ED Files PMLA Chargesheet in ₹33.34 Crore Medical Stipend Scam at MRMC Kalaburagi
Court / Authority
Supreme Court of India
Update / Judgement Date
04 Aug 2026
Source
WCP News Bulletin
Author
Manas Yadav — WCP Legal Desk
Reading Time
2 min read
View Count
The Directorate of Enforcement (ED), Mangalore Sub Zonal Office, has filed a Prosecution Complaint under the Prevention of Money Laundering Act (PMLA), 2002 before the Special Court for PMLA cases at Mangalore against Bhimashankar Bilgundi and Mallanna S Maddarki in connection with a large-scale stipend scam at Mahadevappa Rampure Medical College (MRMC), Kalaburagi.
The investigation was initiated on the basis of an FIR registered by the Kalaburagi City CEN Crime Police Station, Karnataka under various provisions of the Indian Penal Code against Dr. S. M. Patil, Subash (Manager, Canara Bank), and others. The case relates to alleged diversion of stipend funds meant for postgraduate medical students of the institution.
According to the ED, the main accused Bhimashankar Bilgundi, the then President of the Hyderabad Education Society which manages MRMC, along with accounts section staff and Mallanna S. Maddarki, the Office Superintendent of the HKE Society, orchestrated the fraud between 2018 and 2024. The accused allegedly collected blank signed cheques from PG medical students at the time of admission and later filled in details on these cheques to withdraw stipend amounts from their bank accounts.
Through this mechanism, the accused are alleged to have siphoned off stipend funds amounting to ₹33.34 crore, thereby depriving students of their rightful payments. During search operations conducted under Section 17 of PMLA in April and May 2025 at nine locations in Kalaburagi, ED officials seized several incriminating documents related to the scheme.
Further investigation revealed that part of the proceeds of crime was used to acquire assets. Properties worth ₹6.72 crore were provisionally attached under Section 5 of PMLA through orders dated 18 July 2025 and 4 September 2025. These include immovable properties purchased by Bhimashankar Bilgundi in the names of his sons Rajkumar Bilgundi and Santosh Bilgundi, several bank accounts linked to him, and properties belonging to co-accused Mallanna S. Maddarki.
The prosecution complaint alleges commission of the offence of money laundering under Section 3 of the PMLA, punishable under Section 4. Further investigation in the case is ongoing.
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