BENGALURU: In a significant development, the Karnataka High Court has ordered the suspension of the investigation against Union Finance Minister Nirmala Sitharaman, former BJP state president Nalin Kumar Kateel, and others in connection with allegations of collecting money through electoral bonds. This follows an FIR registered at Tilak Nagar Police Station after a complaint was filed by social activist Adarsh Iyer.
The bench, led by Justice M Nagaprasanna, suspended the investigation, pointing out that the Magistrate’s Court had not fully considered the lack of direct loss suffered by the complainant. The court stressed that continuing the case in such a manner could lead to the misuse of legal procedures, and as a result, the investigation has been paused until the next hearing.
The court found that the complaint lacked specific allegations or wrongdoing that could justify a criminal case. The Electoral Bond Scheme, along with the related statutory amendments, was legally in effect during the relevant period. Therefore, any actions taken by the accused, including public servants like Nirmala Sitharaman, under the law in force cannot be treated as criminal offenses.
The court noted that no FIR can be registered unless there is direct evidence linking the actions of the accused to criminal activities. “The offenses alleged against the petitioners do not hold up under scrutiny, and registering a case based on such accusations seems politically motivated,” the bench remarked. It highlighted that extortion charges under Sections 383 and 384 of the Indian Penal Code cannot be applied as there is no direct connection between the accused and the complainant.
Moreover, the court criticised the Magistrate for failing to consider key aspects of the case before allowing the FIR. It urged that the order must be dismissed, as the investigation was initiated on flawed grounds.
The complaint by Adarsh Iyer alleged that the Electoral Bond Scheme , introduced by the government between 2019 and 2023, had been misused by political figures to collect large sums of money. Iyer claimed that the scheme facilitated corrupt practices, including extortion. However Nirmalas counsel argued that , the Electoral Bond Scheme, enacted under Section 31(3) of the BII Act, was in full force and remained constitutional until February 15, 2023.
The petitioners argued that since the scheme was legal during the time in question, it cannot be considered a crime. Additionally, the court pointed out that the Magistrate acted without due diligence by allowing the filing of an FIR without first seeking permission from the competent authorities, given that public servants were involved.
This case has heightened political tensions, with supporters of Nirmala Sitharaman and Nalin Kumar Kateel arguing that the complaint is politically motivated and intended to damage their reputations. The BJP has defended its leaders, maintaining that the Electoral Bond Scheme was transparent and operated within the legal framework, with no evidence of misuse.
The court’s suspension of the investigation provides relief for Sitharaman, Kateel, and others involved, raising doubts about the legitimacy of the case against them. However, the final decision will depend on future hearings, where the court will determine whether to quash the FIR or allow the investigation to proceed.
The case will now undergo further scrutiny, with the court’s next hearing set to evaluate the validity of the FIR and whether the complaint has merit. The Karnataka High Court’s ruling has temporarily halted the investigation, but the issue is far from resolved. Until the next ruling, the political controversy surrounding the alleged misuse of the Electoral Bond Scheme will continue to unfold.
The court’s decision to suspend the investigation also brings up broader concerns about the legal accountability of public servants and the potential for legal mechanisms to be misused for political purposes.
