Kawasi Lakhma Vs the State of Chhattisgarh

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2025:CGHC:34179

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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ORDER RESERVED ON 08.07.2025 ORDER DELIVERED ON 18.07.2025

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MCRC No. 3392 of 2025

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1 - Kawasi Lakhma S/o Lt. Mr. Hadma Kawasi Aged About 66 Years R/o 134, Officer's Colony, Dharampura, Raipur, Chhattisgarh 492001. Currently Under Judicial Custody At Central Jail, Raipur, Chhattisgarh.

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... Applicant(s)

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versus

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1 - The State Of Chhattisgarh Through Economic Offences Wing (EOW)/Anti-Corruption Bureau (ACB), Headquarter, Opposite Jai Jawan Petrol Pump, Telibandha, Raipur, Chhattisgarh 492001

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... Respondent(s)

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For Petitioner(s) : Shri Harshwardhan Parganiha, Advocate For Respondent/State) : Shri Vivek Sharma, Addl. Advocate General

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(Hon’ble Shri Justice Arvind Kumar Verma)

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(CAV ORDER)

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The applicant has filed the instant bail application before this Court in terms of the provisions of Section 483 of the Bhartiya Nagarik Suraksha Sanhita 2023 ('BNSS' for short) for grant of bail in connection with FIR No. 04/2024 registered with Anti Corruption Bureau, District

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Raipur under Sections 420, 467, 468, 471,120-B IPC and Sections 7 & 12 of the Prevention of Corruption Act,1988.

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FACTUAL ASPECTS OF THE CASE

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Facts of the case leading to the filing of the present applicant is that the applicant was arrested on 02.04.2025 by the respondent/ACB on the allegation which are as follows:

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a. Out of the illegal money allegedly generated by the syndicate, systematically engaged in the manufacture and sale of illegal liquor through licensed government shops between 2019 to 2022, a sum of INR 50,00,000/- per month was given to the applicant when was then serving as Excise Minister of the State of Chhattisgarh.

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b. The operations of the syndicate have allegedly resulted in generation of a huge amount of money which has been distributed amongst the members of the syndicate and used to bribe high political and administrative functionaries.

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b. The grounds of arrest supplied to the applicant at the time of his arrest further alleges that the applicant had played an important role in framing policies that facilitated the alleged illegal operation of the syndicate, posted desired Excise Officers at desired locations and laid down terms and conditions in the public procurement process that demonstrates favoritism and biasness.

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ARGUMENTS ON BEHALF OF THE APPLICANT

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Contention of the counsel for the applicant is that the present FIR No. 04 of 2024 constitutes a gross abuse of criminal justice machinery. It is submitted that the present applicant at the time when the alleged offence is said to have been committed, he was said to be

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in the helm of affairs in the role of Excise Minister. The applicant was arrested when he was judicial custody pursuant to his arrest in connection with ECIR No.4. The need for custodial interrogation was sought for by the respondent. After the registration of FIR, the applicant was not even summoned once by the Investigating Agency. Counsel for the applicant submits that the malafidee which has been committed against the applicant as to how he was arrested. After the ECIR No.11 was registered by the Enforcement Directorate in the alleged liquor scam, information was shared under Section 66(2) of the PMLA relevant material along with statements under Section 50 were shared by the prosecution agency. The said information was collected pursuant to a patently illegal investigation being carried out in relation to ECIR No. 11 of 2022. The charge sheet was filed against the applicant. The material relied upon which can be relied from the statement of Arunpati Tripathi which reads as under:

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“ v#.kifr f+=ikBh & izorZu funs’kky; ds

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ECIR/RPZO/11/2022 esa fnukad 03-04-2023 dks v#.kifr f=ikBh ds }kjk fn;s x;s c;ku esa Li"V rkSj ij ;g mYys[k gS fd rRdkyhu vkcdkjh ea=h Jh doklh y[kek dks izfrekg 50 yk[k #i;sa ¼fixed½ vu ,dkmaVsM ch&ikVZ dh 'kjkc dh fcdzh jde esa ls vkcdkjh foHkkx dks izkIr gksus okys 150 #i;s izfr isVh jde esa ls izkIr gks jgs FksA blds vykok Jh doklh y[kek dks izfr ekg vuoj <scj ds }kjk vjfoan flag ds ek/;e ls 1-5 djksM #i;s vyx ls fn;s tk jgs FksA”

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He submits that both the ECIR and statement came to be quashed by the Apex Court. The material was with the Investigating Agency and the timing of the arrest came when the applicant was against the incumbent government and there was no need or necessity of custodial interrogation. It was only a means to strong arm the

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applicant and only of political rivalry, the applicant was put behind the bars. The ED cannot and must not act as a complainant for the purpose or registration of scheduled offences as the same is not contemplated under the scheme of the PMLA. It is submitted that permitting the same would amount to gross miscarriage of justice in as much as the ED would then be at liberty to create its own scheduled offence, completely rendering the concept of the scheduled offence nugatory.

