Bengaluru: The Directorate of Enforcement (ED) has filed an appeal before the High Court of Karnataka against a Single Judge Bench order that declared its search and seizure operation at the residence of Dr. D.B. Natesh, former Mysuru Urban Development Authority (MUDA) Commissioner, as illegal, unwarranted and an abuse of law.

The ED has also contested the Judge’s decision to grant Natesh the liberty to take action against ED officials under Section 62 of the Prevention of Money Laundering Act (PMLA). With ED now seeking interim relief and the case set for further hearing, the legal battle over the MUDA scam investigation has intensified.

A Division Bench, comprising Chief Justice N.V. Anjaria and Justice M.I. Arun, admitted ED’s appeal and recorded an undertaking from senior counsel Dushyant Dave, representing Natesh, that they will not act upon the liberty granted by the Single Judge Bench until the appeal is resolved.

Meanwhile, Additional Solicitor Generals S.V. Raju and K. Aravind Kamath urged the Court to stay the Single Judge’s order, arguing that it has effectively halted all ED investigations related to the MUDA site allotment scam. Dave, however, opposed the stay, pointing out that the appeal itself does not request interim relief.

The Court granted ED time to file an application for interim relief and adjourned the hearing to April 8. Kamath informed the Court that the application would be filed on Mar. 11 (today).

ED had registered an Enforcement Case Information Report (ECIR) on October 1, 2024, based on an FIR filed by the Lokayukta. The case pertains to the illegal allotment of 14 sites, including commercial sites, by MUDA to B.M. Parvathi, the wife of Chief Minister Siddaramaiah, during Natesh’s tenure as                MUDA Commissioner.

On the directions of ED’s Joint Director, the Assistant Director conducted a raid at Natesh’s residence under Section 17 of PMLA, during which his mobile phone was seized and its data transferred to a hard disk.

The Single Judge’s order, now challenged by the ED, stated that mere possession of an illegally allotted site does not constitute an offence under PMLA unless it satisfies the essential elements of ‘proceeds of crime’ under Section 3 of the Act.