The Jharkhand High Court has clarified that prior association with a corporate entity, without any active role or demonstrable link to the alleged offence at the relevant time, cannot justify continued custody. This ruling reinforces the principle that arrest must be grounded in concrete evidence of involvement, not speculative or outdated affiliations.
Background & Facts
The Dispute
The petitioner, Naveen Kedia, is accused in ACB Ranchi P.S. Case No. 09 of 2025, relating to a large-scale liquor supply scam in Jharkhand. The prosecution alleges that Chhattisgarh Distilleries Limited, as a supplier to M/s Om Sai Beverages, participated in illegal liquor distribution. The petitioner, formerly a director of Chhattisgarh Distilleries Limited, was arrested on 10.03.2026 and remains in custody.
Key Facts
- The petitioner served as director of Chhattisgarh Distilleries Limited from 02.11.2009 to 10.05.2010 and again from 20.11.2024 to 05.03.2025.
- The alleged offence occurred in 2022, during which the petitioner had no directorship or employment connection with Chhattisgarh Distilleries Limited.
- The statutory documents submitted in the supplementary affidavit confirm the petitioner’s directorship tenure and its discontinuity during 2022.
- No financial transaction, communication, or document signed by the petitioner links him to the supply chain or transactions involving M/s Om Sai Beverages.
- The petitioner’s statement under Section 183 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) mentions meeting co-accused in Raipur, but does not establish any actionable role in the alleged conspiracy.
- The documents issued by Chhattisgarh Distilleries Limited to M/s Om Sai Beverages bear no signature or endorsement of the petitioner.
- The prosecution’s counter-affidavit admits that the petitioner was not a director during 2022.
- The prosecution previously relied on the petitioner’s earlier disclosures in other petitions to assert his directorship, but failed to update its case despite the supplementary affidavit.
- The petitioner is currently undergoing medical treatment at RIMS Ranchi.
Procedural History
- 09.2025: ACB Ranchi registers Case No. 09 of 2025 under Section 120B read with Sections 420, 467, 468, 471, 409, 107, 109 of IPC and Section 7(c)/12, 13(2) read with 13(1)(a) of the Prevention of Corruption Act, 1988.
- 10.03.2026: Petitioner arrested and taken into custody.
- 28.04.2026: Supplementary affidavit filed before the High Court disclosing the petitioner’s non-involvement during 2022.
- 30.04.2026: Bail application heard and decided by the High Court.
The Parties' Positions
For the Petitioner: The petitioner’s counsel argued that there is no evidence connecting him to the 2022 offence. His directorship ended before the alleged acts occurred. The prosecution’s reliance on his prior position, without any contemporaneous link, is legally unsustainable. The statement under Section 183 BNSS is vague, uncorroborated, and does not establish criminal intent or participation.
For the Respondent (ACB): The prosecution contended that the petitioner’s admission in his statement under Section 183 BNSS - meeting co-accused and being asked to make supplies - constitutes incriminating conduct. They also cited prior disclosures in other petitions where the petitioner had claimed directorship, suggesting a pattern of concealment.
Relief Sought
The petitioner sought immediate release on bail, arguing that continued custody is unjustified in the absence of any material linking him to the offence. He also requested that the court consider his medical condition and the lack of prima facie evidence.
The Legal Issue
The central question was whether continued custody of an accused can be justified solely on the basis of prior corporate directorship, when there is no evidence of involvement, authority, or participation during the period the alleged offence was committed.
Arguments Presented
For the Petitioner
The petitioner’s counsel relied on Arnesh Kumar v. State of Bihar and Siddharth v. State of U.P. to argue that arrest is not a rule but an exception, and must be preceded by a reasonable satisfaction that the accused is likely to abscond, tamper with evidence, or repeat the offence. They emphasized that mere association with a company in the past, without any active role during the relevant period, cannot constitute a ground for arrest. The prosecution’s failure to produce any document signed by the petitioner, any transaction trail, or any communication linking him to the 2022 supply chain rendered the case against him speculative.
For the Respondent
The prosecution argued that the petitioner’s own statement under Section 183 BNSS, wherein he admitted meeting the co-accused and being requested to facilitate supply, was sufficient to establish involvement. They also pointed to prior representations made by the petitioner in other proceedings, suggesting that his current denial of directorship was a recent fabrication to evade liability.
The Court's Analysis
The Court conducted a meticulous review of the materials on record and found no factual nexus between the petitioner and the alleged offence in 2022. The prosecution admitted that the petitioner was not a director during the relevant period. The documents issued by Chhattisgarh Distilleries Limited to M/s Om Sai Beverages bore no signature or authorization from the petitioner. The Court noted that the statement under Section 183 BNSS was uncorroborated and did not indicate any act of commission or omission by the petitioner.
"It is not even the case of the prosecution that the petitioner was holding any position in the company, Chhattisgarh Distilleries Limited at the relevant point of time."
The Court further observed that the prosecution’s reliance on prior disclosures in other petitions could not override the documentary evidence submitted in the supplementary affidavit, which was uncontested. The Court held that a person cannot be held criminally liable for acts of a company during a period when they held no authority, control, or responsibility.
The Court rejected the argument that the petitioner’s prior directorship created a presumption of involvement. It emphasized that criminal liability requires personal participation or active connivance, not historical association. The absence of any material evidence linking the petitioner to the 2022 transactions rendered the case against him legally unsustainable at the stage of custody.
The Verdict
The petitioner was granted bail on furnishing a bail bond of Rs. 5,00,000 with two sureties of the like amount each, to the satisfaction of the Special Judge, ACB, Ranchi. The petitioner must deposit his passport, submit a self-attested copy of his Aadhaar Card with his mobile number, and furnish his email ID. He shall attend all court dates without fail; any default will cancel the bail bond. The prosecution must give at least three days’ prior notice via email for investigation appearances; failure to do so will permit the petitioner to invoke protection against coercive action. The bail is subject to full cooperation with the investigation. The order was communicated to the concerned court via fax/email.
What This Means For Similar Cases
Directorship Alone Is Not Criminal Liability
- Practitioners must challenge arrests based solely on historical corporate roles when the accused had no authority during the period of the alleged offence.
- The burden shifts to the prosecution to prove active involvement, not merely past association.
- Courts must scrutinize the temporal alignment between directorship and the commission of the offence.
Statement Under Section 183 BNSS Requires Corroboration
- A self-serving statement under Section 183 BNSS, without documentary or witness corroboration, cannot sustain custody or charge.
- Vague admissions of meeting co-accused, without proof of participation in the scheme, are insufficient for arrest.
- Courts must distinguish between mere knowledge and active participation.
Documentary Evidence Trumps Oral Assertions
- Statutory records of directorship (MCA filings, board resolutions, appointment letters) prevail over oral claims or prior pleadings.
- Prosecution cannot rely on outdated disclosures to justify current accusations when contradicted by official documents.
- Legal teams must proactively submit corporate records to establish timelines of involvement or non-involvement.
