[Cites 27, Cited by 0]
Gujarat High Court
Nanabhai Virabhai Panchal vs State Of Gujarat on 27 April, 2026
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Reserved On : 18/03/2026
Pronounced On : 27/04/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR ANTICIPATORY BAIL) NO. 21739
of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE UTKARSH THAKORBHAI DESAI
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Approved for Reporting Yes No
✔
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NANABHAI VIRABHAI PANCHAL
Versus
STATE OF GUJARAT
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Appearance:
MS. A. N. RAMNANI (14156) for the Applicant(s) No. 1
MR.SOAHAM JOSHI, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR.JUSTICE UTKARSH THAKORBHAI
DESAI
CAV ORDER
1. The applicant who is apprehending arrest at the hands of
CID Crime, Vadodara Zone Police Station for the offence
which came to be registered vide Part-A I CR No.
11201005250003 of 2025 dated 22.06.2025, as regards the
offence alleged to have been committed under sections
406, 409, 420, 467, 468, 471, 474, 114 and 120-B of the IPC
and 13(1)(a), 13(1)(b), 13(2), 7(a) of Prevention of
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Corruption Act, has preferred the present application
prayed for anticipatory under section 482 of the BNSS,
2023.
2. Heard learned advocate Mr. N. L. Ramnani assisted by
learned advocate Ms. A. N. Ramnani, for the applicant. Mr.
Ramnani would submit that, the applicant is a proprietor of
a registered firm namely Nanabhai Virabhai Panchal and is
carrying on business as government approved contractor.
3. The State Government had established Water and
Sanitation Management Organization (WASMO) in the year
2002, which is working under the supervision of Gujarat
Water Supply and Sewerage Board, Gandhinagar. The said
authority WASMO had invited tenders for laying pipelines
and providing water connection in different villages in
Mahisagar District under the Government Scheme named
"Tap Connectivity in Triable Area (Nal se Jal Yojana)" in the
year 2020-2021.
4. It is submitted that, the applicant was awarded four works
contracts at villages Vadhela, Kanod, Khadodi Ni Movadi
and Keslavati. He had completed all the works to the fullest
satisfaction of the site engineer and other office staff
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deputed by the WASMO and that, he was never put to
notice about the quality and quantity of work being
deficient.
5. It is further submitted that, all the works were under the
direct charge of the Chairman of water committee
appointed by WASMO, and the said post was given to the
Sarpanch of the concerned village, and accordingly, there
was a written contract between the applicant and the
Chairman of water committee appointed by WASMO. Thus,
the entire work was being monitored by the Chairman and
also by the engineer deputed by the WASMO.
6. It is submitted that, all the measurements of the work
completed were taken and maps were prepared and joint
measurements were also taken by both the parties and
were sent for approval of the WASMO, and after complete
cross-verification, bills were prepared by the department.
7. It is further submitted that, the applicant had completed all
the works awarded to him since long. However, the
department had not released his payments and had
wrongly withheld huge amounts to the tune of 20% to 25%
of the total amount due and payable to him.
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8. It is also submitted on behalf of the applicant that, the
department had remained silent for two years and had not
released his outstanding dues despite repeated follow-ups,
and then, all of a sudden had passed absolutely wrong and
illegal orders of not only blacklisting the his firm along with
110 other firms for indefinite period, but had also made an
attempt to recover the amount more than what was paid to
the his firm against the execution of the works, which were
awarded by the way of contract.
9. It is also submitted that, the applicant was neither given
any chance to put up his defence nor a prior notice was
given to him before issuing the recovery notice. However,
the order of blacklisting and recovery was challenged by
the applicant as well as other contractors before the High
Court, and all the orders of recoveries were set aside
whereas, the order of blacklisting the applicant's firm and
other firms was voluntarily revoked by the department.
10. It is submitted that, the applicant was served with a fresh
notice whereby, he was called at Gandhinagar and that, he
had submitted all the relevant documents and bills with the
department, and he was assured that his balance amount
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would be released soon by the department. However, the
same was not done.
