Madras HC Stays V&AC Probe Against Man Not Named in FIR, Arrested at Prison Gate Hours After Getting Bail

The Madras High Court has stayed investigation in a DVAC case against a Karur fitness centre operator who was arrested at the prison gate immediately after being released on bail in a separate case, even though he was not named as an accused in the new FIR.

A Division Bench of the Madras High Court, led by Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan, on 14 August 2026 stayed all further proceedings and investigation in V&AC Headquarters Crime No.05 of 2026, registered on 28 July 2026, insofar as it concerns petitioner Ramesh, a private individual running a fitness centre in Karur. The stay operates pending disposal of W.P.Crl.No.2077 of 2026. The bench acted on the striking fact that Ramesh does not figure anywhere in the FIR — neither in the list of seven named accused nor in the eleven-page narrative annexure — yet was arrested at the prison gate on 30 July 2026, within hours of being released on bail in an entirely separate case. The court found that the issues raised require a full hearing after all parties file counter-affidavits.

The FIR and the Petitioner’s Absence from It

V&AC Headquarters Crime No.05 of 2026 was registered by the Directorate of Vigilance and Anti-Corruption on 28 July 2026. According to the petition, the FIR traces its origin to a letter dated 25 July 2026 from the Additional Chief Secretary, Home, Prohibition and Excise Department, which forwarded two petitions and a copy of the counter-affidavit filed by the Directorate of Enforcement in SLP (Crl.) No.7958 of 2025.

That Supreme Court proceeding was one in which the State itself, through the Home Department, had challenged the Enforcement Directorate’s search, seizure and recording of statements at TASMAC as illegal, coercive and beyond jurisdiction. The Supreme Court stayed further coercive action arising from that material by orders dated 22 May 2025 and 14 October 2025 in SLP (Crl.) Nos.7958 of 2025 and 8048–8049 of 2025.

Senior Counsel Mr. V. Ragavachari, appearing for the petitioner, argued before the bench that the same Home Department which had described this material as coerced and unlawful before the Supreme Court then used it, without independent verification, as the foundation for a fresh FIR. He characterised this as a colourable exercise of power that overreaches the pending Supreme Court proceedings and the protective orders passed in them.

The FIR itself, as placed before the court, covers several unconnected transactions: bar tenders across six districts, transport tenders for 45 depots, demand drafts, dealings between bottle suppliers and distilleries, brand approvals, and transfers of TASMAC officials spread over 2020 to 2025. The petitioner submitted that none of these allegations mentions him, attributes any act to him, or connects him to any of the named transactions, payments or documents. No act of entrustment, deception, conspiracy or abetment — the essential ingredients of the offences invoked — is alleged against him.

The Arrest at the Prison Gate

Ramesh had been in custody in a separate case, Crime No.205 of 2026 on the file of D-1 Triplicane Police Station. He secured bail in that case on 28 July 2026. On 30 July 2026, despite his release order reaching the prison at around 3.00 pm, the prison authorities kept him inside until approximately 6.30 pm. DVAC officials then took him into custody at the prison gate itself in connection with Crime No.05 of 2026, even though his name did not appear in that FIR.

The petitioner was remanded to judicial custody the following day, 31 July 2026. He was treated as accused No.8, a designation not reflected anywhere in the original FIR documentation.

Senior Counsel Ragavachari pressed this timing before the bench. Bail was granted in the morning. The present FIR was registered around 8.30 pm on the very same day, 28 July 2026. He argued that this sequence demonstrates an attempt to overreach the High Court’s bail order and keep the petitioner in continuous custody.

The petition also pointed out that the earlier case, Crime No.205 of 2026, had itself been stayed by this court by order dated 29 July 2026 in W.P.Crl.No.1840 of 2026.

Arrest Procedure and the Disputed Statement

The petitioner raised a specific procedural complaint: no notice under Section 35(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 was issued to him before arrest, and grounds of arrest were not furnished to him in any meaningful way before he was produced before the Special Judge on 31 July 2026.

