Punjab & Haryana HC Grants Bail to HPGCL Finance Director in CBI Banking Fraud Cases
Justice Sandeep Moudgil found no money trail to the petitioner, noted the Managing Director was not arraigned, and held continued detention served no purpose.
The High Court of Punjab and Haryana at Chandigarh on 12 June 2026 granted regular bail to Amit Dewan, who was serving as Director (Finance) of the Haryana Power Generation Corporation Limited (HPGCL) at the relevant time, in two CBI cases alleging a large-scale banking fraud involving diversion of public funds. Justice Sandeep Moudgil, sitting singly, disposed of both bail petitions by a common order after finding that no money trail had been traced to the petitioner, that the Managing Director whose approval was part of the decision-making chain had not been arraigned, and that investigation in one of the two FIRs had already concluded with a challan. The court held that further incarceration would serve no useful purpose and that the apprehension of evidence tampering could be addressed through conditions.
The Two CBI FIRs and the Petitioner’s Custody
The first case originated as FIR No. 04 dated 23 February 2026 registered by the State Vigilance and Anti-Corruption Bureau, Panchkula. The CBI took over the matter and re-registered it as FIR No. RC2212026E0005 dated 8 April 2026. The allegations concern irregularities in accounts maintained by HPGCL and other government entities with IDFC First Bank and AU Small Finance Bank, resulting in alleged siphoning of public funds.
The second case began as FIR No. 03 dated 12 March 2026 registered by the Economic Offences Wing, Chandigarh. The CBI re-registered it as FIR No. RC2212026E0009 dated 4 May 2026. The allegations here relate to unauthorised deposit and withdrawal transactions from accounts maintained by the Chandigarh Renewable Energy and Science & Technology Promotion Society (CREST) with IDFC First Bank, Chandigarh.
Dewan was arrested on 18 March 2026 and remained in custody throughout. Both petitions were filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (the provision corresponding to Section 439 of the Code of Criminal Procedure). The offences invoked include Sections 316(5), 318(4), 336(3), 338, 340(2) and 61(2) of the Bharatiya Nyaya Sanhita, 2023, as well as Sections 13(2) and 13(1)(a) of the Prevention of Corruption Act, 1988 as amended in 2018.
Because both FIRs arose from the same broad set of banking transactions, involved overlapping parties and facts, and raised common questions of law, the court heard them together and resolved them by a single order.
What the Petitioner Argued
Senior Counsel for Dewan pressed several points. The petitioner was not named in the original FIRs, and no specific role was attributed to him at the initial stage of investigation. As Director (Finance), he operated within an administrative hierarchy where proposals for opening bank accounts and investing public funds required approval of the Managing Director and other competent authorities. He was neither a signatory to the accounts in question nor the custodian of the cheque books allegedly misused.
Counsel pointed out that the officials who actually opened and operated the accounts, handled banking transactions, and maintained custody of the relevant instruments had not been proceeded against, even though they occupied a more proximate position to the alleged transactions. No money trail had been traced to the petitioner, no recovery had been effected, and no documentary, electronic or forensic evidence showed transfer of any part of the alleged proceeds to him.
On the second FIR specifically, it was submitted that Dewan was arrested without prior issuance of notice under Section 35 of the BNSS, and that the allegations substantially overlapped with those already under investigation in the first case. Regarding the alleged suicide note left by the late Balwant Singh — an employee of the same organisation — counsel argued that its evidentiary value and admissibility could only be determined at trial, and that the prosecution did not concern any offence of abetment of suicide.
Finally, counsel submitted that custodial interrogation had already been completed, no further recovery was required, and the case rested predominantly on documentary evidence already in the agency’s possession.
The Complainant Bank and CBI’s Opposition
Senior Counsel for the complainant bank argued that Dewan was an active participant in a large-scale conspiracy. While serving as Director (Finance), HPGCL, he allegedly facilitated the opening of accounts with private banks in violation of government norms and played a pivotal role in processing and approving proposals for transfer of substantial public funds into those accounts. When unauthorised transactions came to notice, he allegedly failed to report the matter to higher authorities, thereby aiding concealment.
