Introduction:

In a significant development, the Karnataka High Court recently dismissed the bail petitions filed by Kannada actress Harshavardhini Ranya Rao and her co-accused Tarun Konduru Raju in a major gold smuggling case. The case, titled Harshavardini Ranya Rao v. Directorate of Revenue Intelligence and Tarun Konduru Raju v. Directorate of Revenue Intelligence, numbered Criminal Petition 5047/2025 c/w Criminal Petition 5432/2025, was adjudicated by Justice S. Vishwajith Shetty, who delivered the verdict on April 26, 2025. The petitions were dismissed with the judge succinctly stating, “Petitions dismissed,” while a detailed order is awaited. The matter arose after the Directorate of Revenue Intelligence (DRI) seized gold bars worth ₹12.56 crore from Ranya Rao at Bengaluru’s Kempegowda International Airport on March 3, followed by the discovery of gold jewellery worth ₹2.06 crore and Indian currency of ₹2.67 crore from her residence. Both accused were charged under various sections of the Customs Act, including Sections 135(1)(a), 135(1)(b), 135(1)(a)(i)(a), 135(1)(a)(i)(b), 135(1)(b)(i)(a), 135(1)(b)(i)(b), 104(4)(a), 104(4)(b), 104(6)(a), and 104(6)(c).

Arguments on Behalf of the Petitioners:

Senior Advocate Sandesh Chouta, representing Harshavardhini Ranya Rao, strongly contended that the entire search and seizure operation carried out by the Directorate of Revenue Intelligence was vitiated due to non-compliance with the mandatory procedures stipulated under the Customs Act, particularly Section 102. He emphasised that as per Section 102, a person who is to be searched must be taken before a gazetted officer of customs or a magistrate, and non-compliance would render the entire seizure illegal. He pointed out that although the SIO who led the search was claimed to be a gazetted officer, discrepancies existed in the procedural safeguards, including the mahazar and the notices issued before the search. Furthermore, he argued that the mandatory requirement of informing the grounds of arrest to the family members in writing was violated, as the communication was merely made telephonically to Rao’s husband. Highlighting that offences under the Customs Act are compoundable and carry a punishment of less than seven years, he argued that normally bail would be granted, particularly when the petitioner is a lady who had already spent over 49 days in custody. Similarly, Advocate Bipin Hegde, appearing for Tarun Konduru Raju, argued that his client’s involvement was minimal. He contended that there was no direct evidence against Raju other than statements recorded during the investigation. Raju’s counsel asserted that even if the DRI’s case is taken at face value, the failure to pay customs duty was attributable to Rao and not Raju. He maintained that Raju merely travelled to Dubai and handed over the gold to Rao, and that such action by itself did not constitute an offence unless active participation in smuggling was proven. Moreover, it was argued that Raju had not dealt with or attempted to evade taxes personally, and that implications based on mere association were insufficient for the denial of bail.

Arguments on Behalf of the Directorate of Revenue Intelligence:

The Directorate of Revenue Intelligence, opposing the bail petitions, presented a detailed picture of an organised smuggling racket involving both Rao and Raju. The DRI submitted that apart from the gold seized during the interception at Kempegowda Airport, further investigation revealed an extensive network of gold smuggling involving Rao, Raju, and a third party named Sahil Jain, who has previous antecedents in gold smuggling. It was argued that both Rao and Raju had travelled to Dubai 31 times, of which at least 11 instances of smuggling were documented. Often, they would return to India on the same day after handing over the smuggled gold to Jain in Bengaluru. DRI emphasised that the mode of operation included declarations showing travel to Geneva or Thailand, but in reality, the gold was handed over to Rao in Dubai for smuggling. Refuting the petitioners’ claims regarding procedural lapses, the DRI counsel stated that the grounds of arrest were duly communicated to Rao’s husband in writing, and not merely over a phone call. Furthermore, the DRI submitted that investigations were still ongoing regarding the disposal of smuggled gold and whether any protocol misuse was involved, as there were allegations of Rao being facilitated by a protocol officer at the airport. The statement of Rao’s father, a senior police officer, had also not been recorded yet. Therefore, given the seriousness of the offence, the organised nature of the crime, huge amounts involved (approximately 100 kilograms of smuggled gold according to confessions and declarations), and the likelihood of tampering with evidence if released on bail, the DRI vehemently opposed the granting of bail to both accused.

Court’s Judgement:

After hearing exhaustive arguments from both sides, Justice S. Vishwajith Shetty dismissed both the bail petitions filed by Harshavardhini Ranya Rao and Tarun Konduru Raju. While the detailed reasoning behind the dismissal will be elaborated in the forthcoming detailed order, the immediate pronouncement indicated that the court was not convinced by the submissions made on behalf of the petitioners. By stating “Petitions dismissed” at the time of pronouncement, the court effectively upheld the prosecution’s contention that the allegations were serious, the investigation was ongoing, and granting bail at this juncture would not be appropriate. Significantly, the court appeared to give weight to the DRI’s evidence suggesting a systematic and repeated smuggling operation rather than isolated incidents. The court also presumably took into account the vast quantities of smuggled gold involved, the organised nature of the operation, the international dimensions of the conspiracy, and the possibility of influencing witnesses or tampering with evidence if bail was granted. The court, by dismissing the bail petitions, underscored the importance of preserving the integrity of the investigation, particularly in cases involving serious economic offences such as large-scale smuggling operations. As per the directions, the petitioners will continue to remain in judicial custody while the investigation proceeds further, and the DRI continues to probe the deeper nexus involved, including the role of protocol misuse and the alleged support network facilitating such operations. The case citation for this important judgment is 2025 LiveLaw (Kar) 154.