The constitutional prayer in the writ petition seeks a declaration that Section 17 of the Prevention of Corruption Act, 1988 cannot be read as an independent, self-contained power of arrest that overrides the safeguards under Sections 35, 36, 47, 48 and 62 of the BNSS, 2023. Senior Counsel Ragavachari clarified before the bench that this constitutional challenge is already pending in a connected petition and was therefore not argued at length in the present proceedings.

The material actually used to implicate the petitioner in Crime No.05 of 2026, according to the petition, was not anything found in that FIR. It was an alleged confession statement said to have been recorded from him in Crime No.205 of 2026. The petitioner submitted that no such statement was ever made; he declined to sign it when it was read over to him in the presence of the Special Judge. He had separately complained in writing to the Governor, the Director General of Police and the Commissioner of Police that he was being pressured to give a false statement implicating former Minister V. Senthil Balaji and his brother.

On the admissibility question, Senior Counsel pointed to Section 181(1) of the BNSS, which bars taking a person’s signature on a police statement, and to Section 23 of the Bharatiya Sakshya Adhiniyam, 2023, under which such a statement is inadmissible except to the extent it leads to a discovery. He submitted that no discovery is attributed to the petitioner in the present case.

Respondents’ Positions

Senior Counsel Mr. Siddhartha Dave, appearing for the State of Tamil Nadu (second respondent), countered on two points. He submitted that the constitutional challenge — declaring Section 17 of the PC Act ultra vires in relation to BNSS — cannot succeed because both are Central statutes and one cannot be declared ultra vires the other. On the petitioner’s inclusion, he pointed to Annexure-B of the FIR which records that the accused include “Distillery/Brewery Companies, Transport firms/Companies, and other unknown public servants of TASMAC and others,” placing the petitioner within the residual category of “others.” He also noted that the Supreme Court, by order dated 31 July 2026 in SLP (Crl.) Diary No.45695 of 2026 filed by co-accused V. Senthil Balaji, had stayed the arrest and FIR until further orders subject to cooperation with the investigation.

Mr. AR.L. Sundaresan, Additional Solicitor General for the Union of India (first respondent), submitted that no cogent legal ground had been made out to strike down or read down Section 17 of the PC Act, and that a writ petition under Article 226 is not the appropriate forum to challenge the evidentiary merits of an FIR when the remedy lies elsewhere and statutory investigation authorities possess jurisdiction.

The Public Prosecutor for respondents 4 and 5 submitted that the petitioner is closely associated with accused No.7, that phone contacts recovered reveal calls with numerous TASMAC officials, and that the petitioner and accused No.7 operated as key facilitators for illegal hawala transactions. He stated that State authorities took a cue from materials placed before the Supreme Court and verified them with corroborative documents, and that the case involves financial transactions running into hundreds of crores of rupees warranting full investigation.

The Bench’s Reasoning for the Interim Stay

The bench, after hearing counsel and going through the affidavit, the FIR and the annexures, identified the central issue: Ramesh obtained bail in Crime No.205 of 2026 on 28 July 2026 and was arrested at the prison gate on 30 July 2026 in connection with Crime No.05 of 2026 — a case in which he was not named as an accused.

The court observed that this sequence gains significance given that Crime No.205 of 2026 itself had been stayed by this court on 29 July 2026. It held that the issues raised need to be considered after affording all parties an opportunity to be heard. To balance the rights and protect the interests of the petitioner in the interim, the bench found it fit to stay all further proceedings and investigation in V&AC Headquarters Crime No.05 of 2026 insofar as they concern the petitioner.

The bench did not resolve the constitutional question regarding Section 17 of the PC Act at the interim stage, leaving it for full consideration along with the connected petitions.

Order

The Division Bench stayed all further proceedings and investigation in V&AC Headquarters Crime No.05 of 2026, dated 28 July 2026, insofar as the petitioner Ramesh is concerned, pending disposal of W.P.Crl.No.2077 of 2026. The respondents were directed to file their counter-affidavits on or before the next date of hearing, after serving a copy in advance on the petitioner’s counsel. The petition has been listed along with W.P.(Crl.) Nos.1840, 1928 and 1931 of 2026 for hearing on 27 August 2026.