- 1 - HC-KAR NC: 2025:KHC:20261 WP No. 11664 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 11664 OF 2025 (GM-RES) BETWEEN: SHRI B. LAKSHMINARAYANA SHETTY, S/O LATE SHRI B. MALLIKARJUNA SHETTY, AGE 49 YEARS, H.NO. 201, SATYANARAYAN PET, 3RD CROSS, BELLARY – 582 101 …PETITIONER (BY SRI. KIRAN S.JAVALI, SENIOR ADVOCATE FOR SRI. MANE SHIVAJI H. MANE, ADVOCATE) AND: DIRECTORATE OF ENFORCEMENT, REPRESENTED BY ASSISTANT DIRECTOR, GOVERNMENT OF INDIA, MINISTRY OF FINANCE, DEPT. OF REVENUE, 3RD FLOOR, B BLOCK, BMTC SHANTHI NAGAR K H ROAD, BANGALORE – 560 027 REP. BY SPECIAL PUBLIC PROSECUTOR, HON’BLE HIGH COURT OF KARNATAKA BENGALURU – 560 001. …RESPONDENT (BY SRI. UNNIKRISHNAN M., ADVOCATE) THIS W.P. IS FILED UNDER ARTICLE 226 & 227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE, 1973 PRAYING TO ORDER DIRECTION DIRECTING THE RESPONDENT TO RELEASE THE IMMOVABLE PROPERTIES PROVISIONALLY ATTACHED AS DETAILED IN SEECHEDULE-C OF THE COMPLAINT IN LIEU OF DEPOSITING A SUM OF RS.25,66,462/ BY MEANS OF A FIXED DEPOSIT IN ANY NATIONALIZED BANK AND BE HELD BY THE RESPONDENT ENFORCEMENT DIRECTORATE, TILL COMPLETION OF THE PROCEEDINGS (ANNEXURE-A) AND ETC. Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:20261 WP No. 11664 of 2025 THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, the petitioner seeks the following reliefs: “(a) Issue a Writ of Mandamus or any other appropriate writ, order, or direction, directing the Respondent to release the immovable properties provisionally attached, as detailed in Schedule-C of the complaint, in lieu of depositing a sum of Rs.25,66,462/0 by means of a Fixed Deposit in any Nationalized Bank and beheld by the Respondent Enforcement Directorate, till completion of the proceedings. (ANNEXURE-A). (b) Issue a writ of Mandamus, or any other appropriate writ, order, or direction, directing the Respondent to communicate to Vikasa Sauardha co-operation bank Ltd to de-freeze the Fixed deposit in Petitioners bank account and to remove all restrictions on the petitioners bank account. (ANNEXURE-C). (c) Pass such other order or orders as deemed fit and proper in the circumstances of the matter, in the interest of justice.” 2. Heard learned counsel for the petitioner and learned counsel for the respondent and perused the material on record. - 3 - HC-KAR NC: 2025:KHC:20261 WP No. 11664 of 2025 3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner invited my attention to the impugned Provisional Attachment Order at Annexure-A dated 12.06.2019 in order to point out that even as per the valuation shown of the attached properties shown in the said order, total value of the property would be Rs.25,66,462/-. It is submitted that the petitioner is ready to deposit the entire aforesaid covered sum of Rs. 25,66,462/- with the respondent, which has to be directed to invest the sum in fixed deposit by marking lien on the said amount, which would be subject to the final outcome of the petition. 4. In support of their contentions, learned counsel for the petitioner places reliance upon the following judgments: i) G.E. Veerabhadrappa Vs. State of Karnataka and others – W.P.No.124/2023 with I.A.No.61135/2023 dated 21.04.2023. ii) M/s. Trishul Buildtech Vs. Directorate of Enforcement – Crl.A.No.2134/2024 dated 17.12.2024. iii) Davy Varghese and Another Vs. Deputy Director, Directorate of Enforcement, Department of Revenue and others – 2024 SCC OnLine Ker 7343. - 4 - HC-KAR NC: 2025:KHC:20261 WP No. 11664 of 2025 5. Per contra, learned counsel for the respondent would reiterate the various contentions urged in the Statement of Objections and submitted that there is no merit in the petition and the same is liable to be dismissed. 6. In G.E. Veerabhadrappa’s case (supra), the Apex Court held as under: “Heard learned counsel for the petitioner and Shri S.V. Raju, learned Additional Solicitor General for the respondents. 2. The main relief claimed in this petition is to permit the petitioner to furnish a bank guarantee of a sum of Rs.1,72,40,951/- in lieu of and in replacement of the proposed confiscation. 