Detention Before Conviction is Punitive; Bail is the Norm, Not the Exception: Orissa High Court Grants Bail in Alleged Rs. 3–4 Crore Fraud Involving ‘Spiritual Influence’

In a compelling reaffirmation of bail jurisprudence, the Orissa High Court granted bail to Sambit Ray, who had been in custody since May 2025 on charges of forging documents, impersonation, and misappropriation of crores of rupees by misrepresenting himself as a spiritual figure. Justice G. Satapathy held that the case, though serious in allegations, was primarily a civil dispute wrapped in criminal allegations, and the petitioner’s continued detention was unwarranted after the investigation had concluded and the charge sheet had been submitted.

The Court made a pointed observation that “detention before conviction is punitive and grant of bail should be the norm; imprisonment before conviction has a substantial punitive content”, underlining that liberty cannot be curtailed merely on the basis of accusations when trial is pending.

“Existence of Prior Civil Suit Indicates Dispute is Civil in Nature with Criminal Facade”: Observes High Court in Fraud and Forgery Case

In the case titled Sambit Ray v. State of Odisha, decided on October 28, 2025, the Orissa High Court weighed in on the balance between personal liberty and criminal prosecution in the context of complex financial and emotional fraud. The petitioner had been accused of manipulating the informant under the guise of a spiritual mentor, obtaining large sums of money, vehicles, land, and even executing an adoption deed allegedly through forgery.

However, the Court found it significant that a civil suit seeking cancellation of the adoption deed had already been filed by the informant prior to the lodging of the FIR, thereby giving strong weight to the contention that the criminal prosecution arose out of a pre-existing civil transaction gone sour.

As per the FIR filed by one Vijay Khandelwal, the petitioner, Sambit Ray, allegedly entered his life during a spiritual gathering in 2022 and gained his trust by falsely presenting himself as a person with spiritual powers and the son of an IAS officer. Over time, he allegedly manipulated the informant into transferring land via a gift deed, made him execute an adoption deed, and extracted sums to the tune of ₹2.76 to ₹4 Crores, including high-end cars and cash deposits.

The informant’s daughters later raised red flags, claiming the petitioner had misled their father into believing in his spiritual identity. Based on these revelations, an FIR was lodged in May 2025, leading to the petitioner’s arrest.

What tipped the scales in bail's favour was the admission by the informant’s counsel during arguments that a civil suit challenging the very same adoption deed was instituted prior to the FIR—a fact notably absent in the FIR and the informant’s police statements. This, according to the Court, cast serious doubt on the purely criminal nature of the allegations.

The main legal question before the Court was whether bail could be granted in a case involving serious financial fraud and forgery when there is documentary evidence and some criminal antecedents, and whether the existence of a parallel civil dispute weakened the necessity for pre-trial detention.

Justice G. Satapathy began by stating that “bail deals with the two conflicting interests of personal liberty and societal interest… but bail means conditional liberty, not acquittal.”

The Court stressed that the object of bail is not to punish, but to ensure presence at trial, and that punishment begins only post-conviction. On the nature of the evidence, it was noted:

“The investigation has already been completed… gold and diamond ornaments, 10 luxury watches, an iPhone, and multiple property-related documents have been seized… the allegations revolve around forged gift deed and adoption deed—both of which are already under challenge in a civil suit.”

Referring to the triple test laid down in Indian bail jurisprudence—risk of flight, tampering with evidence, and influencing witnesses—the Court found no compelling reason to deny bail. It stated:

“Since the evidence predominantly collected in this case is based on documentary evidence, the petitioner would be hardly in a position to tamper such document and thereby, there is little apprehension of tampering with the evidence.”

While the State and the informant vehemently opposed bail, citing the petitioner’s alleged criminal history, the Court was unconvinced, noting that:

“Though the petitioner is found to be involved in two to three other cases, including one that has been quashed, it would be improper to curtail the liberty of the petitioner, especially given the background of civil proceedings instituted before the FIR.”

The Court also examined Satender Kumar Antil v. CBI [(2022) 10 SCC 51] and rejected the State’s reliance on P. Chidambaram v. Directorate of Enforcement [(2019) 9 SCC 24] to deny bail on the ground of “patterned conduct”, observing that:

“Such a principle has never been discussed in the case law, and therefore, such contention merits no consideration.”

The Court granted bail on the execution of a bail bond of ₹5 lakhs with two solvent sureties, subject to several strict conditions including:

• Surrender of passport

• Regular court appearance

• Cooperation with any further investigation

• No change of address without notice

• No foreign travel without court’s permission

The Court clarified that the trial court would be at liberty to cancel the bail if any of the conditions are violated, and reserved liberty for the informant and State to seek modification or revocation if necessary.

Justice Satapathy concluded with a strong reiteration of fundamental legal principles:

“Every man is presumed innocent until proven guilty… Granting of bail is purely for securing liberty pending adjudication… and must not be construed as a reflection on the merits of the case.”

The Orissa High Court’s decision in Sambit Ray v. State of Odisha is a notable reaffirmation of the judicial philosophy that bail should be granted unless there is a compelling reason for incarceration. The Court’s clear recognition that a civil dispute masked as criminal litigation cannot justify prolonged custody, even in high-value fraud cases, sends a strong message about safeguarding liberty within the framework of law.

The judgment also highlights the increasing relevance of the Bharatiya Nyaya Sanhita (BNS), 2023 and Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 in current criminal procedure, especially with respect to Sections dealing with bail violations and procedural compliance.

Date of Decision: October 28, 2025