11. It is also mentioned that, the government portal of Gujarat
government has posted the scheme of "Nal Se Jal Yojana"
of Mahisagar district highlighting it as grand success and
the same was completed, and the department had achieved
100% target as expected, by the said scheme.
12. It is stated on behalf of the applicant that, he came to know
that one Mr. Girish Amarshibhai Agola (unit Manager), had
filed a complaint with CID crime police station alleging
huge scam worth crores of rupees in the "Nal Se Jal Yojana"
of Mahisagar district, wherein, 12 persons i.e. officials of
the department were shown as accused. During the course
of investigation names of 111 contractors were also
included as accused in the said FIR. Hence, the present
application came to be filed.
13. Heard learned advocate Mr. N. L. Ramnani for the applicant,
who has reiterated the averments of the application and
has taken the court through the evidence which was
collected by the investigation officer. Mr. Ramnani has
placed on record the documents pertaining to completion
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of work under the project of "Nal Se Jal Yojana" by the
applicant. He has forcefully submitted that, the applicant
had placed on record, all the documents revealing
completion of work before the department, and though he
had given a detailed explanation to the notice of the
department pursuant to the order passed by the High
Court, the same was malafidely not considered. Mr.
Ramnani has further submitted that, the department had
initiated proceedings by filing the FIR after a delay of
almost 2 years, and that there is no iota of evidence to
substantiate the allegations against the applicant.
14. Though the applicant had submitted all the documents
before the department, it had not considered the same in
true and correct spirit. The applicant has not committed any
misappropriation of monies, and the allegations in the FIR
are hugely concocted. Accordingly, Mr. Ramnani has urged
the court to allow this application and grant the
anticipatory bail to the applicant.
15. Heard learned APP Mr. Soaham Joshi on behalf of the
respondent-State who has submitted that, the applicant
had not completed the works contract of 4 villages of
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Mahisagar district which were awarded to him as per the
terms and conditions of the contract agreement, and
thereafter, though the works were incomplete, had raised
false and bogus bills pertaining to purchase of pipes which
were approved and also had submitted false report of pipe
testing. It is further submitted that, the applicant while
being awarded the works contract at Kanod village had
submitted a false bill of Rs. 11,29,802/- from Aroma
Marketing as regards purchase of pipes. The applicant had
also given a false test report of pipe testing, and there are
statements of prosecution witnesses who have affirmed
this fact. It is also submitted that, the WASMO had
conducted inspection at village Kanod from wherein, it was
revealed that, the pipes used by the applicant were not of
approved quality and the measurement as mentioned in the
tender was also not followed. So also, the applicant had
done the work at Vadhela village, wherein also a false bill
for purchasing pipes was raised. So also, the pipe testing
report from Gujarat Industrial Research and Development
Agency (In short 'GIRDA') was false. Learned APP has
submitted that, the applicant by not completing the
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works for which contract was awarded to him and by
submitting false bills had committed fraud with the
government. Hence, considering his role in the offence the
present application be dismissed.
16. At the outset, an FIR came to be lodged before the CID
Crime, Vadodara Zone Police Station on 22.06.2025, by one
Mr. Girish Amarshibhai Agola, who was the Unit Manager of
District Water and Cleanliness Unit, Water Sanitation and
Management Organisation (WASMO), Mahisagar, wherein,
various office bearers of WASMO along with contractors
were named as accused.
17. The Government had approved the project of "Nal Se Jal
Yojana" in all the Talukas of Mahisagar district, whereby
620 villages were to be provided drinking water through
pipeline, wells and tube wells for which the Government
had allocated budget. However, the office bearers of the
WASMO and concerned Government department in
collusion with the applicant and the other co-accused had
entered into a criminal conspiracy and had siphoned off
funds which were meant for the completion of the "Nal Se
Jal Yojana".
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18. It is further alleged that, the pipelines, home connections
and incidental work were not completed as per the contract
agreement and bogus documents, accounts and invoices
were created and accordingly, loss of Rs. 123.22 crores was
caused to the Government of Gujarat.
