KAILAS GAWARAM RAUTversusTHE STATE OF MAHARASHTRA

2026:BHC-AUG:37445
                                                                          BA709-26

                      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                 BENCH AT AURANGABAD

                             BAIL APPLICATION NO. 709 OF 2026

                  Kailas Gawaram Raut,                        ...   Applicant
                  Age 38 years, Occu: Service & agri.
                  R/o Raut Wasti, Loni Kh.
                  Tq. Rahata, Dist. Ahmednagar

                  VERSUS

                  The state of Maharashtra,                   ...   Respondent
                  Through the Police Inspector,
                  Loni Police Station, Tq. Rahata
                  Dist. Ahmednagar.


            Mr. Shailesh S. Chapalgaonkar, Advocate for the Applicant
            Mr. S. D. Ghayal, Addl. P. P. For the Respondent,
            Mr. A. D Ostwal, Advocate assists to P.P.


                                    CORAM : HITEN S. VENEGAVKAR, J.
                                     Dated : 19th August, 2026
            ORDER:-

            1.        The applicant seeks regular bail under Section 483 of the

            Bharatiya Nagarik Suraksha Sanhita, 2023, in connection with Crime

            No. 587 of 2025 registered with Loni Police Station, District

            Ahilyanagar, for offences punishable under Sections 314, 316(1),

            316(2), 316(4), 316(5), 318(1), 318(2), 318(4), 319, 335, 336, 338,

            340, 344 and 61(2), read with Sections 2(1) and 3(5) of the Bharatiya

            Nyaya Sanhita, 2023. The applicant is accused no.1. He was arrested

            on 3 November 2025. The investigation is complete and the charge-

            sheet has been filed.



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2.       The prosecution case arises from the internal audit of

Padmashri Dr. Vitthalrao Vikhe Patil Sahakari Sakhar Karkhana Ltd.,

Loni. Sugarcane payments were required to be periodically credited to

the accounts of farmers on the basis of lists containing their names,

quantity of sugarcane supplied, applicable rate, amount payable, bank

particulars and IFSC codes. The applicant was working as an Assistant

Accountant and was directly concerned with preparation and

processing of the sugarcane-payment lists.


3.       According to the prosecution, between 3rd January, 2019 and

3rd November, 2025, the applicant manipulated the payment data,

created duplicate or fictitious beneficiary accounts and caused funds

belonging to the sugar factory to be transferred to accounts held by

him, his wife, close relatives and other persons who had not supplied

sugarcane to the factory. The audit report quantifies the disputed

transactions at approximately Rs.1.91 crore.


4.       The audit report does not refer to a solitary mistaken entry. It

identifies different modes by which the funds were allegedly diverted.

One category concerns payments made to persons who had not

supplied sugarcane. It records that duplicate beneficiary accounts were

created to confer an additional financial benefit upon the applicant, his

friends or members of his family. Another category concerns interest

payments allegedly credited in the applicant’s name although no

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corresponding farmers’ deposit existed in his favour.


5.       The audit further refers to migration from the earlier

accounting software to a new ERP system during the financial year

2024-2025. It is alleged that unpaid balances standing in the names of

genuine farmers were not correctly carried forward. Instead, false

opening balances were prepared and furnished for uploading into the

new ERP system. The prosecution alleges that, after the passage of

time, these amounts were transferred into accounts of the applicant, his

family members and other persons to secure wrongful financial gain.


6.       The transaction schedules prima facie show direct credits into

three bank accounts belonging to the applicant. They also show

transfers into the account of his wife, the account of his sister, the

account of his sister’s son and other connected accounts. The

prosecution has collected the corresponding bank statements. Thus, the

accusation is supported, at this stage, not merely by oral statements but

also by an identified banking transactions and the internal audit

schedules.


7.       Learned counsel for the applicant submitted that the applicant

had no authority to introduce a new beneficiary, delete an existing

account or independently authorise payment. The procedure involved

the cane department, accounts department, cheque department,



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superior officers and the concerned banks. It was argued that a large

cooperative sugar factory could not have remained dependent upon a

single Assistant Accountant and that a diversion continuing for nearly

six years could not have escaped the annual audits and scrutiny of

superior officers. According to the applicant, the entire responsibility

has been placed upon him to protect those who exercised actual

administrative and financial control.


8.       It was further submitted that the applicant’s duty was confined

to preparation of payment bills. Every transaction had to pass through

several stages of verification and authorisation. The applicant has been

made a scapegoat, although the alleged transactions could not have

been completed without the participation or negligence of several other

officers. The investigation is complete, the evidence is documentary,

and the applicant has remained in custody since 3 November 2025. The

other accused have either secured bail or interim protection, and

therefore, his further detention is unnecessary.


9.       Learned APP, assisted by learned counsel for the informant,

strongly opposed the application. It was submitted that the statements

of the factory employees explain the procedure and the particular

manner in which it was allegedly bypassed by the applicant. The

applicant had handled the payment work for several years and had

gained the confidence of the management. He used to personally carry

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the payment data, Excel sheets and pen drive to different banks

without taking any other employee with him. He did not make the final

lists available in the cheque department in the ordinary course.


10.      Learned APP submitted that the audit report commencing

from page 48 provides year-wise particulars of the alleged diversion.

