The Karnataka High Court on Wednesday (July 15) ordered the State to pay Rs 5 Lakhs as compensation for 'illegal arrest' of the owner of a Kodagu Homestay, where a US National was allegedly raped. [2026 LiveLaw (Kar) 248]

The court however refused to quash the FIR in its entirety at this stage, holding that it was imperative that the investigation should continue.

The single judge bench of Justice M. Nagaprasanna observed,

“...On Summation of preceding analysis, there is no warrant of interference at the stage of crime. In result, the prayer with regards to the quashing of crime is sans acceptance. Arrest of petitioner is declared illegal. Petitioner becomes entitled to compensation for such illegal arrest. The criminal petition is partly allowed. The petitioner is entitled to compensation of Rs 5 Lakhs. State shall pay the aforesaid compensation within 4 weeks from the date of receipt of copy of the order. The challenge to the FIR in CR no.34 fails as it is imperative that investigation should continue…”

The single judge bench has pronounced the order in a plea moved by the homestay owner, challenging an FIR lodged after a US national was allegedly raped at his premises. The owner, who was arrested on April 19, sought quashing of the FIR for rape and had sought Rs 15 Lakh as compensation for breach of his Fundamental Rights.

The owner had been booked for offences under Sections 64(1) (rape), 351(2) (criminal intimidation), 238 and 239 BNS (concealing design to commit offence and giving false information), among which the rape and criminal intimidation charges were dropped in the final chargesheet filed by the Kodagu Police.

On June 10 the court had orally flagged the security risk concerning the "mushrooming of homestays" across the state, remarking that no one no longer knows where these accommodations are and what was happening there, while reserving the matter for orders.

The complainant has alleged that she was served a welcome drink upon her arrival on April 12 which was allegedly spiked. It is alleged that on losing consciousness, the employee sexually assaulted her.

On June 8, the high court had refused to grant an interim stay on proceedings in the FIR. However, the court had stayed all proceedings against the homestay owner, charge sheeted for offences under the now-repealed Foreigners Act 1946.

A coordinate bench had last month directed the State government to formulate a comprehensive policy for regulation of homestays, noting that the existing framework under Karnataka Tourism Trade (Facilitation and Regulation) Act does not properly address concerns of public safety, health, hygiene, security among others.

Case Title: Palecanda Ponnappa @ Vishal v. State of Karnataka & Anr.

Case No: CRL.P 7712/2026

2026 LiveLaw (Kar) 248