J&K&L High Court Grants Bail To Treasury Official In ₹1.38 Crore Embezzlement Case, Says Bar U/S 480 BNSS Not Attracted
The Jammu & Kashmir and Ladakh High Court has granted bail to an MTS official posted at Sub-Treasury Dharmari, Reasi, in a case alleging embezzlement of ₹1,38,17,971 from the government exchequer, holding that the statutory bar under Section 480 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) was not attracted to the offences alleged against him.
Admitting him on bail Justice Mohd Yousuf Wani observed that in non-bailable offences not carrying death or life imprisonment in the alternative, “bail is a rule and its denial an exception”, particularly where custodial questioning is not imperative and there is no material indicating that the accused would misuse liberty by tampering with evidence, failing to cooperate or absconding.
The case originated from a complaint lodged by the District Treasury Officer, Reasi, after financial irregularities were detected at Sub-Treasury Dharmari. According to the material noticed by the Court, fraudulent payments were made from the treasury to accounts associated with the petitioner, involving the pensionary and NPS heads. The investigation was subsequently transferred from District Police, Reasi to the Economic Offences Wing of the Crime Branch, Jammu.
The prosecution alleged that the petitioner, then working as MTS, had access to treasury credentials and, in conspiracy with co-accused officials, prepared forged bills and vouchers, falsified accounts and caused diversion of ₹1,38,17,971. The investigation alleged that the amount was credited into accounts associated with the petitioner and thereafter transferred to various accounts.
The investigating agency stated that offences under Sections 409, 420, 467, 468, 471, 477-A and 120-B IPC had been established against the petitioner and the co-accused, while further investigation remained open.
Seeking bail, the petitioner relied, inter alia, on the fact that the investigation had been completed, the co-accused including the then Assistant Treasury Officer had already been granted bail, and that his continued custody could not be justified in the absence of a likelihood of tampering with evidence or absconding. He also relied on the settled principle that bail is the rule and imprisonment pending trial is not intended to be punitive. Bail
Court's Observations:
Justice Wani first examined the governing principles for consideration of bail. Referring to the Supreme Court's decision in State of Rajasthan, Jaipur v. Balchand, the Court reiterated the basic principle of “bail not jail”, subject to circumstances such as the likelihood of fleeing from justice, thwarting the course of justice, repeating offences or intimidating witnesses.
The Court then addressed the principal statutory issue concerning Section 480 BNSS. It held,
“It is also well settled that the bar imposed under section 480 of BNSS on the exercise of the discretion in the matters of bail subject to proviso contained in the section, is confined to the offences carrying a sentence of death or imprisonment for life in alternative and the offences carrying a sentence of imprisonment for life disjunctive of death sentence are exempted from the embargo.”
The Court acknowledged that Sections 409, 467 and 471 IPC carry a maximum sentence of life imprisonment. However, it held that the mere availability of life imprisonment as the maximum punishment did not bring the offences within the statutory embargo.
The Court noted that, in the offences before it, life imprisonment was not prescribed as an alternative punishment to death but was available as a maximum punishment.
While considering the broader principles governing bail, the Court emphasised that no single formula could determine every bail application. It referred to factors including the nature of the case, possibility of witness tampering, interference with investigation or judicial proceedings, the balance between individual liberty and societal interests, the nature of the evidence and the punishment prescribed.
The Court relied upon Sanjay Chandra v. Central Bureau of Investigation, where the Supreme Court had considered bail in an economic-offence case and cautioned that seriousness of the charge, though relevant, could not by itself determine the outcome. The High Court reproduced the Supreme Court's observation,
“seriousness of the charge is, no doubt, one of the relevant considerations while considering bail applications but that is not the only test or the factor.”
The Court further relied upon Sanjay Chandra for the principle that the purpose of bail is to secure the accused's appearance at trial and that pre-trial detention should not operate as punishment. It also referred to Dataram Singh v. State of U.P., Pankaj Jain v. Union of India and other authorities concerning the exercise of judicial discretion in bail matters.
At the same time, the Court did not overlook the allegations concerning the handling of public funds. It noted that the prosecution alleged the petitioner had acted in conspiracy with other officials and that he had allegedly discharged the role of the main accused.
The Court, however, found that the governing bail principles, when applied to the legal and factual circumstances before it, did not justify continued denial of bail.
The Court also considered the petitioner's reliance on the fact that co-accused, including the then Assistant Treasury Officer Ajeet Kumar, had already been granted bail. It noted the petitioner's contention that the investigation stood completed with the filing of the charge sheet and that there was no apprehension of misuse of liberty.
Importantly, the Court clarified the procedural position concerning direct approaches to the High Court under Section 483 BNSS. It observed that ordinarily a successive bail application should be filed before the competent lower court after disposal of the first application, although Section 483 does not expressly bar a direct approach to the High Court. The Court held,
“fairness requires that the competent court of first level should not be bypassed.”
Ultimately, after considering the rival submissions, the nature of the allegations, the applicable bail principles, the statutory question under Section 480 BNSS and the circumstances of the case, the Court concluded that denial of bail was not justified. It accordingly allowed the petition.
Case Title: Ali Hussain Shah v. Union Territory of Jammu and Kashmir
Citation: 2026 LiveLaw (JKL) 326