Arjun Singh Vs State of Hp

The petitioner has filed the present petition for seeking pre-arrest bail in FIR No. 77 of 2025, dated 22.6.2025, registered at Police Station Amb, District Una, H.P., for the commission of offences punishable under Sections 318(4) read with Section 3(5) of the Bharatiya Nyaya Sanhita (BNS), 2023.

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It has been asserted that the petitioner is a Pradhan of the Diara Gram Panchayat and was previously elected as Vice

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Whether reporters of Local Papers may be allowed to see the judgment? Yes.

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President of Dilwan Cooperative Agriculture Service Society Ltd., Una. An inquiry was conducted under Section 69(1) of the H.P. Cooperative Society Act, 1968, by the District Audit Officer (Co-operative Societies). Certain discrepancies and shortcomings were noticed in the cash book of the Societies. The cash book was exclusively maintained and operated by the Secretary of the Society, who was responsible for daily accounting and financial administration. The report does not attribute any role to the petitioner. The petitioner had put his signatures on a resolution passed by the Managing Committee for enhancing the Society’s Cash Credit Limit from ₹1,80,00,000/- to ₹2.00 crores, which was a collective decision of the Committee. Certain loans were disbursed to the members and the beneficiaries in the ordinary course of business. A loan of ₹ 17.00 lacs was sanctioned to the petitioner, and the amount of ₹19,81,623/- was disbursed to the business concern of the petitioner. The disbursal was made with supporting documentation. The majority of the amount has been returned to society. The amount advanced to Guru Nanak Filling Station was fully repaid on 19.2.2021. The fact that the loan was disbursed to the petitioner’s son or the petitioner cannot infer any misappropriation. The disciplinary proceedings were

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initiated against Smt. Rimpi Devi, the Secretary of the Society. A penalty of ₹25,43,537/- was imposed upon her by the Society. The audit report does not record any finding of misappropriation, embezzlement or diversion of funds. The acts committed by the petitioner may amount to a procedural lapse, but do not constitute embezzlement. The ingredients of cheating are not satisfied. The petitioner has already tendered his resignation from the post of Vice President on 5.9.2023. He is ready and willing to join the investigation and abide by the terms and conditions which the Court may impose. Hence, the petition.

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The petition is opposed by filing a status report asserting that a complaint was received in the Police Station regarding the misappropriation of ₹2,91,00,370.65 by Smt. Rimpi Devi and the petitioner. The police registered the FIR and conducted the investigation. The police seized the record and found that an audit was conducted in which various discrepancies were detected. The Cash Credit Limit was enhanced from ₹1.00 crore to ₹1,30,00,000/- on 29.3.2016, which was enhanced to ₹1,80,00,000/- and thereafter to ₹2.00 crores in 2016-2017. These enhancements were signed by the petitioner and Urmila Devi. Signatures of Urmila Devi did not match. Various

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proceedings were conducted, which were only signed by Urmila Devi and the petitioner. The money was disbursed to certain persons. The loan was disbursed to Ajay, Dinesh and Bhura Kumar, who were not Members of the Society. ₹19,81,683/- was transferred to Guru Nanak Patrol Filling Station. The maximum amount was disbursed to the petitioner or his relatives after enhancing the limit. ₹2,91,00,370.65 were misappropriated by the petitioner and Rimpi Devi. The audit report recommended the recovery of the amount as arrears of land revenue. The petitioner is to be interrogated regarding the misappropriated amount. Hence, it was prayed that the present petition be dismissed.

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I have heard Mr. Vikrant Thakur, learned counsel for the petitioner, and Mr. Lokender Kutlehria, learned Additional Advocate General, for the respondent-State.

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Mr. Vikrant Thakur, learned counsel for the petitioner, submitted that the petitioner is innocent and was falsely implicated. The FIR was registered out of the political rivalry between the petitioner and other persons. No case of cheating is made out in the present case. The petitioner would join the investigation as and when called upon to do so. Therefore, he

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prayed that the present petition be allowed and the petitioner be released on bail. He relied upon the judgment of this Court in Harish Singh Rawat v. State of H.P. 2025:HHC:20282 in support of his submission.

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Mr. Lokender Kutlehria, learned Additional Advocate General, for the respondent-State, submitted that the petitioner is involved in the embezzlement of a huge amount. The custodial interrogation of the petitioner is necessary to unearth the extent of embezzlement and the role of other persons. The resolution regarding the enhancement of the Cash Credit Limit was signed by the petitioner and Urmila. Signatures of Urmila are suspicious. The amount was disbursed to the petitioner and his relatives after enhancement. The custodial interrogation of the petitioner is necessary to determine the involvement of other persons and trace the money. Therefore, he prayed that the present petition be dismissed.

