Delhi High Court
Lalit Kumar vs Central Bureau Of Investigation on 18 February, 2026
* I N T H E H I G H CO U RT O F DE L H I AT NE W DE L H I
Reserved on: January 13, 2026
% Pronounced on: February 18, 2026
+ CRL.M.C. 6229/2022
LALIT KUMAR .....Petitioner
Through: Mr. Aashul Aggarwal and Mr. Yogesh
Panwar, Advs.
Versus
CENTRAL BUREAU OF INVESTIGATION .....Respondent
Through: Mr. Anuram S. Sharma, SPP for CBI
alongwith Ms. Harpreet Kalsi, Mr.
Vashisht Rao, Mr. Ripudaman
Sharma, Ms. Riya Sachdeva and Ms.
Amisha, Advs.
CORAM:
HON'BLE MR. JUSTICE SAURABH BANERJEE
JUDGMENT
1. By way of the present petition under Section 482 of the Code of
Criminal Procedure1, the petitioner seek setting aside of the order dated
07.09.2022 passed by the learned Special Judge (PC Act) (CBI)-07, Rouse
Avenue Court, New Delhi2 in CC No.375/2019 whereby charges were
framed against the petitioner under Section 120B read with Sections
420/468/471 of the Indian Penal Code3 and under Section 13(2) read with
1 Hereinafter referred to as ‘Cr.P.C.’
2
Hereinafter referred to as ‘Trial Court’.
3 Hereinafter referred to as ‘IPC‘.
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Section13(1)(d) of the Prevention of corruption Act4.
2. Briefly encapsulated, based on a written complaint of the Deputy
General Manager, Corporation Bank, Zonal Office, Delhi (South)5, an FIR
bearing no. RC-09/A/2017 dated 21.06.2017 came to be registered wherein it
was alleged that in March 2013, one Sumit Mittal, projecting himself to be
the proprietor of M/s. Shree Balaji Overseas6, approached the Bank seeking
working capital finance of Rs.600 lakhs. The said loan proposal was
sanctioned by the Bank on 19.04.2013, stipulating hypothecation of stock-in-
trade and EMG of property bearing no.A-68, measuring 138.17 sq. mtrs.,
situated at Pushpanjali Enclave, Pitampura, Delhi, in the name of Sh. Sat
Narayan Mittal. Pursuant thereto, on 26.04.2013, the Vasant Kunj branch of
the Bank disbursed a Corp. Vyapar Loan of Rs.600 lakhs to the account of
the borrower firm.
3. However, during inspection certain suspicion arose. As such, the Bank
initiated an internal inquiry and it was found that the loan was applied based
on forged and fabricated documents, which were not verified before
sanctioning of the loan, and the title documents of the property which was
offered as collateral were also found to be fabricated, as also the said loan
was sanctioned in violation of various Circulars and Guidelines. It also
emerged that the borrower firm and its proprietor were fictitious/ non-
existent, as also that the said Sumit Mittal, along with certain senior bank
officials at the Vasant Kunj Branch, CCPC and ZLCC, Delhi (South), and
4 Hereinafter referred to as ‘PCAct’
5 Hereinafter referred to as ‘Bank’
6
Hereinafter referred to as ‘borrower firm’
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other private person had entered into criminal conspiracy to unlawfully get a
loan of Rs.600 lakhs sanctioned based on those false and fabricated
documents. The investigation also revealed that the loan amount was
siphoned out within a period of twenty days through the accounts of various
fake firms opened in the name of different impersonators, companies against
accommodation entries and self-withdrawal. M/s. Kabir Enterprises Pvt.
Ltd.7, was one of those entities which received Rs.87,50,166/- from the loan
account of the borrower firm. The petitioner herein and Mr. Shyam Lal are
stated to be Director of said M/s. Kabir Enterprises Pvt. Ltd.
4. Thereafter, with the aforesaid findings, chargesheet dated 25.03.2019
was filed and vide order dated 07.09.2022 charges were framed against the
petitioner. Aggrieved thereby, the petitioner has approached this Court by
way of the present petition.