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It is submitted by the counsel for the applicant that the FIR does not attribute any specific role, overt act or participation by the applicant in the commission of the alleged offence. It contains vague and general allegations against multiple individuals without detailing the involvement of the applicant. As per the allegations of the respondent is that there were two parts of the commission which the applicant received ie. 50,00,000/- and 1.5 crores. In both the instances, one part is said to be delivered by the excise officials which was collected by them from point B, come to the bungalow of the applicant and handover the same to the OSD ie. Jayant Dewangan. He is the person who received the cash and had admitted the fact. The arrest of the applicant has been effectuated in a hasty manner with an ulterior motive to frustrate the application of the applicant seeking grant of anticipatory bail in connection with the present FIR which was pending consideration before this Court. Next contention is that there was absolutely no material with the non-applicant necessitating the arrest of the applicant in the present case. It is settled law that there is a distinction between the power to arrest and justification for the exercise of such powers.

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It is next submitted that the arrest of the applicant reeks of

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malafides. Despite the fact that present FIR was registered in the month of January 2024 and the EOW/ACB has filed 3 charge sheets (ie. on 29.06.2024, 26.09.2024 and 17.11.2024) arraigning a total number of 11 accused persons, not a single summon was issued to the applicant for the investigation. He has relied upon the decision of Apex Court in the matter of Arvind Kejriwal Vs. Directorate of Enforcement, 2024 Scc OnLine SC1703.

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The private person who was involved in transfer of such funds to the applicant ie. Prakash Sharma used to work with Vikas Agrawal @ Subbu who has been absconding since, has been entrusted the task of delivering the amount on the instructions of Amit Singh and Arvind Singh to the residence of the applicant. Both these persons have negated the fact that they knew Prakash Sharma and has stated while in judicial custody when confronted with the applicant. The applicant has come from a naxalite effected area and therefore he has been provided Z+ security and no person or car could have entered his residential premises without there being any entry or exit record thereof. Merely reliance has been made on the statement under Section 161 Cr.P.C. It is a government residential bungalow where the entry and exit register are maintained and records are also secured in the electronic form. There has never been any instances and in charge sheet such material is absent.

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It is contended by the learned counsel for the applicant that the custodial detention of the applicant is no longer necessary because the applicant has been sufficiently interrogated while being in police custody from 02.04.2025 to 11.04.2025. There is no evidence which

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forms part of the charge sheet reflecting that his vehicle or he himself had by any stretch of imagination, come to this particular place where he has admitted the he frequently come to. There are two major individuals who had stated about the transfer of money to his bungalow is by the cook, guard and PSO who have stated that some bags used to come however they have not identified that there used to be money in it though they did not identified the person who brought the bags.

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Counsel for the applicant submits that there is absence of approval under Section 17A of the PC Act, 1988 because admittedly, at the time of commission of the alleged offence, he was discharging his duties as a public servant and the very investigation suffers from procedural defects that goes to the root of the nature. There is no direct or circumstantial evidence establishing that the applicant made any demand for illegal gratification or accepted any amount from the alleged syndicate. It is a settled position of law that in order to constitute an offence under Section 7 of the PC Act, 1988 there must be cogent evidence providing both demand and acceptance of illegal gratification. Mere allegation without any substantive evidence cannot form the basis of prosecution. He has referred to the decision of the Apex Court in the matter of Soundarajan Vs. State Represented by the Inspector of Police Vigilance Anti corruption Dindigul, 2023 SCC OnLine SC 424.

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It is submitted that there is no cogent evidence showing any physical manifestation of agreement between the applicant and other co-accused for committing the alleged crime for making out a case of

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criminal conspiracy under Section 120-B IPC. It is well settled that there must be cogent evidence to show that the co-accused persons are acting as per common agreement. He has referred to the decision of the Apex Court in the matter of Ram Sharan Chaturvedi Vs. State of MP (2022) 16 SC 166. T he offence under Section 420 IPC is also not made out for the reason that the fraudulent or dishonest intention to cheat is altogether absent.

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It has been argued that on meticulous examination of the evidence at the stage of bail is not required. The statements of 41 individuals recorded under Section 161 Cr.P.C, 1973 cannot be relied upon at this stage as they are to be tested during trial which is yet to commence. Even under the Special Acts wherein the accused has to meet a higher threshold for grant of bail, the Apex Court has held that at the stage of considering bail application, the court is not required to enter into the merits or delve into the statements of the witnesses and conduct a mini trial. He further contends that it is not a case of investigation of money laundering. It is a case wherein a criminal conspiracy is brought on record to show the involvement of the applicant with the liquor scam and his active role. As per the charge sheet, the applicant is a signatory to the FL-10A licensee in which the applicant was also involved. He submits that there were other coaccused who were also involved mainly the Excise Commissioner and other authorities but till date they have not been arrested nor custodial interrogation has been done. In so far as transfer of Excise Officers is concerned, it is stated that the applicant has passed the directive that until and unless the Minister concerned will not approve the transfer

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shall not take place and that any raids made by the flying squad, if at all, has to be approved by the Commissioner. To this, he submits that the flying squad who are government officials that is stated to have assisted in the alleged liquor scam they received 50 lacs per month from the alleged scam and they have stated that they worked under the dictate of the Commissioner but they have not been arrested nor the Commissioner has been arrested and the applicant is arrested. He submits that the other persons who were also involved in the scam, they would have also been interrogated.

