Madras HC Denies Bail to Nishad Kannu in Rs 43-Crore Fraud Case

The Madras High Court has dismissed the bail petition of Nishad Ahammed Kannu, an accused arrested in connection with an alleged Rs 43-crore investment fraud case in Puducherry, ruling that a long period of imprisonment alone cannot be considered a ground for granting bail under money-laundering laws.

Justice C Kumarappan stated that the stringent bail conditions mandated under Section 45 of the Prevention of Money Laundering Act (PMLA) strictly apply to the case. The judge rejected the petition filed by Kannu, who was taken into custody by the Enforcement Directorate (ED) in September 2025 after the Puducherry CB-CID registered the initial predicate offence against him.

According to facts presented by investigators, Kannu allegedly induced about 825 people to invest Rs 4.5 lakh each into a scheme by promising them total returns amounting to Rs 9 lakh. Through this scheme, the accused allegedly cheated the investors out of nearly Rs 43 crore.

Opposing the bail application before the court, the Enforcement Directorate submitted that the accused had collected Rs 4.5 lakh each from nearly 800 people on the promise of paying monthly returns of Rs 55,000 for a duration of 11 months. The agency further informed the court that Kannu had withdrawn substantial sums of money from various bank accounts after the investigation had commenced.

In his plea seeking relief, the petitioner contended that the Enforcement Directorate had not identified any proceeds of crime, shell entities, or benami transactions in the case. Kannu claimed before the court that the matter was, at best, a commercial investment dispute rather than a criminal offence.

Relying on the Supreme Court’s ruling in the V Senthilbalaji case, the petitioner sought bail and further alleged that the written grounds for his arrest had not been furnished to him by the investigating agency. After considering the arguments from both sides and the nature of the allegations under the PMLA, Justice C Kumarappan rejected the arguments and dismissed the bail application.