19. So far as the allegations against the applicant are
concerned, he was awarded contract for 4 villages namely,
Vadhela, Kanod, Khadodi Ni Movadi and Keslavati. As per
the report of the fact finding committee, the irregularities
which were noticed in village Khadodi Ni Movadi were as
regards payments being done for the entire work which
was of lesser length at the spot, the payments done for
digging, refilling and pipelines laying being in excess
instead of the actual work which was done, the pipelines
which were laid were at lesser depth than the prescribed
depth, for which payments were done, the works were not
completed and the works being done without any
agreement.
19.1 So far as the works contract at village Vadhela was
concerned, it had come to the notice of the fact-finding
committee that, the purchase of pipes was not being done
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from the approved vendors, inspite of the purchase not
being done from the approved vendors, the payment as
regards price variation was done to the applicant, the
payment was done for the pipelines which were of lesser
length than what was prescribed, payments being done for
digging, refilling and laying of pipelines for excess work,
though such work was not done, the pipelines which were
laid were found to be at lesser depth than the prescribed
depth for which payments were done, work was done for
lesser connections and payments were accepted for more
connections, and the works not having being completed.
19.2 So far as village Kanod is concerned, the fact-finding
committee had found that, the pipes were not purchased
from the approved vendors, the payment as regards price
variation was done to the applicant, the payment was done
for the pipelines which were of lesser length than what was
prescribed, payments being done for digging, refilling and
laying of pipelines for excess work, though such work was
not done, the pipelines which were laid were found to be at
lesser depth than, the prescribed depth for which payments
were done, work was done for lesser connections and
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payments were accepted for more connections, and the
works not having being completed.
19.3 So far as the works contract at village Keslavati is
concerned, the fact-finding committee found that, the
pipelines which were laid were found to be at lesser depth
than the prescribed depth for which, payments were done,
work was done for lesser connections and payments were
accepted for more connections, and the works not having
being completed.
19.4 Thus, it is alleged that the works which were shown to
completed were either not fully completed or not
completed at all, as per the terms and conditions of the
tenders which were floated by the Government, pursuant
to which contracts were awarded.
20. The I.O. had also recorded the statement of one Mitesh
Kumar Kantibhai Prajapati who is a research assistant with
GIRDA. He has clearly mentioned in his statement that, the
report which was submitted by the applicant is false. It is
also alleged that, the measurements of the work were not
as per the tender document.
21. It is true that, the applicant herein had preferred a Special
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Civil Application No. 14203 of 2024 praying for Writ of
Mandamus for recovery of Rs. 47,26,311.70/- from the
respondents. The Co-ordinate bench vide order passed on
22.02.2025, had quashed and set aside the order passed by
the respondents seeking recovery from the petitioner i.e.
applicant herein, and had directed the respondents to
proceed with show cause notice dated 20.01.2025, and to
give a fresh hearing to the petitioner, and thereafter
adjudicate all the contentions so raised by the petitioner.
22. It is pertinent to observe that, the applicant herein had
given a reply to the Chief Engineer of WASMO on
12.03.2025, wherein he had denied all the allegations
against him and had submitted that, he had neither raised
any false bills nor had done any scam. However, the spot
verification done by the agency did not find that, the works
done by the applicant were as per the terms and conditions
of the tender, and so also, the bills which were raised being
neither true nor valid nor legal.
23. This court cannot be oblivious to the fact that, after
thorough inquiry and verification done by the WASMO, the
entire scam was unearthed, wherein, the applicant along
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with the other co-accused were expressly involved, and in
spite of the Government of Gujarat having allocated funds
to provide drinking water to 620 villages of Mahisagar
district, the concerned government officials in connivance
with the contractors not having completed the works as per
the terms and conditions of the tenders, and instead have
caused loss to the exchequer to the tune of Rs.123.22/-
crores. In the State of Gujarat, the government is making
every effort to see that drinking water reaches every
household. The government being mindful of the said fact
had allocated funds to provide drinking water to every
household of the 620 villages of Mahisagar district. It
clearly appears that, the government officials and the
contractors involved in this scam by either not completing
the work fully or doing the work of substandard quality, has
deprived the villagers of 620 villages of Mahisagar district.