5. Mr. Aashul Aggarwal, learned counsel for the petitioner has advanced
his submissions and contended that:-
i. No individual act/ role has been attributed to the petitioner in the
entire chargesheet as there is no material on record indicating direct/
indirect ties of the alleged offence with the petitioner. In as much as,
neither the petitioner received any money in his personal account nor
he took part in the movement of the funds or was the signatory on any
of the documents.
ii. Since, only the Company had received the funds, and it is not an
accused herein, therefore, as per the settled law, no proceedings can be
7
Hereinafter referred to as ‘Company’CRL.M.C. 6229/2022 Page 3 of 17
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initiated against the (Managing) Director(s) of the said company.
Reliance in this regard is placed upon Sharad Kumar Sanghi Vs
Sangita Rane8; Dayle De’souza Vs Government of India through
Deputy Chief Labour Commissioner & Anr.9; S.K Alagh Vs State of
Uttar Pradesh & Ors.10; Aneeta Handa Vs Godfather Travels &
Tours Pvt Ltd.11.
iii. Even otherwise, the sole allegation against the petitioner is that
he is a Director of the Company, in whose account an amount of
Rs.87,50,166/- was credited from the loan account of the borrower
firm without any genuine business transaction for siphoning it. Since,
neither the IPC nor the PC Act, under which the offences are alleged,
provide for automatic vicarious liability of a Director and there is no
specific role, no criminal liability can be fastened upon the petitioner.
Reliance in this regard is placed upon Ravindranatha Bajpe Vs.
Mangalore Special Economic Zone Ltd and Ors. Etc.12; Sunil Bharti
Mittal Vs CBI13.
iv. It is not the case of the prosecution that the Company is a
fictitious and/ or benami to siphon the loan amount. Moreover, since
there is no material on record to establish that the transaction between
the borrower firm and the Company was sham, mere transfer of funds8 2015 (2) SCC 127
9
2021 SCC Online SC 1012
10
2008 5 SCC 662
11
2012 (5) SCC 661
12
Criminal Appeal nos. 1407/2021
13
2015 (1) SCALE 140CRL.M.C. 6229/2022 Page 4 of 17
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cannot by itself give rise to a presumption of siphoning.
v. The prosecution has taken contradictory stands at different
stages as though it was asserted before the learned Trial Court that the
petitioner, as a Director of the Company, had helped in siphoning the
loan amount, however, before this Court it is asserted that the
petitioner acted in his individual capacity, allegedly misusing the
Company as a conduit.
vi. To constitute an offence under Section 120B IPC, there must be
prima facie material showing meeting of minds between the accused
persons in furtherance of a common illegal object, which is not the
case of the prosecution herein as there is neither any such allegation
nor material to suggest prior agreement, communication or
coordination between the petitioner and anyone else. A solitary
transaction cannot be elevated to a criminal conspiracy in the absence
of circumstances pointing towards a pre-existing agreement. To
buttress his submissions, the learned counsel placed reliance upon
Navjot Sandhu Vs State of NCT14; K.R Purushothaman Vs State of
Kerala15; Ms. Arunwan Thamvaro Vs State16; Mohd. Khaild Vs State
of West Bengal17; State of Gujarat Vs Mohammed Atik & Ors18.
6. Controverting the aforesaid submissions of the learned counsel for the
petitioner, Mr. Anuram Sharma, learned SPP for CBI submitted that:-
14 2005 SCC (Cri) 1715
15
(2005) 12 SCC 631
16
(2005) DLT 433
17
(2002) 7 SCC 334
18
(1998) 4 SCC 351CRL.M.C. 6229/2022 Page 5 of 17
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i. This is not a case of vicarious liability as it is based on the
individual conduct of the petitioner and the Company was merely a
conduit used for receiving the diverted loan amount.
ii. Since the loan was sanctioned in favour of the borrower firm on
19.04.2013 and an amount of Rs.87,50,166/- was transferred to the
petitioner through his Company on 26.04.2013, i.e. within seven days
thereof, his involvement is evident.
iii. Moreover, as per investigation, it has been established that the
borrower firm was a fictitious and non-existent entity, and there was/ is
no legitimate transaction. This clearly demonstrates the petitioner’s
active involvement in the commission of the offences, in collusion and
connivance with the other co-accused persons.
iv. For purposes of Section(s) 227 and 228 of the Cr.P.C., the Court
is only required to assess the material on record, which gives rise to
grave suspicion against the accused and nothing more. The learned
Trial Court has rightly found sufficient ground to proceed against the
petitioner under Section 228 of Cr.P.C.