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It is next contended that the applicant satisfies the triple test for grant of bail viz. Flight risk, influencing witnesses and tampering evidence as laid down by the decision of the High Court of Delhi reported in 2023 SCC OnLine Del. 3622, Preeti Chandra Vs. Directorate of Enforcement and upheld by the Apex Court in SLP (Crl.) No.7409/2023 and as such the applicant is entitled for bail.

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It is now a settled position of law that apprehension of influencing the witnesses and tampering of evidence is required to be based on tangible evidence and mere allegation cannot be taken at face value on the asking of the investigating agency. The learned Special Court has rejected the bail application of the applicant solely on the basis of prima facie involvement of the applicant and the circumstance of the case which by any stretch of imagination cannot amount to a conclusive determination of guilt and such findings are not sufficient to deny grant of bail, especially in absence of compelling reasons such as the likelihood of absconding, tampering with evidence or influencing witnesses. In the matter of Sanjay Chandra Vs. CBI,

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2012 (1) SCC 40, it has been held that seriousness of the charge, though a relevant condition, is no only factor that needs to be considered while granting bail and the object of bail is not punitive but to secure the presence of the accused for trial. Int he matter of P. Chidambaram Vs. Directorate of Enforcement (2020) 13 SCC 791 has observed that the parameters of bail do not change in economic offences and held that “ it is not a rule that bail (with appropriate conditions) cannot be granted in cases of such offences.”

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The Apex Court has held in plethora of cases Manoranjan Sinha Vs. Central Bureau of Investigation, (2017) 5 SCC 218, where it has been held that denial of bail ought not be used as a punitive device. It is well settled that bail is the rule and its denial is exception. The denial of bail in the present case would act as a completely disproportionate restriction on the personal liberty of the applicant guaranteed under Article 21 of the Constitution of India.

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13. Three charge sheets have been filed arraigning total of 11 accused persons and citing more than 300 witnesses and 300 plus documents and that charge sheet against the applicant is yet to be filed. The Apex Court in the matter of Javed Gulam Nabi Shaikh Vs. State of Maharashtra and Another, 2024 SCC OnLine SC 1693, while considering the bail application of an accused prosecuted under UAPA,1967 observed thus:

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“19. If the State or any prosecuting agency including the court concerned has no wherewithal to provide or protect the fundamental right of an accused to have a speedy trial as enshrined under Article 21 of the Constitution then the State or any other

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prosecuting agency should not oppose the plea for bail on the ground that the crime committed is serious. Article 21 of the Constitution applies irrespective of the nature of the crime."

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In catena of decisions, the Apex Court while considering the period spent in the custody and there being no likelihood of conclusion of trial within a short span has been pleased to enlarge the accused on bail. He has referred to the decisions reported in SLP (Crl.) No. 3205/2024 Ramkripal Meena Vs. Directorate of Enforcement and SLP (Crl.) No. 8781/2024 Manish Sisodia Vs. Directorate of Enforcement.

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The applicant has already undergone pre-trial incarceration of over more than 3 months in the money laundering case which is based on the same set of transactions and almost three weeks in the present FIR. The extension of custody of the applicant in such circumstances would militate against the constitutional guarantee of personal liberty guaranteed under Article 21 of the Constitution of India as held by the Apex Court in the the matter of Union of India Vs. K.A. Najeeb (2012) 3 SCC 713 and Criminal Appeal No. 4011/2024, V. Senthil Balaji Vs. The Deputy Director, Directorate of Enforcement.

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Counsel for the applicant contended that the co-accused in the present FIR have been either given interim protection or released on regular bail by the Apex Court. Subsequent to the filing of the present bail application, the co-accused persons have been granted interim protection way of the writ petitions and is continuing till date, they are

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participating in the investigation and therefore the applicant is seeking for grant of bail on the ground of parity. So far as the ground of parity is concerned, the object for consideration would be the manner of investigation, mere possibility of the investigating culminating into full fledged trial and no likelihood of trial to be commencing in the near future. He submits that the trial is yet to commence and that the charge sheet against the applicant has been filed on 30.06.2025 wherein total of 47 witnesses have been cited and documents running to more than 1000 pages have been relied upon. He has referred to the decision of the Apex Court in the matter of Vinubhai Haribhai Malviya & Others Vs. State of Gujarat and Another, (2019) 17 SCC 1. Lastly, it has been argued that the applicant is a 67 year old person, sitting MLA and has been in incarceration for about 6 months (arrested on 14^th January 2025), the charges have not yet been framed, allegations based on 161 Cr.P.C. statements, 164 Cr.P.C statements of the co-accused persons, the premises of the applicant have been raided and it is on record, therefore, the applicant may be granted bail.