24. The investigation officer in his affidavit has rightly
submitted that, a thorough investigation is required for
which the custody of the applicant is mandatory.
25. It would be apposite to refer to the judgment of the
Hon'ble Apex Court in the case of Serious Fraud
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Investigation Office Vs Aditya Sarda reported in 2025 SCC
Online SC 764, the Hon'ble Apex Court in para nos. 18, 19,
20 and 21 has observed thus:-
18. Now, so far as anticipatory bail is concerned, this
Court has consistently emphasized that anticipatory bail
should not be granted as a matter of routine, particularly in
serious economic offences, involving large scale fraud, public
money or complex financial crimes. In P. Chidambaram vs.
Directorate of Enforcement, it was observed as under: -
"Grant of anticipatory bail in exceptional cases
69. Ordinarily, arrest is a part of procedure of the
investigation to secure not only the presence of the accused
but several other purposes. Power under Section 438 CrPC is
an extraordinary power and the same has to be exercised 2
(2019) 9 SCC 24 sparingly. The privilege of the pre-arrest bail
should be granted only in exceptional cases. The judicial
discretion conferred upon the court has to be properly
exercised after application of mind as to the nature and
gravity of the accusation; possibility of the applicant fleeing
justice and other factors to decide whether it is a fit case for
grant of anticipatory bail....
70. .............
71. Article 21 of the Constitution of India states that no
person shall be deprived of his life or personal liberty
except according to procedure prescribed by law.
However, the power conferred by Article 21 of the
Constitution of India is not unfettered and is qualified by
the later part of the Article i.e. "...except according to a
procedure prescribed by law". In State of M.P. v. Ram
Kishna Balothia [State of M.P. v. Ram Kishna Balothia,
(1995) 3 SCC 221: 1995 SCC (Cri) 439] , the Supreme Court
held that the right of anticipatory bail is not a part of
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Article 21 of the Constitution of India and held as under:
(SCC p. 226, para 7)
"7. ... We find it difficult to accept the contention that
Section 438 of the Code of Criminal Procedure is an
integral part of Article 21. In the first place, there was no
provision similar to Section 438 in the old Criminal
Procedure Code. The Law Commission in its 41st Report
recommended introduction of a provision for grant of
anticipatory bail. It observed:
'We agree that this would be a useful advantage.
Though we must add that it is in very exceptional cases that
such power should be exercised.
' In the light of this recommendation, Section 438 was
incorporated, for the first time, in the CriminalProcedure
Code of 1973. Looking to the cautious recommendation of
the Law Commission, the power to grant anticipatory bail is
conferred only on a Court of Session or the High Court. Also,
anticipatory bail cannot be granted as a matter of right. It is
essentially a statutory right conferred long after the coming
into force of the Constitution. It cannot be considered as an
essential ingredient of Article 21 of the Constitution. And its
non-application to a certain special category of offences
cannot be considered as violative of Article 21.
(emphasis supplied)
72. We are conscious of the fact that the legislative
intent behind the introduction of Section 438 CrPC is to
safeguard the individual's personal liberty and to protect him
from the possibility of being humiliated and from being
subjected to unnecessary police custody. However, the court
must also keep in view that a criminal offence is not just an
offence against an individual, rather the larger societal
interest is at stake. Therefore, a delicate balance is required
to be established between the two rights--safeguarding the
personal liberty of an individual and the societal interest. It
cannot be said that refusal to grant anticipatory bail would
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amount to denial of the rights conferred upon the appellant
under Article 21 of the Constitution of India....
