BENGALURU – The LX Additional City Civil and Sessions Court in Bengaluru has granted bail to Raghavendra Karanth, a bank official arrayed as Accused No. 5 in a major financial fraud and misappropriation case involving the Doddagubbi Branch of Karnataka Bank. The order, delivered by Judge Sri Narashimsa M.V. on June 20, 2022, comes after the completion of the investigation and the filing of a formal charge sheet by the Kothanur Police.
Raghavendra Karanth had been in judicial custody since March 12, 2022. The case, registered under Crime No. 35/2022, involves allegations of a massive internal fraud totaling approximately Rs 400 lakhs. The court’s decision to grant bail was influenced significantly by the filing of the charge sheet and the principle of parity, as several other co-accused had already been released.
Background of the Karnataka Bank Fraud Case
The legal proceedings were initiated following a first information report (FIR) lodged by the Assistant General Manager of Karnataka Bank. The primary allegation was directed at Muralidhar (Accused No. 1), who was working as a Clerk at the Doddagubbi Branch. The bank’s internal audit revealed that Muralidhar had allegedly misused his position to create fraudulent Fixed Deposit (FD) receipts and illegally collect money from customers.
The investigation suggested that Muralidhar operated customer accounts without authorization and forged numerous documents to facilitate the embezzlement of bank funds. Raghavendra Karanth, who was initially arrayed as Accused No. 2 but later repositioned as Accused No. 5 in the charge sheet, was implicated for his alleged role in overseeing these transactions or failing to prevent them through negligence.
The charges filed against the accused include several sections of the Indian Penal Code, such as Section 408 (Criminal breach of trust by clerk), 409 (Criminal breach of trust by public servant or banker), 420 (Cheating), 468 (Forgery for purpose of cheating), and 471 (Using as genuine a forged document).
Allegations Against Raghavendra Karanth
According to the charge sheet, the prosecution alleged that Karanth received funds from the primary accused, Muralidhar, and deposited the money into the bank account of his son-in-law. Furthermore, the Kothanur Police claimed that Karanth had signed the fraudulent FD receipts created by Muralidhar without proper verification, simply reposing faith in his subordinate.
Karanth’s legal counsel, Sri S. Doreraju, argued that his client was innocent and had no direct involvement in the criminal conspiracy. The defense highlighted that Karanth was actually on leave during the period when many of the alleged offenses took place. They contended that he had signed the documents in the routine course of business, trusting that his subordinates had performed their duties correctly, which amounted to a dereliction of duty rather than a criminal intent to defraud.
The Court’s Reasoning and the Principle of Parity
In evaluating the bail application, the court noted that the investigation was complete and the charge sheet had been filed before the 4th ACMM court. This mitigated the concern that the petitioner might interfere with the collection of evidence.
A crucial factor in the court’s decision was the “Law of Parity.” The defense provided copies of orders from the Hon’ble High Court of Karnataka (Crl. Petition No. 3660/2022), which had already granted bail to Accused No. 2. Other co-accused had also been enlarged on bail by various courts. Under Indian law, when co-accused with similar or more severe allegations are granted bail, the court generally extends the same benefit to others to ensure equality before the law.
Judge Narashimsa M.V. observed that the offenses alleged against Karanth are not punishable by death or life imprisonment. The court also noted that there were no direct allegations against Karanth from the bank’s customers. “Accused No. 5 appears to have put his signatures on FDs in the routine course of his work, on the faith that his subordinates would have done their job perfectly,” the judge noted in the order.
Bail Conditions and Final Order
The court concluded that since the evidence is largely based on bank records and documents already seized by the police, there was no immediate risk of the petitioner tampering with the evidence. Consequently, the court allowed the bail application under Section 439 of the Cr.P.C.
Raghavendra Karanth was ordered to be released on bail subject to the following conditions:
- Bond and Surety: The petitioner must execute a personal bond for a sum of Rs 50,000 with one surety for the like sum.
- Witness Protection: The petitioner is strictly prohibited from threatening or influencing the witnesses in any manner.
- Jurisdictional Restrictions: The petitioner must attend all court hearing dates and is not permitted to leave the jurisdiction of the court without prior permission.
The ruling marks a significant step in the trial process, allowing the bank official to defend himself from outside of prison as the court prepares for a full-fledged trial to determine the actual extent of criminal liability in the Rs 4 crore misappropriation scandal.