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SUBMISSION ON BEHALF OF THE RESPONDENT/STATE

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17 . Shri Vivek Sharma, learned counsel for the respondent submits that the petitioner is a key conspirator whose role in the Chhattisgarh Liquor Scam is omnipresent through out various stages of conceptualization and implementation of the scam, whereby loss of about 2100 crores has been inflicted on the State exchequer. It is submitted that on 11.07.2023, respondent/EOW received a communication from the ED and after due verification, on being satisfied, prima facie cognizable offence was committed and therefore

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FIR No. 04/2024 came to be registered under Sections 7 & 12 of the Prevention of Corruption Act and 420,467,471 and 120-B IPC against 71 accused persons. The name of the present applicant as accused is mentioned in the supplementary charge sheet dated 17.01.2024. It is revealed that applicant Kawasi Lakhma along with Anwar Dhebar was the head of the criminal syndicate comprising of high level State government officials, private persons and political executives of the State of Chhattisgarh and other persons namely Trilok Singh Dhillon, Arunpati Tripathi and Niranjan Das. The syndicate used to collect illegal money in three different ways from the sale of liquor which is classified by the syndicate itself into three parts:

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Part A- illegal commission charged from liquor supplier for official sale of liquor in the State of Chhattisgarh.

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Part B – Sale of unaccounted illicit countrymade liquor from State run shops done with the involvement of distillers, hologram manufacturers, bottle makers, transporters, man power management and District Excise Officials. Part C – Annual Commission from distillers for allowing them to operate a syndicate and divide the market share amongst themselves.

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The liquor was divided into two categories namely Country liquor (CL) and Indian Manufactured Foreign Liquor (IMFL). Country liquor is produced in Chhattisgarh only through three distilleries ie. M/. Chhattisgarh Distilleries Ltd., M/s. Bhatia Wines and Merchants Pvt. Ltd. and M/s. Welcome Distilleries Pvt. Ltd. It has been revealed in the investigation that since it was difficult to extract bribes for foreign liquor makers in respect of IMFL & FL and there was strong demand for good quality foreign brands in April 2020 the syndicate introduced a 4^th type of mechanism to extort bribes from FL makers also by introducing the

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concept of FL-10A licenses. These licenses were again given to three chosen associates of Anwar Dhebar who act as the ‘collectors’ or intermediary and buy the foreign liquor and sell it to the Chhattisgarh government warehouses and generated commission of around 10% on it.

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On the top of this commission, the licenses were given with a promise that 50-60% of the final profit amount of the FL-10A licensee be paid to the syndicate. The multinational companies were already briefed about this mechanism by Arunpathi Tripathi who was appointed by Anil Tuteja. The FL-10A liens was given only to three people who were ready to hike prices in the middle and thus ensure payment of cash bribes ie. Sanjay Mishra (M/s. Nexgen Power Engitech Private Limited), Atul Kumar Singh & Mukesh Manchanda (M/s. Om Sai Beverages Pvt. Ltd.) and Asheesh Saurabh Kedia (M/d. Dishita Ventures Private Ltd.). The present applicant being the Minister of Excise Department has played a crucial role in approving the FL-10A License policy and received illegal gains from the syndicate for the said purpose. The syndicate has made a total earning of Rs. 1660,41,00,056/- from the financial year 2019-20 to 2022-23 which is nothing but loss caused to the State exchequer from the offence of conspiracy by criminal syndicate.

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He submits that from the investigation till date, it is clear that massive corruption had taken place in the Excise Department of the State of Chhattisgarh since 2019. The excise departments were setup to regulate the supply of liquor, ensure quality liquor to user to prevent hooch tragedies and to earn revenue for the State which has been

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misused by the criminal syndicate by systematically altering the liquor policy and extorted maximum personal benefit for themselves with the help of co-conspirators-Arunpati Tripathi and Trilok Singh Dhillon and the present applicant provided shelter to them for running their operation being Excise Minister.

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Further contention of Shri Sharma, is that the applicant is one of the master mind of the liquor scam and he used his position as Minister of Excise to provide shelter to the persons involved in the illegal sale of liquor and received financial gain for the same. The FL-10A policy was framed to enable commission extortion through intermediaries. The applicant while holding the office of Excise Minister through the intermediary entities had procured the foreign liquor from manufacturing companies. After multinational liquor companies refused to pay commission in cash the syndicates faced difficulty in collecting illegal payments and to overcome this, the FL-10A policy was deliberately introduced to insert intermediaries-handpicked firms with no legitimate infomercial necessity who would purchase liquor from the manufacturers and then resell it to CSMCL at inflated rates adding an artificial 10% margin. This structure has been created to ensure continuous and concealed channel for generating illegal commissions due to which the State suffered a financial loss exceeding Rs. 220 crores. These intermediaries functioned primarily as a commission collection fronts on behalf of the political and administrative syndicate headed by the applicant.