77. After referring to Siddharam Satlingappa Mhetre
[Siddharam Satlingappa Mhetre v. State of Maharashtra,
(2011) 1 SCC 694 : (2011) 1 SCC (Cri) 514] and other
judgments and observing that anticipatory bail can be
granted only in exceptional circumstances, in Jai Prakash
Singh v. State of Bihar [Jai Prakash Singh v. State of Bihar,
the Supreme Court held as under: (SCC p. 386, para 19)
"19. Parameters for grant of anticipatory bail in a
serious offence are required to be satisfied and further while
granting such relief, the court must record the reasons
therefor. Anticipatory bail can be granted only in exceptional
circumstances where the court is prima facie of the view that
the applicant has falsely been enroped in the crime and
would not misuse his liberty. (See D.K. Ganesh Babu v. P.T.
Manokaran [D.K. Ganesh Babu v. P.T. Manokaran, State of
Maharashtra v. Mohd. Sajid Husain Mohd. S. Husain, and
Union of India v. Padam Narain Aggarwal."
Economic offences
78. Power under Section 438 CrPC being an
extraordinary remedy, has to be exercised sparingly; more so,
in cases of economic offences. Economic offences stand as a
different class as they affect the economic fabric of the
society. In Directorate of Enforcement v. Ashok Kumar Jain
[Directorate of Enforcement v. Ashok Kumar Jain, (1998) 2
SCC 105: 1998 SCC (Cri) 510], it was held that in economic
offences, the accused is not entitled to anticipatory bail."
19. In Y.S. Jagan Mohan Reddy vs. Central Bureau of
Investigation,3 it was observed as under: -
"34. Economic offences constitute a class apart and
need to be visited with a different approach in the matter of
bail. The economic offences having deep-rooted conspiracies
and involving huge loss of public funds need to be viewed
seriously and considered as grave offences affecting the
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economy of the country as a whole and thereby posing
serious threat to the financial health of the country.
35. While granting bail, the court has to keep in mind
the nature of accusations, the nature of evidence in support
thereof, the severity of the punishment which conviction will
entail, the character of the accused, circumstances which are
peculiar to the accused, reasonable possibility of securing the
presence of the accused at the trial, reasonable apprehension
of the witnesses being tampered with, the larger interests of
the public/State and other similar considerations."
20. In Nimmagadda Prasad vs. Central Bureau of
Investigation,4 it was observed as under: -
"23. Unfortunately, in the last few years, the country
has been seeing an alarming rise in white-collar crimes, which
has affected the fibre of the country's economic structure.
Incontrovertibly, economic offences have serious
repercussions on the development of the country as a whole.
In State of Gujarat v. Mohanlal Jitamalji Porwal [(1987) 2
SCC 364: 1987 SCC (Cri) 364] this Court, while considering a
request of the prosecution for adducing additional evidence,
inter alia, observed as under: (SCC p. 371, para 5)
"5. ... The entire community is aggrieved if the
economic offenders who ruin the economy of the State are
not brought to book.
A murder may be committed in the heat of moment
upon passions being aroused. An economic offence is
committed with cool calculation and deliberate design with
an eye on personal profit regardless of the consequence to
the community. A disregard for the interest of the community
can be manifested only at the cost of forfeiting the trust and
faith of the community in the system to administer justice in
an even-handed manner without fear of criticism from the
quarters which view white- collar crimes with a permissive
eye unmindful of the damage done to the national economy
and national interest."
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21. Recently in Srikant Upadhyay and Others vs. State
of Bihar, a very pertinent observations have been made with
regard to the powers of the Court to grant anticipatory bail
under Section 438 of CrPC. It has been observed that -
"9. It is thus obvious from the catena of decisions
dealing with bail that even while clarifying that arrest should
be the last option and it should be restricted to cases where
arrest is imperative in the facts and circumstances of a case,
the consistent view is that the grant of anticipatory bail shall
be restricted to exceptional circumstances. In other words,
the position is that the power to grant anticipatory bail under
Section 438, Cr. PC is an exceptional power and should be
exercised only in exceptional cases and not as a matter of
course. Its object is to ensure that a person should not be
harassed or humiliated in order to satisfy the grudge or
personal vendetta of the complainant. (See the decision of
this Court in HDFC Bank Ltd. v. J.J.Mannan alias J.M. John
Paul).
