Karnataka High Court Rejects Union Bank’s Plea to Transfer Valmiki Corporation Scam Case to CBI

Bengaluru: The Karnataka High Court on Wednesday dismissed a petition filed by Union Bank of India seeking a direction to the government to transfer the probe being carried out in the alleged scam regarding the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd, to the Central Bureau of Investigation (CBI). A single judge bench of Justice M Nagaprasanna while pronouncing the verdict orally said, "I have not accepted the interpretation of Section 35A (Banking Regulation Act) to become a ground for reference to CBI. If I permit that every banking institution may ask. DSP Act may become redundant".The high court had previously reserved its decision on September 30 after hearing arguments from both sides, specifically on whether the bank’s petition met the conditions for consideration by the Supreme Court under Article 131, and if Section 35A justified a CBI transfer without violating the Delhi Special Police Establishment Act.The Karnataka government opposed the bank’s petition, arguing that the state police have authority over the case and that this jurisdiction cannot be overridden by the central government. Senior advocate B V Acharya, representing the state, argued that investigation powers are a statutory right of the state police and are not subject to central intervention. He also argued that the matter should be addressed by the Supreme Court, not the High Court, as it involves jurisdictional authority between central and state governments.The KMVSTDC scandal surfaced when Chandrasekaran, a superintendent at the corporation, died by suicide, leaving a note alleging corruption worth crores and naming several officials. Following this, B. Nagendra, the Scheduled Tribes Welfare Minister, resigned and was subsequently detained by the Enforcement Directorate. On May 29, KMVSTDC Managing Director A. Rajashekar filed a formal complaint alleging that Rs 94.73 crore had been illegally siphoned from the corporation’s account with Union Bank of India through falsified board resolutions.What led to Valmiki caseThe Valmiki case came to light after a corporation official, Chandrasekaran, who worked as a Superintendent, ended his life, leaving behind a note. The note accused certain corporation officials of corruption worth crores. In a six-page suicide note recovered by the police, Chandrasekaran named three officials and alleged multi-crore corruption in the corporation, calling for action against them. As a result, "the Scheduled Tribes Welfare Minister, B Nagendra, resigned and is currently in Enforcement Directorate custody." Additionally, A Rajashekar, the Managing Director of KMVSTDC, filed a complaint on May 29, stating that "Rs 94.73 crore was taken from the corporation's account in Union Bank of India (UBI) using fake board resolution signatures to transfer the funds to multiple accounts."

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Karnataka High Court Rejects Union Bank’s Plea to Transfer Valmiki Corporation Scam Case to CBI

Valmiki Scam: The Karnataka High Court on Wednesday dismissed Union Bank of India’s petition seeking transfer of Valmiki corporation case to CBI.

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