Karnataka High Court Refuses to Quash Predicate Offences and ED Proceedings in ₹20 Crore Land Compensation Fraud Matter

Case Background and Overview

Mehaboob Allabaksh Dundasi Vs Directorate of Enforcement (Karnataka High Court)

The Karnataka High Court recently disposed of three interconnected petitions filed by a single petitioner — one challenging criminal proceedings registered under the IPC in two separate cases, and the third targeting proceedings initiated by the Enforcement Directorate (ED) on the basis of those very predicate offences. The Court declined relief across all three petitions, holding that the matter was riddled with disputed questions of fact that could only be adjudicated through a full and fair trial.

Background: The Alleged Land Compensation Fraud

The controversy at the heart of these proceedings centres on land acquisition carried out by the Karnataka Industrial Areas Development Board (hereinafter referred to as "the Board"). Lands situated in the villages of Kelageri, Mummigatti, and Koturu were acquired by the Board over multiple phases concluding in 2011–12, 2012–13, and 2018. Compensation for these acquisitions was duly disbursed to landowners during 2013 and 2018.

Despite full compensation having already been paid, fresh applications for compensation in respect of the same acquired lands were filed in 2022. Astonishingly, the Board processed and disbursed a further sum of approximately ₹19,99,55,000/- — nearly ₹20 crore of public money — as a second round of compensation for the very same lands. The Special Land Acquisition Officer, upon conducting an internal enquiry, lodged a complaint on 20-12-2022 alleging a calculated conspiracy involving Board officials, landowners, and intermediaries who purportedly colluded to facilitate this fraudulent double disbursement.

The Three Petitions: A Consolidated Overview

Writ Petition No.108746 of 2025 — Predicate Offence No. 1

This petition challenged the proceedings in Special Case No.1 of 2025 arising out of Crime No.251 of 2022. The offences registered were under Sections 406, 409, 419, 420, 465, 467, 468, 471, 201, 204 r/w 34 of the IPC. The petitioner was not named as an accused at the time the FIR was registered; however, upon completion of investigation and filing of the charge sheet, he was arrayed as Accused No.18. The cognizance taken by the concerned Court in Special Case No.1 of 2025 was what the petitioner sought to undo through this writ petition.

Criminal Petition No.104961 of 2025 — Predicate Offence No. 2

In this petition, the petitioner appeared as Accused No.7. The facts were substantially similar, though the specific land in question was Survey No.640/A measuring 2 acres 13 guntas, for which a sum of ₹18,88,224/- had already been disbursed as compensation back in the year 2008. Once again, a fresh compensation claim was filed for the same parcel in 2022, allegedly through connivance with Board officials. The charge sheet filed by the police named the petitioner, giving rise to C.C.No.3619 of 2023, which was the subject of this petition. The offences invoked included Sections 120B, 166, 167, 403, 419, 465, 467, 468, 471, 409, 420 r/w 149 of the IPC.

Criminal Petition No.472 of 2026 — Enforcement Directorate Proceedings

Riding on the two predicate offences above, the Enforcement Directorate registered ECIR No.ECIR/BGZO/40/2023 on 30-11-2023, which led to Special Case No.233 of 2024 before the Special Court. The petitioner was arrayed as Accused No.9 in these proceedings. Notably, in addition to Crime Nos. 251 of 2022 and 72 of 2023, there were also Crime Nos. 150 of 2023 and 164 of 2024 pending investigation — further substantiating the ED's basis for action. This petition was filed primarily on the logic that if the predicate offences were quashed or stayed, the ED proceedings would consequently collapse.

Petitioner's Contentions

The learned Senior Counsel appearing on behalf of the petitioner advanced the following key submissions: