₹13.92-crore SBI loan fraud involving 282 borrowers: Odisha High Court rejects anticipatory bail for 16 accused, grants relief to one woman

The petitions sought anticipatory bail under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023, in connection with EOW, Bhubaneswar P.S. Case No. 8 of 2026, arising from allegations under Sections 409, 420, 467, 468, 471 and 120-B of the IPC.

The FIR was registered against 282 borrowers who allegedly obtained SBI Xpress Credit loans between May 2022 and November 2023 by producing forged employment, salary and KYC records, with the assistance of brokers/middlemen and certain bank officials.

The alleged outstanding loss initially quantified in the charge-sheet was Rs.6,88,29,323, while the investigation subsequently disclosed alleged defalcation of approximately Rs.13.92 crores.

Although a charge-sheet had been filed against certain accused persons in custody, the investigation remained open under Section 193(9) BNSS for tracing further money trails and identifying additional involvement.

The petitioners contended that the case was documentary, the charge-sheet had been filed, and custodial interrogation was unnecessary.

The State opposed anticipatory bail, asserting that the case involved a large-scale economic offence and that custodial interrogation was required.

1. Whether the petitioners were entitled to the exceptional remedy of anticipatory bail under Section 482 BNSS in a large-scale economic offence involving alleged fraud, forgery, conspiracy and diversion of public money.

2. Whether the filing of the charge-sheet and the documentary nature of the evidence justified dispensing with custodial interrogation and granting pre-arrest bail.

3. Whether the case of Bhagyabati Gahan, against whom there was no direct money trail and whose alleged complicity was based on receipt of money from a co-accused, required separate consideration.

The Court applied Section 482 BNSS, 2023, governing anticipatory bail, together with Sections 409, 420, 467, 468, 471 and 120-B IPC concerning criminal breach of trust, cheating, forgery, use of forged documents and criminal conspiracy.

It held that anticipatory bail is an exceptional statutory remedy to be exercised sparingly after considering the nature and gravity of the accusation, the possibility of evasion, the need for investigation and other relevant factors.

Relying on P. Chidambaram v. Directorate of Enforcement, (2019) 9 SCC 24, and Jai Prakash Singh v. State of Bihar, (2012) 4 SCC 379, the Court reiterated that pre-arrest bail in serious offences requires exceptional circumstances and a prima facie case of false implication.

Under Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439, and Nimmagadda Prasad v. CBI, (2013) 7 SCC 466, economic offences involving deep-rooted conspiracies and substantial loss of public funds constitute a distinct category requiring a stricter approach to bail.

The Court also relied on SFIO v. Aditya Sarda, 2025 SCC OnLine SC 764, and State v. Anil Sharma, (1997) 7 SCC 187, particularly regarding the adverse impact of pre-arrest protection on effective custodial interrogation.

Further investigation after submission of a police report was recognised under Section 193(9) BNSS.

The Court treated the alleged diversion of approximately Rs.13.92 crores through forged employment and KYC documents as a serious white-collar economic offence affecting public funds and the banking system.

The bank-official petitioners were alleged to have sanctioned or recommended multiple loans despite material departures from mandatory procedures, including failure to verify employment records, conduct pre-sanction inspections and scrutinise KYC documents; the broker petitioners were linked through identifiable transfers from loan beneficiaries and money-trail evidence recorded in the charge-sheet.

The Court rejected the argument that the conduct amounted merely to supervisory lapses or errors of judgment, holding that the nature of the allegations and the ongoing investigation justified the State’s apprehension that pre-arrest protection could derail the investigation, particularly the tracing of the money trail and the identification of other participants.

The filing of the charge-sheet did not eliminate the need for custodial interrogation because further investigation under Section 193(9) BNSS was continuing.

However, Bhagyabati Gahan’s case was distinguished: there was no direct money trail from the loan beneficiaries to her account, and the allegation rested on money received from co-accused P.S. Biswa Bikash Mohanty; the Court therefore found sufficient grounds for separate protection.

Their anticipatory bail applications were accordingly rejected, and the interim orders were vacated.

In ABLAPL No. 6335 of 2026, filed by Bhagyabati Gahan, the Court directed that, in the event of her arrest, she be released on bail by the Arresting Officer on appropriate terms and conditions, subject to verification of antecedents and her cooperation with the investigation.

All the applications were disposed of by the common judgment.