10. When a Court grants anticipatory bail what it
actually does is only to make an order that in the event of
arrest, the arrestee shall be released on bail, subject to the
terms and conditions. Taking note of the fact the said power
is to be exercised in exceptional circumstances and that it
may cause some hinderance to the normal flow of
investigation method when called upon to exercise the power
5 (2024) SCC OnLine SC 282 under Section 438, Cr.PC, courts
must keep reminded of the position that law aides only the
abiding and certainly not its resistant. By saying so, we mean
that a person, having subjected to investigation on a serious
offence and upon making out a case, is included in a charge
sheet or even after filing of a refer report, later, in
accordance with law, the Court issues a summons to a person,
he is bound to submit himself to the authority of law. It only
means that though he will still be at liberty, rather, in his
right, to take recourse to the legal remedies available only in
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accordance with law, but not in its defiance. We will dilate
this discussion with reference to the factual matrix of this
case. However, we think that before dealing with the same, a
small deviation to have a glance at the scope and application
of the provisions under Section 82, Cr.PC will not be
inappropriate......
25. We have already held that the power to grant
anticipatory bail is an extraordinary power. Though in many
cases it was held that bail is said to be a rule, it cannot, by
any stretch of imagination, be said that anticipatory bail is
the rule. It cannot be the rule and the question of its grant
should be left to the cautious and judicious discretion by the
Court depending on the facts and circumstances of each case.
While called upon to exercise the said power, the Court
concerned has to be very cautious as the grant of interim
protection or protection to the accused in serious cases may
lead to miscarriage of justice and may hamper the
investigation to a great extent as it may sometimes lead to
tampering or distraction of the evidence. We shall not be
understood to have held that the Court shall not pass an
interim protection pending consideration of such application
as the Section is destined to safeguard the freedom of an
individual against unwarranted arrest and we say that such
orders shall be passed in eminently fit cases. At any rate,
when warrant of arrest or proclamation is issued, the
applicant is not entitled to invoke the extraordinary power.
Certainly, this will not deprive the power of the Court to
grant pre-arrest bail in extreme, exceptional cases in the
interest of justice. But then, person(s) continuously, defying
orders and keep absconding is not entitled to such grant."
26. So also, the Hon'ble Apex Court in the case of Sudhir Vs
State of Maharashtra with Chandrakant Vs State of
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Maharashtra reported in 2015(0) AIJEL-SC 57156 while
dealing with the criminal appeals filed by the accused
challenging their cancellation of anticipatory bail by the
Bombay High Court, had declined to interfere with the
order of cancellation of anticipatory bail passed by the said
High Court and consequently, had dismissed the appeals
preferred by the accused therein the subject matter of the
said case also pertained to serious allegations of criminal
misappropriation of funds released for implementation of
schemes of drinking water in the villages of Waghlud and
Sonwad Khurd in Tehsil Dharangaon, Maharashtra. The
Hon'ble Apex Court in para no. 14 has observed thus:-
"14. Having considered the submissions made by
learned counsel for the parties, and after considering the
gravity of the offence, circumstances of the case, particularly,
the allegations of corruption and misappropriation of public
funds released for rural development, and further considering
the conduct of the appellants and the fact that the
investigation is held up as the custodial interrogation of the
appellants could not be done due to the anticipatory bail, we
are of the opinion that the High Court has rightly cancelled
the anticipatory bail granted to the appellants by the
Additional Sessions Judge, Jalgaon. Therefore, we are not
inclined to disturb the same."
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27. The aforesaid observations of the Hon'ble Apex Court in
both the cases are squarely applicable to the case on hand.
28. Thus, considering the investigation papers in its entirety, it
does not deem fit to this court to exercise discretion in
favour of the applicant, accordingly the present bail
application is rejected.
(UTKARSH THAKORBHAI DESAI, J)
ANIRUDH OJHA