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I have given considerable thought to the submissions made at the bar and have gone through the records carefully.

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It was laid down by the Hon’ble Supreme Court in P. Chidambaram v. Directorate of Enforcement, (2019) 9 SCC 24: (2019)

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3 SCC (Cri) 509: 2019 SCC OnLine SC 1143 that the power of prearrest bail is extraordinary and should be exercised sparingly. It was observed:

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“69. Ordinarily, arrest is a part of the procedure of the investigation to secure not only the presence of the accused but also several other purposes. Power under Section 438 Cr.P.C. is an extraordinary power, and the same has to be exercised sparingly. The privilege of prearrest bail should be granted only in exceptional cases. The judicial discretion conferred upon the court has to be properly exercised after application of mind as to the nature and gravity of the accusation; the possibility of the applicant fleeing justice and other factors to decide whether it is a fit case for the grant of anticipatory bail. Grant of anticipatory bail to some extent interferes in the sphere of investigation of an offence, and hence, the court must be circumspect while exercising such power for the grant of anticipatory bail. Anticipatory bail is not to be granted as a matter of rule, and it has to be granted only when the court is convinced that exceptional circumstances exist to resort to that extraordinary remedy.”

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It was held in P Chidambaram (supra) that economic

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offences are to be treated differently from other offences. It was observed:

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Economic offences

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78. Power under Section 438 CrPC being an extraordinary remedy, has to be exercised sparingly; more so, in cases of economic offences. Economic offences stand as a different class as they affect the economic fabric of society. In Directorate of Enforcement v. Ashok Kumar Jain [ Directorate of Enforcement v. Ashok Kumar Jain , (1998) 2

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SCC 105: 1998 SCC (Cri) 510] , it was held that in economic offences, the accused is not entitled to anticipatory bail.

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80. Observing that an economic offence is committed with deliberate design with an eye on personal profit regardless of the consequence to the community, in State of Gujarat v. Mohanlal Jitamalji Porwal [State of Gujarat v. Mohanlal Jitamalji Porwal, (1987) 2 SCC 364: 1987 SCC (Cri) 364] , it was held as under: (SCC p. 371, para 5)

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“ 5 . … The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of the moment, upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit, regardless of the consequences to the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even-handed manner without fear of criticism from the quarters which view white-collar crimes with a permissive eye, unmindful of the damage done to the national economy and national interest.”

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81. Observing that economic offences constitute a class apart and need to be visited with a different approach in the matter of bail, in Y.S. Jagan Mohan Reddy v. CBI [Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439: (2013) 3 SCC (Cri) 552] , the Supreme Court held as under: (SCC p. 449, paras 34-35)

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“ 34 . Economic offences constitute a class apart and need to be viewed with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and

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thereby posing a serious threat to the financial health of the country.

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35 . While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations.” (emphasis supplied)

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82. Referring to Dukhishyam Benupani v. Arun Kumar Bajoria [Dukhishyam Benupani v. Arun Kumar Bajoria, (1998) 1 SCC 52: 1998 SCC (Cri) 261 ], in Directorate of Enforcement v. Bher Chand Tikaji Bora [Directorate of Enforcement v. Bher Chand Tikaji Bora, (1999) 5 SCC 720: 1999 SCC (Cri) 1045] , while hearing an appeal by the Enforcement Directorate against the order [ Bherchand Tikaji Bora v. State of Maharashtra, Criminal Application No. 2140 of 1998, decided on 21-7-1998 (Bom) ] of the Single Judge of the Bombay High Court granting anticipatory bail to the respondent thereon, the Supreme Court set aside the order of the Single Judge granting anticipatory bail.

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This position was reiterated in Srikant Upadhyay v.

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State of Bihar, 2024 SCC OnLine SC 282, wherein it was held:

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“25. We have already held that the power to grant anticipatory bail is extraordinary. Though in many cases it was held that bail is said to be a rule, it cannot, by any stretch of the imagination, be said that anticipatory bail is the rule. It cannot be the rule, and the question of its grant should be left to the cautious and judicious discretion of the Court, depending on the facts and circumstances of each case. While called upon to exercise the said power, the Court concerned has to be very cautious, as the grant of interim protection or protection to the accused in serious

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cases may lead to a miscarriage of justice and may hamper the investigation to a great extent, as it may sometimes lead to tampering or distraction of the evidence. We shall not be understood to have held that the Court shall not pass interim protection pending consideration of such application as the Section is destined to safeguard the freedom of an individual against unwarranted arrest, and we say that such orders shall be passed in eminently fit cases.”

