Court cites absence of direct evidence, applicant's cooperative behavior, medical condition, and lack of personal benefit in granting bail amid ongoing investigation by CBI.
In a significant development, the Bombay High Court on August 25, 2026, granted bail to Vishwanath Devaraja Rao, a senior executive formerly associated with Reliance Communications group, who was accused in a high-profile financial fraud case involving alleged diversion and misappropriation of funds amounting to several thousand crores. The case, investigated by the Central Bureau of Investigation (CBI) Bank Securities and Fraud Branch, revolves around alleged offences under Sections 120-B (criminal conspiracy), 406 (criminal breach of trust), 420 (cheating), and 409 (criminal breach of trust by public servant) of the Indian Penal Code (IPC) read with Sections 13(2) and 13(1)(d) of the Prevention of Corruption Act, 1988.
The accused, aged 67 and having been in judicial custody since April 24, 2026, faced allegations of active involvement in sanctioning and disbursing credit facilities obtained by the Reliance Communications group from a consortium of banks led by the State Bank of India (SBI) during 2013-2017. The prosecution alleged that these funds were diverted through a complex web of layered transactions, including bill discounting and routing through group entities, causing substantial financial losses to the banks.
However, the Court observed that the prosecution had failed to produce direct evidence or specific facts tying Vishwanath Devaraja Rao to any overt act of fraud or misrepresentation. The allegations, the Court noted, were largely generic and based on documentary evidence such as sanction letters, audit reports, and board minutes, without any concrete proof of the applicant's personal monetary gain or recovery of assets from him. Furthermore, the applicant had demonstrated cooperative behavior during the investigation, appearing for statements multiple times and assisting the authorities.
The Court also took into account the applicant's medical condition, including uncontrolled Type-2 diabetes, hypertension, and coronary artery disease, for which he had undergone angioplasty with stenting earlier in 2026. Considering his age, health issues, and absence of prior criminal record, the Court deemed it appropriate to grant bail with stringent conditions to ensure the integrity of the trial process.
The bail conditions include furnishing a personal bond of Rs. 1,00,000 with sureties of the like amount, monthly reporting to the investigating officer, refraining from influencing witnesses or tampering with evidence, and restrictions on leaving the state without prior court permission. The applicant is also required to deposit his passport with the Trial Court.
Special Public Prosecutor Amit Munde contended that the applicant's senior position facilitated the alleged fraudulent transactions, and that releasing him on bail could jeopardize the investigation. Nevertheless, the Court emphasized that the trial must proceed on the basis of evidence and not on prima facie allegations, reserving its final judgment on the merits of the case.
This judgment underscores the judiciary's careful balancing of protecting individual liberty against the need to uphold the integrity of criminal investigations, particularly in complex socio-economic offences involving white-collar crime.
Bottom Line:
Grant of bail to the applicant accused in a case involving allegations of financial fraud and socio-economic offenses, based on the absence of direct evidence, the applicant's cooperative behavior, medical condition, and lack of any recovery or benefit from the alleged offense.
Statutory provision(s):
Sections 120-B, 406, 420, 409 of the Indian Penal Code, 1860; Sections 13(2), 13(1)(d) of the Prevention of Corruption Act, 1988
Vishwanath Devaraja Rao v. Central Bureau of Investigation, (Bombay) : Law Finder Doc Id # 2971231