7. This Court has heard the counsel for the petitioner and the learned SPP
and perused the documents on record along with the judgements cited
therewith at bar.
8. As per Chapter XVIII of the Cr.P.C., the Court is either to discharge
the accused in terms of Section 22719 thereof, if no case is made out or
19
227. Discharge.-If, upon consideration of the record of the case and the documents
submitted therewith, and after hearing the submissions of the accused and the prosecution in
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proceed with the framing of charges against the said accused under Section
228 of the Cr.P.C.20, if there is/ are sufficient ground(s) for proceeding
against him. However, either of the above have to be keeping in mind that at
the said stage of framing of charges, the purpose of the inquiry is not to
arrive at the conclusion whether the proceedings are likely to lead to a
conviction, as that is left for trial, and the Court has only to prima facie
consider whether there is a sufficient ground for proceeding against the
accused and for the said limited purpose the Court may sift the evidence. As
such, if the material placed before a Court discloses grave suspicion against
the accused, to which there is no proper explanation, the Court will be fully
justified in farming the charge and proceeding with the trial, however, if two
views are equally possible and the Court is satisfied that the material/
evidence produced gave rise to some suspicion but not grave suspicion
against the accused, the Court will be fully justified to discharge the accused.
Notably, the stage of framing of charge is not a mere ritual but a judicial
this behalf, the Judge considers that there is not sufficient ground for proceeding against the
accused, he shall discharge the accused and record his reasons for so doing.
20
228. Framing of charge.-(1) If, after such consideration and hearing as aforesaid, the Judge
is of opinion that there is ground for presuming that the accused has committed an offence
which–
(a) is not exclusively triable by the Court of Session, he may, frame a charge against the
accused and, by order, transfer the case for trial to the Chief Judicial Magistrate, [or any
other Judicial Magistrate of the first class and direct the accused to appear before the Chief
Judicial Magistrate, or, as the case may be, the Judicial Magistrate of the first class, on such
date as he deems fit, and thereupon such Magistrate] shall try the offence in accordance with
the procedure for the trial of warrant-cases instituted on a police report;
(b) is exclusively triable by the Court, he shall frame in writing a charge against the accused.
(2) Where the Judge frames any charge under clause (b) of sub-section (1), the charge shall be
read and explained to the accused and the accused shall be asked whether he pleads guilty of
the offence charged or claims to be tried.
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exercise requiring conscious application of mind. The Court cannot merely
act as the post office or a mouthpiece of the prosecution.
9. The Hon’ble Supreme Court in Amit Kapoor v. Ramesh Chander 21,
while considering the scope of Section(s) 227 and 228 of the Cr.P.C. has held
as under:-
“17. Framing of a charge is an exercise of jurisdiction by
the trial court in terms of Section 228 of the Code, unless the
accused is discharged under Section 227 of the Code. Under
both these provisions, the court is required to consider the
“record of the case” and documents submitted therewith and,
after hearing the parties, may either discharge the accused
or where it appears to the court and in its opinion there is
ground for presuming that the accused has committed an
offence, it shall frame the charge. Once the facts and
ingredients of the section exists, then the court would be right
in presuming that there is ground to proceed against the
accused and frame the charge accordingly. This presumption
is not a presumption of law as such. The satisfaction of the
court in relation to the existence of constituents of an offence
and the facts leading to that offence is a sine qua non for
exercise of such jurisdiction. It may even be weaker than a
prima facie case. There is a fine distinction between the
language of Sections 227 and 228 of the Code. Section 227 is
the expression of a definite opinion and judgment of the
Court while Section 228 is tentative. Thus, to say that at the
stage of framing of charge, the Court should form an opinion
that the accused is certainly guilty of committing an offence,
is an approach which is impermissible in terms of Section
228 of the Code.