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It was held in Pratibha Manchanda v. State of Haryana,

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(2023) 8 SCC 181: 2023 SCC OnLine SC 785 that the Courts should balance individual rights, public interest and fair investigation while considering an application for pre-arrest bail. It was observed:

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“21. The relief of anticipatory bail is aimed at safeguarding individual rights. While it serves as a crucial tool to prevent the misuse of the power of arrest and protects innocent individuals from harassment, it also presents challenges in maintaining a delicate balance between individual rights and the interests of justice. The tightrope we must walk lies in striking a balance between safeguarding individual rights and protecting public interest. While the right to liberty and presumption of innocence are vital, the court must also consider the gravity of the offence, the impact on society, and the need for a fair and free investigation. The court's discretion in weighing these interests in the facts and circumstances of each case becomes crucial to ensure a just outcome.”

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It was held in Devinder Kumar Bansal v. State of Punjab ,

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(2025) 4 SCC 493: 2025 SCC OnLine SC 488 that pre-arrest bail can be granted in exceptional circumstances where the Court is of the

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view that the petitioner was falsely implicated in the case, and the presumption of innocence cannot be a reason to grant bail. It was observed at page 501:

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“21. The parameters for the grant of anticipatory bail in a serious offence like corruption are required to be satisfied. Anticipatory bail can be granted only in exceptional circumstances where the court is prima facie of the view that the applicant has been falsely implicated in the crime or the allegations are politically motivated or are frivolous. So far as the case at hand is concerned, it cannot be said that any exceptional circumstances have been made out by the petitioner-accused for the grant of anticipatory bail, and there is no frivolity in the prosecution.

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22. In the aforesaid context, we may refer to a pronouncement in CBI v. V. Vijay Sai Reddy [CBI v. V. Vijay Sai Reddy, (2013) 7 SCC 452: (2013) 3 SCC (Cri) 563] , wherein this Court expressed thus: (SCC p. 465, para 34)

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“ 34 . While granting bail, the court has to keep in mind the nature of accusation, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/ State and other similar considerations. It has also to be kept in mind that for the purpose of granting bail, the legislature has used the words “reasonable grounds for believing” instead of “the evidence” which means the court dealing with the grant of bail can only satisfy itself as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond a reasonable doubt .” (emphasis in original and supplied)

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23. The presumption of innocence, by itself, cannot be the sole consideration for the grant of anticipatory bail. The presumption of innocence is one of the considerations which the court should keep in mind while considering the plea for anticipatory bail. The salutary rule is to balance the cause of the accused and the cause of public justice. Over solicitous homage to the accused's liberty can, sometimes, defeat the cause of public justice.

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The present petition is to be decided as per the parameters laid down by the Hon’ble Supreme Court.

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The status report shows that the petitioner was Vice President of the Society. The Cash Credit Limit of the Society was enhanced from ₹1.00 crore to ₹2.00 crores during his tenure, with his signatures and the signatures of Urmila Devi. The status report also shows that the signatures of Urmila Devi were suspicious. Money was thereafter disbursed to the petitioner and his relatives. These allegations clearly show that the petitioner had taken advantage of his position to enhance the Cash Credit Limit and thereafter to utilise the money of the Society for his benefit. The petitioner, being a Vice President of the Society, was supposed to protect its interests; however, he failed to do so and utilised the money for his benefit. This is prima facie an abuse of the authority vested in the petitioner. While dealing with a similar issue of an abuse of public service by a public servant, the Hon’ble

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Supreme Court had held in Devinder Kumar Bansal (supra) that pre-arrest bail should not be granted in such cases. It was observed:-

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“24. If liberty is to be denied to an accused to ensure a corruption-free society, then the courts should not hesitate to deny such liberty. Where overwhelming considerations in the nature aforesaid require denial of anticipatory bail, it has to be denied. It is altogether a different thing to say that once the investigation is over and a charge-sheet is filed, the court may consider granting regular bail to a public servant accused of indulging in corruption.

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25. Avarice is a common frailty of mankind, and Robert Walpole's famous pronouncement that all men have their price, notwithstanding the unsavoury cynicism that it suggests, is not very far from the truth. As far back as more than two centuries ago, it was Burke who cautioned: “Among a people generally corrupt, liberty cannot last long.” In more recent years, Romain Rolland lamented that France fell because there was corruption without indignation. Corruption has, in it, very dangerous potentialities. Corruption, a word of wide connotation, has, in respect of almost all the spheres of our day-to-day life, all over the world, the limited meaning of allowing decisions and actions to be influenced not by the rights or wrongs of a case but by the prospects of monetary gains or other selfish considerations.

