HC Denies Anticipatory Bail in Alleged Panchayat Funds Embezzlement Case

The Punjab and Haryana High Court has refused to grant anticipatory bail to a contractor accused of generating fake bills and facilitating misappropriation of Panchayat funds in a large-scale corruption case involving Gram Panchayat Nalas Khurd, Patiala. The Court held that custodial interrogation was necessary to ascertain the source of the material allegedly supplied and to uncover the petitioner’s role in the alleged fraud.

Justice Surya Partap Singh was hearing a petition filed by Dinesh Kumar Bansal seeking pre-arrest bail in an FIR registered by the Vigilance Bureau under various provisions of the IPC, including criminal breach of trust, cheating, forgery and conspiracy, along with offences under the Prevention of Corruption Act.

The case arose from a vigilance inquiry into the functioning of the Gram Panchayat between 2019 and 2022. According to the inquiry report, substantial irregularities were detected in expenditure incurred on development works. Among other allegations, payments were allegedly made for the purchase and installation of an electric crematorium furnace, though no such furnace was found at the site during inspection, resulting in an alleged loss of Rs.43.32 lakh to public funds.

The petitioner contended that he was merely a contractor entrusted with construction work and had duly executed the assigned work. He argued that genuine bills had been raised and GST had been paid on the transactions. Reliance was also placed on the grant of regular bail to certain co-accused.

The State opposed the plea, submitting that the petitioner was actively involved in generating fake bills and creating false documentation to facilitate embezzlement of Panchayat funds. It was argued that custodial interrogation was essential to verify the source of the material allegedly supplied and to trace the financial transactions connected with the disputed bills.

The Court observed that there was no material on record to show from where the petitioner had procured the furnace or related material for which bills had been generated, nor was there evidence of payments made to any supplier.

Holding that custodial interrogation was of “paramount importance” for effective investigation, the Court noted that anticipatory bail is an extraordinary remedy and cannot be granted routinely, particularly in cases involving serious allegations of fraud and corruption. The Bench also took note of the fact that similarly placed co-accused had earlier been denied anticipatory bail.

Thus, finding no special circumstances warranting exercise of discretion in favour of the petitioner, the High Court dismissed the anticipatory bail petition.

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