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Grants Bail To Directors In Systematic Fraud Case Citing Corporate Liability
The has granted to Amit Prabhakar Salunke and Ajit Jaysinghrao Darandale, two directors of , in connection with an alleged financial irregularities scam involving the (). The court’s order, delivered by Justice Amitendra Kishore Prasad, emphasizes the of proving active participation by directors in any .
Case Background
The case originates from FIR No. 0044/2024, registered by the and in Raipur. The prosecution alleged an organized conspiracy wherein inflated overtime and bonus claims were generated for manpower supply agencies, with the resulting funds diverted as illegal commissions. While the applicants were not initially named in the FIR, they were later implicated during the investigation and arrested in . The state charged them with various sections of the , including () and forgery, as well as provisions under the .
Conflicting Legal Arguments
Counsel for the applicants argued that their clients were unfairly targeted solely based on their status as company directors. They pointed to contractual agreements showing that one Siddharth Singhania held operational control over the project and day-to-day management. Emphasizing that the applicants had fully cooperated with the investigation, the defense contended that the prosecution failed to produce evidence of specific overt acts or personal receipt of illegal funds.
Conversely, the State Counsel maintained that the scam involved deep-rooted corruption affecting the public exchequer. The state argued that the directors were not merely nominal and that their release would prejudice ongoing investigations, given the scale of the financial diversion.
Legal Analysis and Judicial Precedent
The High Court underscored that in criminal jurisprudence, under must be balanced against the gravity of . Citing landmark precedents such as and , the court clarified that criminal liability cannot be automatically inferred from corporate designation.
Justice Prasad noted that once an investigation is concluded and charge-sheets are filed, if the evidence is primarily documentary, continued loses its necessity. The court also observed that with previously released co-accused was essential, as the prosecution failed to distinguish the applicants' roles from those who had already been granted bail.
Key Observations
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"Criminal jurisprudence does not recognise automatic or vicarious criminal liability merely because a person occupies the office of Director, unless the statute specifically creates such liability."
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"Every Director of a company cannot automatically be prosecuted merely because of his designation."
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"The gravity of accusation alone cannot justify denial of bail and the Court is required to strike a balance between the interests of investigation and the valuable right guaranteed under Article 21."
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"The object of bail is to secure the attendance of the accused during trial and not to inflict punishment before conviction."
Court’s Decision
Allowing the bail applications, the High Court directed that the applicants be released upon furnishing bonds of ₹10,00,000 each with two solvent sureties. The court imposed standard conditions, including the surrender of passports, a mandate to cooperate with the ongoing trial, and strict instructions to refrain from tampering with evidence or influencing witnesses. This verdict reinforces the principle that should not serve as a punitive measure before the guilt of an accused is formally established.
