prabhuling Navadgi, for one of the complainants, stated that in cases under the PC Act, there cannot be a question of interim order.

The Bench however held that there cannot be any orders passed by the special court, which would frustrate the proceedings going on before the High Court.

Sr Adv Prof Ravivarma Kumar a/w Advocates Shathabish Shivanna, Samrudh Suraj Hegde, and Abhishek Janardhan also appeared for Siddaramaiah.

Case Title: Siddaramaiah AND State of Karnataka & Others. 

Click here to read the order