The Punjab and Haryana High Court has reaffirmed that bail is a discretionary remedy, not a right, and cannot be granted merely because of procedural delays or inconsistent treatment of co-accused in complex financial fraud cases involving public depositors.
Background & Facts
The Dispute
The petitioner, Karamveer, is accused of operating illegal kitty/lottery schemes between 2010 and 2019, collecting crores of rupees from hundreds of depositors under the guise of high returns. He allegedly diverted funds to purchase immovable properties and later transferred them to family members. After abruptly halting the schemes, he refused to return money and allegedly threatened depositors. The complainant, Sahil, filed a written complaint leading to FIR No. 242/2023 at City Tohana, registered under Sections 420, 406, 120-B IPC and later amended to include Section 3(2) of the Haryana Protection of Interest of Depositors in Financial Establishments Act, 2013.
Procedural History
- 03.05.2023: FIR registered based on complainant’s allegations
- 26.06.2025: Petitioner formally arrested after investigation revealed his role in fund diversion and destruction of records
- 2025: Investigation completed; disclosure statement admitted collection of crores and property transfers
- 2026: Petitioner filed bail petition under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023
- 20.02.2026: Petition heard and dismissed by Justice Manisha Batra
Relief Sought
The petitioner sought regular bail, arguing that: (1) the FIR was delayed by four years without explanation; (2) co-accused had been granted bail; (3) no documentary proof of deposits existed; (4) he had no role since 2019; and (5) the matter was civil in nature. He also noted that his properties were already attached under the Act, 2013.
The Legal Issue
The central question was whether delay in filing the FIR and differential bail grants to co-accused constitute sufficient grounds to grant regular bail in a case involving large-scale financial fraud under Section 420 IPC and the Haryana Protection of Interest of Depositors in Financial Establishments Act, 2013.
Arguments Presented
For the Petitioner
Learned counsel contended that the prosecution’s case was weak due to absence of documentary evidence linking the petitioner to individual deposits, and that the delay of four years in registering the FIR undermined credibility. He cited Arnesh Kumar v. State of Bihar to argue that arrest and continued custody should not be automatic in non-heinous offences. He emphasized that co-accused Jaideep had been granted regular bail and two others anticipatory bail, suggesting arbitrariness. He further argued that since his properties were attached, there was no risk of asset dissipation, and no need for his continued custody.
For the Respondent/State
The Additional Advocate General contended that the allegations involved systematic cheating of hundreds of depositors, many of whom were vulnerable individuals who lost their life savings. The disclosure statement admitted deliberate destruction of records and transfer of assets to evade liability. The State argued that the petitioner posed a real risk of absconding and tampering with evidence, given the scale of the fraud and the number of witnesses. The gravity of the offence, potential punishment, and public interest in protecting depositors outweighed procedural irregularities.
The Court's Analysis
The Court examined the nature of the allegations, the statutory framework under the Haryana Act, 2013, and the jurisprudence on bail under Section 483 BNSS. It held that while delay in filing an FIR is a relevant factor, it cannot override the seriousness of the substantive allegations. The Court noted that the petitioner’s own disclosure statement admitted to collecting crores, transferring properties to sons, and destroying records - acts indicative of criminal intent and attempt to obstruct justice.
"The allegations against the petitioner are serious in nature. Wrongful loss of huge amount of money has been caused to the victims."
The Court distinguished Arnesh Kumar by emphasizing that it applied to cases where arrest was mechanical and the offence was not of a financial or economic magnitude. Here, the crime targeted public trust in financial schemes, affecting numerous innocent depositors. The Court further held that differential treatment of co-accused does not automatically entitle an accused to bail unless the disparity is shown to be arbitrary or based on irrelevant considerations. The fact that some co-accused were granted bail did not establish a legal entitlement for the petitioner.
The Court also rejected the argument that the matter was civil in nature, noting that the intentional misappropriation of funds, destruction of evidence, and threats to depositors crossed the threshold into criminal conduct under Section 420 IPC. The attachment of properties under the Act, 2013, was noted as a civil remedy, not a substitute for criminal accountability.
The Verdict
The petition was dismissed. The Court held that bail cannot be granted merely on the basis of delay in FIR registration or differential treatment of co-accused in cases involving large-scale financial fraud. The gravity of the offence, the petitioner’s own admissions, and the risk of evidence tampering justified continued custody pending trial.
What This Means For Similar Cases
Delay in FIR Does Not Automatically Entitle to Bail
- Practitioners must argue that delay alone is insufficient to challenge the credibility of prosecution in financial fraud cases
- Courts will prioritize the substance of allegations over procedural lapses unless the delay is gross and prejudicial to defence
- Evidence of intentional concealment or destruction of records negates the impact of delay
Differential Bail Grants Require More Than Mere Comparison
- Comparing bail status of co-accused is permissible but not determinative
- Courts will examine whether the accused in question played a distinct or more culpable role
- Absence of a reasoned order granting bail to others does not create a legal right for the petitioner
Financial Fraud Cases Demand Stricter Bail Scrutiny
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Cases under the Haryana Act, 2013 and Section 420 IPC involving public deposits are treated as serious economic offences
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Courts will weigh public interest in deterring financial fraud against individual liberty
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Asset attachment does not negate the need for custodial interrogation or prevent flight risk
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Practitioners must now focus on proving absence of criminal intent, not just procedural defects
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In bail applications, emphasize the accused’s ties to the community, cooperation with investigation, and absence of threat to witnesses
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Always distinguish between civil disputes and criminal misappropriation - this judgment reinforces the latter’s seriousness
