Dismissing ED’s allegations as “politically motivated,” CM Siddaramaiah strongly condemned the ED’s move to both provide the information to the Lokayukta and release it to the media. He asserted that the ED lacks the authority to investigate the alleged MUDA scam.
Published Dec 04, 2024 | 9:15 PM ⚊ Updated Dec 04, 2024 | 9:15 PM
Mysuru Urban Development Authority. (Supplied)
The Karnataka Lokayukta has termed the Enforcement Directorate’s (ED) actions as “unethical” for sharing critical findings of an ongoing investigation not only with the Lokayukta, but also with the media, despite no formal request being made for such information. The leaked report has now pit one investigative agency against another.
The ED submitted its critical findings to the Karnataka Lokayukta regarding an alleged scam in the Mysuru Urban Development Authority (MUDA) on 3 December, sparking a strong objection from Chief Minister Siddaramaiah.
The ED’s probe has revealed irregularities in the de-notification and allocation of prime land parcels, including 14 compensation sites awarded to Chief Minister Siddaramaiah’s wife BM Parvathi.
Additionally, the ED has flagged procedural violations, undue influence, and suspected corruption in the allotment of 1,095 sites under 50:50 scheme, valued at over ₹700 crores, to benami individuals and influential persons under the pretence of compensating land losers.
The ED alleges that the de-notification process, executed during Siddaramaiah’s tenure as Deputy Chief Minister, lacked sufficient reasoning, deliberation, or expert scrutiny.
At the end, the ED stated that it is sharing information under section 66(2) of Prevention of Money Laundering Act (PMLA), 2002 for further necessary action at your end. It also claimed that the probe is still underway.
Dismissing the allegations as “politically motivated,” Siddaramaiah strongly condemned the ED’s move to both provide the information to the Lokayukta and release it to the media. He further asserted that the ED lacks the authority to investigate the alleged MUDA scam.
The Karnataka Lokayukta has raised strong objections against the ED’s decision to not only share critical findings regarding an alleged scam in the MUDA, but also to disclose the same to the media.
Lokayukta’s senior police officer expressed concerns over the ED’s actions, calling it “unethical” to release sensitive information to the public, especially when the investigation is still ongoing and no formal request had been made for such information.
On anonymity, Lokayukta’s senior police officer told South First: “It is true that the ED has shared an information in connection to the MUDA case via a letter. However, it is unethical for them to release it to the media.”
“We are already probing the case. We have not asked any kind of information from the ED. They have voluntarily shared it to us,” stated the police officer.
The case of BM Parvathi’s acquisition of land and subsequent compensation from the MUDA demonstrates a clear abuse of process, influenced by political and administrative interventions, claimed the ED.
The ED has identified serious irregularities in the de-notification of 3.16 acres of land at Survey No. 464 in Kesare Village, Mysuru, terming it a blatant violation of established procedures.
The ED stated that this land, which was originally acquired by the MUDA through a final notification issued on 20 August 1997, for the development of a residential layout, was illegally de-notified under suspicious circumstances.
According to the ED, J Devaraju, the son of the original landowner (Ninga Jawara), bypassed the standard protocol by submitting a request for de-notification directly to the then Urban Development Minister, Bache Gowda, instead of approaching MUDA.
“This irregular approach was further exacerbated by the lack of crucial documentation, including the death certificate of the original owner, a legal heir certificate, and the consent of other legal heirs,” pointed out the ED.
The ED highlighted that although the MUDA Board approved the de-notification, it imposed specific conditions to ensure that the exclusion of the land would not interfere with the layout’s development plan. These conditions were flagrantly disregarded. A layout map revealed that the land in question was centrally located, intersected by key roads, and integral to the layout’s design.
Satellite imagery reviewed by the ED further alleged that development work, including the construction of roads, had commenced on the land as early as 2001. Despite these facts, the de-notification proceeded without justification, underscoring the misuse of administrative power and procedural violations.
The ED has pointed at further irregularities surrounding the land at Survey No. 464 in Kesare Village in Mysuru, highlighting a series of illegal actions and procedural lapses.
Despite being aware of the land’s development and partial allotment to MUDA beneficiaries, J Devaraju sold the land in 2004 to BM Mallikarjuna Swamy, who falsely claimed it as agricultural land.
“No objections were raised by either party during this transaction, even though the land had already undergone significant development,” the ED noted.
The ED alleged that the illegalities deepened when Swamy sought conversion of the land to non-agricultural purposes. In 2005, the spot inspection report prepared by the Tahsildar failed to acknowledge the evident development and falsely classified the land as undeveloped.
“The Deputy Commissioner’s office, which was responsible for scrutinising these claims, also overlooked these discrepancies, allowing the conversion process to proceed unchecked,” pointed the ED.
Critical documentation required for the conversion, such as a land-use certificate from MUDA, was notably absent. The ED further alleged foul play, stating that a questionable “no-objection” letter, purportedly issued by a Town Planning member, was found exclusively in Swamy’s possession.
“The authenticity of this document is highly suspicious and raises serious doubts about its legitimacy,” the ED asserted, pointing to deliberate manipulation and collusion at multiple levels.
