CA accused of forgery by advising investment in a firm gets bail by Allahabad High Court

Chartered Accountant accused of forgery and misappropriation of fund by advising investment in a particular firm gets bail 

In a recent judgment, Hon’ble Allahabad High Court granted bail to a Varanasi based Chartered Accountant who was accused of forgery and misappropriation of fund by advising investment in a particular firm.

ABCAUS Case Law Citation:
4858 (2025) (11) abcaus.in HC

In the instant case, a bail application had been moved on behalf of accused-applicant (chartered accountant) of Varanasi in case under Sections 409, 420, 506, 120-B of IPC for alleged forgery and/or misappropriation of fund of investors (the complainants).

The case in brief was that the on the advice and encouragement of the said CA the complainants advanced lakhs of rupees to a firm who was said to be allotting sub-dealership of LED bulbs. However after taking payment, neither the dealership was allotted not amount was returned. This lead to filing of FIR and arrest of the CA.

Before the Hon’ble High Court, it was submitted that the accused-applicant had not committed any offence of forgery or misappropriation of funds against the informant as alleged in the FIR and had been falsely implicated in this case.

It was submitted that the applicant was languishing in jail since last six months. It was submitted that the applicant was working as Chartered Accountant in the company of informant and as per the FIR the role of applicant was only of giving advice to the informant regarding investment in a firm in which the applicant himself had invested large amount.

It was further submitted that the applicant and his wife had also filed a complaint case under section 138 of N.I. Act against the owner of the said firm. It was argued that the said chartered accountant was not the actual beneficiary of the so called fraudulent transaction and no reliable evidence had been collected during the course of investigation as to how much amount had been misappropriated by the CA in this case.

It was submitted that charge-sheet had already been submitted, therefore, there was no reasonable possibility of intimidating or pressurizing the prosecution witnesses. Submission was that the conclusion of trial will take sufficiently long and there was no likelihood of his fleeing from course of justice or tampering with evidence in case of release on bail.

The Hon’ble High Court opined that in view the uncertainty regarding conclusion of trial; larger mandate of the Article 21 of the Constitution of India, considering the guideline of the Apex Court and also considering 5-6 times overcrowding in jails over and above their capacity by under trials and without expressing any opinion on the merits of the case, the CA be released on bail on his furnishing personal bond and two sureties subject to conditions ordered. In case of breach of any of the conditions prescribed, it shall be a ground for cancellation of bail.

Accordingly, the bail application was allowed.

Download Full Judgment Click Here >>

• Mutual Funds to value physical Gold and Silver by using the polled spot prices
• SC allows simultaneous CIRP proceedings against principal debtor & corporate guarantor
• Merely because sales were declared for only one month, same cannot be treated as bogus
• ITAT deleted addition as method of accounting had been accepted in earlier years
• Orders passed under Benami Act cannot be challenged under IBC 2016 – SC