India

Background In its Statement on Developmental and Regulatory Policy Measures issued in October 2023, the RBI recognised the importance of having a strong regulatory framework to govern the Indian project finance landscape, especially with respect to income recognition, asset classification and provisioning requirements for projects under implementation. RBI indicated that extant prudential norms would soon be replaced by a comprehensive framework applicable to all regulated entities to harmonize the Indian regulatory landscape for project financing to projects under implementation. Soon after, the RBI released the ‘Reserve Bank of India - Prudential Framework for Income Recognition, Asset Classification and Provisioning pertaining to Advances - Projects Under Implementation, Directions, 2024’ (“Draft Framework”), inviting comments and suggestions from industry stakeholders, experts, academicians, legal experts and the general public. The Draft Framework proposed to rehaul the existing ‘Prudential Framework for Resolution of Stressed Assets’ issued on June 7, 2019 (“Prudential Framework”) which excluded guidance on restructuring of borrower accounts pertaining to projects under implementation involving a change in date of commencement of commercial operations (“DCCO”). Thus, the RBI (Project Finance) Directions, 2025 were issued vide circular no. RBI/2025-26/59 on June 19, 2025 (“2025 Directions”) taking into account the  feedback on the Draft Framework. Given below is a synopsis of lenders’ responsibilities in relation to, amongst other things, provisioning, resolution and monitoring, in respect of project finance accounts.   Applicability and Effectiveness The 2025 Directions shall be effective from October 01, 2025 and are applicable to the following sectors, where projects[1] are yet to achieve financial closure: infrastructure sector; and non-infrastructure (including commercial real estate (“CRE”) and CRE-residential housing (“CRE-RH”)) sectors. The following lenders regulated by RBI (“REs”) come under the purview of the 2025 Directions: commercial banks; non-banking financial companies; primary (urban) cooperative banks; and all India Financial Institutions.   Exposures qualified as ‘project finance’ RE’s exposure would qualify as ‘project finance’ only if the following conditions are satisfied: predominant source of repayment (minimum 51%) as envisaged at the time of financial closure must be from cashflows of the project being financed; and all lenders must have a common loan agreement (which may have different loan terms for each lender but should have the same DCCO) agreed between the lenders and the borrower.   Project Phases RBI has categorized projects into the following 3 (three) phases: Design phase – designing, planning, obtaining all applicable clearances/approvals till financial closure; Construction phase – after financial closure up to and the day prior to actual DCCO; and Operational phase – from the actual DCCO up to the day of repayment of the project finance exposure.   Sanction, Disbursement, Monitoring – some critical obligations of lenders Prior to loan sanction   ·       achievement of financial closure and original DCCO documented; ·       post DCCO repayment schedule to consider initial project cash flows; ·       repayment tenor does not exceed 85% of economic life of project; ·       until project achieves actual DCCO, each individual lender should have not less than: o   10% of aggregate exposure for loans up to INR 1500 crores; and o   5% or INR 150 crores, whichever is higher, for aggregate exposure more than INR 1500 crores. ·       All approvals / clearances for constructing the project to be obtained, unless specific timelines provided under law. Pre-disbursement conditions ·       loan agreement to specify disbursement schedule vis-à-vis project completion milestones; ·       minimum requirement for right of way/sufficient land is in place: o   for infrastructure projects under public-private partnership (PPP) model – 50%; o   for other projects (non-PPP infrastructure, and non-infrastructure including CRE and CRE-RH) – 75%; and o   for transmission line projects – as decided by lender. ·       for infrastructure projects under PPP model, declaration of the appointed date necessary for fund-based credit facilities; ·       disbursal to be proportionate to project completion milestones (as certified by the LIE), infusion of equity and other finance.   Resolution Stress-related accounts lenders to monitor project performance and stress build-up regularly; resolution plan to be initiated as soon as any signs of stress build-up; occurrence of a ‘credit event’ with any lender, to trigger collective resolution under the Prudential Framework; credit events to be reported to the Central Repository of Information on Large Credit (CRILC) as well as other lenders in the consortium/multiple lending arrangement, by the relevant lender[2]; and lenders to review the debtor account within 30 (thirty) days from the date of such credit event.   