Karnataka HC Refuses to Cancel PMLA Bail Granted to Woman Accused, Holds Twin Conditions Not Mandatory for Women

The Karnataka High Court dismissed the Enforcement Directorate's petition to cancel bail granted to a woman accused under the PMLA, holding that Section 45's twin conditions do not apply to women under the first proviso, and that the Trial Court had passed a reasoned order on the facts.

The High Court of Karnataka at Bengaluru, on 24 June 2026, dismissed a petition filed by the Directorate of Enforcement (ED) seeking cancellation of bail granted to Mrs. Aishwarya Gowda, a woman accused in a money-laundering case. Justice S. Vishwajith Shetty, sitting singly, held that the Trial Court had applied its mind and passed a reasoned order, and that the ED had not made out a case for cancellation. The judgment engages at length with the contested question of whether the twin conditions in Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA) must be satisfied when the person seeking bail is a woman, resolving it in favour of the accused by drawing on three Supreme Court decisions handed down between 2024 and 2025.

The Alleged Offence and Arrest

The ED registered Enforcement Case Information Report (ECIR) No. BGZO/06/2025 against Mrs. Aishwarya Gowda and others. The underlying allegation was that the respondent, claiming to be a prominent businesswoman and projecting herself as the sister of a Member of Parliament, approached various individuals, lured them to invest in her business with promises of high returns, and collected money and gold from them without repayment. Multiple criminal cases were registered against her at police stations in Bengaluru and Mandya for offences under Sections 384 and 420 of the Indian Penal Code, which constituted the schedule offences.

During investigation, the ED found that Rs. 2.385 crores received through bank transfers and Rs. 4.79 crores received in cash and gold were proceeds of crime within the meaning of Section 2(1)(u) of the PMLA. Mrs. Aishwarya Gowda was arrested on 24 April 2025. The investigation was subsequently completed and a charge sheet, running to more than 6,700 pages and citing 39 witnesses, was filed before the Trial Court.

The Trial Court's Bail Order and the ED's Challenge

After her arrest, Mrs. Aishwarya Gowda applied for regular bail before the Court of the Principal City Civil and Sessions Judge, Bengaluru, which was also functioning as the Special Court under the PMLA. The Special Court allowed her bail application on 17 June 2025 in ECIR/BGZO/06/2025.

The ED moved the Karnataka High Court under Section 483(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) seeking cancellation of that bail. The petitioner's counsel, Smt. Anuparna Boradoloi, argued that the Trial Court had granted bail solely on the ground that the respondent is a woman, without recording any finding on the twin conditions required under Section 45 of the PMLA. Counsel relied on Saumya Chaurasia v. Directorate of Enforcement — (2024) 6 SCC 401 — and Tarun Kumar v. Assistant Director, Directorate of Enforcement — (2024) 13 SCC 788 — for the proposition that the first proviso to Section 45, which permits certain categories of accused including women to be released without satisfying the twin conditions, is not mandatory and cannot be applied mechanically.

The Respondent's Case

Counsel for Mrs. Aishwarya Gowda, Sri Sunil Kumar S, did not dispute the factual background but argued that the twin conditions in Section 45 need not be satisfied when the accused is a woman, relying on two later Supreme Court decisions: Shashi Bala @ Shashi Bala Singh v. Directorate of Enforcement (Criminal Appeal No. 212/2025, decided 15 January 2025) and Kalvakuntla Kavitha v. Directorate of Enforcement — 2024 SCC OnLine SC 2269.

He also pointed to the sheer scale of the trial ahead: the charge sheet exceeds 6,700 pages, the prosecution has cited 39 witnesses, and trial has not yet commenced. The prospect of the case concluding in the near future, he submitted, is remote. He added that Mrs. Aishwarya Gowda had co-operated with the ED throughout the investigation, that proceedings in the underlying criminal cases registered for predicate offences had been stayed by the High Court itself, and that she had already been granted bail in all those predicate cases.

The Court's Reading of Section 45 and Supreme Court Precedent

Justice Vishwajith Shetty examined the three Supreme Court decisions in sequence to determine which reading of Section 45's first proviso was authoritative in the present facts.

In Saumya Chaurasia, the Supreme Court had held that the phrase “may be released on bail, if the special court so directs” in the first proviso to Section 45(1) is discretionary, not mandatory. The Court had cautioned that bail for women cannot be granted automatically and that courts must exercise discretion judiciously, taking into account the extent of involvement of the accused and the nature of evidence collected. That judgment had denied bail to the appellant, who was a Deputy Secretary and OSD in the Office of the Chief Minister, on the ground that there was sufficient evidence of active involvement in money laundering.

In Kalvakuntla Kavitha, decided after Saumya Chaurasia, the Supreme Court clarified the earlier ruling. It held that Saumya Chaurasia did not say that the proviso to Section 45(1) applies only to “vulnerable women”, and did not say that educated, sophisticated, or politically prominent women are excluded from the benefit of the proviso. The Court found that the High Court in that matter had “totally misdirected herself while denying the benefit of the proviso to Section 45(1) of the PMLA.” It confirmed that the proviso entitles a woman to special treatment when her bail prayer is being considered, and that if a court denies that benefit, it must give specific reasons.

In Shashi Bala, the Supreme Court went further. Reading the first proviso to Section 45(1) on its plain terms, it held that the proviso “operates as an exception to clause (ii) of sub-Section (1) of Section 45 of the PMLA” and that when a woman applies for bail, “the twin conditions in clause (ii) need not be satisfied.” The Solicitor General, appearing in that matter, conceded before the Supreme Court that the rigours of clause (ii) of Section 45(1) do not apply to a woman in view of the proviso. In Shashi Bala, the Court had also factored in that the maximum punishment for the alleged offences is seven years and that the possibility of trial being concluded in the near future was remote, and on those facts held that a prima facie case for enlarging the accused on bail was made out.

Assessment of the Trial Court's Order

Having mapped the Supreme Court's position, Justice Vishwajith Shetty turned to whether the order of the Special Court was legally infirm. He found that it was not. The Trial Court had applied its mind and passed a reasoned order. It had taken into account that the respondent had been granted bail in all the cases registered against her for predicate offences, that further proceedings in some of those cases had been stayed by the High Court, and that the prosecution did not require the respondent's presence for the purpose of investigation any longer. The respondent, a married woman, had been in custody for nearly two months at the time the bail was granted.

The facts of the present case, Justice Vishwajith Shetty observed, align with those the Supreme Court had weighed in Shashi Bala: the charge sheet runs to more than 6,700 pages, 39 witnesses have been cited, trial has not commenced, and a conclusion in the near future is remote.

The ED's argument that the Special Court granted bail “solely for the reason that the respondent is a lady” was not accepted. The High Court read the Trial Court's order as a reasoned exercise of discretion that took several factors into account, not a mechanical application of the gender exception. In the absence of any ground for cancellation — such as breach of bail conditions, tampering with evidence, or threatening witnesses — the petition could not be sustained.

Outcome

Criminal Petition No. 13915 of 2025 filed by the Directorate of Enforcement was dismissed. The bail granted to Mrs. Aishwarya Gowda by the Court of the Principal City Civil and Sessions Judge, Bengaluru, on 17 June 2025, in ECIR/BGZO/06/2025 for offences under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002, stands.