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The complaint against BJP leaders alleges that many companies, fearing punitive action, were coerced into purchasing electoral bonds, thus, constituting extortion
The Karnataka High Court, on Wednesday, reserved its order on a petition seeking to quash a criminal case against several Bharatiya Janata Party (BJP) leaders, including the Union Finance Minister Nirmala Sitharaman, in connection with alleged extortion and illegal activities under the Electoral Bonds scheme. The complaint filed by Adarsh R. Iyer, also names BJP national president JP Nadda, BJP Karnataka president BY Vijayendra, senior leader Naleen Kumar Kateel, and officials from the Enforcement Directorate (ED).
The court, presided over by Justice M. Nagaprasanna, who had previously stayed the investigation following BJP leader Naleen Kumar Kateel's challenge to the registration of a first information report (FIR), extended the interim relief until the final decision. “Orders reserved. Interim relief to continue until final orders,” the Court remarked.
The FIR alleges that top BJP leaders misused the Electoral Bond Scheme to extort funds from private companies using enforcement agencies as tools of coercion. According to the complaint, Sitharaman, in her official capacity, conspired with ED officials to target major corporations such as Vedanta, Sterlite, and Aurobindo Pharma through raids. Iyer claims these raids created an atmosphere of fear, compelling companies to purchase electoral bonds worth over ₹8,000 crore to avoid punitive action. These bonds, the complaint alleges, were subsequently encashed by BJP leaders. The complaint describes the alleged scheme as an extortion racket orchestrated with the collaboration of BJP officials at multiple levels to channel funds into the party's coffers under the guise of legitimate donations.
Senior Advocate K.G. Raghavan, appearing for Kateel, argued that the allegations failed to satisfy the legal criteria for extortion under Section 383 of the Indian Penal Code (IPC). It was submitted that the accused, including Sitharaman, had not received any property or benefit as required under the provision. It was also pointed out that the alleged victims, namely the companies purportedly coerced into purchasing electoral bonds, had not come forward with complaints. “If a person who is deprived of property does not want to make a grievance about it, then third person cannot say you have been deprived of your property…This is taking the law to an absurd situation.If somebody assaults me and i dont want to complaint. Then can somebody else complaint,” Raghavan contended, citing Section 39 of the Code of Criminal Procedure (CrPC), which outlines when the public is obligated to report certain offences.
Opposing these contentions, Advocate Prashant Bhushan, appearing for the complainant, argued that the allegations amounted to a “classic case of extortion” and were actionable under the law. It was alleged that government agencies like the ED and the Income Tax Department threatened companies with raids unless they purchased electoral bonds to support the ruling party. It was further claimed that the accused used fear of prosecution under the Prevention of Money Laundering Act (PMLA) to coerce companies into compliance. “When ruling party is able to secure huge money through electoral bonds, then milord, its distorts the level playing filed in electoral politics and every citizen is aggrieved. It is extortion to close criminal offence,” the complainant submitted. It was also emphasised that the absence of a victim's complaint did not bar the proceedings, especially when public interest was at stake. Referencing the Supreme Court’s judgment in Lalita Kumari, it was argued that the allegations warranted investigation, asserting that a magistrate must consider the facts in the complaint without requiring exhaustive evidence at the preliminary stage.
The High Court questioned whether the allegations met the legal definition of extortion under IPC Section 383. It sought clarity on whether the accused had received any benefits or property directly or indirectly, to which Raghavan responded that neither the complaint nor the evidence supported such claims. “The complaint doesn't show the accused received the money,” Raghavan stated, contending that allegations were baseless.
The court's final decision on the matter is awaited.
Cause Title: Naleen Kumar Kateel v State of Karnataka
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