Extension of original / extended DCCO accounts satisfying conditions specified in Chapter III of the 2025 Directions, may continue to be classified as ‘Standard’, if the resolution plan is implemented, subject to fulfilment of the following conditions: the DCCO deferment and consequential shift in repayment schedule should be of the same or shorter duration and within the limits specified in the 2025 Directions[3]; financing of any cost overrun should not exceed 10% of the original project cost (excluding interest during construction); any financing through standby credit facility should be specified upfront or approved at the time of financial closure and premium should also be specified in the documentation; and financial parameters should remain unchanged for the lenders.   Change in scope and size of project due to extended DCCO accounts can still be categorised as ‘Standard’, subject to compliance with certain conditions including: increase in project cost (excluding cost-overrun in respect of the original project) is 25% or more; lender re-assesses the project viability; revised credit rating not below previous rating, by more than 1 (one) notch; for unrated debt, it should be at least investment grade if aggregate lender exposure exceeds INR 100 crores. Re-classification under this head is permitted only once in the lifetime of the project. If the resolution plans are not implemented successfully, the accounts need to immediately be downgraded to NPA status. Upgradation of NPA accounts is permitted only upon successful implementation of the resolution plan / performance post DCCO. Provisioning   Asset Classification Sector Construction Phase Operational Phase – after commencement of repayment of interest and principal     Standard CRE 1.25% 1.00% CRE-RH 1.00% 0.75% All others 1.00% 0.40% DCCO Deferred Standard Assets Infrastructure 0.375% (quarterly in addition to standard provisioning) to be reversed upon commencement of operations Non-infrastructure 0.5625% (quarterly in addition to standard provisioning) Existing Projects As per Prudential Guidelines NPAs As per provisions of the Master Circular - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated April 01, 2025   Miscellaneous   The Prudential Framework will continue to apply where the loan does not qualify as ‘project finance’ or where the project is in the operational phase.   ‘Credit event’ has been defined in the 2025 Directions to mean any of the following: default with any lender; need for extension of the original/extended DCCO or expiry of original/extended DCCO; need for infusion of additional debt; the project is faced with financial difficulty as determined under the Prudential Framework.   Maintenance of database and disclosures   Lenders are required to maintain and update project specific data, in electronic format on an ongoing basis. Lenders need to disclose resolutions plans implemented by them, in their financial statements.   The 2025 Directions also stipulate penal consequences for lenders including supervisory and enforcement action, against non-compliance entities.   Conclusion   The 2025 Directions place considerable onus on REs with respect to monitoring stress, provisioning, disclosures, ensuring satisfaction of conditions prior to sanctioning and disbursement, etc. However, early identification of stress, guidance on asset classification in various scenarios (without downgrading the asset), satisfaction of essential conditions prior to loan sanctioning (including ensuring availability of project land), etc., are key to reducing the risk of project delays, losses to REs (due to delayed DCCO and cash flows) and resultant NPAs.   RBI has kept the ‘Reins in Check’ to ensure discipline and a healthy regulated financing market, by delegating several responsibilities to REs. However, RBI’s plan is clear - to ease the project financing exercise for both REs and borrowers by providing a robust framework and clarity on critical aspects of the project cycle. All in all, the 2025 Directions will hopefully catapult project financing and help to accelerate growth in the infrastructure and non-infrastructure (including CRE) sectors, a key agenda for the GoI. [1] The term ‘Project’ has been specifically defined in the 2025 Directions as any “ventures undertaken through capital expenditure (involving current and future outlay of funds) for creation/expansion/upgradation of tangible assets and/or facilities in the expectation of stream of cash flow benefits extending far into the future.” [2] Instructions in this regard to be issued in due course. [3] Permitted deferment of DCCO is up to 3 years for Infrastructure projects and up to 2 years for non-infrastructure projects