3. Undisputed facts are that the petitioner has been convicted by the Court of the XXXII Additional City Civil and Sessions Judge and Special Judge for CBI cases, Bengaluru, vide order dated 14.02.2023 in Special CC. No. 56/2015, for an offence under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act and sentenced to simple imprisonment of two years and fine of Rs.1,00,000/-. Though, the CBI had alleged disproportionate assets to the tune of Rs.2,91,70,984/-, however, the Court only directed confiscation of disproportionate assets to the extent of Rs.1,72,40,951/- in favour of the Central Government. - 5 - HC-KAR NC: 2025:KHC:20261 WP No. 11664 of 2025 4. In pursuance to the registration of case by CBI, the Directorate of Enforcement, Bangalore Zonal Office also registered an ECIR bearing ECIR/BGZO/16/2015 dated 06.11.2015 to investigate offence of laundering of proceeds of crime derived from the said scheduled offence of having disproportional assets alleged by CBI. 5. Enforcement Directorate also passed an order dated 29.06.2018 for provisional attachment of various properties including properties involving third party interest as disproportionate assets alleged in the CBI case. Appeal filed by the petitioner against confirmation of attachment of disproportionate assets by the Enforcement Directorate is pending before the PMLA Tribunal. The pleadings further go to show that one of the properties under attachment situate in Karnataka under PMLA is subject matter of a decree drawn in favour of the respondent no. 3 herein, who is in possession of the attached property, pursuant to MOU dated 15.05.2013 for development rights, entitlements and interest in that property against valuable consideration. 6. Learned counsel for the petitioner submits that without prejudice to the final outcome of the criminal proceedings for disproportionate assets, he may be permitted to give security of the said amount by way of a Bank Guarantee which may be made subject to final disposal of the proceedings and the attachment be lifted. In support of the contention, he has relied upon an order dated 16.09.2022 passed by this Court in the case of Esskay Properties and - 6 - HC-KAR NC: 2025:KHC:20261 WP No. 11664 of 2025 Investment Private Limited & Anr. Vs. Union of India & Ors., in SLP (c) No. 9335 of 2022. 7. Having considered the factual matrix of the matter and the arguments advanced by the learned counsel for the parties, we are not inclined to accept any bank guarantee. In the order relied upon by the petitioner passed in the case of Esskay Properties and Investment Private Limited (Supra), the offer made by the petitioner therein to furnish a bank guarantee was not accepted, rather, a direction was issued to furnish a fixed deposit receipt of a nationalized bank of the entire amount with a lien in favour of CBI and the enforcement directorate, as a pre-condition for lifting the attachment of the properties. 8. Learned Additional Solicitor General has no objection in case the petitioner secures the amount by furnishing a fixed deposit receipt of a nationalized bank of the said amount with a lien in favour of the CBI and the Enforcement Directorate. 9. To secure the ends of justice, in the case at hands, we also direct that in case the petitioner furnishes a fixed deposit receipt of a nationalized bank for a sum of Rs.1,72,40,951/- with a lien in favour of the CBI and the enforcement directorate within a period of two weeks from today, the attachment of all the properties vide provisional attachment order dated 29.06.2018 by the enforcement directorate shall be lifted. The said fixed deposit receipt would be subject to the final outcome of the proceedings - 7 - HC-KAR NC: 2025:KHC:20261 WP No. 11664 of 2025 against the petitioner in pending CBI matters as well as PMLA matters. 10. We further make it clear that this order is only by way of interim arrangement and shall be subject to the final outcome of the proceedings and is without prejudice to the contention of the respective parties. 11. The pending proceedings shall be decided strictly in accordance with law and on its own merits without in any way influenced by the present interim arrangements. 