Chhattisgarh HC Grants Bail to Sumeet Facilities Directors in CSMCL Corruption Case, Rejects Vicarious Liability on Directorial Designation Alone

The High Court of Chhattisgarh found no prima facie material linking the company directors personally to illegal gratification, forgery, or the alleged commission mechanism within CSMCL.

The High Court of Chhattisgarh at Bilaspur, on 17 July 2026, granted regular bail to two directors of Sumeet Facilities Private Limited — Amit Prabhakar Salunke and Ajit Jaysinghrao Darandale — who had been arrested on 4 May 2026 in connection with an alleged large-scale corruption and manpower billing fraud involving the Chhattisgarh State Marketing Corporation Limited (CSMCL). Justice Amitendra Kishore Prasad, sitting singly, allowed MCRC No. 5181 of 2026 after finding that the prosecution had not placed before the Court any independent material demonstrating that either applicant personally demanded or received illegal gratification, handled intercepted cash, or prepared any forged document. The order rests on the settled proposition, drawn from National Small Industries Corporation Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330 and Sunil Bharti Mittal v. Central Bureau of Investigation, (2015) 4 SCC 609, that criminal liability cannot be visited upon a Director of a company solely because of that designation.

The Alleged Conspiracy Within CSMCL

The case originates from FIR No. 0044/2024 registered at Police Station Economic Offences Wing/Anti-Corruption Bureau (EOW/ACB), Raipur, on 5 October 2024. The prosecution case, as set out in the FIR, charge-sheet and case diary, is that a deep-rooted syndicate operated within CSMCL, under which manpower supply agencies were compelled to pay illegal commission as a condition for clearance of their legitimate bills.

Sumeet Facilities Private Limited was one such manpower agency contracted by CSMCL. The prosecution alleges that inflated claims were raised in the name of overtime wages, bonus, additional working days and other service heads. Amounts were released by CSMCL, but the corresponding benefits were allegedly not paid to the employees. Instead, a substantial portion was diverted as illegal commission to those said to be controlling the conspiracy.

The offences charged include criminal conspiracy under Section 120-B of the Indian Penal Code, 1860 and offences under Sections 7(b) and 8 of the Prevention of Corruption Act, 1988. After the charge-sheet was filed, offences under Sections 467, 468 and 471 of the IPC were additionally incorporated, adding allegations of forgery and use of forged documents.

The prosecution further stated that the Enforcement Directorate, during investigation of a separate ECIR under the Prevention of Money Laundering Act, 2002, had forwarded material to the Director General of Police, Chhattisgarh under Section 66(2) of the PMLA, which led to the registration of the present FIR. The applicants were not named in the original FIR. Their arrest on 4 May 2026 followed several rounds of interrogation during which they had appeared pursuant to notices and supplied documents to the investigating agency.

What the Applicants Contended

Senior Advocate Mr. Rajeev Shrivastava appeared for both applicants. He argued that neither applicant was named in the FIR and that no specific overt act was attributed to either of them. Their prosecution, he submitted, proceeds entirely from their designation as Directors — a basis that settled Supreme Court authority does not support.

Counsel placed before the Court a Consultancy Agreement dated 1 October 2018 and an Operational Management Agreement dated 1 December 2020, both pointing to one Siddharth Singhania as the individual entrusted with day-to-day operational management of the CSMCL contract. According to the applicants, Singhania supervised execution, coordinated with CSMCL officials and managed financial affairs independently. The Board of Directors had authorised operational management through these arrangements.

A striking argument concerned Singhania's own status in the case. Despite the prosecution material repeatedly referring to his role in the project, he was cited as a prosecution witness rather than arraigned as an accused. Counsel argued that this internal inconsistency in the prosecution's approach was relevant at the bail stage when examining the comparative culpability of the Directors.

On the legal architecture of bail, counsel relied on a broad range of Supreme Court decisions including Sanjay Chandra v. CBI, (2012) 1 SCC 40; Satender Kumar Antil v. CBI, (2022) 10 SCC 51; Dataram Singh v. State of Uttar Pradesh, (2018) 3 SCC 22; Joginder Kumar v. State of U.P., (1994) 4 SCC 260; Siddharth v. State of Uttar Pradesh, (2022) 1 SCC 676; Arvind Dham v. Directorate of Enforcement, 2026 SCC OnLine SC 30; Vihaan Kumar v. State of Haryana, 2025 SCC OnLine SC 269; and Mihir Rajesh Shah v. State of Maharashtra, (2026) 1 SCC 500. The consistent thread is that Article 21 personal liberty cannot yield to prolonged pre-trial detention once investigation is complete and custodial interrogation is no longer required.

Counsel also pressed parity. Two co-accused in the same FIR — Ajay Lohia (MCRC No. 5063 of 2026) and Amit Mittal (MCRC No. 4981 of 2026) — had been granted regular bail by this Court on 3 July 2026 on consideration of the same FIR and charge-sheet. No material distinction in role, counsel submitted, could justify denying similar relief to the present applicants.

The State's Opposition

Additional Advocate General Mr. Praveen Das and Government Advocate Mr. S.S. Choubey opposed bail on behalf of the State. They characterised the offence as a large-scale economic crime with wider societal consequences and argued that the applicants were not nominal Directors but were actively associated with the affairs of the company during the relevant period of 2019 to 2022.

