Karnataka HC quashes ED proceedings against Reddy

Bengaluru: The Karnataka High Court on Monday quashed Enforcement Directorate proceedings against former minister and mining baron Gali Janardhan Reddy under the Prevention of Money Laundering Act.

A division bench comprising Chief Justice Subhro Kamal Mukherjee and Justice R B Budhihal pronounced the verdict on the grounds that the ED cannot initiate proceedings against Reddy and his associates’ property for offences committed prior to the inclusion of the amended provisions of the Prevention of Money Laundering Act, 2009.

The ED had passed an order under sections 5 and 8 of the Prevention of Money Laundering Act 2002.

Under the act, ED had attached the shares bought by Reddy and his wife Laxmi Aruna and other directors of Obalapuram Mining Company Private Limited by investing about Rs 900 crore in Brahmani Industries Limited, an independent company owned by the mining baron.

The Obalapuram Company and Brahmani Industries had challenged the ED proceedings against them.

Reddy and his companies were booked under various IPC sections including 420 (cheating) and 471 (forgery) and under Section 13 of Prevention of Corruption Act, 1988 (criminal misconduct by a public servant).