Supreme Court Upholds ₹5 Lakh Compensation to Kodagu Homestay Owner Over Illegal Arrest
New Delhi: The Supreme Court has upheld a Karnataka High Court order directing the state government to pay ₹5 lakh compensation to a Kodagu homestay owner over his illegal arrest in connection with a case involving the alleged rape of a US citizen at the facility.
On September 22, the Supreme Court dismissed Karnataka’s special leave petition challenging the High Court’s order, stating that it was “not inclined to interfere” with the judgment, according to a report published in The Print.
The compensation awarded to the homestay owner, however, does not amount to a judicial finding that he was innocent of the allegations. The High Court’s order was based on its finding that his arrest amounted to an unlawful deprivation of his personal liberty.
The case relates to an alleged sexual assault of a US citizen at a Homestay in Kodagu in April 2026. According to the FIR, a male staff member of the homestay was accused of committing the alleged sexual assault. The home stay owner, who was the principal operator and managing person of the homestay, was named as Accused No. 2.
Police arrested the homestay owner on the evening of April 18. He was produced before a magistrate the following day and remained in judicial custody until he was granted bail on May 2.
A key issue before the High Court was that homestay owner was not present at the homestay when the alleged sexual assault took place, and the allegation of committing the sexual act was not made against him.
The prosecution had argued that the homestay owner and the principal accused had acted with common intention under Section 3(5) of the Bharatiya Nyaya Sanhita (BNS). The state contended that his arrest was necessary to establish the circumstances surrounding the incident and determine his possible role in the case. It also argued that the investigation could ultimately result in a ‘B’ report if no material was found against him.
The High Court, however, held that Section 3(5) was a provision for attributing liability and did not constitute an independent substantive offence that could, by itself, provide a legal basis for arrest.
The court examined the offences specifically attributed to Vishal and found that the relevant offences were non-cognizable. It consequently considered whether the police had a lawful basis to arrest him, rather than merely investigate his alleged role.
The High Court also relied on the Supreme Court’s earlier directions on arrests, including those in Arnesh Kumar v. State of Bihar (2014) and Mohammed Zubair v. State of NCT of Delhi (2022). These judgments emphasise that the existence of a power to arrest does not mean that arrest can be made automatically and that police officers must apply their mind to whether arrest is necessary.
The High Court consequently declared home stay owner’s arrest illegal.
The home stay owner had sought compensation of at least ₹15 lakh, citing alleged violations of his fundamental rights under Articles 14, 21 and 22 of the Constitution, as well as loss of liberty, dignity, reputation and business losses arising from his arrest and detention.
The High Court awarded ₹5 lakh, treating it as a public-law remedy for the violation of his fundamental right to personal liberty. It relied on Supreme Court precedents, including Rudul Sah v. State of Bihar (1983) and Nilabati Behera v. State of Orissa (1993), which recognise compensation in appropriate cases involving established violations of fundamental rights.
The court directed Karnataka to pay the amount within four weeks and clarified that home stay owner could pursue any additional damages through civil proceedings.
At the same time, the High Court refused to quash the FIR against him. It held that the finding of an illegal arrest did not mean that there was no case to investigate.
The court directed that the investigation continue and allowed the home stay owner to approach it later if he was aggrieved by the final report submitted by the investigating agency.
The Supreme Court’s September 22 order has now left that position undisturbed. It did not issue a separate finding declaring the home stay owner innocent, nor did it quash the FIR.
The operative position, therefore, is that home stay owner arrest has been held illegal, Karnataka has been directed to pay ₹5 lakh for the violation of his personal liberty, while the investigation into the FIR can continue.
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