The complainant relied on the alleged dying declaration or suicide note of the late Balwant Singh to contend that Dewan had obtained possession of the cheque book subsequently used for unauthorised withdrawals and had intimidated subordinate officials who attempted to report the irregularities. Investigation had also disclosed receipt of illegal gratification by the petitioner from co-accused persons. Counsel emphasised the magnitude of the alleged fraud — described as involving diversion of public funds running into several hundred crores of rupees — and the position of trust the petitioner occupied.
The CBI echoed these submissions, adding that investigation in FIR No. RC2212026E0009 was still underway and that the flow of funds, the role of beneficiaries, and the inter se involvement of accused persons were yet to be fully unravelled. The agency also relied on the suicide note as prima facie indicating the petitioner’s involvement in events surrounding the fraudulent transactions.
How the Court Reasoned
Justice Moudgil began by setting out the well-settled factors for bail consideration drawn from P. Chidambaram v. CBI, (2020) 13 SCC 791: the nature of accusation and severity of punishment; apprehension of tampering with witnesses or threat to the complainant; likelihood of abscondence; character and standing of the accused; and the larger public interest.
Applying those factors, the court identified several undisputed circumstances. Dewan had been in custody since 18 March 2026. Investigation in FIR No. RC2212026E0005 had concluded and the challan had been presented. Investigation in FIR No. RC2212026E0009 was continuing, but both FIRs arose from the same broad set of transactions. No further custodial interrogation or recovery was stated to be required from the petitioner.
On the allegation of illegal gratification, the court found that despite extensive investigation and custodial interrogation, no money trail leading to Dewan had been placed before it. No bank account, property or asset had been identified as representing alleged proceeds of crime. The allegation of receipt of illegal gratification rested primarily on statements of certain witnesses claiming to have extended benefits in kind — the correctness, admissibility and evidentiary value of which were matters for trial.
The court found substance in the submission that opening accounts and placing public funds therein were not matters falling exclusively within the petitioner’s domain. The record indicated that proposals required the Managing Director’s approval. The Managing Director, whose approval formed part of the decision-making process, had not been arrayed as an accused. The petitioner was also admittedly not a signatory to the account-opening forms. Various officials connected with operating the accounts and processing banking transactions had not been proceeded against either.
On the suicide note, the court held that its evidentiary value, authenticity and legal effect could only be examined at trial after the parties were afforded an opportunity to lead evidence. The prosecution did not concern any offence under Section 306 IPC or any allegation of abetment of suicide. The document therefore could not be treated as a determinative circumstance for denying bail.
The court also noted that Dewan had been arrested in the second FIR without issuance of notice under Section 35 of the BNSS, a fact it considered relevant while examining whether continued custodial detention was warranted, though it refrained from expressing any final opinion on the legal consequences of that omission.
Justice Moudgil drew on Sanjay Chandra v. CBI, (2012) 1 SCC 40, where the Supreme Court observed that “when the undertrial prisoners are detained in jail custody to an indefinite period, Article 21 of the Constitution is violated.” That judgment had held that even in economic offences of huge magnitude, once investigation is complete and the charge sheet is filed, the presence of the accused in custody may not be necessary for further investigation.
The court also relied on Dataram v. State of Uttar Pradesh, 2018(2) R.C.R. (Criminal) 131, for the proposition that “the grant of bail is the general rule and putting persons in jail or in prison or in correction home is an exception.” That judgment had emphasised a humane approach to incarceration, the requirements of Article 21, and the need to consider whether the accused was a first-time offender and whether any recovery remained to be effected.
Tying these threads together, the court held that the apprehension of tampering with evidence or influencing witnesses could be adequately addressed by imposing suitable conditions on bail. Balancing the seriousness of the allegations with settled principles governing personal liberty and pre-trial detention, it concluded that further incarceration would serve no useful purpose.
Outcome
Justice Moudgil allowed both petitions. Amit Dewan was directed to be released on regular bail in both FIRs on furnishing bail and surety bonds to the satisfaction of the trial court or Duty Magistrate concerned. The court expressly clarified that nothing stated in the order should be construed as an expression of opinion on the merits of the case. The order was marked as a speaking and reasoned order and as reportable.