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‘D.K. Shivakumar involved in palace property transaction in benami deal’

Allegation made in documents submitted to HC; Energy Minister has denied any role in the transaction

December 09, 2017 11:16 pm | Updated December 10, 2017 08:00 am IST

BANGALORE, 11/12/2007: A view of Karnataka High Court in Bangalore.
Photo: V. Sreenivasa Murthy 11-12-2007

BANGALORE, 11/12/2007: A view of Karnataka High Court in Bangalore. Photo: V. Sreenivasa Murthy 11-12-2007

Energy Minister D.K. Shivakumar has allegedly been found to have indulged in ‘benami transaction’ of a portion of the Bangalore Palace property through his conduits in June this year, a month prior to the search of his premises, and that of his relatives and associates, by the Income Tax Department.

This is revealed in documents submitted to the Karnataka High Court in connection with a petition filed by Vishalakshi Devi, one of the five daughters of former Maharaja of Mysuru Jayachamaraja Wadiyar, who owns a portion of the palace property.

Ms. Vishalakshi moved the court questioning a September 15, 2017 order provisionally attaching five acres of the Palace property by the Initiating Officer (IO) under provisions of the Prohibition of Benami Property Transactions Act.

Claiming that she continues to be the absolute owner of the property and not a ‘benamidar’, the petitioner has contended that agreements signed by her with Shashikumar with respect to five acres was ‘prospective agreements’ and there is no conveyance or transfer of land. It was also stated in the petition that ‘she has no privity with D.K. Shivakumar’.

The I-T authorities had searched her premises on August 2-3, 2017.

MoU and sale agreement

The Initiating Officer (IO), in a written response to the court, pointed out that Ms. Vishalakshi had signed a memorandum of understanding (MoU) and an agreement with Mr. Shashikumar, a relative of Mr. Shivakumar, on June 18, 2017, in respect of five acres, which are part of the Palace property owned by her.

The MoU was for leasing the land in favour of Mr. Shashikumar by accepting ₹20 lakh as advance rental deposit in cheque, with a condition that monthly rent would be increased 6% every three years sans mentioning the monthly rent. Not mentioning the amount of monthly rental in the MoU strengthens the aspect of ‘benami transaction’, the IO claimed.

The agreement is for purchase of the same land by Mr. Shashikumar from Ms. Vishalakshi with an advance payment of ₹80 lakh made in cheque. Interestingly, both of them agreed to execute the registered sale deed after payment of the balance amount, which was mutually agreed by them as per the SR [sub-registrar value] or the market value. Again not mentioning of the sale consideration in the agreement strengthens the aspect of ‘benami transaction’, the IO’s statement claimed.

Though the agreement states that the sale deed would be executed after disposal of the litigation before the apex court, it also admits to handing over possession of the land in favour of Mr. Shashikumar, the IO pointed out.

Received ₹4 crore in cash

The IO claimed that Ms. Vishalakshi Devi, in a statement given on oath to authorities, had ‘admitted’ receipt of ₹1 crore in cheque from Mr. Shashikumar and a sum of ₹4 crore in cash in connection with the agreement.

“It was stated by the petitioner [Vishalakshi Devi] that the cash component was delivered by Mr. Chandrashekar on behalf of Mr. Shashikumar. The petitioner further stated that there was no communication with Mr. Shashikumar for the negotiation and the entire transaction was coordinated by Mr. Chandrashekar at the instruction of Mr. D.K. Shivakumar,” the IO pointed out relying on her statement.

The IO claimed that Mr. Chandrashekar had ‘admitted that he paid her ₹4 crore in cash, which he had received from Shridhar (private secretary to Mr. Shivakumar) and Shiv Shankar (personal assistant to Mr. Shivakumar), and the entire transaction took place on the instruction of Mr. Shivakumar’.

 D.K. Shivakumar

D.K. Shivakumar

 

D.K. Shivakumar’s denial

The IO pointed out that Mr. Shivakumar, in his statement to authorities, has denied that the cash belonged to him, but claimed that the entire transaction was done by Sachin Narayan, who is one of his friends and an independent businessman.

Mr. Sachin Narayan, in his statement to the authorities, owned up to delivering ₹4 crore in cash from ‘his unaccounted income’ to Ms. Vishalakshi through Mr. Chandrashekar.

But the IO stated, his claim cannot be accepted as he did not explain the source of the cash, and his owning up of payment was ‘an afterthought’.

Pointing out that as both Mr. Chandrashekar and Mr. Shashikumar had not established any source of generating ₹4 crore, the IO claimed that it is clear that ₹4 crore was provided by Mr. Shivakumar and the transaction carried out by Mr. Shashikumar was for the ‘ultimate benefit’ of Mr. Shivakumar, who would be the ‘real owner’ of the five acres of land.

The IO claimed that Ms. Vishalakshi has ‘not been treated as a benamidar’, but the transaction has been treated as ‘benami’, and Mr. Shashikumar and Mr. Sachin Narayan as ‘benamidars’ of Mr. Shivakumar.

Justice A.S. Bopanna, who heard the petition, adjourned further hearing stating that the IO or the Adjudicating Authority can pass any adverse order against Ms. Vishalakshi Devi’s provisionally attached property only after obtaining appropriate orders from the court while continuing the period of provisional attachment till final adjudication of the petition.

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