The Karnataka High Court on Thursday ordered issue of notices to the Union and State governments, the Central Bureau of Investigation (CBI), Serious Fraud Investigation Organisation (SFIO) and others on a petition by B.M. Vijayshankar, suspended IAS officer, seeking a probe by the CBI into the criminal case registered against M/s I Monetary Advisory (IMA) Group of Companies.

Justice P.S. Dinesh Kumar also ordered issue of notice to the Special Investigation Team (SIT) constituted by the State government to probe the case against the IMA Group.

The petitioner was arrested by the SIT on the allegation of taking a bribe of ₹1.5 crore for submitting a ‘favourable’ report about the IMA Group when he was the deputy commissioner of Bengaluru Urban district and a competent authority under the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 for the district.

Earlier, Senior Counsel V. Lakshminarayana, appearing for Mr. Vijayshankar, contended that the government could not have constituted an SIT for probing the case against the IMA Group in view of the promulgation of the Banning of Unregulated Deposit Schemes (BUDS) Ordinance 2019 by the President of India on February 21, 2019.

The police officer who received complaints about commission of offence by the IMA Group should have informed the competent authority, an additional chief secretary nominated by the State as per provisions of the BUDS Ordinance, and the competent authority should have referred the complaints to the CBI as the amount involved is of a magnitude that significantly affects public interest and the alleged scam is spread across various States, including Karnataka, Kerala and Tamil Nadu.

Mr. Lakshminarayana pointed out to the court that in April 2019 the petitioner had merely forwarded, without expressing any opinion, two reports — one by the Criminal Investigation Department (CID), which, in January 2019, said that no action can be taken against the IMA Group, and another by the Assistant Commissioner of Bengaluru North taluk, which had, in March 2019, recommended closure of the probe against the IMA Group.

However, Advocate-General Udaya Holla contended that the IMA Group is operating from Shivajinagar in Bengaluru, and if it comes to the knowledge of the authorities that alleged offences were committed beyond the territory of Karnataka, then appropriate decision would be taken. As A-G suggested that the petition could be referred to a division bench, which is hearing a PIL petition seeking a CBI probe in the case, the court adjourned further hearing till next week while orally observing that it is for the State and the petitioner to make a plea before the division bench.