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26. If even a fraction of what was the vox populi said about the magnitude of corruption to be true, then it would not be far removed from the truth that it is the rampant corruption indulged in with impunity by highly placed persons that has led to economic unrest in this country. If one is asked to name one sole factor that effectively arrested the progress of our society to prosperity, undeniably, it is corruption. If the society in a developing country faces a menace greater than even the one from the hired assassins to its law and order, then that is from the corrupt elements at the higher echelons of the Government and of the political parties.

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27. In Manoj Narula v. Union of India [Manoj Narula v. Union of India, (2014) 9 SCC 1] , this Court held that corruption erodes the fundamental tenets of the rule of law and quoted with approval its judgment in Niranjan Hemchandra Sashittal v. State of Maharashtra [Niranjan Hemchandra Sashittal v. State of Maharashtra, (2013) 4 SCC 642 : (2013) 2 SCC (Cri) 737 : (2013) 2 SCC (L&S) 187] and held as under : ( Manoj Narula case [Manoj Narula v. Union of India, (2014) 9 SCC 1 ], SCC pp. 25-26, para 16)

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“ 16 . … ‘ 26 . It can be stated without any fear of contradiction that corruption is not to be judged by degree, for corruption mothers disorder, destroys societal will to progress, accelerates undeserved ambitions, kills the conscience, jettisons the glory of the institutions, paralyses the economic health of a country, corrodes the sense of civility and mars the marrows of governance .’ ( Niranjan Hemchandra Sashittal case [Niranjan Hemchandra Sashittal v. State of Maharashtra, (2013) 4 SCC 642: (2013) 2 SCC (Cri) 737: (2013) 2 SCC (L&S) 187] , SCC pp. 654-55, para 26)” (emphasis supplied)

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28. In Subramanian Swamy v. Manmohan Singh [Subramanian Swamy v. Manmohan Singh, (2012) 3 SCC 64: (2012) 1 SCC (Cri) 1041: (2012) 2 SCC (L&S) 666] this Court held as under: (SCC p. 100, para 68)

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“ 68 . Today, corruption in our country not only poses a grave danger to the concept of constitutional governance, but it also threatens the very foundation of Indian democracy and the Rule of Law. The magnitude of corruption in our public life is incompatible with the concept of a socialist, secular democratic republic. It cannot be disputed that where corruption begins, all rights end. Corruption devalues human rights, chokes development and undermines justice, liberty, equality, and fraternity, which are the core values in our preambular vision. Therefore, the duty of the court is that any anti-corruption law has to be interpreted and worked out in such a fashion as to strengthen the fight against corruption .” (emphasis supplied) 29. In K.C. Sareen v. CBI [K.C. Sareen v. CBI, (2001) 6 SCC 584: 2001 SCC (Cri) 1186] , this Court observed thus: (SCC p. 589, para 12)

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“12 . Corruption by public servants has now reached a monstrous dimension in India. Its tentacles have started

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grappling with even the institutions created for the protection of the republic. Unless those tentacles are intercepted and impeded from gripping the normal and orderly functioning of the public offices, through strong legislative, executive, as well as judicial exercises, the corrupt public servants could even paralyse the functioning of such institutions and thereby hinder the democratic polity .” (emphasis supplied)

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30. While approving the judgment of Subramanian Swamy v. CBI [Subramanian Swamy v. CBI, (2014) 8 SCC 682 : (2014) 6 SCC (Cri) 42 : (2014) 3 SCC (L&S) 36] , rendered by another Constitution Bench in Manoj Narula case [Manoj Narula v. Union of India, (2014) 9 SCC 1] , a Constitution Bench of this Court, dealing with rampant corruption, observed as under : (SCC pp. 26-27, paras 17-18) “ 17 . Recently, in Subramanian Swamy v. CBI [Subramanian Swamy v. CBI, (2014) 8 SCC 682 : (2014) 6 SCC (Cri) 42 : (2014) 3 SCC (L&S) 36] , the Constitution Bench, speaking through R.M. Lodha, C.J., while declaring Section 6-A of the Delhi Special Police Establishment Act, 1946, which was inserted by Act 45 of 2003, as unconstitutional, has opined that : (SCC pp. 725-26, para 59)

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‘ 59 . It seems to us that the classification which is made in Section 6-A on the basis of status in the government service is not permissible under Article 14, as it defeats the purpose of finding prima facie truth in the allegations of graft, which amount to an offence under the PC Act, 1988. Can there be sound differentiation between corrupt public servants based on their status? Surely not, because irrespective of their status or position, corrupt public servants are corrupters of public power. The corrupt public servants, whether high or low, are birds of the same feather and must be confronted with the process of investigation and inquiry equally. Based on the position or status in service, no distinction can be made between public servants against whom there are allegations amounting to an offence under the PC Act, 1988 .’

