The Bombay High Court (Nagpur Bench) granted bail to former Chief Executive Officer of Babaji Date Mahila Sahakari Bank Ltd., Yavatmal, who had been arrested in connection with a massive financial fraud involving alleged misappropriation of over ₹242 crore affecting approximately 37,000 depositors.
Justice Urmila Joshi-Phalke, noted that although the case involved serious allegations of economic offences under various sections of the Indian Penal Code and the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999, the arrest of the applicant was procedurally flawed. The Court found that the officer had been arrested after sunset, allegedly at 10:39 p.m., in clear violation of Section 46(4) of the CrPC, which prohibits the arrest of women after sunset and before sunrise unless exceptional circumstances are shown and prior permission is obtained from a Judicial Magistrate.
Further, the Court found that the grounds of arrest were not communicated to the applicant or to her nominated relatives, as mandated under Article 22(1) of the Constitution and Section 50A of the CrPC. Referring to the Supreme Court’s decision in Vihaan Kumar v. State of Haryana 2025 SCC OnLine SC 269, the High Court held that mere intimation of arrest is not equivalent to communicating the grounds of arrest, and failure to do so renders the arrest illegal.
The FIR against the applicant was based on a report by a Special Auditor. The report alleged that during her tenure as CEO, loans were sanctioned in the names of her husband and relatives without proper approval from the bank’s Board of Directors. Though the initial loans were repaid, subsequent disbursals were allegedly routed back into her husband’s accounts, and official loan documentation was destroyed in violation of RBI guidelines.
The prosecution contended that the applicant played a central role in supervising and disbursing these loans and that her involvement was backed by witness statements, audit findings, and missing records. Given the scale of the fraud, the State argued that the officer, as CEO, was the principal accused.
However, the Court held that the procedural violations during arrest outweighed the gravity of the allegations at this stage. It emphasized that any arrest, particularly of a woman, must adhere strictly to legal safeguards. The arrest memo and related documents presented contradictory timings, and there was no written report or judicial order authorizing a post-sunset arrest.
In light of these findings, the Court allowed the bail application. The applicant was granted bail on furnishing a personal bond of ₹1,00,000 with two solvent sureties. Additional conditions include: reporting to the police on the 1st and 15th of every month, surrendering her passport, not leaving Yavatmal District without prior court permission, and abstaining from tampering with evidence or influencing witnesses.
Appearances in the case
Appellant: Shri S.V.Manohar, Senior Counsel assisted by Shri Atharva Manohar, Adv.
Respondent: Shri D.V.Chauhan, Public Prosecutor (Senior Counsel) assisted by Shri Anant Ghongre, Addl.P.P.for the State.