Page 49 identifies the accounts into which the amounts were

transferred. Three of those accounts belong to the applicant. The

remaining accounts include those of his wife and close relatives. Page

50 records that payments were transferred to persons who had not

supplied sugarcane and that duplicate beneficiary accounts and false

opening balances were created. It was, therefore, argued that this is not

a case resting upon a general allegation of supervisory negligence. The

funds of the sugar factory are directly traced to accounts belonging to

the applicant and his family.


11.      It was further submitted that Section 316(5) BNS is

specifically invoked. The said provision applies where criminal breach

of trust is committed by a person entrusted with property or dominion

over property in the capacities specified therein and provides for

imprisonment for life or imprisonment extending to ten years, together

with fine. Considering the magnitude, duration and systematic nature

of the alleged transactions, learned APP submitted that the applicant is

not entitled to the exercise of discretion.

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12.      I have considered the rival submissions and examined the

relevant part of the charge-sheet. The Court is conscious that a detailed

evaluation of the evidence or a finding concerning guilt is

impermissible at the stage of bail. The evidence is required to be

examined only to determine whether there is a prima facie case and

whether, upon considering the nature of the accusation, role of the

applicant, gravity, punishment, period of custody, antecedents,

possibility   of   interference   with   witnesses   and   other   relevant

circumstances, the discretion of granting bail ought to be exercised.


13.      It is true that the payment procedure involved more than one

department and that the allegations extend over a considerable period.

Whether the transactions could have been effected without the

knowledge, participation or negligence of other officers is a matter for

investigation and trial. However, the possible involvement of other

persons does not, at this stage, displace the material specifically

attributable to the applicant.


14.      The prosecution material prima facie indicates that the

applicant was not merely performing a mechanical or ministerial task.

The statements relied upon by the prosecution attribute to him control

over preparation and transmission of the payment data. He allegedly

carried the electronic payment data personally to the banks and did not

associate other employees with that part of the process. The

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truthfulness and legal effect of those statements will be determined at

the trial; nevertheless, they cannot be excluded from consideration at

the bail stage.


15.      More significantly, the audit schedules and bank statements

prima facie show repeated transfers into three accounts belonging to

the applicant and into the accounts of his wife and close relatives. The

applicant’s contention that he lacked final authority to sanction the

payments does not presently explain the repeated direct financial

benefit allegedly received by him and persons closely connected with

him. This is not a case where the prosecution relies only upon the

applicant’s designation or upon the fact that he worked in the accounts

department.


16.      The audit material also attributes to the applicant the creation

of duplicate beneficiaries and preparation of false opening balances

during migration to the new ERP system. If ultimately established,

these acts would indicate a planned and continuing course of conduct

rather than an inadvertent duplicate payment. The accusation concerns

funds belonging to a cooperative sugar factory and earmarked for

sugarcane suppliers. The magnitude and duration of the alleged

diversion, therefore, cannot be disregarded.


17.      The applicant has relied upon the grant of protection to the



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other accused. However, the material presently placed before the Court

attributes to the applicant the preparation and handling of the

impugned payment data, whereas the other accused are principally

alleged to be beneficiaries of the transfers. Parity cannot be applied by

merely counting the accused who have secured bail or interim

protection; the nature of the role and the material against each accused

must be comparable. The applicant’s role is prima facie distinguishable.


18.      Completion of investigation and filing of the charge-sheet are

relevant circumstances. They reduce the requirement of custodial

interrogation but do not create an indefeasible entitlement to bail. The

applicant worked within the establishment, and several material

witnesses are employees of the factory. Considering the position of

confidence allegedly enjoyed by him and the manner in which the

transactions are stated to have continued, the apprehension of

influencing those witnesses cannot, at this stage, be treated as wholly

unfounded.


19.      Section 316(5) BNS, as invoked in the charge-sheet, carries

imprisonment for life or imprisonment extending to ten years. Whether

every ingredient of that provision is ultimately established against the

applicant will be decided by the trial Court. At the present prima facie

stage, however, the prosecution allegation is that the applicant was

entrusted with and exercised dominion over the payment process and

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dishonestly diverted funds. The Court cannot proceed on the footing

that the highest punishment is only seven years when Section 316(5)

forms part of the charge-sheet.


20.      The applicant has been in custody since 3rd November 2025.

The period of custody, though material, is not presently so

disproportionate to the gravity of the accusation and the punishment

prescribed as to override the other considerations. There is also no

material at this stage demonstrating that the trial is unlikely to

commence within a reasonable period. The question of prolonged

incarceration may be reconsidered if the trial does not progress for

reasons not attributable to the applicant.


21.      On a cumulative consideration of the specific role attributed to

the applicant, the direct banking trail, repeated transfers into accounts

belonging to him and his close relatives, the alleged creation of

duplicate beneficiaries and false opening balances, the magnitude and

duration of the alleged diversion, and the punishment prescribed under

Section 316(5) BNS, this Court is not inclined to exercise its discretion

in favour of the applicant at the present stage.


22.      The application is accordingly rejected.


23.      It is clarified that the observations made in this order are

confined to the consideration of the present bail application. They are


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           prima facie in nature and shall not influence the trial Court while

           framing the charge, recording evidence or deciding the case on its

           merits. The applicant shall be at liberty to renew his prayer for bail if

           the trial does not make reasonable progress or upon any other

           substantial change in circumstances.




                                                     ( HITEN S. VENEGAVKAR, J.)
JPChavan




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