Chhattisgarh HC Grants Bail to Applicant for Offences u/s 7 & 12 of Prevention of Corruption Act in ₹4000 Cr Liquor Scam Case [Read Order]

In the ₹4000 Cr Liquor Scam Case, the High Court of Chhattisgarh has granted bail to the applicant for offences committed under sections 7 and 12 of the Preventionof Corruption Act,1988.

The applicant in the instant case was Chaitanya Baghel, son of Shri Bhupesh Baghel. The case was registered by the Economic Offences Wing/Anti-Corruption Bureau (EOW/ACB) for violation of Sections 420, 467, 468, 471, 120-B IPC along with Sections 7 & 12 of the Prevention of Corruption Act, 1988.

The prosecution's case was set out in the FIR and subsequent records. It alleged a massive syndicate operating between 2019 and 2023, involving the manufacture and sale of illegal liquor through licensed government shops in Chhattisgarh.

This generated huge proceeds, which were distributed among excise officials, bureaucrats, distillers, and political functionaries, causing a loss to the exchequer.

The applicant was not named in the FIR. The investigation spanned 21 months. The charge sheet filed against four accused stated that “further investigation is underway.”

Five supplementary charge sheets were filed sequentially, yet none arraigned the applicant despite passing references. A total of 51 accused were arrayed and 29 charge sheets were filed without arrest.

The Enforcement Directorate registered ECIR RPZO/04/2024 predicated on this FIR and searched the applicant’s premises, which led to an arrest. Thereafter, the EOW arrested the applicant post-rejection of anticipatory bail, notwithstanding that the production warrant did not authorise arrest.

The Senior Counsel Shri N. Hariharan submitted that the arrest was ex facie malafide and arbitrary. It was further argued that the arrest constitutes a classic instance of “evergreening” custody to defeat statutory remedies. It was contended that the applicant stood completely unmentioned in the FIR and he was excluded from six charge sheets. Arrest was timed on the cusp of statutory release from ED custody, amounting to “insurance arrest.”

It was argued that custody was not a measure of last resort but a first impulse, with no recovery effected, no further interrogation post-remand, and no searches carried out by EOW. The arrest violated statutory safeguards under Section 35(b) BNSS, as none of the preconditions preventing further offence, aiding investigation, preventing tampering, or securing presence were satisfied.

The Counsel further contended that further investigation was void ab initio, conducted without mandatory court permission under Section 173(8) BNSS. It was argued that it was contrary to authoritative pronouncements in Vinay Tyagi v. Irshad Ali and Vinubhai Haribhai Malaviya v. State of Gujarat.

On parity, it was submitted that several co-accused with graver roles had already been granted bail by the Supreme Court and High Court, including Arun Pati Tripathi (A-1), Trilok Singh Dhillon (A-5), Anurag Dwivedi, Arvind Singh, and Sanjay Kumar Mishra.

It was contended that denial of bail to the applicant, unnamed in FIR and chargesheets, would amount to hostile discrimination offending Article 14.

The counsel contended that the applicant has successfully satisfied the classic triple test: no flight risk, no tampering apprehension, and full cooperation assured. It was further argued that the case was highly documentary, with 885 witnesses and 939 documents already seized. Any continued incarceration amounted to punishment by process rather than proof, violating Article 21 of the constitution

Learned Senior Counsel Shri Mahesh Jethmalani opposed bail, submitting that the applicant was the alleged kingpin and principal beneficiary of a ₹4000 crore liquor syndicate, posing an existential threat to the ongoing investigation.

It was argued that the arrest was not malicious but based on emerging evidence from supplementary charge sheets and witness statements, including Probir Sharma and Laxminarayan Bansal, corroborated by banking trails confirming the routing of scam proceeds into the applicant’s firms.

On parity, it was argued that bail granted to minor operatives could not extend to kingpins. The state argued that the applicant failed the triple test, being a flight risk with undeclared assets, capable of tampering with evidence and intimidating witnesses.

JusticeArvind Kumar Verma observed that the applicant was not named in the FIR, nor arraigned in the first or five supplementary charge sheets.

No recovery whatsoever, money, property or incriminating article was effected from him. It was further observed that the investigation was substantially complete and custodial interrogation was no longer required.

The Court noted that several co-accused, including alleged masterminds and excise officials, had already been granted bail, thereby squarely attracting the principle of parity. The selective application of law, particularly permitting a proclaimed absconder to walk free while relying on his statement against the applicant, reflected a “pick and choose” approach antithetical to fair investigation.

Also it was opined that given the magnitude of the case, 51 accused, 1110 witnesses, 990 documents, the prospect of early conclusion of trial was illusory. Prolonged incarceration would amount to pre-trial punishment and violate the applicant’s fundamental right to a speedy trial under Article 21.

The Court held that no compelling or justifiable reason now survives for continued incarceration. The bail application was allowed, directing release on furnishing a personal bond of ₹1,00,000 with two local sureties, subject to stringent conditions including surrender of passport, cooperation with investigation, non-inducement of witnesses, and intimation of address changes.

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