On May 8, 2025, the Reserve Bank of India (RBI) issued a very significant notification in respect of the regulatory framework governing Foreign Portfolio Investor (FPI) investment in India's corporate debt market. In removing the short-term investment limit, and the concentration limit, for FPIs investing in India via the general route, the RBI is signaling its commitment to develop a more transparent, liquid, and internationally competitive bond market.[1] This is part of a series of steps that would foster foreign capital inflows, enhance domestic financial market depth, and bring India's regulatory framework in line with international best practices. In the past, there were two restrictions related to FPI investment in Indian corporate debt applicable under the Master Directions - Reserve Bank of India (Non-Resident Investment in Debt Instruments) Directions, 2025. The first restriction was the "short-term investment limit" that limited FPI amounts in corporate debt securities with residual maturity up to one year, to 30% of the total corporate debt portfolio based on a daily measurement. The second restriction was a concentration limit that capped investments (with related persons) by the FPI in corporate debt securities at 15% long-term FPI and at 10% for other FPIs in respect to their maximum investment limit.[2] Initially, these policies were designed to assist with market stability, managing short-termism, and monitoring systemic risks (Provisions to this effect were contained in a scheme entitled "FPIs in the corporate bond market"). However, these clearly had operational problems and restricted active FPI engagement. Essentially, it meant that FPIs had to sell bonds that had less than one year of residual maturity, or increase the total amount of bonds (to comply with the 30% cap), and the amount of bonds they purchased was somewhat wasted; in early 2025 FPIs had only exploited 14.3% (₹1.1 lakh crore) of the total potential limit of ₹7.63 lakh crore. Additionally, the restriction imposed on FPIs prevented them from responding to market opportunities and steward capital prudently. To ameliorate these issues, the RBI had steadily increased limits for FPIs and now cover ₹8.22 lakh crore from April to September 2025, and ₹8.80 lakh crore from October 2025 to March 2026. Thus, the May 2025 notification represented not a fundamental shift, but merely a pragmatic optimization of the compliance regime so that it could deal with the real frustrations experienced by global investors and improve efficiency within India's corporate bond market. The 2025 Relaxations: Nature, Rationale, and Global Alignment On May 8, 2025, the Reserve Bank of India (RBI) released a notification[3] that caused a major shift in regulation, when it removed two significant restrictions on foreign portfolio investors ('FPIs'), investing in corporate debt through the General route: the short-term investment limit and the concentration limit. The short-term investment limit which had been defined by the Master Directions (RBI Non-Resident Investment in Debt Instruments, 2025) to restrict FPIs from holding more than 30% of their corporate debt portfolio at any time in instruments with a residual maturity of up to one year.[4] The concentration limit was defined, to prevent any single FPI (and related) entity from having exposure to 15% of the highest investment limit proposed for long term FPIs or 10% for others. These limits were set in place to address the threat to market stability posed by capital flows (as a result of excess volatility from short-term holdings) and concentration posed by large pools in a few entities. The RBI eliminated these caps based on the premise that FPI investment limits in corporate debt are barely utilized (around 14.3 % in total in early 2025). Industry inputs also confirmed that these limits created operational issues such as forced rebalancing, and tying up inefficiently assigned or allocated capital which caused FPIs to invest less than their available limits. Deregulation is designed to provide more flexibility for FPIs to manage their portfolio and will hopefully foster more active investing and liquidity in the market. Relaxing limits will help align India's framework with what is common in the rest of the world. For example, many EM and developed markets do not implement as strict regulations on foreign holdings of short-term debt, or no restrictions on indicating concentration of ownership by foreign investors, therefore allowing more Foreigners to invest and making it easier to capital to move in and out of EM. Therefore, RBI's deregulation should help India's ability to get added to global bond indices (e.g. JPMorgan GBI-EM), and increase foreign investment in India. Overall, the 2025 relaxations represent a pragmatic and strategic response by the RBI to market reality, and investor concerns to support an ongoing effort to deepen India's corporate debt market with a focus on regulatory monitoring. Capital Market Deepening and Economic Implications The RBI's May 2025 relaxations have the potential to substantially deepen India's corporate debt market by allowing FPIs to invest more flexibly and efficiently than before. The removal of short-term investment and concentration limits will likely prompt greater foreign capital inflows, which have historically been hampered by regulations and restrictions. One of the biggest benefits of these relaxations is the expected increase in FPI ownership. The removal of the 30% limit on short-term corporate debt securities now means that FPIs can hold securities at any maturity without having to adjust their portfolios, thus reducing transaction costs for the issuers and complexity of operations for the FPIs' operations.  