The Punjab and Haryana High Court has granted regular bail to Virender Bhardwaj, an accused in a case involving alleged diversion of company funds, creation of a duplicate vendor entity and preparation of allegedly forged invoices, holding that continued custody was no longer necessary after completion of the investigation and filing of the challan.
The bench of Justice Manisha Batra noted that although the allegations were serious, the prosecution case was primarily based on documentary material already in the possession of the investigating agency. The accused had also remained in custody for more than a year, while the complainant and other private witnesses had already been examined.
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The criminal case arose from an internal audit conducted by Grohe India Private Limited, a company engaged in providing bathroom solutions and kitchen fittings.
According to the FIR, the company’s audit revealed irregularities indicating alleged siphoning of funds. A mismatch was noticed during reconciliation of GST input credit relating to invoices issued by Sai Raj Packaging, a Mumbai-based vendor supplying packaging material to the company.
The company’s authorised representative, Nitin Kumar Gupta, alleged that comparison of the vendor’s statement of account with the company’s books disclosed substantial discrepancies. As per the High Court’s order, 54 invoices totalling ₹72,72,662 that had been accounted for in the company’s books were not reflected in the legitimate vendor’s statement of account.
The investigation also revealed that 298 invoices amounting to ₹2,86,96,133, although reflected in the statement of account of the legitimate vendor and accounted for in the company’s books, had payments credited into a bank account other than the legitimate vendor’s account.
The prosecution alleged that Bhardwaj, who had worked in the company’s finance and accounts functions from March 2017 to August 2024, misused his position and access to vendor-related information.
The Court recorded the allegation that on January 16, 2018, the petitioner registered a concern named Sai Raj Packaging on the GST portal, using the same name as the company’s legitimate vendor. A bank account was allegedly opened for this concern.
Subsequently, on May 17, 2018, the petitioner allegedly added the bank account of the newly created concern to the vendor details maintained by the company for the legitimate vendor.
According to the prosecution, this allegedly resulted in payments relating to the 298 invoices, totalling ₹2.86 crore, being credited into the account associated with the allegedly duplicate entity.
The prosecution further alleged that 54 forged and fictitious invoices, aggregating ₹72,72,662, were prepared in the name of the legitimate vendor on the petitioner’s office laptop.
It was alleged that payments against these invoices were made even though the corresponding goods or services had not been received. The prosecution case was that the petitioner caused an aggregate amount of ₹3,62,91,303 to be credited to the account in question.
The order records further allegations that part of the amount was subsequently transferred to the petitioner’s personal bank accounts, while some amount was withdrawn in cash. Another ₹2,77,13,370 was allegedly transferred to a different bank account.
The prosecution also relied upon an alleged admission made by the petitioner during inquiries conducted on August 8, 2024. Following this, his services were terminated in August 2024.
The petitioner was subsequently arrested on July 27, 2025, and the investigation was completed with the filing of the challan.
The present proceedings constituted the petitioner’s third petition under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) seeking regular bail.
The High Court recorded that the petitioner’s previous two bail petitions had been dismissed as withdrawn.
Before the High Court, the petitioner argued that he had been falsely implicated and made a scapegoat for discrepancies detected during the company’s internal audit.
His counsel emphasised that the investigation had already been completed, the challan had been filed and the petitioner had been in custody since July 27, 2025. It was further submitted that the prosecution case was primarily documentary in nature and that the private witnesses, including the complainant, had already been examined.
The petitioner also argued that the offences were triable by a Magistrate and that the trial was likely to take considerable time. He claimed clean antecedents and undertook to comply with any conditions imposed by the Court.
The State opposed the bail application, maintaining that specific and serious allegations had been levelled against the petitioner.
According to the State, the petitioner had allegedly caused a wrongful loss to the complainant company by transferring a much larger amount of ₹4,05,54,624 into accounts of allegedly tainted or fake firms.
The State submitted that approximately ₹2,81,14,974 had been transferred from the petitioner’s account and that he had allegedly embezzled approximately ₹1,24,40,250.
The prosecution also expressed apprehension that the petitioner, if released, could influence or intimidate witnesses. It argued that the trial was progressing at an appropriate pace and therefore bail should not be granted.
After considering the rival submissions, the High Court acknowledged the seriousness of the allegations.
Justice Manisha Batra noted that the petitioner was alleged to have misused his position in the finance and accounts department and facilitated the transfer of company funds into an account associated with a fake or tainted firm. He was also alleged to have prepared forged and fictitious invoices.
However, the Court held that the seriousness of the allegations, by itself, did not justify continued incarceration when the circumstances relevant to custody no longer existed.
A key factor was that the investigation had already been completed and the challan had been filed. Consequently, the Court held that custodial interrogation was no longer required.
The Court particularly relied upon the nature of the prosecution evidence.
It observed that the case was primarily based on documentary material and that the relevant records were already in the possession of the investigating agency.
The Court also considered the prosecution’s apprehension that the petitioner could influence or intimidate witnesses. It held that this concern could be addressed through appropriate bail conditions.
Importantly, the Court noted that the complainant and other private witnesses had already been examined. In those circumstances, it found that there were no chances of the petitioner intimidating or influencing those witnesses.
Another significant consideration was the period of incarceration.
The High Court noted that the petitioner had remained in custody for more than one year. It further observed that the conclusion of the trial was likely to take some time.
Against this backdrop, the Court concluded that continued detention would not serve any useful purpose.
The Court therefore held that the petitioner had made out a case for grant of regular bail and allowed the petition.
The petitioner was directed to be released on regular bail upon furnishing personal bonds and surety bonds by two sureties to the satisfaction of the concerned trial Court/Duty Magistrate.
The High Court imposed several conditions to safeguard the integrity of the proceedings.
The petitioner has been prohibited from directly or indirectly making any inducement, threat or promise to anyone acquainted with the facts of the case and from tampering with evidence.
He has also been directed to deposit his passport, if any, with the trial Court and has been prohibited from leaving India without prior permission of the trial Court.
Further, the petitioner must appear before the trial Court whenever directed. He is required to provide his residential address after release and cannot change it without informing the concerned Investigating Officer or Station House Officer.
The Court also directed him to provide his mobile phone number to the concerned IO/SHO and keep the phone switched on at all times.
The High Court further clarified that if any FIR or complaint is lodged against the petitioner, the respondent-State would be at liberty to seek appropriate relief by filing an application for cancellation of bail.
The Court also made it clear that the observations contained in the bail order were made only for deciding the bail petition and would have no bearing on the merits of the criminal case.
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