The Supreme Court has granted bail to two accused in a corruption case concerning the alleged use of forged certificates to secure 104 tenders worth approximately ₹979.45 crore under Rajasthan’s Jal Jeevan Mission, holding that pre-trial incarceration cannot become punitive detention when the trial is unlikely to conclude in the near future.
A bench of Justice Dipankar Datta and Justice Sheel Nagu allowed the appeals filed by Sanjay Badaya and Shubhanshu Dixit and set aside the Rajasthan High Court’s orders rejecting their regular bail applications.
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Alleged Use Of Forged Certificates To Secure Government Tenders
The prosecution arose from a preliminary enquiry initiated on January 18, 2024, which subsequently led to the registration of FIR No. 245/2024 on October 30, 2024, at the Anti-Corruption Bureau police station in Jaipur.
The case concerns alleged financial irregularities in Rajasthan’s Public Health Engineering Department in the execution of the Jal Jeevan Mission, a joint initiative of the Central and State Governments intended to provide functional household tap connections for safe and adequate drinking water.
According to the prosecution, two private contracting firms—M/s Shri Ganpati Tubewell Company and M/s Shri Shyam Tubewell Company—acted in connivance with public servants and private intermediaries to obtain forged work-experience and completion certificates purportedly issued by IRCON International Limited.
The prosecution alleged that these certificates enabled the firms to establish eligibility and secure approximately 104 tenders worth ₹979.45 crore, causing wrongful loss to the State exchequer. These allegations remain subject to determination at trial.
The FIR invoked Sections 7(c), 9, 10, 13(1)(a) read with Section 13(2), and Section 12 of the Prevention of Corruption Act, 1988, along with Sections 409, 466, 467, 468, 471, 477-A and 120-B of the Indian Penal Code.
Allegations Against The Public Servant
Shubhanshu Dixit served as Secretary of the Rajasthan Water Supply and Sewerage Management Board between December 30, 2022, and February 13, 2024. By virtue of that position, he also functioned as the de facto Secretary of the PHED Finance Committee.
The prosecution alleged that he failed to take effective action despite receiving whistleblower complaints and legal notices specifically flagging the use of forged IRCON certificates by the contracting firms.
It further alleged that he deliberately suppressed these complaints in conspiracy with the then Additional Chief Secretary and the contractors.
According to the prosecution, Dixit participated in Finance Committee meetings in which the financial bids of the firms were approved and issued the minutes of those meetings, allegedly facilitating the award of tenders to ineligible contractors.
He was arrested on February 17, 2026. The Rajasthan High Court rejected his bail application on June 1, 2026.
Allegations Against The Private Intermediary
The prosecution described Sanjay Badaya as a private intermediary acting on behalf of the then PHED Minister, Mahesh Chandra Joshi.
Although he held no official departmental position, the prosecution alleged that Badaya exercised influence over tender files, vigilance enquiries, and the transfers and postings of engineers.
He was also accused of collecting cash bribes from contractors to secure favourable treatment, suppress pending enquiries and facilitate the clearance of inflated bills.
The prosecution relied predominantly on intercepted telephone conversations to allege that bribe amounts were routed through bank accounts belonging to his relatives or acquaintances and subsequently transferred to M/s Sumangalam Landmark LLP, a firm owned by the then Minister’s son.
Badaya was arrested on May 11, 2026. His bail application was rejected by the High Court on August 13, 2026.
Investigation Complete And Evidence Already Secured
The Anti-Corruption Bureau filed a chargesheet on April 12, 2026, followed by a supplementary chargesheet on June 29, 2026.
While considering the bail appeals, the Supreme Court noted that the investigation against both appellants had been completed and that the prosecution’s case predominantly rested on documentary records and electronic trails.
Since these materials had already been seized and were in the investigating agency’s safe custody, the Court found that the apprehension of evidence tampering had been substantially reduced.
The bench accepted that the State was justified in opposing bail given the seriousness of the alleged economic offences. Nevertheless, it held that the other circumstances of the case also required consideration.
Trial Yet To Begin, With 124 Witnesses To Be Examined
The Court noted that the prosecution proposed to examine 124 witnesses and rely on documentary evidence running into thousands of pages.
Despite the filing of the chargesheets against the appellants, charges had not been framed and the trial had not commenced.
The proceedings remained at an early stage because investigation against some accused was still pending, two accused were absconding, and prosecution sanction under Section 19 of the Prevention of Corruption Act for six other public servants had been granted only on September 6, 2026.
Considering the volume of evidence, the bench concluded that the trial would be a protracted exercise.
The Court stressed that pre-trial custody cannot operate as punishment, particularly where the commencement and conclusion of the trial are not imminent. It held that judicial intervention was necessary to protect personal liberty under Article 21 of the Constitution when a trial could not reasonably conclude in the near future.
Bail Granted To Other Accused Also Considered
The Supreme Court also took into account that some co-accused in the alleged conspiracy had already obtained bail or protection.
It noted that Arun Srivastava had been granted bail by the Rajasthan High Court on June 1, 2026.
The bench further recorded that the then PHED Minister, Mahesh Chandra Joshi, had been granted bail by the Supreme Court on December 3, 2025, in the corresponding money laundering case arising from the present FIR.
These circumstances, together with the completion of investigation against the appellants and the likely duration of the trial, persuaded the Court that their continued pre-trial detention would serve no fruitful purpose.
Release Subject To Cooperation And Trial Attendance
Allowing the appeals, the Supreme Court directed that Badaya and Dixit be released on bail, unless required in another case, upon furnishing bail bonds to the satisfaction of the trial court.
The trial court may impose any further conditions it considers appropriate.
Since investigation against some other accused remained pending, the Supreme Court directed both appellants to attend the police station if called by the investigating officer to assist in completing the investigation and filing appropriate reports.
They must also participate diligently in the trial and appear on the dates fixed, unless exempted. An unjustified failure to appear or a breach of bail conditions may lead to cancellation of bail.
No Finding On Guilt Or Merits
The Supreme Court expressly clarified that its order did not express any opinion on the truth of the allegations, the roles attributed to the appellants or the evidentiary value of the records.
Those questions remain for the trial court to decide independently. The observations in the order are confined to the grant of bail and will have no bearing on the merits of the prosecution.
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