The removal of concentration limits means that FPIs can now put larger amounts into preferred issuers or sectors, improving investment decisions and implementing a better risk engineered portfolio. This flexibility is expected to draw a broader group of institutional global investors, such as sovereign wealth funds, pension funds and asset managers wanting diversified coverage of India's robust growing corporate sector. The addition of FPIs and larger ownership of corporate securities as investors will enhance liquidity, which is an important condition for an active corporate bond market. As more liquidity is added into the market, price discovery is more sustainable, bid-ask spreads are narrower, and the cost of trading is lower, thus encouraging issuers and investors to participate further. For Indian corporates, these developments mean greater access to long-term funding at competitive rates, facilitating business expansion and infrastructure spending. This economic development aspect is particularly relevant, in so far as the corporate bond market deepening is aligned to India's broader financial sector reforms designed to reduce reliance on bank credit and promote alternative sources of capital. A healthy bond market exists alongside equity markets and bank channels of supply, better characterized by a more resilient and diversified financial system. Finally, the RBI's alignment of India's FPI investment direction with global best practices increases India's capacity for inclusion in major global bond indices. Such inclusion generates passive inflows from global funds into the Indian bond market, further integrating the market to global capital flows. Overall, the 2025 relaxations should lead to a more liquid, efficient, and globally integrated corporate debt market which has spillover effects for economic development and financial stability. Systemic Risk, Volatility, and Regulatory Safeguards Although the 2025 relaxations from the RBI are widely expected to expand the corporate debt market and draw in additional foreign capital, they also introduce new aspects of risk that may require closer attention from regulators. The two risk areas that are of particular concern are the potential increase in market volatility arising from changes in FPI flows and the general increase of systemic risk arising from removing previous restrictions. By removing the short-term investment limit, the portfolio of FPIs can now allocate a significantly larger portion to shorter maturity instruments, which are typically more sensitive to fluctuations in risk sentiment and changes in the global interest rate environment. In conditions of extreme financial stress (also called contagion) or rapid changes in monetary policy from central banks (in the current example the US), foreign capital could exit the market at very high speeds, exerting pressure on bond prices and the INR. Not only could the resulting volatility affect the corporate debt market, but volatility on such a large scale could also increase the risk of embarrassment for the financial system (in the worst-case scenario if lots of people are forced to liquidate), especially if there is a lot of debt currently held by FPIs in a short space of time. Likewise, the removal of the concentration limit increases the risk of undue concentration in issuers or sectors. If a handful of large FPIs were to over concentrate their holdings in a handful of corporate bonds - then any negative event, for example a credit downgrade or default, could have exaggerated consequences that could potentially lead to contagion across the market. This risk is more pronounced in emerging markets, where there are likely to be fewer investors in general, and likely also to have less depth in the market. In order to mitigate these risks, the RBI has retained various macro prudential tools and regulatory safeguards. The central bank has the ability to reinstate restrictions, or impose restrictive measures, if the risks evolve into a systemic risk. In addition to monitoring FPI flows, the simple introduction of regulation requiring increased disclosure will ensure that updating disclosures is another risk management control not only for FPIs, but for all investors. Clear coordination with the SEBI provides the necessary "forward looking" mechanism for basic information sharing, and the extension of FPI monitoring risk management will be added layers of FPI investment management and ongoing recognition of the limits of authority by the RBI. The introduction of basic stress testing and scenarios fitting the various volatility ranges will be an important addition to risk management for showing the resilience of the corporate bond market to upside and downside external shocks. In summary the 2025 relaxations are a welcome step forward to developing a bond market, however the success of the measures will rely on the continuous vigilance of the RBI to recognize and respond to risk in an expanding global environment. Trade Integration, Foreign Relations, and Policy Effectiveness The RBI's 2025 foreign portfolio investor (FPI) relaxations to corporate debt securities must also be understood in the context of India’s larger economic diplomacy objectives in an increasingly integrated global financial system. The liberalization of FPI norms accompanying rather significant developments in India’s trade policy, most notably the India-UK Free Trade Agreement (FTA) and the UK’s reduction of import duties on Indian goods. Trade agreements such as these are established to encourage the exchange of goods and services but more broadly as an impetus to facilitate cross-border investment flows. As such, it is particularly relevant and timely to talk about India’s capital market regulations alongside international expectations. By liberalizing FPI norms, India is signaling support for financial openness and a welcome alignment of its regulatory framework with global expectations, thus enhancing its appeal to foreign investors. Especially as India seeks inclusion to large global bond indexes, which requires clear, predictable, and investor-friendly regulatory frameworks. Once India is included in indexes, this can lead to significant passive inflows from most international funds further developing and deepening the corporate bond market in India and the country’s integration with international capital markets. The success of these reforms depends on the RBI's Master Directions (Non-Resident Investment in Debt Instruments, 2025), which present an integrated and dynamic regime for foreign investment in Indian debt[5]. The Master Directions have been constructed to be flexible, allowing the RBI the ability to move quickly to capitalize on prevailing market conditions and stakeholder input. The relaxations instituted in May 2025 are a clear indication of this flexibility, reflecting a consultative process that considered the investors' needs while ensuring the continued exercise of macroprudential oversight. The early feedback from the market has been mostly favorable, with domestic corporates and international investors appreciating the regulatory clarity and operational leeway afforded them. However, a meaningful indication of whether the policy is effective will be in whether the RBI is able to maintain the openness now afforded to the market space while appropriately moderating risk, ensuring that more foreign capital can flow into India and lead to sustained economic benefits, without undermining financial stability. The recent reforms of the RBI offer a clear and concise path forward for India's aspirations to be better integrated into trade and investment; but they also have a strong line of attack for reaffirming both the legitimacy and reliability of regulatory institutions within India, at a crucial time when India is evolving as a major player on the global stage. Authored by Ms. Jyostna Chaturvedi, Head - Corporate Practice and Shreya Mazumdar, Associate References "India-UK FTA: Tariff Reductions and Market Access," Ministry of Commerce, https://commerce.gov.in/fta/india-uk-fta-details/ "RBI relaxes requirement for investment by FPIs in Corporate Debt Securities," SCC Online Blog (13 May 2025), https://www.scconline.com/blog/post/2025/05/13/rbi-relaxes-requirement-for-investment-by-fpis-in-corporate-debt-securities/ "RBI’s Financial Stability Report," RBI (June 2024), https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=56067 "SEBI’s role in monitoring FPI flows," SEBI (May 2025), https://www.sebi.gov.in/legal/circulars/may-2025/sebi-role-in-fpi-monitoring [1] RBI, https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12847&Mode=0 [2] RBI, https://m.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12765#F_i [3] RBI, https://www.rbi.org.in/commonman/English/scripts/FAQs.aspx?Id=836 [4] RBI, https://www.rbi.org.in/commonman/English/scripts/Notification.aspx?Id=856 [5] RBI, https://rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12765    

New Delhi, July 22, 2025: Lakshmikumaran & Sridharan Attorneys (LKS) has announced the elevation of sixteen lawyers from Partner to Executive Partner, reinforcing the firm’s continued focus on nurturing leadership and advancing legal excellence across its practice areas. Speaking about the new promotions, Mr. V Lakshmikumaran, Managing Partner, Lakshmikumaran & Sridharan Attorneys, said, “These promotions are a testament to the extraordinary talent and dedication within our firm. Each new Executive Partner brings unique perspectives and deep expertise that will not only enhance our service delivery but also drive the firm’s long-term vision. I am confident their leadership will further strengthen our standards and create enduring value for our clients. My warmest congratulations to all on this well-deserved achievement.’’ These elevations show the commitment of the firm to emerging practice areas, strategic growth in key industries as also geographies in India. The new Executive Partners embody the firm’s values of excellence, knowledge and commitment to clients. The promotions will take effect from 01st July 2025. Partners elevated to Executive Partners Name Practice Areas Office Location Amar Pratap Singh Tax Chandigarh Asish Philip Abraham Corporate and Tax Mumbai Atul Gupta Tax Prayagraj Devinder Bagia International Trade and WTO New Delhi Gaurav Dayal Corporate M&A New Delhi Jaya Pandeya Intellectual Property New Delhi Krati Singh Tax Chandigarh Narendra S Dave Tax Hyderabad Rahul Tangri Tax Kolkata Rajesh Ostwal Tax Mumbai S K Noorul Hassan Corporate M&A Hyderabad Shweta Kathuria Tax New Delhi Sriram S Tax Mumbai Syed Maqdum Peeran Disputes Bengaluru Vinay Kumar Jain Tax Mumbai Yogendra Aldak Disputes New Delhi About Lakshmikumaran & Sridharan attorneys Lakshmikumaran & Sridharan (LKS) is a premier full-service law firm in India, specializing in areas such as corporate & M&A/PE, dispute resolution, taxation and intellectual property. The firm, through its 14 offices across India, works closely on Corporate, M&A, litigation and commercial law matters, advising and representing clients both in India and abroad. Over the last nearly 4 decades the firm has worked with over 15,500 clients which range from start-ups, small & medium enterprises, to large Indian corporates and multinational companies. The professionals within the firm bring diverse experience to service clients across sectors such as automobiles, aviation, consumer electronics, e-commerce and retail, energy, EPC, financial services, FMCG, hospitality, IT/ITeS, logistics, metals, mining, online gaming, pharma and healthcare, real estate and infra, telecom and media, and textiles. The firm takes pride in the value-based, client-focused approach that combines knowledge of the law with industry experience to design bespoke legal solutions. The firm’s driving principles to achieve our vision are integrity, knowledge and passion.    For more details contact:  Arnab Bhattacharya   +91 8287613705  [email protected]  Sakshi Sharma +91 9521867484 [email protected] www.lakshmisri.com 

INTRODUCTION The question of whether an improper or irregular arrest automatically entitles an accused to bail has been the subject of considerable judicial scrutiny. This issue has gained renewed significance with the enactment of the Bharatiya Nagarik Suraksha Sanhita, 2023 (“BNSS”), particularly Section 483, which governs the grant of bail. While the Constitution of India and various statutory provisions lay down procedural safeguards to protect the liberty of individuals, the law also seeks to ensure that criminal investigations are not impeded by mere technicalities. Courts have consistently struck a delicate balance between safeguarding individual rights and preserving the integrity of criminal investigations. The jurisprudence that has emerged affirms that procedural irregularities in arrest, such as non-compliance with procedure, do not, by themselves, constitute a standalone ground for grant of bail. Rather, the decision to grant bail must be grounded in a holistic appreciation of the facts and circumstances of each case. This article examines the recent Karnataka High Court decision of Edwin Thomas v. State of Karnataka (Criminal Petition Nos. 101502/2025 and 101503/2025 – Judgment dated April 29, 2025), particularly in light of recent developments under the BNSS, and underscores the principle that procedural lapses alone do not ipso facto justify the release of an accused on bail. STATUTORY OVERVIEW REGARDING ARREST The right to life and personal liberty is enshrined under Article 21 of the Constitution of India, which mandates that no person shall be deprived of these rights except according to procedure established by law. This constitutional guarantee encompasses the right of an individual to be arrested only through lawful means and in strict adherence to statutory procedures. Furthermore, Article 22(1) of Constitution of India states that no person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice and Article 22(2) of Constitution of India states that every person who is arrested and detained in custody must be produced before the nearest Magistrate within 24 hours of such arrest. In furtherance of these constitutional safeguards, Chapter V of the BNSS outlines certain safeguards, such as informing the arrestee of the grounds of arrest, particulars of the offences for which arrest is made, and the right to bail, the right of an arrested individual to meet an advocate of their choice during interrogation, information as to the arrest of the person and where the arrested person is being held, to his relatives, friends or any other person mentioned by the arrested person, etc. These provisions, when read collectively, establish a comprehensive statutory framework designed to balance the powers of law enforcement authorities with the rights and liberties of individuals and echoes constitutional vision of fair procedure. Any deviation from these prescribed procedures can raise serious constitutional concerns and may invite judicial scrutiny regarding the legality of the arrest. KARNATAKA HIGH COURT’S RECENT DECISION In a recent judgment, the Hon'ble High Court of Karnataka addressed whether procedural irregularities during an arrest automatically grant bail under Section 483 of the BNSS. In the case of Edwin Thomas v. State of Karnataka (Criminal Petition Nos. 101502/2025 and 