Consensual Relationship Spanning Years Cannot Be Turned Into Rape Charge Merely Because Stock Market Investments Soured: Karnataka High Court Grants Bail

"Allegation springs when the stock market falls. The allegation is that the desired amount is not handed over by the petitioner to the complainant. On the said allegation, it appears that the offence of repeated rape has sprung on consensual acts that has happened between the two for over 4 years." Karnataka High Court, in a significant ruling, held that criminal charges of repeated rape cannot arise from a long-standing consensual relationship merely because joint financial investments in the stock market suffered losses.

A single-judge bench of Justice M. Nagaprasanna observed that converting a financial dispute over unsatisfactory stock returns into an allegation of sexual assault distorts the criminal justice process. Granting bail to the petitioner, the bench emphasized that courts must carefully examine whether a physical relationship was genuinely non-consensual or whether allegations were weaponized following commercial disagreements.

The petitioner, Santosh Poojary, approached the High Court seeking enlargement on bail after his application was rejected by the Principal District and Sessions Judge at Udupi. He was implicated in Crime No. 35 of 2026 registered at the Mahila Police Station in Udupi for offences punishable under Sections 318(2) and 64(2) read with Section 3(5) of the Bharatiya Nyaya Sanhita, 2023 (BNS). The FIR was lodged following a financial falling out between the petitioner and the complainant, who had been closely associated for nearly five years through both personal ties and stock market investments.

The primary question before the court was whether criminal charges under penal provisions dealing with rape and cheating are sustainable when a prolonged consensual relationship sours due to monetary disputes. The court was further called upon to determine whether the breakdown of joint stock market investments involving substantial sums can retrospectively invalidate years of consensual physical intimacy between consenting adults.

Relationship Dating Back Years

The court noted from the record that the petitioner and the complainant were known to each other for close to five years and had engaged in a physical relationship over that period. Alongside their personal association, the two individuals jointly invested in the stock market starting from a modest sum of Rs. 2,000 on September 5, 2024, which eventually escalated to Rs. 79,50,000.

"Dispute Arises From Market Losses"

The bench pointed out that the entire criminal machinery was set into motion only when the stock market experienced a downturn and the returns failed to meet expectations. The court observed that the core grievance stemmed from the petitioner's alleged failure to hand over desired financial amounts to the complainant following market losses, rather than any initial deception or forced sexual subjugation.

Distinction Between Rape and Consensual Sex

Relying extensively on the landmark Supreme Court ruling in Dhruvaram Murlidhar Sonar v. State of Maharashtra, the High Court reiterated that a clear legal distinction exists between rape and consensual sex. The bench recalled the principles laid down in catena of judgments including Uday v. State of Karnataka, Deelip Singh v. State of Bihar, Deepak Gulati v. State of Haryana, and Shivashankar v. State of Karnataka, wherein the Apex Court held that sexual intercourse in the course of a long-standing relationship cannot be termed as rape simply because the relationship eventually soured.

"Conscious Decision Made By Parties"

Highlighting the doctrine of free consent, the court noted that individuals possessing sufficient intelligence who willingly participate in a prolonged relationship exercise a conscious choice. The bench underscored that when partners cohabit or maintain intimacy over several years without immediate protest, subsequent allegations regarding the inception of the relationship fail to establish the foundational ingredients of non-consensual sexual offences.

Concluding that the petitioner had made out a strong case for pre-trial liberty, the High Court allowed the criminal petition and set aside the lower court's rejection order. The petitioner, accused No. 1, was ordered to be released on bail in connection with Crime No. 35 of 2026 pending before the II Additional Senior Civil Judge and ACJM Court at Udupi. The relief was granted subject to the execution of a personal bond of Rs. 2,00,000 with two solvent sureties of like amount, alongside standard conditions barring witness tampering and mandating regular court appearances.

Date of Decision: 05 August 2026