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It is submitted that with regard to the receipt of Rs. 72 crores from Corrupt proceeds of FL-10A and illegal liquor sales (Part-B) – from the

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investigation, it is established that the present applicant received approximately 64 crores over a period of 3 years as illegal commission rom two major corrupt channels ie. through the FL-10A licensing scheme involving intermediaries and second through the illegal sale of unaccounted, duty evaded country liquor (referred to as Part-B stock) via government run liquor shops. This Part-B stock operated as a parallel black market system and generated substantial off-the book cash revenue. The statements of the witnesses including those of departmental insiders and his own OSD, confirm that regular cash payments of Rs. 2 crores per month was delivered to his residence. These illegal proceeds were directly linked to the benefits extended under the policy level decisions and administrative protection. The above facts clearly demonstrate that the applicant used his ministerial position and had procured benefit from the network of corruption.

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It is the contention on behalf of the State counsel that these illegal cash was utilized in the construction of immovable properties and out of the 64 crores which was acquired by him, cash amounting to approximately 4.60 crores has been directly traced from the construction of Congress Bhawan at Sukma, the residential house of his son Harish Lakhma and a building which was constructed by the applicant himself. The valuation reports, witness testimonies and registers seized from the contractor Jagannath Sahu confirm that the actual expenditures far exceeded the declared amounts thereby establishing the use of unaccounted cash. Additionally a portion of this money was used to fund private travel expenses of the accused associates. These actions reflect a systematic effort to conceal the

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origin of illicit funds and integrate them into physical assets. The remaining portion of the 64 crores received is currently under investigation to determine the full extent of its deployment and possible involvement of other entities and individuals.

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It is submitted that during investigation, the ACB has recorded the statement of one Prakash Sharma @ Chhotu who has categorically stated that he used to deliver cash amounting ot Rs. 50 lacs and 1.5 crores per month in two installments to one Jayant Dewangan who was the OSD of the present applicant. This fact was corroborated from the statements of Khem Lal Bhuarya, Mukesh Kumar Sukhdev, Ramesh Kumar Nag, Satish Kumar Singh, Sheikh Saket. The Excise Officials and Prakash Sharma used to visit the official resident of the applicant every month and handed over the money to Jayant Dewangan.

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Prakash Sharma has further stated that till March-April 2020 he used ot hand over the money to one Inderdeep Singh Gill and from the year 2021, he handedover to Kamlesh Nahata, close aide of present applicant. From the statement of Kanhaiya Lal Kurrey and Vikas Singh Thakur recorded by the EOW, they are the employees of Excise Department, have stated that on the instructions of co-accused Janardhan Gaurav and Arunpathi Tripathi, they used to deliver Rs. 50 lacs per month to the residence of the present applicant. Jayant Dewangan has admitted this fact that Kanhaiya Lal Kurrey used to deliver Rs. 50 lacs per month and Prakash Sharma @ Chotu delivered Rs. 1.5 crores per month in the resident of the present applicant.

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In the statements of Sandeep Beg, Mukesh Vaishnav, Harsh

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Verma, Chamanlal Dehari and Ashok Kumar Yadav who are the employees in the residence of the applicant, have admitted the fact that Kanhaiya Lal Kurrey used to deliver cash to OSD Jayant Dewangan every month and Prakash Sharma used to deliver once or twice in a month to Jayant Dewangan. Indradeep Singh Gill and Kamlesh Nahata have also admitted in their statements that they used to receive money on behalf of the applicant.

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It is submitted that the applicant used to make cash payment for construction of his house and it has been admitted by Jagannath Sahu and Sangram Pandey. He submits that the applicant being a Member of Legislative Assembly, is a highly influential person and if he is granted bail, he can influence the investigation. Therefore keeping in view the gravity of the crime and circumstances, it will be detrimental to the ongoing investigation and the grounds so urged by the applicant are not available to him as the same are false and frivolous, the instant application for grant of bail is liable to be dismissed.

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So far as the legal grounds are concerned, the findings of the Hon’ble Supreme Court in the State of UP Vs. Amarmani Tripathi (2005) 8 SCC 21 would be applicable to the present case. The Apex Court inter alia has held that the relevant facts for considering bail are : (I) whether there is any prima facie or reasonable ground to believe that the accused had committed the offence; (ii) nature and gravity of the charge (iii) severity of punishment in the event of conviction (iv) danger of accused absconding or fleeing if released on bail; (v) character, behavior, means, position and standing of the accused; (vi) likelihood of

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the offence being repeated; (vii) reasonable apprehension of the witnesses being tampered with and (viii) danger, of course, of justice being thwarted by grant of bail. Moreover it is also held that mere fact that the accused had been incarcerated for a certain period of time is also not a factor for granting bail.

