Mumbai, January 19, 2019 – Sagar Dattaram Sawant (46), a former employee of Punjab National Bank (PNB), was granted bail today by the Special CBI Court in Mumbai. Sawant, who was originally Accused No. 8 in the case, was implicated in the ₹9.09 crore (USD 1.42 million) Letters of Undertaking (LOUs) fraud that rocked the banking sector in 2018.

The bail application, No. 961 of 2018, was heard by H.H. the Special Judge Shri. Jayendra C. Jagdale. Mr. Kiran Varma, the learned Advocate, represented the applicant/accused, while Mr. Omprakash, the learned Special Public Prosecutor (S.P.P.), appeared for the CBI/Respondent.

Sawant, who joined PNB as a Peon in 2011 and was later promoted to Single Window Operator-A in August 2015, served at the Brady House Branch in Fort until his suspension in February 2018. His suspension was revoked after four months, and he was re-designated and promoted to Single Window Operator-B. He was subsequently called for investigation by the CBI and formally arrested on December 17, 2018.

The CBI’s case alleges that Gokulnath Shetty, the then Deputy Manager, and Manoj Hanumant Kharat, a Single Window Operator at PNB’s Brady House Branch, conspired with Aditya Rasiwasia and Ishwardas Agarwal, directors of M/s. Chandri Paper and Allied Products Pvt. Ltd., to fraudulently issue two LOUs totaling USD 1,421,311.82 in favor of SBI, Antwerp, Belgium. These LOUs were allegedly issued without any sanctioned credit limit or the stipulated 110% margin, with the intention to defraud PNB’s Brady House Branch.

While Sawant was working as a Single Window Operator at the Brady House Branch during the relevant period and was authorized as a Maker & Checker for SWIFT messages, his counsel argued that he was only temporarily assigned to the Exports Section for a brief six-month period in 2016 to fill a vacancy. It was contended that the issuance of LOUs was beyond his scope of powers. Furthermore, a search of Sawant’s residence yielded no incriminating documents or materials. The defense emphasized that the evidence in the case was primarily documentary and already in the custody of the investigating agency, thus negating the need for Sawant’s continued physical custody.

The prosecution strongly opposed the bail, citing the crucial stage of the investigation and expressing concerns that Sawant might tamper with evidence and influence witnesses.

However, the Special Judge Shri. Jagdale, while acknowledging the seriousness of the allegations, referred to the Supreme Court’s guidelines in Nimmagadda Prasad v/s. Central Bureau of Investigation, which outline the considerations for granting bail. The court noted that the prosecution had not raised concerns about Sawant’s availability for trial or any larger threat to public interest. The prosecution’s apprehension about evidence tampering and witness influencing was deemed vague, lacking specific details about which witnesses or evidence were at risk.

Crucially, the court highlighted that the investigation against Sawant was complete, and a charge sheet had already been filed. On this basis, the court reasoned that the primary purpose of custodial investigation was over, and Sawant’s personal liberty should not be curtailed indefinitely based on vague allegations. Sawant’s undertaking to cooperate with the investigation agency and abide by any stringent conditions imposed by the court was also taken into consideration.

Consequently, the Special Judge allowed the bail application, subject to several conditions:

ORDER

1. Bail Application No. 961/2018 is allowed.
2. Applicant/original accused no. 8 SAGAR DATTARAM SAWANT is directed to be released on executing a P.R. Bond of ₹50,000/-. He must also furnish one or more sureties of the like amount within two months.
3. Sawant is directed not to leave India without prior permission from the Court.
4. Pending the furnishing of surety, Sawant must surrender his passport, if any, to the CBI.
5. Sawant must furnish his permanent address and contact numbers to the CBI.
6. Sawant must furnish the addresses and contact numbers of two relatives to the CBI.
7. Sawant is directed not to tamper with prosecution evidence and to assist in the disposal of the trial.
8. Sawant shall not commit any offence while on bail.
9. Sawant is directed to remain present before the investigating officer every Tuesday between 10:00 a.m. and 4:00 p.m. until further order.
10. Breach of any of these conditions will lead to the cancellation of his bail.
11. Sawant is allowed to be released provisionally upon furnishing a cash bail of ₹50,000/- for a period of two months, pending the submission of sureties.

The order was dictated, transcribed, signed, and uploaded on the court’s website on January 19, 2019. This decision underscores the importance of the completion of the investigation and the filing of a charge sheet as key factors in the consideration of bail applications, even in significant financial fraud cases. While granting bail, the court has imposed stringent conditions to ensure the accused’s cooperation with the ongoing legal process and to prevent any potential obstruction of justice.