101503/2025), the Petitioners claimed their arrests were illegal due to the local police not being informed. The Karnataka High Court clarified that procedural lapses do not automatically entitle someone to bail. It ruled that the arrests were not illegal, noting that the only irregularity was a failure to notify the New Delhi police during the transfer of the Petitioners, which the investigating officer apologized for. Consequently, the Court concluded that the Petitioners were not entitled to automatic bail and could seek legal action regarding their arrest, but the arrests themselves were deemed proper. To substantiate their claim, the Petitioners placed strong reliance on two decisions of the Hon’ble Supreme Court, namely Vihaan Kumar v. State of Haryana (2025 SCC OnLine SC 269) and Directorate of Enforcement v. Subhash Sharma (2025 SCC OnLine SC 240). Both judgments pertain to instances where the Court found serious lapses in the process of arrest and recognized the breach of fundamental rights as a ground to grant relief to the accused and were considered to be misplaced. In the case of Vihaan Kumar, the Supreme Court intervened in light of a clear violation of the statutory safeguards and emphasized the protection of personal liberty under Article 21 of the Constitution of India. Similarly, in the case of Subhash Sharma, it was observed that the arrest had been carried out in flagrant disregard of procedural requirements mandated by the Prevention of Money Laundering Act, 2002, and the Accused was denied access to legal representation and basic rights. These cases involved egregious violations which were absent in the present matter. In the instant case, the Petitioners have not alleged any grave violation of their fundamental rights such as illegal detention, denial of legal counsel, or inhuman treatment in custody and neither have the Petitioners alleged that the grounds of arrest were not informed to them. Instead, the foundation of the Petitioners’ argument is based solely on a procedural lapse, which, by itself, does not render the arrest illegal in the absence of demonstrable prejudice or mala fide intent on the part of the police authorities. Furthermore, the Petitioners had earlier approached the Hon’ble High Court of Delhi by filing a habeas corpus petition concerning the very same arrest. During the course of those proceedings, the Investigating Officer had tendered an unconditional and voluntary apology before the Court, acknowledging the procedural oversight, which the Petitioners had accepted without any objection. The said habeas corpus petition was thereafter voluntarily withdrawn by the Petitioners without pressing any further claim of illegal arrest. Therefore, it is evident that the Petitioners had already waived any grievance related to the arrest by accepting the apology of the investigating authorities and by choosing not to pursue the habeas corpus remedy to its logical conclusion. Hence, the Petitioners could not raise the same contention as ag round for bail. This is in consonance with the concurring decision of Justice Bela Trivedi in the case of Radhika Agarwal v. Union of India (2025 SCC OnLine SC 449) where she voiced that, minor procedural lapse on the part of authorized officers may not be seen with a magnifying glass by the courts in the exercise of judicial review, which may ultimately end up granting undue advantage or benefit to the accused persons. The observation was made in relation to special acts and not with respect to offences under IPC / BNS. CONCLUSION The case of Edwin Thomas presents a significant judicial pronouncement that draws a fine line between procedural irregularity and illegality in the context of arrest and custody. While the Indian judiciary has time and again reiterated that violations of procedural safeguards, especially those impacting fundamental rights under Articles 21 and 22 of the Constitution of India, can render an arrest unlawful and illegal, this protection cannot be extended to cover every minor lapse or technical omission by the investigating agency. The Karnataka High Court, sends a clear signal that while procedural fairness is paramount, the same cannot be misused as a tool to escape prosecution. The Courts are duty-bound to protect individual liberty, but they must also prevent the dilution of criminal justice by frivolous or opportunistic claims framed on procedural grounds. The police authorities also have a duty to ensure that the arrest is conducted as per law and that the rights of the arrested person are not affected. More importantly, such lapses do not, by themselves, render the evidence adduced inadmissible, as courts are required to consider the totality of the facts and circumstances of each case. Hence, this serves as a reaffirmation of the principle that the grant of bail must be governed by a holistic assessment of facts, legal merit, and judicial conscience—not by technicalities devoid of substance. It also reinforces the judiciary’s balanced approach in ensuring that the rights of the accused are protected without compromising the integrity and efficiency of criminal investigations.