Bombay High Court
BHAUSAHEB BABAN NAWALEversusTHE STATE OF MAHARASHTRA AND ANOTHER
- Disposal
- APPLICATION ALLOWED
- Bench
- R M JOSHI
Holding
In the absence of any evidence that the directors participated in or benefited from the alleged embezzlement, they cannot be held criminally liable and their anticipatory bail applications are allowed.
Summary
The applicants, who are directors of a cooperative society, feared arrest in connection with FIR No. 532/2024 alleging a Rs. 66 crore embezzlement. The complaint alleged violations of IPC sections 409, 420 read with 34 and Section 3 of the Maharashtra Protection of Interest of Depositors Act. An audit under Section 81(3)(c) of the Maharashtra Cooperatives Societies Act found that the society’s chairman had acted unilaterally without board meetings, and subsequent inquiries under Sections 83 and 88 exonerated the applicants. The State opposed anticipatory bail, arguing that directors could still be liable. The court held that without any evidence of the applicants’ participation or benefit from the alleged crime, they could not be criminally liable merely for being directors, and therefore granted anticipatory bail.
Issues considered
- Whether directors of a cooperative society can be held criminally liable for alleged embezzlement under IPC 409, 420 and MPIDA when audit and inquiry reports exonerate them.
- Whether anticipatory bail should be granted in the absence of evidence of participation in the alleged offence.
Legislation cited
- Indian Penal Code, 1860 — s. 34, 409, 420
- Maharashtra Cooperatives Societies Act — s. 81(3)(c), 83, 88
- Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act — s. 3
Subjects
- anticipatory bail
- cooperative society
- director liability
- embezzlement
- IPC
- MPIDA
- audit report
- section 81
- section 83
- section 88
- Maharashtra law
Judgment
2026:BHC-AUG:23685
937-ABA-637-2026+.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
ANTICIPATORY BAIL APPLICATION NO. 637 OF 2026
Bhagwant Chandrakant Thube
VERSUS
The State Of Maharashtra And Another
...
Mr. A. M. Gaikwad, Advocate for Applicant
Mrs. P. J. Bharad, APP for Respondents
WITH
ANTICIPATORY BAIL APPLICATION NO. 635 OF 2026
Santosh Gulabrao Thube
VERSUS
The State Of Maharashtra And Another
…
Mr. A. M. Gaikwad, Advocate for Applicant
Mrs. P. J. Bharad, APP for Respondents
WITH
ANTICIPATORY BAIL APPLICATION NO. 75 OF 2026
Pramod Narayan Londhe
VERSUS
The State Of Maharashtra And Another
…
Mr. A. M. Gaikwad h/f Mr. N. M. Kalyane, Advocate for Applicant
Mrs. P. J. Bharad, APP for Respondents
WITH
ANTICIPATORY BAIL APPLICATION NO. 362 OF 2026
Bhausaheb Baban Nawale
VERSUS
The State Of Maharashtra And Another
…
Mr. A. M. Gaikwad h/f Mr. N. M. Kalyane, Advocate for Applicant
Mrs. P. J. Bharad, APP for Respondents
Page 1 of 4
937-ABA-637-2026+.odt
WITH
ANTICIPATORY BAIL APPLICATION NO. 542 OF 2026
Udaykumar Balwant Sonawale
VERSUS
The State Of Maharashtra And Another
…
Mr. S. B. Pawar, Advocate for Applicant
Mrs. P. J. Bharad, APP for Respondents
WITH
ANTICIPATORY BAIL APPLICATION NO. 227 OF 2026
Shamshuddin Gulabbhai Inamdar
VERSUS
The State Of Maharashtra
…
Mr. M. D. Shinde, Advocate for Applicant
Mrs. P. J. Bharad, APP for Respondents
...
CORAM : R.M. JOSHI, J
DATE : JUNE 17, 2026
PC :
1. Applicants apprehend arrest in connection with C.R. No.
532/2024 registered with Police Station Parner, Dist. Ahilyanagar for the
offences punishable under Sections 409, 420 read with Section 34 of the
Indian Penal Code & Section 3 of the Maharashtra Protection of Interest of
Depositors (in Financial Establishments) Act.
2. First information report came to be lodged on the basis of
grievance made by member of Raje Shivaji Gramin Bigar Sheti Pat Sanstha
Ltd claiming that during the period from 22.04.2022 to 14.02.2023, there is
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937-ABA-637-2026+.odt
embezzlement of Rs.66 crores from the investments of depositors.
3. Learned Counsels for Applicants submit that a special audit was
conducted by the auditor and report was submitted on 11.10.2024 under
Section 81(3)(c) of the Maharashtra Cooperatives Societies Act wherein a
finding is recorded that during the relevant period, the chairman of Accused
No. 1 – Society has not called any meeting of the board of directors and has
taken a decision of affairs of society as if it is a private limited company. It is
their submission that thereafter an enquiry was conducted under Sections
83 and 88 of the Maharashtra Cooperatives Societies Act and by report
dated 05.08.2025, present Applicants/Directors were excluded and other 46
persons were held to be responsible for the act. It is their submission that
having regard to the said facts, interim relief be confirmed.
4. Learned APP opposed applications contending that there is no
dispute about the fact that Applicants were directors of the society. It is her
submission that merely because a report is submitted under Sections 81,
83/88 of the Maharashtra Cooperatives Societies Act, it cannot be said that
no offence has been committed by present Applicants.
5. There is material on record to indicate that pursuant to
complaint, an enquiry was conducted under Section 81 of the Maharashtra
Cooperatives Societies Act and report was submitted under Section 81(3)(c)
thereof. In this report, it is held that the entire affairs of the society were
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937-ABA-637-2026+.odt
conducted by chairman and that no meeting was called of the board of
directors. Similarly, there is further inquiry under Section 83 and 88 of the
Act exonerating present Applicants from any liability.
6. This Court finds substance in contentions of learned Counsels
for Applicants that merely because the Applicants are directors, they cannot
be held responsible for the alleged embezzlement. Non participation in the
meeting if amounts to breach of requirements/regulations under the
Maharashtra Cooperatives Societies Act, Applicants may face action in that
regard. However, once the findings is recorded that the Applicants were not
concerned with the society, no criminal liability cannot be fasten upon them
only for the reason that they are directors of the society. Moreover, there is
no evidence to show that they participated in the transaction of the society
or beneficiary of the crime.
7. As a result of above discussion, applications deserve to be
allowed and the same are accordingly allowed in terms of interim orders
dated 24.04.2026, 25.02.2026, 12.02.2026 & 05.03.2026 except clause nos.
‘i’, ‘b’ respectively & attendance to police station in ABA No. 362/2026.
(R. M. JOSHI, J.)
Malani
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