Chandigarh | June 15, 2026
In a significant development in the multi-crore Haryana government funds diversion case, a Panchkula Court has granted statutory or "default bail" to Rajesh Sangwan, former Chief Controller of Finance of the Haryana State Agricultural Marketing Board (HSAMB), after the Central Bureau of Investigation (CBI) failed to file a complete chargesheet against him within the prescribed statutory period.
The case forms part of the alleged ₹645 crore bank scam involving unauthorized diversion of government funds through accounts maintained with IDFC First Bank and AU Small Finance Bank. The scam is presently being investigated by the CBI following transfer of the investigation from the Haryana State Vigilance and Anti-Corruption Bureau (SV&ACB).
What Is the Case About?
The investigation pertains to alleged illegal transfer and diversion of large amounts of Haryana government funds deposited in accounts maintained with private banks. Investigating agencies have alleged a wider conspiracy involving bank officials, government functionaries and private individuals, resulting in unauthorized movement of public money. The scam amount was initially estimated at approximately ₹504 crore and was later revised upwards during the course of investigation.
Rajesh Sangwan, who served as Chief Controller of Finance of HSAMB, is alleged to have played a role in matters relating to financial supervision and operation of government accounts that are under investigation. However, investigations concerning his specific role are stated to be continuing.
Why Was Default Bail Granted?
The Court's order was not based on the merits of the allegations but on the statutory right available to an accused where the investigating agency fails to complete investigation and file its final report within the time prescribed by law.
Sangwan was arrested on 14 March 2026 and his first remand was granted on 15 March 2026. He contended before the Court that the statutory period of 90 days had expired on 12 June 2026 and no complete final report had been filed against him within that period.
After examining the custody period and the status of investigation, the Court held that Sangwan had successfully exercised his statutory right to default bail under Section 167(2) of the Code of Criminal Procedure, corresponding to Section 187 of the Bharatiya Nagarik Suraksha Sanhita (BNSS).
CBI's Stand Before the Court
The CBI opposed the bail application and sought additional time to complete the investigation. The agency informed the Court that it had already filed a final report against certain accused persons and entities and had subsequently filed a supplementary report against additional accused. However, the agency also acknowledged that further investigation concerning Rajesh Sangwan was still continuing.
The Court observed that filing chargesheets against other accused could not defeat the statutory right available to an accused against whom investigation remained incomplete within the prescribed period.
Court Clarifies Statutory Period Cannot Restart
An important aspect of the decision relates to the transfer of investigation from the Haryana Vigilance Bureau to the CBI.
The Court held that transfer of investigation from one agency to another does not result in commencement of a fresh statutory period for filing a chargesheet. Consequently, the period spent in custody while the matter was investigated by the Vigilance Bureau was also required to be counted while calculating the 90-day limit.
Impact of the Order
The order does not amount to an acquittal and does not determine the innocence or guilt of the accused. The investigation by the CBI is stated to be continuing and the agency remains entitled to file further reports or supplementary chargesheets in accordance with law.
The ruling nevertheless serves as a reminder of the importance of statutory timelines in criminal investigations and reinforces the settled legal principle that personal liberty cannot be curtailed beyond the period permitted by law in the absence of a complete chargesheet.
Key Takeaway
The Panchkula Court's decision underscores that even in high-value economic offences, the investigating agency must adhere to the statutory timelines prescribed under criminal procedure laws. Failure to do so may entitle an accused to default bail irrespective of the seriousness of the allegations, as the right flows from procedural safeguards protecting personal liberty.