12. With the aforesaid observations and directions, the matter stands finally disposed of. 13. Pending application(s), if any, shall also stand disposed of.” 7. In M/s. Trishul Buildtech’s case (supra), a C- ordinate Bench of this Court held as under: “16. The words “such properties involved in money laundering or which has been used for commission of offence of money laundering” would indicate that the disproportionate assets acquired by the accused which had been used for money laundering is subject to be confiscated to the Central Government under Sub Section (5) of Section 8 of the P.M.L.A Act. The scheduled offence alleged against late Sri.G.E.Veerabharappa has been tried in Spl.CC.No.56/2015. Even though the C.B.I had alleged disproportionate assets to the tune of Rs.2,91,70,984/-, the Court only directed - 8 - HC-KAR NC: 2025:KHC:20261 WP No. 11664 of 2025 confiscation of disproportionate asset to the extent of Rs.1,72,40,951/- in favour of the Central Government. Therefore, the proceeds of crime is to the extent of Rs.1,72,40,951/-. The said disproportionate assets to the extent of Rs.1,72,40,951/- is alleged to have been used by late Sri.G.E.Veerabharappa in money laundering. Therefore, the properties to the extent of Rs.1,72,40,951/- requires to be confiscated to the Central Government under Sub Section (5) of Section 8 of the P.M.L.A Act. Late Sri.G.E.Veerabharappa had furnished the fixed deposit receipts to the tune of Rs.1,72,40,951/- pursuant to the order of the Hon’ble Apex Court dated 21.04.2023 passed in WP (Crl.)No.124/2023 in favour of C.B.I and E.D. The said fixed deposit receipts in a sum of Rs.1,72,40,951/- is the properties involved in money laundering and it is said to have been used for commission of the offence of money laundering. The properties worth more than Rs.1,72,40,951/- cannot be confiscated under Sub Section (5) of Section 8 of the P.M.L.A Act. The option open for the Special Court was to confiscate the fixed deposit to the extent of Rs.1,72,40,951/- furnished by late Sri.G.E.Veerabharappa with a lien in favour of the C.B.I and E.D. Instead of that, the Special Court has confiscated the properties of the appellant. Therefore, the Trial Court has erred in ordering confiscation of the properties of the appellant which are at Sl.No.2 of schedule ‘A’ properties in Spl.CC.No.359/2019. Therefore, the said order of confiscation of properties of the appellant requires to be set-aside. In the result, the following; - 9 - HC-KAR NC: 2025:KHC:20261 WP No. 11664 of 2025 ORDER The appeal is allowed. The impugned order dated 24.06.2024 passed in Spl.C.C.No.359/2019 by the XXXII Additional City Civil and Sessions Judge and Special Judge for C.B.I cases, Bengaluru, sofar as it relates to confiscation of the appellant’s properties ie., Sl.No.2 of the Schedule ‘A’ properties namely, the land measuring 6 acres 37 guntas, located at Gunjal village, Varthuru Hobli, Bengaluru East Taluk, bearing Survey No.187/3 (28 guntas), Survey No.188/1 (3 acres and 20 guntas) and Survey No.210/2 (2 acres and 29 guntas) is set-aside.” 8. In the instant case, it is an undisputed fact borne out from the Provisional Attachment Order that the value of the attached property is Rs.25,66,462/- as per Schedule-‘C’ of the said order. Under these circumstances, in the light of the judgment of the Apex Court in G.E. Veerabhadrappa’s case and the judgment of a Co-ordinate Bench of this Court in M/s. Trishul Buildtech’s case (supra), I am of the considered opinion that the present petition deserves to be disposed of directing release of Schedule- ‘C’ properties of the petitioner by imposing certain conditions. 9. In the result, I pass the following: ORDER - 10 - HC-KAR NC: 2025:KHC:20261 WP No. 11664 of 2025 i) The petition is disposed of. ii) The respondent is directed to release the immovable properties provisionally attached in the Schedule-‘C’ of the complaint subject to the petitioner depositing the aforesaid sum of Rs.25,66,462/- with the respondent at the earliest. iii) Immediately upon the petitioner depositing the aforesaid sum of Rs.25,66,462/- with the respondent, the respondent shall invest the said sum in fixed deposit by marking a lien to the said extent, which would be subject to the final outcome of the proceedings. iv) This order is made under special/peculiar facts and circumstances of the instant case and the same shall not be treated as a precedent nor shall have any precedential value for any purpose, whatsoever. Sd/- (S.R.KRISHNA KUMAR) JUDGE BMC: List No.: 1 Sl No.: 13