K'taka HC rejects Union Bank of India's plea seeking transfer of Valmiki scam probe to CBI
Bengaluru, Nov 13: The Karnataka High Court on Wednesday dismissed a petition by Union Bank of India seeking transfer of the investigation of the alleged scam involving the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd to the CBI.
The petition was heard by Justice M Nagaprasanna, who ruled that Section 35A of the Banking Regulation Act could not be used as grounds for such a transfer. He noted that allowing this could lead to an overreach by banking institutions, potentially undermining the Delhi Special Police Establishment Act (DSP Act).
The case, reserved for judgment on September 30, focused on two main questions: whether the petition should be referred to the Supreme Court under Article 131 of the Constitution, and if Section 35A of the Banking Regulation Act justified seeking a CBI investigation without invoking the DSP Act.
The Karnataka government, represented by senior advocate B V Acharya, argued against allowing the petition, stating that the state police have the statutory authority to investigate the case, and this authority should not be overridden by the central government.
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Acharya emphasised that any dispute between the central and state governments must be addressed by the Supreme Court, not the High Court, as per Article 131 of the Constitution. He added that the RBI's master circular does not grant CBI the power to register or investigate cases, and Section 35A of the Banking Regulation Act does not extend such authority.
Senior Advocate Professor Ravivarma Kumar, representing the state-run Corporation, supported the state's stance.
He argued that the CBI's authority is limited to investigating crimes that are specifically notified and that the bank's plea to transfer the case to CBI was unfounded as the issue lies within the state's jurisdiction.
Attorney General R Venkataramani, representing Union Bank of India, argued for the necessity of transferring the probe to the CBI to safeguard the integrity of the banking system.
He contended that RBI's directions under Section 35A should be interpreted broadly to include CBI investigations, especially in cases involving potential bank frauds.
Venkataramani stressed that banking institutions are crucial to the nation's economic stability, and specialised agencies like the CBI are better suited to handle such sensitive cases.
The illegal money transfer scam involving Corporation came to the fore, after its accounts superintendent, Chandrasekharan P, died by suicide on May 26, leaving behind a note.
After the scam came to light, Congress MLA B Nagendra resigned as the Scheduled Tribes Welfare Minister in June. The ED had in July arrested Nagendra under the provisions of the Prevention of Money Laundering Act (PMLA), and also five other key accused during the investigation. He was released on bail last month.
The ED had said its investigation revealed that under the influence of Nagendra, the account of the corporation was moved to the MG Road Branch (of the bank) without any proper authorisation, where Rs 187 crore, including Rs. 43.33 crore from the State Treasury under the 'Ganga Kalyana Scheme', were deposited without following proper procedures and in violation of government guidelines.
These funds were subsequently siphoned off through multiple shell accounts and converted into cash and bullion. ED investigation also revealed that an amount of Rs 20.19 crore of the diverted funds was used to support a candidate contesting the 2024 Lok Sabha election from the Bellary constituency, as well as for the personal expenses of Nagendra, the federal probe agency has said.
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National Herald case: Shivakumar to seek time next week to appear before Delhi police
New Delhi/Bengaluru (PTI): Karnataka Deputy Chief Minister D K Shivakumar on Monday said he will ask for time from Delhi police to appear before them next week, to provide required information as part of the probe into the National Herald case.
He said he will seek time after the ongoing winter session of Karnataka legislature ends on December 19. He will also ask the Delhi police to provide him the FIR copy.
Shivakumar, who is in the national capital, had earlier said that he will appear before the Delhi police on Monday. But, he postponed the plan in order to rush back to Karnataka to participate in the last rites of veteran Congress leader Shamanuru Shivashankarappa, scheduled later in the day in Davangere.
"I had to go (to appear before the Delhi police), but I have to go back urgently. I'm asking them for time, stating that I will come next week," Shivakumar told reporters in New Delhi.
"They (Delhi police) have not attached the FIR copy while issuing notice to me. I need FIR copy, because we had already given all the required replies to the ED. I don't know what the FIR says, I only read in papers. They have given notice, I will ask for a FIR copy. I will come next week after the Assembly session."
The Delhi Police had issued a notice to Shivakumar, who is also the Karnataka Congress chief, seeking financial and transactional details as part of its probe into the National Herald case.
The notice issued by the Economic Offences Wing (EOW) states that Shivakumar is "supposed to be having vital information" pertaining to the National Herald case registered on October 3 this year, against top Congress leaders Sonia Gandhi and Rahul Gandhi.
In the notice dated November 29, the EOW had asked Shivakumar to appear before it or provide the requested information by December 19 latest.
Investigators have sought details about his personal background, his association with the Congress party, and a complete break up of funds allegedly transferred by him or associated entities to Young Indian.
To a question on meeting AICC General Secretaries K C Venugopal and Randeep Singh Surjewala, amid the ongoing power tussle between him and CM Siddaramaiah over the Chief Minister post, Shivakumar said when he comes to Delhi, he usually meets every one.
"Whether it is Surjewala or Kharge (AICC President Mallikarjun Kharge) or Venugopal, I will meet everyone. During lunch yesterday I met Rahul Gandhi and Sonia Gandhi. I have met everyone. What's wrong?" he asked.
Shivakumar was in Delhi to take part in Congress' "Vote Chori" rally on Sunday, and had also participated in the lunch organised by the party for its leaders.
Responding to a question, whether any meeting is planned with leaders today, the Deputy CM said, he and Kharge will be travelling together to Karnataka, to pay last respects to Shamanuru Shivashankarappa.
Asked if he will seek time for a separate meeting with Congress leadership including Rahul Gandhi, during the next visit to Delhi, Sivakumar said, "such things will be there between us in the party.... you don't worry."
