Justice Dipankar Datta, Justice Sheel Nagu, Supreme Court

While granting bail to two accused in a case of alleged financial irregularities within the Rajasthan Public Health Engineering Department, the Supreme Court has reaffirmed that pre-trial incarceration cannot masquerade as punitive detention, particularly when the commencement and conclusion of the trial are not imminent.

The Supreme Court was considering an appeal challenging the judgment dismissing the applications seeking regular bail by the Rajasthan High Court vide separate impugned orders.

The Division Bench of Justice Dipankar Datta and Justice Sheel Nagu held, “It is a well-settled postulate of criminal jurisprudence that pre-trial incarceration cannot masquerade as punitive detention, particularly when the commencement and conclusion of the trial are not imminent. This Court must intervene to safeguard the right to personal liberty under Article 21 of the Constitution of India when a trial cannot be reasonably concluded in the near future.”

Senior Advocate Siddharth Dave represented the Appellant while Additional Advocate General Sansriti Pathak represented the Respondent.

Factual Background

The case revolves around conspiracy and massive financial irregularities within the Public Health Engineering Department, Rajasthan. These anomalies pertained to the execution of the “Jal Jeevan Mission”. The prosecution projected that two private contracting firms, acting in connivance with senior public servants and private intermediaries, procured forged and fabricated work-experience and completion certificates purportedly issued by IRCON International Limited. Relying on these forged documents, the firms deceitfully secured eligibility and were awarded work orders for approximately 104 tenders, amounting to a sum of ₹ 979.45 crore, thereby causing immense wrongful loss to the State exchequer.

A common Preliminary Enquiry subsequently culminated in the registration of an FIR. The said FIR was registered for offences punishable under Sections 7(c), 9, 10, 13(1)(a) read with Section 13(2), and Section 12 of the Prevention of Corruption Act, 1988 (as amended in 2018), alongside Sections 409, 466, 467, 468, 471, 477-A, and 120-B of the Indian Penal Code. It was alleged that the first appellant, Shubhanshu Dixit, a public servant who served as the Secretary of the Rajasthan Water Supply and Sewerage Management Board (RWSSMB), Jal Bhawan, Jaipur, acted in criminal conspiracy with the then Additional Chief Secretary and the accused contractors by deliberately suppressing the complaints highlighting the use of forged IRCON certificates by the accused firms.

The second appellant, Sanjay Badaya, a private individual, was portrayed by the prosecution as a central intermediary and broker acting on behalf of the then Cabinet Minister of the PHED. It was alleged that he collected substantial cash bribes from the accused contractors in exchange for securing favourable treatment, suppressing pending inquiries, and ensuring the smooth clearance of inflated bills.

Reasoning

The Bench affirmed the view of the counsel for the State that economic offences having deep-rooted conspiracies must be viewed seriously. The Bench noted that the investigation with respect to the appellants was complete, and chargesheets had since been filed. The prosecution’s case predominantly rested on documentary records and electronic trails. “Since these materials are already seized and in the safe custody of the investigating agency, the apprehension of tampering with evidence is substantially obliterated”, it added.

The Bench also found that the materials to be placed before the Trial Court were voluminous and the proceedings are at a nascent stage. It was further noticed that charges were yet to be framed and the trial was bound to be a protracted exercise.

The Bench further noticed that some co-accused in this overarching conspiracy, whose alleged roles would be considered at trial, had already been granted bail or protection. “One such co-accused, Mr. Arun Srivastava, was enlarged on bail by the High Court vide order dated 1st June, 20265 . Notably, the principal political executive, the then PHED Minister, Mr. Mahesh Chandra Joshi, has been granted bail in the corresponding PMLA offence6 arising out of the present FIR, by this Court vide order dated 3rd December, 2025”, it noted.

Thus, holding that no fruitful purpose would be served in keeping the appellants under further pre-trial custody, the Bench allowed the appeals, set aside the impugned orders passed by the High Court and granted bail to the two accused.

Cause Title: Sanjay Badaya v. State of Rajasthan (Neutral Citation: 2026 INSC 1065)

Appearance

Appellant: Senior Advocate Siddharth Dave, Advocates Pankaj Singhal, Ashima Gupta, Chandan Kashyap, Etti Sharma, AOR M. P. Srivignesh, Advocates Deepriya Snehi, Yashika Kaushik, AOR Shagufa Salim

Respondent: Additional Advocate General Sansriti Pathak, AOR Saurabh Rajpal, Advocates Sagufa Khan

Click here to read/download Order


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