Case Law Details
Jagadeesh Chandra Raj URS Vs State of Karnataka (Karnataka High Court)
The Karnataka High Court allowed the bail petition filed by Accused No. 7 in Special Case No. 91/2018, pending before the III Additional District and Sessions Judge, Mangaluru, for offences under Sections 3, 4 and 8(5) of the Prevention of Money Laundering Act, 2002 (PMLA).
The petitioner had earlier been charge-sheeted in Crime No. 245/2013 registered by Ankola Police Station for offences under Sections 302, 353 and 307 read with Section 34 of the Indian Penal Code and Sections 25 and 27 of the Arms Act, 1959. Subsequently, offences under the Karnataka Control of Organized Crimes Act, 2000 were also invoked. As these offences were scheduled offences under the PMLA and there was prima facie material indicating money laundering, ECIR No. 15/BGZO/2014-15 was registered. After investigation, a complaint was filed and the Special Court took cognizance of the PMLA offences on 28.09.2018. The petitioner’s earlier bail application under Section 439 of the Code of Criminal Procedure had been dismissed on 02.08.2025.
Before the High Court, the petitioner submitted that the maximum punishment for the alleged offences under the PMLA was imprisonment for seven years and that he had remained in custody since 18.12.2021. It was also contended that his parole application was either not being considered or was being rejected because bail had not been granted in the present case.
The respondent opposed the petition, submitting that the petitioner’s custody was necessary to trace properties involved in money laundering and to ascertain the process of placement and layering undertaken by the accused in conjunction with others. It was also submitted that the petitioner had been convicted and sentenced to life imprisonment in the predicate offences and that the rigour of Section 45 of the PMLA barred the grant of bail.
The High Court noted that the petitioner had remained in custody for more than four years and that the maximum punishment prescribed for the alleged PMLA offences was seven years. Referring to Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), the Court observed that an undertrial prisoner who has undergone detention extending up to one-half of the maximum period of imprisonment specified for the offence is entitled to be released on bail.
The Court further held that, in the facts of the present case, the rigour of Section 45 of the PMLA could not be applied, particularly in view of the Supreme Court’s judgment in Udhaw Singh vs. Enforcement Directorate (2025 SCC OnLine SC 357).
The High Court also considered the respondent’s submission regarding the need for continued custody for tracing properties involved in money laundering. However, it observed that the investigation had already been completed, the charge sheet as well as a supplementary charge sheet had been filed, and further proceedings in the case had been stalled because proceedings against Accused Nos. 2, 3 and 4 had been stayed by the High Court in separate criminal petitions.
Considering these circumstances, the Court held that the petitioner’s request for regular bail deserved to be allowed. It directed that the petitioner be released on bail subject to conditions including execution of a personal bond of ₹1,00,000 with two sureties, regular appearance before the trial court, non-interference with prosecution witnesses, refraining from involvement in similar offences, and not leaving the jurisdiction of the trial court without its permission until disposal of the case.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
1. Accused No.7 in Spl.C.No.91/2018 pending before the Court of III Addl. District & Sessions Judge, Mangaluru, Dakshina Kannada District, for the offences punishable under Sections 3, 4 and 8(5) of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as ‘the PMLA’ for short), is before this Court in this petition filed under Section 483 of BNSS, 2023 seeking regular bail.
2. Heard the learned counsel for the parties.
3. Petitioner was charge sheeted for the offences punishable under Sections 302, 353, 307 read with Section 34 of IPC and Sections 25 and 27 of the Indian Arms Act, 1959 in Crime No.245/2013 registered by Ankola Police Station, Uttara Kannada District, and in the said case, subsequently the offences punishable under the provisions of the Karnataka Control of Organized Crimes Act, 2000, were also invoked. Since the offences mentioned in Crime No.245/2013 were scheduled offences under Section 2(1)(x) and 2(1)(y) of the PMLA and since there was prima-fade material for money laundering, a report was registered in ECIR No.15/BGZO/2014-15 and after completing investigation, complaint was filed in which petitioner is arraigned as accused no.7. The Special Court has taken cognizance of the alleged offences punishable under the provisions of the PMLA on 28.09.2018 in Spl. C. No.91/2018. In the said case, petitioner had filed bail application under Section 439 of Cr.P.C., which was dismissed on 02.08.2025. Therefore, he is before this Court in this petition.
4. Learned counsel for the petitioner submits that the maximum punishment for the alleged offences in the present case is imprisonment for a period of seven years. Petitioner is in custody in the present case from 18.12.2021 onwards. His application for parole is not considered or being rejected for the reason that he is not granted bail in the present case. He, accordingly, prays to allow the petition.
5. Per contra, learned counsel for the respondent, who has filed statement of objections has opposed the petition. He submits that for the purpose of tracing the properties involved in money laundering and to find out the end process of placement and layering done by the accused in conjunction with others involved, petitioner’s custody is very much required. He also submits that petitioner has been now convicted for life imprisonment for the predicate offences. He further submits that in view of Section 45 of the PMLA, petitioner’s bail application is liable to be rejected.
6. Petitioner is in custody in the present case from 18.12.2021 onwards. The maximum punishment for the alleged offences is imprisonment for a period of seven years. Section 479 of BNSS, 2023 provides for the maximum period for which an undertrial prisoner can be detained.
7. From a reading of the same, it is apparent that an undertrial prisoner, who is under detention for a period extending upto one-half of the maximum period of imprisonment specified for that offence, shall be released by the Court on bail. In the present case, petitioner is in custody for the last more than four years. Therefore, the rigour under Section 45 of the PMLA cannot be made applicable as against the petitioner in the present case more so, in view of the judgment of the Hon’ble Supreme Court in the case of Udhaw Singh vs. Enforcement Directorate – 2025 SCC OnLine SC 357.
8. Learned counsel for the respondent has made a submission that petitioner’s custody is required for the purpose of tracing the properties involved in money laundering and to find out the end process of placement and layering done by the accused in conjunction with others involved. Investigation of case is already completed and charge sheet has been filed in the present case. Supplementary charge sheet was subsequently filed in the present case and the progress in the case is stalled since further proceedings as against accused Nos.2, 3, and 4 is stayed by this Court in CrI.P.No.8522/2018 and CrI.P.No.8970/2018. Under the circumstances, I am of the opinion that the prayer made by the petitioner for grant of regular bail needs to be answered affirmatively. Accordingly, the following:-
9. The petition is allowed. The petitioner is directed to be enlarged on bail in Spl.C.No.91/2018 pending before the Court of III Addl. District & Sessions Judge, Mangaluru, Dakshina Kannada District, for the offences punishable under Sections 3, 4 and 8(5) of the Prevention of Money Laundering Act, 2002, subject to the following conditions:
a. Petitioner shall execute a personal bond for a sum of Rs.1,00,000/- with two sureties for the likesum, to the satisfaction of the jurisdictional Court;
b. The petitioner shall appear regularly on all the dates of hearing before the Trial Court unless the Trial Court exempts his appearance for valid reasons;
c. The petitioner shall not directly or indirectly threaten or tamper with the prosecution witnesses;
d. The petitioner shall not involve in similar offences in future;
e. The petitioner shall not leave the jurisdiction of the Trial Court without permission of the said Court until the case registered against him is disposed off.
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