Bengaluru: The high court has refused to quash Enforcement Directorate (ED) proceedings against former Shimoga DCC Bank president RM Manjunath Gowda and his wife in a fake gold loan case which the judge said mirrored systemic corruption.
The Supreme Court has observed that if denial of liberty to an accused is the price to be paid for a corruption-free society, the courts should not hesitate to do so, Justice M Nagaprasanna said while refusing to intervene in the arrest of Gowda. Gowda was arrested recently by ED in a money laundering case pertaining to a fake gold loan scheme at the DCC (District Central Cooperative) Bank.

The couple challenged ED’s order of arrest and reasons depicted to believe that the petitioners are in possession of proceeds of crime.
They argued that offences under Sections 409 (criminal breach of trust) and 202 (intentional omission to provide information about an offence) of IPC are not scheduled offences under the provisions of the Prevention of Money Laundering Act (PMLA) and hence ED has no jurisdiction.
On the other hand, ED submitted that there was a huge misappropriation of funds by Gowda. His wife Asha was the bank manager and was involved in misappropriation totalling ₹63 lakh. The modus operandi involved was opening of 785 fraudulent gold loan accounts without the knowledge of account holders, by utilising fake, fabricated, and forged documents and siphoning off gold ornaments pledged with the bank and replacing them with gold-coated articles.
Justice M Nagaprasanna said though the inviolable sanctity of individual liberty and the mandate of the rule of law are paramount and the statutory scheme mandates disclosure of grounds of arrest, constitutional courts cannot transmute themselves into appellate tribunals, examining the probative worth of each ground. As long as there is a demonstrable application of mind and the arrest is not predicated upon whim or conjecture, this court cannot intrude into the domain of investigative discretion, he added.
The case at hand is a mirror held up to systematic corruption, the judge said, adding: “Therefore, upon a meticulous consideration of the facts, grounds, elucidation of the law by the Supreme Court, and the corpus of the material on record, this court finds no infirmity that would warrant its interference.”