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Reliance is next placed on Dolat Ram and others vs. State of Haryana 1995 (1) SCC 349, wherein the distinction between the factors relevant for rejecting bail in a non-bailable case and cancellation of bail already granted, was brought out :

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"Rejection of bail in a non-bailable case at the initial stage and the cancellation of bail so granted, have to be considered and dealt with on different basis. Very cogent and overwhelming circumstances are necessary for an order directing the cancellation of the bail, already granted. Generally speaking, the grounds for cancellation of bail, broadly (illustrative and not exhaustive) are: interference or attempt to interfere with the due course of administration of justice or evasion or attempt to evade the due course of justice or abuse of the concession granted to the accused in any manner. The satisfaction of the court, on the basis of material placed on the record of the possibility of the accused absconding is yet another reason justifying the cancellation of bail. However, bail once granted should not be cancelled in a mechanical manner without considering whether any supervening circumstances have rendered it no longer conducive to a fair trial to allow the accused to retain his freedom by enjoying the concession of bail during the trial."

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They also relied on the decision in S.N. Bhattacharjee vs. State of West Bengal 2004 (11) SCC 165 where the above principle is reiterated. The decisions in Dolat Ram and Bhattacharjee cases (supra) relate to applications for cancellation of bail and not appeals against orders granting bail. In an application for cancellation, conduct subsequent to release on bail and the supervening circumstances alone are relevant. But in an appeal against grant of bail, all aspects that were relevant under Section 439 read with Section 437, continue to be relevant. We, however, agree that while considering and deciding appeals against grant of bail, where the accused has been at large for a considerable time, the post bail conduct and supervening circumstances will also have to be taken note of. But they are not the only factors to be considered as in the case of applications for cancellation of bail.

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It is well settled that the matters to be considered in an application for bail are (i) whether there is any prima facie or reasonable ground to believe that the accused had committed the offence; (ii) nature and gravity of the charge;

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(iii) severity of the punishment in the event of conviction; (iv) danger of accused absconding or fleeing if released on bail; (v) character, behaviour, means, position and standing of the accused; (vi) likelihood of the offence being repeated; (vii) reasonable apprehension of the witnesses being tampered with; and (viii) danger, of course, of justice being thwarted by grant of bail (see Prahlad Singh Bhati vs. NCT, Delhi 2001 (4) SCC 280 and Gurcharan Singh vs. State (Delhi Administration) AIR 1978 SC 179). While a vague allegation that accused may tamper with the evidence or witnesses may not be a ground to refuse bail, if the accused is of such character that his mere presence at large would intimidate the witnesses or if there is material to show that he will use his liberty to subvert justice or tamper with the evidence, then bail will be refused. We may also refer to the following principles relating to grant or refusal of bail stated in Kalyan Chandra Sarkar vs. Rajesh

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Ranjan, 2004 (7) SCC 528:

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"The law in regard to grant or refusal of bail is very well settled. The court granting bail should exercise its discretion in a judicious manner and not as a matter of course. Though at the stage of granting bail a detailed examination of evidence and elaborate documentation of the merit of the case need not be undertaken, there is a need to indicate in such orders reasons for prima facie concluding why bail was being granted particularly where the accused is charged of having committed a serious offence. Any order devoid of such reasons would suffer from non- application of mind. It is also necessary for the court granting bail to consider among other circumstances, the following factors also before granting bail; they are:

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a. The nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence.

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b. Reasonable apprehension of tampering with the witness or apprehension of threat to the complainant.

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c. Prima facie satisfaction of the court in support of the charge. (see Ram Govind Upadhyay vs. Sudarshan Singh, 2002 (3) SCC 598 and Puran vs. Ram Bilas 2001 (6) SCC 338."

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This Court also in specific terms held that:

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"the condition laid down under section 437(1)(i) is sine qua non for granting bail even under section 439 of the Code. In the impugned order it is noticed that the High Court has given the period of incarceration already undergone by the accused and the

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unlikelihood of trial concluding in the near future as grounds sufficient to enlarge the accused on bail, in spite of the fact that the accused stands charged of offences punishable with life imprisonment or even death penalty. In such cases, in our opinion, the mere fact that the accused has undergone certain period of incarceration (three years in this case) by itself would not entitle the accused to being enlarged on bail, nor the fact that the trial is not likely to be concluded in the near future either by itself or coupled with the period of incarceration would be sufficient for enlarging the appellant on bail when the gravity of the offence alleged is severe and there are allegations of tampering with the witnesses by the accused during the period he was on bail."

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In Panchanan Mishra vs. Digambar Mishra, 2005 (3) SCC 143, this Court observed :

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"The object underlying the cancellation of bail is to protect the fair trial and secure justice being done to the society by preventing the accused who is set at liberty by the bail order from tampering with the evidence in the heinous crime..... It hardly requires to be stated that once a person is released on bail in serious criminal cases where the punishment is quite stringent and deterrent, the accused in order to get away from the clutches of the same indulge in various activities like tampering with the prosecution witnesses, threatening the family members of the deceased victim and also create problems of law and order situation."