In 2010, BM Mallikarjuna Swamy transferred the contentious land to his sister BM Parvathi through a gift deed. However, Parvathi failed to claim possession of the property for nearly four years. When she eventually sought compensation in 2014, her claim coincided with the tenure of Siddaramaiah as the Chief Minister of Karnataka, highlighted the ED.
According to the ED, Parvathi’s application for compensation was marred by significant procedural lapses, including unauthorized alterations and missing documents.
“Despite glaring irregularities, she was allotted 14 prime plots in the upscale Vijayanagara Layout,” the ED stated. This allotment bypassed statutory requirements, which mandate that compensation sites must be allocated within the same layout and determined through a transparent lottery system.
The ED highlighted that these 14 plots included commercial properties that, under existing regulations, were required to be auctioned. Instead, MUDA’s then-commissioner DB Natesh exercised discretionary powers to allot these plots, blatantly violating the Karnataka Urban Development Authority (Allotment of Sites in Lieu of Compensation for Land Acquired) Rules, 2009.
“Natesh personally selected the compensation plots, disregarding established procedures and enabling manipulation in the process,” the ED alleged.
The ED further pointed out that Parvathi’s son, Yatindra, who was an MLA and a MUDA board member at the time, attended critical board meetings, underscoring the undue influence exerted in this case. The culmination of these illegalities was the allotment of 14 prime plots in Vijayanagara Layout to Parvathi, collectively valued at approximately ₹56 crore.
The ED also alleged that Siddaramaiah’s personal assistant, SG Dinesh Kumar, played a pivotal role in facilitating this allotment. “Kumar wielded considerable influence over MUDA officials, coordinating high-level communications and pressuring file movements,” the ED said.
The investigation uncovered procedural lapses, including missing entries in official registers and tampered documents, exposing the extensive manipulation in this case, alleged the ED.
The ED has further alleged that a massive scam involving the illegal allotment of 1,095 sites under the 50:50 scheme by the MUDA, conducted in blatant violation of the laws.
The ED alleged that the MUDA violated Karnataka Urban Development Authorities (Allotment of Sites in lieu of Compensation for the Land Acquired) Rules, 2009, as amended in 2015.
The rules mandate that compensation sites be allotted transparently through a lottery system, but the ED’s has alleged that these guidelines were completely disregarded.
According to the ED, the 1,095 sites, valued at over ₹490 crores as per guideline rates, were allotted unlawfully, with the real beneficiaries being influential real estate businessmen, while the allotments were made in the names of Benami or dummy individuals. The real market value of these illegally allotted sites is over Rs 700 crore.
“The majority of these allotments were personally overseen by the then MUDA Commissioner GT Dinesh Kumar, who bypassed formal procedures and made the allotments based on illegal considerations,” pointed the ED.
The ED noted that the process was heavily influenced by real estate agents and businessmen, who directed the allotments as per their interests.
The investigation further revealed that many of the beneficiaries were not land losers, a prerequisite under the scheme. Despite an official directive in October 2023 to halt allotments under the 50:50 scheme, 252 sites were allotted after March 2024.
The ED stated that these allocations were made based on oral instructions from the then MUDA Chairman K Marigowda, and Commissioner GT Dinesh Kumar.
The ED also uncovered evidence that Dinesh Kumar funnelled illegal gratifications received for these allotments through a co-operative society controlled by his associate, Jayaramu. These funds were used to purchase properties in the names of relatives, concealing the proceeds of corruption.
The illegally allotted sites were then sold by influential individuals and real estate businessmen to unsuspecting buyers. “The money earned from the sale of these properties was laundered and presented as legitimate profits from real estate transactions or concealed in the names of Benami individuals and family members,” alleged the ED.
Following the ED’s letter to Lokayukta on MUDA case, Siddaramaiah came down heavily on the central agency and said “the ED does not have authority to probe the MUDA case.”
Siddaramaiah told reporters in Mandya: “First and foremost, the ED does not have the authority to conduct this investigation. What the Governor has stated is that the Lokayukta should investigate and submit the report.”
#Karnataka: The Enforcement Directorate does not have authority to probe the MUDA case: CM @siddaramaiah.
Responding to ED reportedly writing letter to Lokayukta over the alleged #MudaScam, Chief Minister #Siddaramaiah told to reporters: “First and foremost, the ED (Enforcement… pic.twitter.com/MzHlyPfqd9
— South First (@TheSouthfirst) December 4, 2024
“The district court has instructed the investigation report to be submitted by 24 December. The probe is already ongoing. So, why are they sending out letters? What is their intention? Are they deliberately creating this situation?” the Chief Minister questioned.
He further remarked: “This is being done with political motives. They are attempting to politicise the case. There is no truth to these allegations. If they are truly investigating, they should provide an independent report.”
Regarding the letter issued, he added: “Why send out such a letter? If they have any information, they could have shared it openly instead of releasing it to the media through agencies like PTI and news channels.”
“There is no law that requires them to act this way; they could have shared the information directly.” The chief minister concluded by calling the ED’s actions politically motivated.
(Edited by Ananya Rao)
