Misuse Of Authority By Bank Officials Undermines Customers' Trust In Banks: Gujarat High Court Denies Anticipatory Bail

The Gujarat High Court has observed that misuse of authority by banking officials who are charged with guarding customers' money strikes at the very foundation on which financial institutions function. [2026 LiveLaw (Guj) 289]

In doing so the court rejected a man's anticipatory bail plea after noting that a specific role was attributed to him–as an official in a bank accused of defrauding a widow customer of money received under a government scheme, and the material collected during the investigation "prima facie" connected him with the alleged transaction

The court was hearing a man's plea seeking anticipatory bail over allegations of him misusing his position as  Cluster Sales Head at a Bank to reactivate the dormant bank account of a widow and facilitating the withdrawal of money from the widow's account by the co-accused, which was deposited towards her financial assistance under a Government scheme-Ganga Swarup Vidhva Sahay Scheme. 

He was booked under Sections 406(Criminal Breach of Trust) IPC and Section 66-C (Identity Theft) of the Information Technology (Amendment) Act.

It was alleged that as per the co-accused the dormant bank accounts were activated on the applicant's instructions by changing the registered mobile numbers, and the amounts were withdrawn using the respective ATM card/s. It was submitted that co-accused Vishwajitsinh had stated that he repeatedly withdrew amounts from the complainant's account, retained Rs.15,000 for himself, and handed over the remaining amount to the applicant.

At the outset Justice Sanjeev J Thakker said: 

"Misuse of authority by a person entrusted with protecting the money of customers strikes at the very trust on which a banking institution functions"

"The cumulative effect of the specific role attributed to the applicant and the material relied upon by the prosecution, which does not persuade this Court to grant the protection of anticipatory bail. This Court is conscious that the seriousness of the allegations alone cannot be the sole ground for rejecting an application for anticipatory bail. In the present case, however, the prosecution has attributed a specific role to the applicant, and the material collected during the investigation prima facie connects him with the alleged transaction. The allegations concern the use of his position in the bank and his alleged participation in the diversion of money from the complainant's account. These circumstances, when considered together, weigh against granting the protection sought," the court added.

The court further said that role attributed to the applicant is required to be considered in the light of the position held by him in the bank and the nature of the alleged acts.

It said that the prosecution did not allege his involvement merely on account of his employment or association with the co accused, but attributes to him a specific role in the operation of the complainant's account.

The allegations indicated that his involvement extended to the steps allegedly taken to facilitate the withdrawal of money, thereby raising a prima facie question of misuse of the authority entrusted to him, the court said.

"The material collected during the investigation, when considered as a whole, prima facie connects the applicant with the alleged transaction. The prosecution relies upon the manner in which the account was reactivated and operated, as well as the alleged distribution of the withdrawn amount, to attribute an active role to the applicant. These circumstances cannot be considered separately, as they form part of the same alleged transaction and indicate the nature of his involvement," it added.

The court said that the co-accused's statement is  another circumstance whose evidentiary value and admissibility will have to be considered in accordance with law at the appropriate stage.

At present, however, the statement has to be examined along with the other material collected during the investigation, it said. 

"The complainant was receiving financial assistance under a Government scheme, and the alleged diversion of such assistance cannot be viewed merely as a dispute concerning a bank transaction. The applicant was holding a responsible position in the bank and was expected to ensure that customers' accounts were operated in accordance with the prescribed procedure. The alleged acts, if established, would indicate that the authority attached to his position was used against the interests of the customer. This circumstance adds to the seriousness of the allegations and has to be considered along with the specific role attributed to him," it said. 

It further said that return of some money into the account does not, by itself, remove the allegations concerning the earlier transactions or the applicant's alleged involvement.

The court thus dismissed the anticipatory bail plea.