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And thereafter, the larger Bench further said: (SCC p. 726, para 60)

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‘ 60 . Corruption is an enemy of the nation, and tracking down corrupt public servants and punishing such persons is a necessary mandate of the PC Act, 1988. It is difficult to justify the classification which has been made in Section 6-A because the goal of law in the PC Act, 1988 is to meet corruption cases with a very strong hand, and all public servants are warned through such a legislative measure that corrupt public servants have to face very serious consequences.’

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And again: (SCC pp. 730-31, paras 71-72)

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‘ 71 . The Office of Public Power cannot be the workshop of personal gain. The probity in public life is of great importance. How can two public servants against whom there are allegations of corruption of graft, or bribe-taking, or criminal misconduct under the PC Act, 1988 can be made to be treated differently because one happens to be a junior officer and the other, a senior decision-maker

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Corruption is an enemy of the nation, and tracking down a corrupt public servant, however high he may be, and punishing such a person is a necessary mandate under the PC Act, 1988. The status or position of a public servant does not qualify such a public servant for exemption from equal treatment. The decision-making power does not segregate corrupt officers into two classes as they are common criminals and have to be tracked down by the same process of inquiry and investigation.’

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From the aforesaid authorities, it is clear as noonday that corruption has the potentiality to destroy many a progressive aspect, and it has acted as the formidable enemy of the nation.” (emphasis supplied).

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In the present case, there is a huge embezzlement of

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₹2,91,00,370.65. This money was invested by the members of the Society to protect their future, which has been compromised by

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the acts of the petitioner. Therefore, the petitioner cannot be held entitled to pre-arrest bail.

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It was submitted that the custodial interrogation of the petitioner is necessary. This submission has some force. The money was prima facie embezzled over a long period of time. It is necessary to trace the money trail to properly investigate the matter. It was laid down by the Hon’ble Supreme Court in State Versus Anil Sharma (1997) 7 SCC 187 , that where custodial interrogation is required, pre-arrest bail should not be granted. It was observed: -

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“6. We find force in the submission of the CBI that custodial interrogation is qualitatively more elicitation oriented than questioning a suspect who is well ensconced with a favourable order under Section 438 of the Code. In a case like this, effective interrogation of a suspected person is of tremendous advantage in disinterring many useful information and also materials which would have been concealed. Success in such interrogation would elude if the suspected person knows that he is well protected and insulated by a pre-arrest bail order during the time he is interrogated. Very often, interrogation in such a condition would reduce to a mere ritual. The argument that the custodial interrogation is fraught with the danger of the person being subjected to third-degree methods need not be countenanced, for such an argument can be advanced by all accused in all criminal cases. The Court has to presume that responsible Police Officers would conduct themselves in a responsible manner and that those entrusted with the

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task of disinterring offences would not conduct themselves as offender”.

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A similar view was taken by the Delhi High Court in

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Mukesh Khurana v. State (NCT of Delhi), 2022 SCC OnLine Del 1032 ,

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wherein it was observed:

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“13. One of the significant factors in determining this question would be the need for custodial interrogation. Without a doubt, custodial interrogation is more effective to question a suspect. The cocoon of protection afforded by a bail order insulates the suspect, and he could thwart interrogation, reducing it to futile rituals. But it must be also kept in mind that while interrogation of a suspect is one of the basic and effective methods of crime solving, the liberty of an individual also needs to be balanced out.”

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It was held in P Chidambaram (supra) that the grant of

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pre-arrest bail may hamper the investigations. It was observed:

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“83. Grant of anticipatory bail at the stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting useful information, and also the materials which might have been concealed. Success in such interrogation would elude if the accused knows that he is protected by the order of the court. Grant of anticipatory bail, particularly in economic offences, would definitely hamper the effective investigation. Having regard to the materials said to have been collected by the respondent Enforcement Directorate and considering the stage of the investigation, we are of the view that it is not a fit case to grant anticipatory bail.”

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