In a significant development in the ₹504-crore banking fraud case that has drawn attention across Haryana and the banking sector, a Panchkula court has granted default bail to former Haryana State Agricultural Marketing Board (HSAMB) finance officer Rajesh Sangwan after the investigating agency failed to submit a chargesheet against him within the statutory period mandated by law. The order has once again highlighted the importance of procedural safeguards in criminal investigations, even in cases involving allegations of large-scale financial wrongdoing.
The case relates to an alleged fraud involving banking transactions connected to IDFC First Bank and AU Small Finance Bank. Investigators have alleged that a network comprising bank employees, government officials and private individuals caused substantial financial losses through fraudulent transactions and irregular financial dealings. The alleged scam, estimated at ₹504 crore, is among the most closely watched economic offence investigations in the region.
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Chargesheet Deadline at Centre of Case
Rajesh Sangwan, 51, who previously served as Controller (Finance and Accounts) with the Haryana State Agricultural Marketing Board, had approached the court seeking statutory or default bail. His legal team argued that the investigating agency failed to file a final report against him within the legally prescribed timeframe, thereby entitling him to relief under the provisions governing criminal procedure.
According to court records, the case was initially registered by the state vigilance and anti-corruption authorities on February 23, 2026. Sangwan was arrested on March 14 and produced before a magistrate the following day. Following his first remand, he remained in judicial custody while the investigation progressed. Subsequently, the matter was transferred to the Central Bureau of Investigation (CBI), which continued the probe and also obtained police remand for further questioning.
During the hearing, Sangwan’s counsel contended that the statutory period for filing a final report began from the date of the first remand order passed on March 15. Based on that calculation, the legally permissible period expired on June 12. Since no chargesheet or final report specifically naming Sangwan had been filed within that period, the defence argued that his right to default bail had become enforceable.
Court Clarifies Statutory Right
The CBI opposed the application, maintaining that a final report had already been submitted in the case on May 21 against multiple accused persons and two private companies. Investigators further informed the court that a supplementary report was filed on June 12 against additional accused individuals and that the investigation concerning Sangwan remained ongoing.
However, the court examined the records and concluded that neither the original final report nor the supplementary report contained allegations formally presented against Sangwan. The court observed that the statutory period is calculated from the date of the accused’s first remand and does not restart merely because a different investigating agency takes over the probe.
In its order, the court emphasized that the right to default bail is a statutory right that becomes available when investigators fail to complete procedural requirements within the prescribed timeline. The court further noted that once such a right accrues and is exercised before a chargesheet is filed against the accused, it cannot be defeated by subsequent developments in the investigation.
Probe Into Fraud Continues
The judge also clarified that the seriousness of allegations and the magnitude of the alleged fraud may be relevant factors while deciding a regular bail application on merits. However, those considerations cannot override the legislative mandate governing default bail when statutory deadlines are not met by investigating agencies.
The broader fraud investigation remains active and involves scrutiny of financial transactions, banking records and the role of multiple accused persons. Investigators are continuing to examine the alleged mechanisms through which the financial irregularities were carried out and whether additional individuals or entities may have benefited from the transactions under investigation.
While Sangwan has secured default bail, the court’s order does not amount to an acquittal or a finding on the merits of the allegations. The investigation into the ₹504-crore banking fraud case continues, and further legal proceedings are expected as agencies work to complete the probe and determine individual accountability in one of Haryana’s most significant financial crime investigations.
