Court Holds Continued Custody Not Justified After Completion Of Investigation In One Case; Observes Bail Cannot Be Denied Solely Due To Seriousness Of Allegations
Chandigarh, June 12: The Punjab & Haryana High Court has granted regular bail to former Haryana Power Generation Corporation Limited (HPGCL) Director (Finance) Amit Dewan in two CBI cases arising out of the alleged large-scale banking fraud involving government departments and public sector entities in Haryana and Chandigarh.
Justice Sandeep Moudgil passed the order while allowing two connected bail petitions arising from FIRs re-registered by the Central Bureau of Investigation following investigations into alleged unauthorized opening of bank accounts, diversion of public funds and fraudulent banking transactions. The Court observed that despite extensive investigation and custodial interrogation, no money trail linking the petitioner to the alleged siphoned funds had been established and no recovery had been effected from him.
Allegations Related To Diversion Of Public Funds
According to the prosecution, the petitioner was serving as Director (Finance), HPGCL at the relevant time when certain bank accounts were allegedly opened and operated with private banks in violation of prescribed procedures. The investigating agencies alleged that public funds were transferred into such accounts and subsequently siphoned off through unauthorized transactions.
One case originated from an FIR registered by the Haryana Vigilance and Anti-Corruption Bureau, later taken over by the CBI, concerning alleged irregularities involving accounts maintained by HPGCL and other government entities with private banks. The second case related to alleged irregularities in accounts maintained by Chandigarh Renewable Energy and Science & Technology Promotion Society (CREST).
The petitioner was arrested on 18 March 2026 and remained in custody thereafter. While investigation in one FIR had culminated in filing of the charge-sheet, investigation in the second FIR was stated to be continuing.
Petitioner Claimed No Direct Role In Banking Operations
Before the Court, the petitioner argued that he was not named in the original FIRs and that no specific role had initially been attributed to him. It was contended that decisions relating to opening of accounts and placement of public funds required approval of higher authorities and were not matters falling exclusively within his domain.
The petitioner further submitted that he was neither a signatory to the bank accounts nor the custodian of the cheque books allegedly used in the fraudulent transactions. It was also argued that no recovery had been made from him and no evidence existed showing transfer of any part of the alleged proceeds of crime into his accounts.
Court Notes Absence Of Money Trail
While considering the bail plea, the High Court observed that the prosecution's principal allegation was that the petitioner was a beneficiary of the conspiracy and had received illegal gratification. However, the Court noted that despite extensive investigation, no material was placed before it to demonstrate that the petitioner was a direct beneficiary of the alleged siphoned funds.
The Court specifically recorded that no money trail had been traced to the petitioner, no recovery had been effected from him and no bank account, property or asset had been identified as representing proceeds of the alleged crime.
The Court observed that allegations regarding receipt of illegal gratification presently rested primarily on witness statements claiming that certain benefits in kind had been extended to the petitioner and that the evidentiary value of such statements would ultimately be tested during trial.
Court Questions Exclusive Attribution Of Responsibility
The High Court also found it significant that opening of the disputed accounts and placement of public funds were not matters falling exclusively within the petitioner's authority.
The Court observed that the proposals ultimately required approval of the Managing Director and noted that the Managing Director had not been arrayed as an accused. The Court further recorded that the petitioner was admittedly not a signatory to the account-opening forms and that various officials associated with operation of the accounts and processing of banking transactions had also not been proceeded against.
Without expressing any opinion on the merits of the prosecution case, the Court held that these circumstances were relevant while assessing the petitioner's role for the limited purpose of deciding bail.
Suicide Note Not Determinative At Bail Stage
The CBI had also relied upon an alleged suicide note left by late Balwant Singh, an employee associated with the concerned organization, to oppose bail.
However, the Court held that the authenticity, evidentiary value and legal effect of the alleged suicide note could only be examined during trial after parties were afforded an opportunity to lead evidence. The Court further noted that the present prosecution did not involve any offence relating to abetment of suicide and therefore the document could not be treated as a determinative factor for denial of bail.
Economic Offence Alone Cannot Justify Indefinite Incarceration
Relying upon decisions of the Supreme Court including Sanjay Chandra v. CBI and Dataram Singh v. State of Uttar Pradesh, the High Court reiterated that even in economic offences, pre-trial incarceration cannot be prolonged merely because the allegations are serious.
The Court noted that investigation in one FIR had already been completed, no further custodial interrogation was required and the case was primarily based on documentary and electronic evidence already in possession of the investigating agency.
Justice Moudgil emphasized that the object of bail is to secure the presence of the accused during trial and not to impose punishment before conviction. The Court also referred to the constitutional guarantee of personal liberty and the right to speedy trial under Article 21 of the Constitution.
Bail Granted
Holding that continued incarceration would serve no useful purpose, the Court directed release of the petitioner on regular bail in both FIRs subject to furnishing of requisite bail and surety bonds.
The Court clarified that observations contained in the order were confined to adjudication of the bail petitions and should not be construed as an expression on the merits of the prosecution case.