Karnataka High Court dismisses plea challenging MLA Veerendra's arrest in money laundering case

Bengaluru: The Karnataka High Court on Wednesday dismissed the petition challenging the arrest of K C Veerendra, Congress MLA from Chitradurga, in connection with a money laundering case linked to illegal online betting and managing gambling websites. Justice MI Arun dismissed the petition filed by RD Chaitra, Veerendra’s wife.

On July 22, 2025, the Enforcement Directorate (ED) had registered an Enforcement Case Information Report (ECIR) against Veerendra on the basis of seven FIRs registered against him over 10-15 years. Subsequently, the ED registered an addendum ECIR in relation to an FIR registered at Cyber Crime police station, Cyberabad in Telangana and another registered at Harohalli police station in Bengaluru south. After a search and seizure in Karnataka and Goa, the ED arrested Veerendra on August 23.

Justice MI Arun noted that though he has upheld the contention of the petitioner in respect of instances wherein the FIRs have been either quashed or the accused have been acquitted, the arrest has been upheld in view of the amendment to section 2(1)( u) of the Prevention of Money Laundering Act as one FIR (Harohalli police station) is still alive. Section 2(1)( u) expands the expression of "proceeds of crime", including any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. The court said the action of the authorities in arresting Veerendra is upheld as the agency has clearly explained the reasons to believe in detail stating why they have proceeded against him.

The court further said that if the B report filed in the pending FIR were to be accepted by the trial court, the accused would be at liberty to make necessary applications for quashing of proceedings against him. “It is needless to state that observations made above are in relation to the case at hand and if the petitioner were to make any application for bail the same would be considered in accordance with law,” the court said.

The petition had contended that Veerendra was either acquitted or cases against him were quashed and hence the arrest was illegal. It was claimed that Veerendra’s arrest pursuant to the issuance of the grounds of arrest from Gangtok, Sikkim was without jurisdiction as well as illegal, arbitrary and violative of his fundamental rights guaranteed under Article 19 and 21 of the Constitution of India.

On the other hand, the ED submitted that the algorithms of the betting apps, controlled by Veerendra, are structured in a manner that initially a person gambling on the website makes money and he is lured to make larger investments and thereafter he loses money. This is nothing but cheating which is a scheduled offence under the PMLA and Veerendra is the recipient of the tainted money (proceeds of crime) earned through these online betting apps, the agency stated.