Pre-arrest bail was refused where custodial protection could impede investigation into a substantial economic offence.

The four petitioners sought pre-arrest bail under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023, in C.T. Case No. 12 of 2026 arising from EOW P.S. Case No. 9 of 2026, involving alleged offences under Sections 120-B, 420, 409, 419, 467, 468, 471 and 477-A of the IPC read with Section 66-D of the Information Technology Act, 2000.

The prosecution alleged serious irregularities in the sanction, processing and disbursal of 22 UCO Car Loans and two Business Loans, involving approximately ₹3.25 crore.

The principal accused, Shiba Prasad Das, was allegedly the Branch Head of the concerned UCO Bank branches during the relevant period.

The prosecution maintained that the fraud involved manipulation of banking records, fabricated KYC and loan documents, artificial repayment histories, diversion of loan proceeds and siphoning of bank funds, requiring investigation into the role of all officials involved in appraisal, recommendation, verification and sanction processes.

Akash Chandra Padhy, an Assistant Manager and recommending officer, was allegedly connected with multiple loans involving fabricated identities, unverified PAN/Aadhaar, invalid tax documents, fabricated RCs and insurance documents, and diversion of loan proceeds to accounts connected with Shiba Prasad Das.

Itishree Singh, also an Assistant Manager and recommending officer, was allegedly involved in a loan of ₹20 lakh whose proceeds were transferred to Shiba Prasad Das despite another beneficiary being shown.

Suchismita Bihari was allegedly the appraising officer in loan accounts sanctioned on the basis of fabricated or non-genuine KYC and without proper PAN, Aadhaar or ITR verification.

Pradip Kumar Behera was allegedly responsible for creating customer IDs and savings accounts without verifying customer identity or obtaining valid KYC and account-opening documents, thereby facilitating fraudulent loans.

The petitioners contended that they had acted under the directions of the principal accused, had cooperated with the investigation, and that custodial interrogation was unnecessary because the case was substantially based on documentary evidence.

Akash Padhy additionally relied on his retirement and age; the female petitioners relied on their gender and the protective provisions under the BNSS.

The State opposed bail, relying on the economic nature of the offences, the need for an effective investigation, and earlier orders rejecting pre-arrest bail to similarly situated co-accused.

1. Whether the petitioners, who were allegedly involved in processing, recommending, appraising or facilitating fraudulent bank loans, were entitled to pre-arrest bail under Section 482 of the BNSS, 2023.

2. Whether the petitioners’ alleged cooperation, the documentary nature of the evidence, their asserted subordinate role, age or gender, and the claimed absence of a need for custodial interrogation justified protection from arrest.

3. Whether granting pre-arrest bail would impede or render ineffective the ongoing investigation into the alleged banking fraud and the individual roles of the accused.

The Court applied Section 482 of the BNSS, 2023, governing directions for grant of bail to a person apprehending arrest.

The alleged offences were under Sections 120-B, 420, 409, 419, 467, 468, 471 and 477-A of the IPC, read with Section 66-D of the Information Technology Act, 2000.

The Court relied on State v. Anil Sharma, (1997) 7 SCC 187, for the principle that custodial interrogation may be necessary for effective investigation.

The Court relied on P. Chidambaram v. Directorate of Enforcement, (2019) 9 SCC 24; Directorate of Enforcement v. P.V. Prabhakar Rao, (1997) 6 SCC 647; Y.S. Jaganmohan Reddy v. CBI, (2013) 7 SCC 439; State of Gujarat v. Mohanlal Jitamalji Porwal, (1987) 2 SCC 364; and Nimmagadda Prasad v. CBI, (2013) 7 SCC 466, concerning the serious societal and economic consequences of white-collar and economic offences.

The Court also applied the principle that pre-arrest bail should not be granted where it would obstruct a fair, comprehensive or effective investigation into an organised economic offence.

The Court found prima facie material indicating that the alleged fraud was not confined to the principal accused but involved multiple loan accounts, fabricated identities and documents, failures of KYC and statutory verification, manipulation of banking records, and diversion of loan proceeds to accounts linked with the principal accused.

Each petitioner was alleged to have played a distinct role in the appraisal, recommendation, customer-ID creation or processing of the loans.

The Court rejected the argument that acting under a superior’s instructions automatically displaced individual responsibility, holding that the role of each employee or official required independent investigation.

The fact that the evidence was documentary and that the petitioners claimed to have cooperated did not, in the Court’s view, eliminate the need for effective custodial investigation.

Given the scale of the alleged fraud, the involvement of a public financial institution, and the need to examine the petitioners’ respective roles and the banking processes used, the Court held that insulating them from arrest could render the further investigation otiose.

The Court also found no sufficient distinguishing circumstance in the age, retirement, gender or subordinate-status claims, particularly since similarly situated co-accused had previously been denied pre-arrest bail.

It held that, considering the prima facie material concerning their involvement in a substantial economic offence and the risk that pre-arrest protection would impede further investigation, the petitioners were not entitled to relief under Section 482 of the BNSS.

The interim orders previously granted were vacated.

However, the Court directed that if the petitioners surrendered and applied for regular bail, their applications would be considered independently and without being influenced by the observations made in the pre-arrest bail proceedings; those observations were not to be treated as a final finding on their culpability.