The State maintained that sufficient prima facie material existed, including statements recorded under Section 180 of the Bharatiya Nagarik Suraksha Sanhita, bank records, electronic evidence and digital communications. The argument that Singhania was managing operations was, according to the State, a pure trial defence and could not absolve the Directors at the bail stage. The State also argued that certain financial transactions and identification of beneficiaries were still under scrutiny, so release could prejudice investigation and enable witness influence.

On the parity argument, the State submitted that each accused's role must be examined independently and co-accused bail orders do not automatically entitle another accused to similar relief. Reliance was placed on Y.S. Jagan Mohan Reddy v. CBI, 2013 (7) SCC 439; Nimmagadda Prasad v. CBI, 2013 (7) SCC 466; P. Chidambaram v. Directorate of Enforcement, (2020) 13 SCC 791; and Mahipal v. Rajesh Kumar, 2020 (2) SCC 118.

How the Court Reasoned

Justice Prasad began by reaffirming the limited scope of inquiry at the bail stage: no meticulous appreciation of evidence as at trial, but an examination of the prima facie case, the specific role attributed, the necessity of continued custody and the risk to investigation or trial.

The Court identified several undisputed circumstances that collectively favoured the applicants. The applicants were absent from the FIR. The foundational allegations there — cash interception, demand of commission, roles of public servants and intermediaries — did not name them. On arrest procedure, the Court noted that the applicants had appeared repeatedly before the EOW whenever summoned, supplied documents and were arrested only when they appeared voluntarily on 4 May 2026, without any fresh incriminating material said to have surfaced.

The charge-sheet had been filed. Investigation, so far as the applicants were concerned, was complete. The prosecution evidence was predominantly documentary: contracts, invoices, bank statements, official correspondence and electronic records, all already seized and forming part of the charge-sheet. No recovery remained to be effected from either applicant. No cash had been found on them. The Court observed that in these circumstances, no purpose of custodial detention survived.

On the operational management question, the Court noted without resolving it finally that the Consultancy Agreement of 2018 and the Operational Management Agreement of 2020 prima facie indicated that day-to-day management, CSMCL coordination and project execution were entrusted to Singhania. The Court could not overlook that the prosecution itself cited Singhania as a prosecution witness while repeatedly referencing his interactions with CSMCL officials. This circumstance was treated as relevant while evaluating the comparative role of the applicant-Directors at bail stage.

On director liability, the Court applied the ratio in Harmeet Singh Paintal squarely: “every Director of a company cannot automatically be prosecuted merely because of his designation.” Criminal liability can arise only against those actually in charge of and responsible for the conduct of business at the relevant time. Sunil Bharti Mittal reinforced that criminal liability is personal and cannot be inferred from corporate designation absent material showing active participation or distinct overt acts.

At the stage of bail, apart from the applicants' association with the company as Directors, the prosecution had not drawn the Court's attention to any independent material showing personal demand of illegal gratification, receipt of cash, handling of intercepted money, or preparation of any forged document. Similarly, on the added charges of Sections 467, 468 and 471 IPC, no specific forged document prepared by either applicant had been identified. The Court was careful to note these as matters for trial, but held that the apparent absence of direct connecting material could not be ignored while deciding bail.

The Court engaged carefully with the parity argument. While rejecting absolute parity as a rule, it held that judicial consistency requires similar treatment where the prosecution attributes substantially similar roles to co-accused and fails to demonstrate any distinguishing feature. The State had not shown that the role of these applicants was materially graver than that of Ajay Lohia or Amit Mittal, who had been granted bail on 3 July 2026. The allegations against the present applicants arose from the same association with the manpower company and the same alleged commission mechanism already considered by the Court in those orders.

Synthesising the Supreme Court line from Sanjay Chandra (bail is to secure attendance, not to punish before conviction), Satender Kumar Antil (Article 21 deserves weight once investigation is complete and the accused has cooperated), Dataram Singh (bail is the rule, refusal is the exception) and Arvind Dham (prolonged detention cannot become punishment before conviction, especially where documentary evidence is secured and trial will take time), the Court held that continued custody of the applicants would not serve any useful purpose.

Order

The bail application was allowed. Both applicants — Amit Prabhakar Salunke and Ajit Jaysinghrao Darandale — were directed to be released on regular bail in connection with Crime No. 44/2024, EOW/ACB, Raipur, on each of them furnishing a personal bond of Rs. 10,00,000 (Rupees Ten Lakhs) with two solvent sureties in the same amount to the satisfaction of the concerned Trial Court.

The release is subject to the following conditions: the applicants shall not make any inducement, threat or promise to any person acquainted with the facts so as to dissuade disclosure before the Court or any investigating authority; they shall surrender their passports, if any, before the Trial Court and shall not leave India without prior permission of that Court; they shall remain present before the Trial Court on every date fixed unless exempted by law; they shall not indulge in any act that may delay or prejudice the fair conduct of the trial; they shall continue to cooperate with the investigating agency as required; and they shall provide one mobile number on which they can be contacted by officials to verify their whereabouts. Violation of any condition will entitle the State to seek cancellation of bail.

The Court clarified that all observations in the order are confined to the bail application and shall not influence the Trial Court, which must proceed independently on evidence adduced before it.