Karnataka HC Denies Pre-Arrest Bail To Developers Accused Of Creating Documents To Block PACL Land Sale For Investor Repayments

The petitioners, arrayed as accused Nos. 3 to 6, sought anticipatory bail under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023, in Crime No. 149/2026 of Malleshwaram Police Station, registered for alleged offences under Sections 318(4), 336(2), 336(3), 340(2), 329(3), 61(2) and 3(5) of the Bharatiya Nyaya Sanhita, 2023.

The Sessions Court had rejected their application on 27 October 2026.

The prosecution alleged that the petitioners participated in transactions concerning land previously sold to PACL Limited and notified for sale pursuant to Supreme Court directions concerning repayment to PACL investors.

The transactions included a gift deed, an agreement for sale, a joint development agreement and a general power of attorney, all executed on 6 July 2026.

The Court noted that payments said to total Rs. 8 crores had allegedly been made before those documents were executed, although the transferors had no title to the land and no contemporaneous documents were produced to evidence the stated purpose of the payments.

The petitioners claimed to be bona fide investors and victims of the alleged scheme, denied criminal antecedents, and offered to cooperate with the investigation; the State and the complainant opposed bail, citing an alleged conspiracy to obstruct the Supreme Court-directed sale process and the ongoing investigation.

Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023, empowers the Court to grant anticipatory bail.

In State v. Anil Sharma, (1997) 7 SCC 187, the Supreme Court recognised that custodial interrogation may be more effective than questioning a suspect protected by an anticipatory-bail order.

In Sumitha Pradeep v. Arun Kumar C.K., (2022) 17 SCC 391, the Supreme Court held that the absence of a need for custodial interrogation does not, by itself, warrant anticipatory bail; the court must first consider the prima facie case, the nature of the offence and the severity of punishment, with custodial interrogation being one relevant consideration.

The punishment prescribed for the offences is a relevant consideration in a bail application, but is not the sole criterion.

The Court considered the sequence and circumstances of the land transactions significant: the land had previously been sold to PACL, was subject to a Supreme Court-directed sale process, and the alleged transactions were registered on the same day, including an agreement for sale that preceded the gift deed relied upon to restore title to the original owner.

The Court also noted that the petitioners’ alleged payments preceded the formal agreements, were not shown to have come from the partnership firm, and were unsupported by contemporaneous documentation linking them to development of the land.

On those circumstances, the Court found a prima facie basis for the allegation that the documents were created to defeat the sale process and that the accused had conspired to cheat.

Applying Anil Sharma and Sumitha Pradeep, it treated the nature of the allegations and the prima facie case as material, rather than accepting the petitioners’ cooperation offer or the stated sentencing range as determinative.

It dismissed the criminal petition.