Mere Absence Of Need For Custodial Interrogation Isn't A Ground For Bail: Punjab & Haryana HC Denies Relief In ₹5.5 Crore Insurance Fraud

"There appears to be a serious misconception of law that if no case for custodial interrogation is made out by the prosecution, then that alone would be a good ground to grant anticipatory bail." Punjab and Haryana High Court, in a significant ruling, dismissed the anticipatory bail applications of two former employees of Max Life Insurance, finding a prima facie case of large-scale financial embezzlement against them.

A bench of Justice Jasjit Singh Bedi observed that the nature of the offence and the strength of the prima facie case are the paramount considerations for a court while deciding an application for pre-arrest bail, emphasizing that custodial interrogation is merely one of the factors to be weighed by the court.

Genesis Of The Corporate Fraud

The petitioners, Rohit Kumar Singh and Tej Bahadur, were accused of orchestrating a sophisticated fraud against Axis Max Life Insurance Limited by creating fake digital accounts and payment links. The FIR, registered at Police Station DLF-II, Gurugram, alleges the misappropriation of over ₹5.58 crore through the unauthorized issuance of physical Pine cards and thousands of fraudulent digital payment links.

The primary question before the court was whether the petitioners were entitled to the protection of anticipatory bail under Section 482 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023. Additionally, the court examined whether the alleged absence of a need for custodial interrogation could serve as a standalone ground to grant relief in cases involving serious financial crimes and organized embezzlement.

Court Rejects 'Custodial Interrogation' Misconception

Justice Jasjit Singh Bedi underscored that judicial discretion in matters of anticipatory bail cannot be reduced to a binary check on whether the police require the accused in custody. Citing the Supreme Court’s dictum in Sumitha Pradeep Vs. Arun Kumar C.K. & Anr., the Court reiterated that the gravity of the offence and the evidence collected must be the primary focus of the judge.

No Absolute Right To Bail

The Court held that even in instances where a petitioner claims that investigation is document-based or that they are willing to join the process, the court must look at the severity of the allegations. The judge observed that a prima facie case against the accused should never be overlooked or ignored, regardless of the investigative requirements of the prosecution at a specific point in time.

"Custodial interrogation can be one of the grounds to decline anticipatory bail. However, even if custodial interrogation is not required or necessitated, by itself, cannot be a ground to grant anticipatory bail."

Detailed Trail Of Embezzlement Uncovered

The investigation revealed a deeply entrenched network where the misappropriated funds were routed through the accounts of the petitioners' immediate family members, including spouses, parents-in-law, and siblings. The police affidavits detailed that mobile numbers registered in the names of the petitioners were utilized to activate hundreds of digital cards, with the proceeds eventually siphoned into their personal bank accounts and digital wallets.

Evidence Of Organized Financial Crime

The State submitted extensive evidence demonstrating that the petitioners had used their official positions to bypass internal protocols. The court noted that the trail of the ₹5.58 crore fraud was still being unearthed, with digital records from various fintech platforms, including MobiKwik and PhonePe, providing a link between the petitioners and the diverted funds.

"It has transpired that digital cards/payment links had been issued by the petitioners in connivance with other co-accused to embezzle the money of the complainant and had routed the money back to themselves and their relatives to acquire wrongful gains and cause wrongful loss to the company."

Custodial Interrogation Necessary For Trail Discovery

Dismissing the petitions, the Court ruled that the custodial interrogation of the accused was essential to identify other co-conspirators and to trace the entire financial trail of the siphoned amount. The court emphasized that the magnitude of the fraud was likely to increase as the investigation reached its logical conclusion. The judge clarified that these observations were strictly for the purpose of the bail application, leaving the Trial Court free to adjudicate the matter based on evidence led during the trial.

Date of Decision: 26 August 2026