Chandigarh: The Punjab and Haryana High Court has taken a strict view in the high-profile IDFC bank fraud case linked to alleged embezzlement of nearly ₹200 crore from Chandigarh Municipal Corporation (MC) and Chandigarh Renewable Energy and Science & Technology Promotion Society (CREST) accounts. The court has asked Chandigarh Police to explain under what authority it issued communications seeking de-freezing of bank accounts after the investigation had already been transferred to the Central Bureau of Investigation (CBI).
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Court Questions Police Action After CBI Transfer
The matter was heard by a bench comprising Chief Justice Sheel Nagu and Justice Sanjiv Berry. The court directed Chandigarh Police to file its response by May 14. The observations came during the hearing of a petition filed by IDFC Bank, which sought safeguards to prevent the alleged siphoned funds from being withdrawn, transferred, or dissipated by beneficiaries linked to the case.
Appearing for the bank, senior advocate RS Rai informed the court that the Ministry of Home Affairs had already approved the transfer of the FIRs to the CBI. He further stated that a formal communication had been sent to the CBI Director on April 27, after which the local police effectively ceased to have investigative authority in the matter.
Despite this, Chandigarh Police allegedly issued letters to IDFC Bank on May 2 and May 8. These communications reportedly involved requests or directions concerning the de-freezing of at least four bank accounts linked to the investigation. During the hearing, the High Court orally questioned why the local police continued to intervene in matters related to frozen accounts when the probe had already been handed over to the CBI. The bench directed counsel representing the Union Territory administration to obtain instructions and clarify the circumstances under which the letters were issued.
MC and CREST Funds Under Scrutiny
According to documents linked to the investigation, nearly ₹117 crore in fixed deposit receipts belonging to Chandigarh Municipal Corporation and around ₹75 crore from CREST accounts were allegedly embezzled. Investigators suspect that certain bank officials, along with others connected to civic bodies, may have acted in collusion to facilitate the alleged financial irregularities. The case has triggered serious concerns regarding oversight mechanisms within public institutions and banking systems handling government funds.
Around the same period, another alleged financial irregularity involving nearly ₹590 crore from Haryana government accounts maintained at IDFC First Bank in Chandigarh also surfaced. The emergence of both cases has intensified scrutiny over banking controls, audit procedures, and financial governance relating to public sector funds and institutional deposits.
Renowned cyber and financial crime expert and former IPS officer Prof. Triveni Singh said, “In financial crimes involving government accounts, banking trails, fund movement patterns, digital authorisation records, and internal communications become crucial evidence. If parallel interventions continue even after a case has been transferred to another investigative agency, it may affect transparency, procedural integrity, and preservation of evidence.”
CBI Examines Fund Movement and Digital Records
Legal experts believe the High Court’s strong observations indicate growing judicial concern over accountability and procedural compliance in cases involving public money. The upcoming hearing may clarify under what circumstances the Chandigarh Police issued the disputed communications and whether such actions were legally permissible after the transfer of the investigation.
At present, the primary investigation remains with the CBI, which is examining financial transactions, account activities, movement of funds, and the possible role of beneficiaries and officials linked to the alleged fraud. Investigators are also expected to analyse digital banking records and inter-departmental communications as part of the wider probe into the suspected embezzlement network.