¶108

Therefore, the general rule that this Court will not ordinarily interfere in matters relating to

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bail, is subject to exceptions where there are special circumstances and when the basic requirements for grant of bail are completely ignored by the High Court. (see Pawan vs. Ram Prakash Pandey 2002 (9) SCC 166; Ram Pratap Yadav vs. Mitra Sen Yadav 2003 (1) SCC 15 and Kalyan Chandra Sarkar vs. Rajesh Ranjan 2004 (7) SCC 528.

¶111

"The law in regard to grant or refusal of bail is very well settled. The court granting bail should exercise its discretion in a judicious manner and not as a matter of course. Though at the stage of granting bail a detailed examination of evidence and elaborate documentation of the merit of the case need not be undertaken, there is a need to indicate in such orders reasons for prima facie concluding why bail was being granted particularly where the accused is charged of having committed a serious offence. Any order devoid of such reasons would suffer from non- application of mind. It is also necessary for the court granting bail to consider among other circumstances, the following factors also before granting bail; they are:

¶112

a. The nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence.

¶113

b. Reasonable apprehension of tampering with the witness or apprehension of threat to the complainant.

¶114

c. Prima facie satisfaction of the court in support of the charge. (see Ram Govind Upadhyay vs. Sudarshan Singh, 2002 (3) SCC 598 and Puran vs. Ram Bilas 2001 (6) SCC 338."

¶115

This Court also in specific terms held that:

¶116

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"the condition laid down under section 437(1)(i) is sine qua non for granting bail even under section 439 of the Code. In the impugned order it is noticed that the High Court has given the period of incarceration already undergone by the accused and the unlikelihood of trial concluding in the near future as grounds sufficient to enlarge the accused on bail, in spite of the fact that the accused stands charged of offences punishable with life imprisonment or even death penalty. In such cases, in our opinion, the mere fact that the accused has undergone certain period of incarceration (three years in this case) by itself would not entitle the accused to being enlarged on bail, nor the fact that the trial is not likely to be concluded in the near future either by itself or coupled with the period of incarceration would be sufficient for enlarging the appellant on bail when the gravity of the offence alleged is severe and there are allegations of tampering with the witnesses by the accused during the period he was on bail."

¶118

Therefore, the general rule that this Court will not ordinarily interfere in matters relating to bail, is subject to exceptions where there are special circumstances and when the basic requirements for grant of bail are completely ignored by the High Court….”

¶119

Hon’ble Apex Court in Gulabrao Babukar Deokar Vs. State of Maharashtra (2013) 16 SCC 190 has held in para 28 of its judgment that the nature and seriousness of an economic offence and its impact on the society are always important considerations in such a case and

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they must squarely be dealt with by the Court while passing an order on bail application. The instant case pertains to a large scale economic offence perpetrated by the applicant causing a huge loss to the State exchequer of at least 1600 plus crores.

¶122

Further in the matter of Mahipal V. Rajesh Kumar (2020) 2 SCC 118, it has been held that it is necessary to consider the relevant factors while granting bail and if those relevant factors as enumerated in Amarmani Tripathi (supra) have not been taken into consideration while considering the application of bail, founded on irrelevant considerations, indisputably the superior court can set aside the order of such a grant of bail. Further in the matter of Indresh Kumar Vs. State of UP in Criminal Appeal No. 938 of 2022, it has been held that statements under Section 161 of Cr.P.C. may not be admissible in evidence, but are relevant in considering the prima facie case against an accused in an application for grant of bail in case of grave offence.

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CONSIDERATION OF THE BAIL APPLICATION

¶124

In this case, a configured crime has been allegedly committed by the applicant and other co-accused some of whom are holding high posts ie. comprising of high level State government officials, private persons and political executives. In the instant case, after receiving communication from the Enforcement Directorate, the EOW has filed prima facie cognizable offence for commission of the above offences and FIR has been registered in FIR No. 04/2024 against the applicant who is in incarceration from 02.04.2025 for the offence punishable under Sections 7 & 12 of the Prevention of Corruption Act, 1988 and Sections 420,467,468,471,120-B of IPC.

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It is the case of prosecution that a criminal syndicate comprising of high level State Government officials, private persons and political executives of the State Government were operating in the State of Chhattisgarh and collecting illegal bribe from the State Departments and State Public Sector undertakings by sale of liquor which is one of the major source of their illegal earning. In the initial investigation, it has come into account that there was massive corruption in the Excise Department of Chhattisgarh since the year 2019. The Excise department was set up to regulate the supply of liquor, ensure quality liquor to users to prevent hooch tragedies and to earn revenue for the State but the criminal syndicate have altered the policy as per their whims and facies and extorted maximum personal benefit for themselves and total earning of Rs. 1660,41,00,056/- was made by the syndicate from the financial year 2019-20 to financial year 2022-23 to the State exchequer. Therefore, it cannot be said that no prima facie ofence whatsoever is made against the applicant. After carefully analyzing the material available on record which goes to show that there is involvement of the applicant in the crime in question and the charge sheet has been filed.

