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Synopsis

The Karnataka High Court has quashed the proceedings pertaining to a First Information Report (FIR) registered against former BJP state president Naleen Kumar Kateel for alleged extortion under the guise of electoral bonds. Kateel, along with Union Finance Minister Nirmala Sitharaman, BJP National President JP Nadda, BJP Karnataka President BY Vijayendra and officials from the Enforcement Directorate (ED), was accused of pressuring companies into purchasing electoral bonds as a form of quid pro quo for favourable treatment.

Justice M. Nagaprasanna, while delivering the judgment, noted that the complainant, Adarsh Iyer, “is an alien to the transaction and an alien cannot complain of extortion.” Highlighting the absence of any direct involvement or injury to the complainant, the court remarked, “What the complainant projects is a huge hocus-pocus, but alas, he has no locus.” The court also found that the complaint failed to establish the essential ingredients of the alleged offence of extortion under Section 384 of the Indian Penal Code (IPC).

An FIR was registered by Bengaluru police after the Additional Chief Judicial Magistrate had taken cognizance of a private complaint filed by activist Adarsh R. Iyer, associated with the NGO Janaadhikaara Sangharsha Parishath. The complaint accused ruling party leaders, including Finance Minister Nirmala Sitharaman, of extortion and criminal conspiracy under Sections 384, 120B, and 34 of the IPC.

Iyer alleged that raids conducted by the Enforcement Directorate (ED) on corporations like Vedanta and Aurobindo Pharma had been used to extort over ₹8,000 crore, forcing companies to purchase electoral bonds, which were later encashed by BJP leaders. The complaint highlighted Aurobindo Pharma’s ₹52 crore contribution through bonds following the arrest of its director, linking the funds to the BJP and other parties. However, overturning the decision of the Magistrate the High Court had earlier stayed the investigation.

The court dissected the elements of extortion under Section 383 of the IPC, noting, “For offence of extortion, element of consent by putting the victim in fear of injury is imperative.” It further clarified that the complainant had neither been placed under fear nor had he delivered any property to the accused. “If a victim had complained that he had purchased electoral bonds it would have been an altogether different circumstance,” observed the court.

Addressing the allegation of criminal conspiracy under Section 120-B of IPC, the court stated : “If the offence under Section 383 as made penal under Section 384 itself is not made out, it can hardly be said that further investigation must be permitted only for offence under Section120-B of the IPC. Therefore, the offence of 120-B of the IPC gets subsumed on the reasons rendered to hold that the offence under Section 384 is not met in the case at hand.”

The court also criticized the Magistrate’s decision to allow the investigation, noting that “Merely because the complainant has registered a complaint which projects alleged extortion, the learned Magistrate cannot become a rubber stamp Presiding Officer to the complaint, to refer the matter for investigation, without application of mind to the relevant statutory provisions.”

In light of these findings, the court ruled that the complaint lacked legal standing and dismissed the allegations as speculative. The FIR against Kateel was, thus, quashed.

 

Cause Title: Naleen Kumar Kateel v State of Karnataka [CRIMINAL PETITION No.10321 OF 2024]

Appearances: For the Petitioner - Senior Advocate K.G.Raghavan and Advocate Suyog Herele E.; For the Respondents - Additional Senior Public Prosecutor B.N.Jagadeesha, Senior Advocate Prashant Bhushan and Advocate Shivamurthy A.R.