Ex-cooperative bank CEO Sujata Mahajan's arrest in fraud case illegal, court rules

India Today

2 days ago

The Nagpur bench of the Bombay High Court on Friday granted bail to Sujata Vilas Mahajan, former Chief Executive Officer of Babaji Date Mahila Sahakari Bank Limited, Yavatmal, in connection with a multi-crore financial fraud case. The court held her arrest to be illegal, citing procedural lapses during her detention.Justice Urmila Joshi-Phalke, who presided over the matter, emphasised the importance of constitutional rights, saying, "The guarantee of 'life and liberty' as enshrined under Article 21 of the Constitution of India available to citizens of this country cannot be denied even to an accused who is in custody and surely not to a suspect who is sought to be converted to an accused on an investigation and then from an accused to a convict on trial."advertisementShe further added, "It is an obligation upon the state as well as on the court to ensure that there is no infringement of the indefeasible right of a citizen to life and liberty, which he cannot be deprived of without following the procedure established by law."
Mahajan was taken into custody on September 30, 2024, in connection with a major financial fraud case. An audit revealed irregularities in loan disbursements, with loans worth Rs 1.88 crore allegedly obtained by Mahajan's husband and relatives without proper approval from the bank's Board of Directors. The total scam is reportedly valued at over Rs 242 crore.The court acknowledged that Mahajan's involvement in the financial offence was revealed during the investigation. However, it noted that her arrest took place after sunset and without informing her relatives, both of which are violations of legal procedure. As a result, the court deemed the arrest illegal.Appearing for Mahajan, Senior Counsel SV Manohar argued that the chargesheet lacked direct evidence of her involvement in the fraud. He also highlighted that the outstanding loans linked to her husband had already been repaid. Stressing on the procedural flaws, he said Mahajan's arrest after sunset and the failure to inform her relatives violated her fundamental rights.Opposing the bail, Public Prosecutor DV Chauhan contended that the investigation revealed Mahajan's role in sanctioning and disbursing loans without proper authorisation. He described the case as a serious economic offence, affecting nearly 37,000 depositors.The court pointed out discrepancies in the records related to Mahajan's arrest and the lack of communication with her family. It concluded that these procedural violations rendered the arrest unlawful.Granting bail, the High Court directed Mahajan to cooperate with the ongoing investigation, attend all court hearings, and surrender her passport.- Ends