The Chhattisgarh High Court has granted bail to Ajay Lohia, an accused in the alleged Chhattisgarh State Marketing Corporation Limited corruption case, holding that mere knowledge of an alleged illegal commission arrangement, without prima facie material showing conscious participation in a criminal conspiracy, cannot justify continued incarceration.
Justice Amitendra Kishore Prasad was hearing a regular bail application filed by Lohia, who was arrested by the Economic Offences Wing/Anti-Corruption Bureau in connection with an alleged corruption racket involving the clearance of bills of manpower agencies engaged by CSMCL in exchange for illegal gratification. The prosecution alleged that the applicant, along with co-accused including Anwar Dhebar and others, was part of a conspiracy to extract commission from contractors and siphon public funds.
The Court, however, noted that Lohia was not named in the FIR, nor did the foundational allegations attribute any overt act to him such as demanding, receiving or facilitating payment of illegal gratification. His implication arose only during investigation, primarily on the allegation that he had management-level knowledge of the alleged commission arrangement.
Observing that knowledge alone does not constitute criminal conspiracy, the High Court held that the essence of an offence under Section 120-B IPC is the existence of an agreement to commit an illegal act. Unless there is prima facie material demonstrating conscious participation in such an agreement, criminal liability cannot be inferred merely from managerial association or corporate position. The Court relied on the Supreme Court’s decision in State (NCT of Delhi) v. Navjot Sandhu (2005) 11 SCC 600, which held that suspicion, association or knowledge cannot substitute proof of agreement.
The Court further found that the prosecution had not produced any material showing that Lohia personally forged any document, offered any undue advantage to a public servant, or received any proceeds of the alleged illegal commission. It also took note of the fact that the applicant was not serving as Whole-Time Director of Eagle Hunter Solutions Ltd. during a substantial part of the period covered by the alleged conspiracy and that no documentary evidence linked him to the alleged financial transactions.
Referring to the Supreme Court’s ruling in Sunil Bharti Mittal v. CBI (2015) 4 SCC 609, the High Court reiterated that criminal liability is personal and cannot be fastened merely because a person holds a corporate office. Directors or officers of a company cannot be prosecuted solely on account of their designation unless there is specific material demonstrating their active role in the commission of the offence.
The Court also emphasised that the investigation had been completed, the charge-sheet had already been filed, no custodial interrogation was required, and all documentary evidence had been secured by the investigating agency. It further noted that despite the FIR having been registered in October 2024, the applicant was arrested only in May 2026, during which period he had cooperated with the investigation and had neither absconded nor attempted to tamper with evidence.
Relying on the Supreme Court’s decisions, the High Court reiterated that bail is the rule and jail the exception, and that even in economic offences, gravity of allegations alone cannot justify prolonged pre-trial detention once the investigation is complete.
Holding that continued incarceration was unwarranted in the facts of the case, the Court directed Lohia’s release on bail upon furnishing a personal bond of ₹10 lakh with two sureties, subject to conditions including surrender of his passport, cooperation with the investigation, and appearance before the trial court.
