Mere Possession Of Large Amount Of Cash Without Valid Documents Not An Offence U/s 98 Karnataka Police Act: Karnataka High Court

The Karnataka High Court has held that mere possession of a large amount of cash without valid documents does not, by itself, constitute an offence under Section 98 of the Karnataka Police Act.

The Court was considering a Petition against prosecution for offences punishable under Section 98 of the Karnataka Police Act, 1963.

The bench of Justice Hemant Chandangoudar observed, "The mere possession of a large amount of cash without valid documents does not, by itself, constitute an offence under Section 98 of the Act. To establish an offence under this provision, it must be demonstrated that the property in question is either stolen or fraudulently obtained."

The Petitioner was represented by Advocate Rohan Kothari while the Respondent was represented by High Court Government Pleader M V Anoop Kumar.

Facts of the Case

The Prosecution alleged that during the Lok Sabha Elections 2019, the Complainant, along with the staff while on duty, intercepted the Petitioner’s vehicle at a check post. Upon inspection, it was discovered that the Petitioner was in possession of a sum of ₹8,38,250/- without any valid documents to substantiate its lawful possession.

Reasoning By Court

The Court at the outset noted that the offence punishable under Section 98 of the Karnataka Police Act is a non-cognizable offence and therefore it was mandatory for the Police to obtain prior permission from a Magistrate before initiating any investigation.

Noting that the same was not done in the present case, the Court stated that this non-compliance with the statutory requirement renders the investigation as well as the consequent cognizance of the alleged offences legally untenable and vitiated.

It went on to state that the materials on record, including the charge sheet, do not indicate that the complainant had any reasonable belief or suspicion that the cash found in possession of the Petitioner was stolen property or was fraudulently obtained as was required as per Section 98 of the Karnataka Police Act.

"In the absence of any such allegation or reasonable suspicion on record, the essential ingredients required to establish the commission of an offence under Section 98 of the Act are conspicuously absent. Therefore, allowing the proceedings to continue would amount to an abuse of the process of law," the Court held.

The Petition was accordingly allowed.

Cause Title: Shri R. Amarnath vs. The State Of Karnataka (2025:KHC:13643)

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