High Rich Ponzi Case: Kerala High Court Directs Special Court To Reconsider Prime Accused's Bail After ED Challenge

The Kerala High Court in a recent order, directed the Special Court for PMLA cases, Ernakulam to consider afresh the bail application of K.D. Prathapan, the prime accused in the High Rich Pozhi Scheme case, while considering a plea preferred by the Directorate of Enforcement to cancel the bail granted. [2026 LiveLaw (Ker) 500]

Justice C.S. Dias directed the Special Court to reconsider Prathapan's bail application within 60 days after hearing both sides. It was made clear that Prathapan would continue to be on bail until a fresh decision is made by the Special Court.

The prosecution allegation is that Prathapan and other accused received Rs. 25 lakhs from the de facto complainants offering high returns but then they did not pay any return or repay the investment, and thus, cheated the de facto complainants. He is accused of Sections 3 and 4 of the Prevention of Money Laundering Act, 2002.

The Special Court granted him bail on November 3, 2025 after noting that he has been custody for 15 months. Challenging the same, the ED approached the High Court and contended that the rigour under Section 45 of the PMLA was not considered by the Special Court. It was pointed out that Prathapan was an accused in 15 crimes registered in various police stations for allegedly committing offences under the Prize Chits and Money Circulation (Banning) Act and the IPC. Moreover, he was convicted in three cases as well, it was stated.

The ED relied on Supreme Court's decisions in Union of Indian Through the Assistant Director v. Kanhaiya Prasad, Sheikh Javed Iqbal @ Ashfaq Ansari @ Javed Ansari v. State of Uttar Pradesh and Senthil Balaji V v. Deputy Director, Directorate of Enforcement.

Prathapan opposed the plea and it was argued that the bail was granted by the Special Court while exercising its discretion. It was also pointed out that he has been scrupulously complying with the bail conditions imposed. 

After hearing the parties, the Court referred to Section 45, 65 and 71 of the PMLA as well as the decisions referred and remarked:

"A reading of the above provision clearly reveals that an accused, who is alleged to have committed the offences under the Act, can be enlarged on bail, subject to the condition that the prosecutor must be given an opportunity to oppose the application and the Court must be satisfied that there are reasonable grounds to believe that the accused person is not guilty of committing the offence and he is not likely to commit any offence while he is on bail...As the Act being a special enactment, it is mandatory that the twin conditions enumerated under Section 45 of the Act are be complied with while considering the application for the bail."

The Court observed that the Special Court's order granting bail did not consider the twin conditions under Section 45 of the Act and granted bail considering the period of incarceration. It, thus, was of the view that the order required reconsideration.

"There is not a whisper in the order regarding any finding rendered on the satisfaction of the twin conditions envisaged under Section 45 of the Act. Furthermore, it is not disputed that the respondent is a person with antecedents, which is a ground to assume that there is a likelihood of him committing an offence, if he enlarged on bail. Nonetheless, as I am remitting the matter back to the Special Court for reconsideration, I do not want to delve on the said question any further," the Court added.

The Court allowed the plea and 

Case No: Crl.MC No. 10380 of 2025

Case Title: Directorate of Enforcement v. Kolatt Dasan Prathapan

Citation: 2026 LiveLaw (Ker) 500

Counsel for the petitioner: M.J. Santhosh - Additional Standing Counsel - ED

Counsel for the respondent: T.K. Rajeshkumar, Manoj V. George, Jijo Jose, T.N. Bindu, Nandan Suresh

Click to Read/Download Order