No relief for Katta Subramanya Naidu in KIADB scam, wife's plea dismissed

The High Court on Thursday dismissed a petition filed by former minister Katta Subramanya Naidu’s wife K Sowbhagya questioning the constitutional validity of some sections of the Prevention of Money Laundering Act, 2002, and subsequent amendments made to the law in 2005, 2009 and 2012.

Justice Anand Byrareddy also dismissed her petition for quashing of an order issued by the Enforcement Directorate on September 25, 2012, pertaining to seizure of 141 documents related to the assets of Naidu’s family, Itasca Software Development Pvt Ltd and 23 others in connection with the multi-crore compensation scam in the Karnataka Industrial Areas Development Board (KIADB) land acquisition.

Sowbhagya had challenged several sections of the Act, contending that an accused can be tried under this law if they had harmed national security or were involved in terrorist activity.

As the petitioner and the family were not involved in any such activities, they must not be tried under the said Act and the High Court must quash the action taken by the directorate in seizing their property documents and transactions, she argued.

The bench in its order stated that the power of search, seize and arrest were important aspects of investigation and the matter related to economic offences was not unusual.

Similar procedures are followed with regard to the Customs Act, 1962, the Prevention of Food Adulteration Act, 1954, and the Railway Property (Unlawful Possession) Act, 1966.  
As a Lokayukta enquiry is pending against the Naidu family, Katta’s wife also sought the court’s direction for a joint hearing.

Request rejected
But the bench rejected her prayer, saying the Lokayukta conducted the enquiry under a different law whereas the directorate was trying them under the Money Laundering Act, hence the two matters could not be heard together.

The bench dismissed the petitioner stating that it was not maintainable and the said sections of the Act were constitutionally valid.