SC dismisses ED's plea against bail to Shivakumar in money laundering case

The Supreme Court Friday dismissed the Enforcement Directorate's plea challenging the Delhi High Court order granting bail to Karnataka Congress leader D K Shivakumar in a money laundering case. A bench comprising justices R F Nariman and S Ravindra Bhat rejected the request of Solicitor General Tushar Mehta, who appeared for the ED, and said the issue should be heard as it raises an important legal question.

The high court had on October 23 granted bail to Shivakumar, saying he cannot tamper with evidence or influence witnesses and no material has been shown to indicate that he was a flight risk. Shivakumar, a seven-time MLA in Karnataka, was booked along with Haumanthaiah, an employee at the Karnataka Bhavan in Delhi, and others for alleged offences under the Prevention of Money Laundering Act (PMLA).

The ED had arrested Shivakumar on September 3 in the money laundering case. The case was based on a charge sheet filed by the Income Tax Department against them last year before a special court in Bengaluru on charges of alleged tax evasion and 'hawala' transactions worth crores of rupees.

The I-T department has accused Shivakumar and his alleged associate S K Sharma of indulging in transactions involving huge amounts of unaccounted money on a regular basis through 'hawala' channels with the help of three other accused. During the hearing on Friday, Mehta told the apex court that the appeal should be heard as it raises a legal question as to whether the Indian Penal Code's section 120-B (criminal conspiracy) could be a "stand-alone" offense.

Senior advocates Mukul Rohatgi and A M Singhvi, appearing for Shivakumar, opposed the ED's plea and said it should be dismissed. Rohatgi said that the ED's appeal was "a cut and paste job and they (ED) have referred to facts of some other case in the petition".

He said Shivakumar has been referred by the ED as a former union minister in the petition, which shows it is only a cut and pastes job. Singhvi, on the other hand, referred to the high court order and said it has been held that Shivakumar is neither a flight risk nor can he tamper with any evidence.

The Solicitor General countered the arguments of Shivakumar's counsels and said, "I fail to understand that issuance of notice is being opposed on the question of law". The bench told Mehta, "Do not invite us to say something. It is not the way you will deal with citizens' rights".

Rohatgi then referred to section 45 (1) of the PMLA, which was struck down in 2017 by the apex court which had said it was "manifestly arbitrary" and "unconstitutional". Section 45(1) of the PMLA, which was struck down, imposed stringent conditions for securing bail of a person accused in offense of money laundering.

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