¶127

The contention of the learned counsel for the applicant is that the some of the co-accused persons (Anil Tuteja, Trilok Singh Dhillon, Arvind Singh) have been granted interim protection way of the writ petitions and is continuing till date, they are participating in the investigation and the present applicant also stands on the same footing therefore on the ground of parity, he may be granted bail. To this contention, it appears that from the statements of the witnesses including those of departmental insiders and his own OSD, Cook,

¶128

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Driver and Helper, confirms that regular cash payments of Rs. 2 crores per month was delivered to the residence of the applicant. This illegal proceeds were directly linked to the benefits extended under the policy level decisions and administrative protection. The above facts clearly demonstrate that the applicant used his ministerial position and had procured benefit from the network of corruption and therefore, he cannot claim for grant of bail on the ground of parity. The gravity of the offence and its impact on public confidence in government services cannot be overlooked.

¶130

CONCLUSION

¶131

The case pertains to the serious allegations of corruption and criminal misconduct against a sitting Minister, who stands charged under Sections 420,467,468, 471 and 120-B IPC, 1860 relating to the offences of cheating, forgery as well as Sections 7 and 12 of the Prevention of Corruption Act, 1988, involving offences of public misconduct. These charges, if proven, represent a gross abuse of public office for personal gain and direct violation of the principles of integrity and accountability expected of a public servant. The matter underscores the necessity of upholding the rule of law, ensuring due process and reinforcing the foundational values of transparency and ethical governance.

¶132

There is allegation against the applicant that he received illegal unaccounted money from the Excise officials of Rs. 50 lacs and 1.5 crores per month. The applicant who was the then Excise Minister, an elected member entrusted with specific responsibilities, has been involved in causing significant financial loss to the government through

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illegal collection of unaccounted money. The entire summary of facts that transpired during investigation discloses glaring illegalities ie. the applicant is the key conspirator and head of the syndicate who had illegal obtained money causing a huge loss for the state government, impacting public finances and potentially affecting the public exchequer.

¶135

The Apex Court has, in the case of P. Chidambaram Vs. Directorate of Enforcement (2020) 13 SCC 791 , held that precedent of another case alone will not be the basis for either grant or refusal of bail though it may have bearing on principle and the consideration will have to be on case-to-case basis on facts involved therein and securing the presence of the accused to stand trial. As it has been held thus:

¶136

“from cumulative perusal of the judgments cited on either side including the one rendered by the Constitution Bench of this Court it could be deduced that the basic jurisprudence relating to bail remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. However, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the Court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of "grave offence" and in such circumstance while considering the application for bail in such matters, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused. One of the circumstances to consider the gravity of the offence is also the term of sentence that is prescribed for the offence the accused is alleged to have committed. Such consideration with regard to the gravity of offence is a factor which is in addition to the triple test or the tripod test that would be normally applied.

¶137

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In that regard what is also to be kept in perspective is that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case since there is no such bar created in the relevant enactment passed by the legislature nor does the bail jurisprudence provide so. Therefore, the underlining conclusion is that irrespective of the nature and gravity of charge, the precedent of another case alone will not be the basis for either grant or refusal of bail though it may have a bearing on principle. But ultimately the consideration will have to be on case-to-case basis on the facts involved therein and securing the presence of the accused to stand trial.”

¶139

When those entrusted with power betray that trust, it shakes the very foundation of our democracy. The charges brought against a serving Minister under the aforesaid Sections are not just legal indictments, they are moral indictment as well. These grave allegations serve as a clarion call for transparency, accountability and reform in public life. The applicant as the Principal conspirator possess the authority and means to prevent the operations and despite that he deliberately refrained from doing so. Therefore the role of the applicant is distinct and not at par with that of the co-accused persons, he is the principal architect of the conspiracy and had played a pivotal role in the commission of the offence, he cannot claim the benefit of parity for the purpose of seeking bail.

¶140

Instead of serving the pupil and prioritizing the welfare of the State-as is his duty-the Minister stands accused of corruption, proving once again how power is being misused at the cost of public interest. A minister, being head of the department is entrusted with the responsibility to work for the welfare of the state. However, in the present case, he is allegedly involved in corruption which is a serious

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betrayal of public trust and duty. This Court is not satisfied that the applicant, if released on bail at this stage, would not attempt to influence witnesses or tamper with evidence, therefore, considering the totality of circumstances, the serious nature of the allegations against the applicant, the potential impact on witnesses during the course of investigation, prima facie his involvement in the offences under Sections 7 & 12 of PC Act is established. Though economic offences require stringent consideration due to their deliberate nature and national impact, citing precedent that bail in such cases could impede effective investigation. Given the gravity of offense and unexplained assets, this court found applicant unsuitable for grant of regular bail.

¶143

Accordingly, the bail application hereby stands rejected.

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Sd/-

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(Arvind Kumar Verma) Judge

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Digitally signed by SUGUNA SUGUNA DUBEY DUBEY Date:2025.07.21 14:14:00 +0530

Kawasi Lakhma v. the State of Chhattisgarh

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Kawasi Lakhma v. the State of Chhattisgarh

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