***
21
(2012) 9 SCC 460CRL.M.C. 6229/2022 Page 8 of 17
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19. At the initial stage of framing of a charge, the court is
concerned not with proof but with a strong suspicion that the
accused has committed an offence, which, if put to trial,
could prove him guilty. All that the court has to see is that the
material on record and the facts would be compatible with
the innocence of the accused or not. The final test of guilt is
not to be applied at that stage. We may refer to the well-
settled law laid down by this Court in State of
Bihar v. Ramesh Singh [State of Bihar v. Ramesh Singh,
(1977) 4 SCC 39 : 1977 SCC (Cri) 533] : (SCC pp. 41-42,
para 4)
‘4. Under Section 226 of the Code while opening
the case for the prosecution the Prosecutor has got to
describe the charge against the accused and state by
what evidence he proposes to prove the guilt of the
accused. Thereafter comes at the initial stage the duty
of the court to consider the record of the case and the
documents submitted therewith and to hear the
submissions of the accused and the prosecution in that
behalf. The Judge has to pass thereafter an order
either under Section 227 or Section 228 of the Code. If
“the Judge considers that there is no sufficient ground
for proceeding against the accused, he shall discharge
the accused and record his reasons for so doing”, as
enjoined by Section 227. If, on the other hand, “the
Judge is of opinion that there is ground for presuming
that the accused has committed an offence which-… (b)
is exclusively triable by the court, he shall frame in
writing a charge against the accused”, as provided in
Section 228. Reading the two provisions together in
juxtaposition, as they have got to be, it would be clear
that at the beginning and the initial stage of the trial
the truth, veracity and effect of the evidence which the
Prosecutor proposes to adduce are not to be
meticulously judged. Nor is any weight to be attached
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to the probable defence of the accused. It is not
obligatory for the Judge at that stage of the trial to
consider in any detail and weigh in a sensitive balance
whether the facts, if proved, would be incompatible
with the innocence of the accused or not. The standard
of test and judgment which is to be finally applied
before recording a finding regarding the guilt or
otherwise of the accused is not exactly to be applied at
the stage of deciding the matter under Section 227 or
Section 228 of the Code. At that stage the court is not
to see whether there is sufficient ground for conviction
of the accused or whether the trial is sure to end in his
conviction. Strong suspicion against the accused, if the
matter remains in the region of suspicion, cannot take
the place of proof of his guilt at the conclusion of the
trial. But at the initial stage if there is a strong
suspicion which leads the court to think that there is
ground for presuming that the accused has committed
an offence then it is not open to the court to say that
there is no sufficient ground for proceeding against the
accused. The presumption of the guilt of the accused
which is to be drawn at the initial stage is not in the
sense of the law governing the trial of criminal cases in
France where the accused is presumed to be guilty
unless the contrary is proved. But it is only for the
purpose of deciding prima facie whether the court
should proceed with the trial or not. If the evidence
which the Prosecutor proposes to adduce to prove the
guilt of the accused even if fully accepted before it is
challenged in cross-examination or rebutted by the
defence evidence, if any, cannot show that the accused
committed the offence, then there will be no sufficient
ground for proceeding with the trial. An exhaustive list
of the circumstances to indicate as to what will lead to
one conclusion or the other is neither possible nor
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advisable. We may just illustrate the difference of the
law by one more example. If the scales of pan as to the
guilt or innocence of the accused are something like
even at the conclusion of the trial, then, on the theory
of benefit of doubt the case is to end in his acquittal.
But if, on the other hand, it is so at the initial stage of
making an order under Section 227 or Section 228,
then in such a situation ordinarily and generally the
order which will have to be made will be one under
Section 228 and not under Section 227.'”
10. This Court is also to bear in mind the guiding principles regarding
quashing of a charge/ proceedings either in exercise of jurisdiction under
Section 397 Cr.P.C. or Section 482 Cr.P.C. or together, as the case may be,
which have also been laid down in the very same judgment of the Hon’ble
Supreme Court i.e. Amit Kapoor (supra) as under:-
“27. … …27.1. Though there are no limits of the powers of
the Court under Section 482 of the Code but the more the
power, the more due care and caution is to be exercised in
invoking these powers. The power of quashing criminal
proceedings, particularly, the charge framed in terms of
Section 228 of the Code should be exercised very sparingly
and with circumspection and that too in the rarest of rare
cases.
27.2. The Court should apply the test as to whether the
uncontroverted allegations as made from the record of the
case and the documents submitted therewith prima facie
establish the offence or not. If the allegations are so patently
absurd and inherently improbable that no prudent person
can ever reach such a conclusion and where the basic
ingredients of a criminal offence are not satisfied then the
Court may interfere.
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27.3. The High Court should not unduly interfere. No
meticulous examination of the evidence is needed for
considering whether the case would end in conviction or not
at the stage of framing of charge or quashing of charge.
27.4. Where the exercise of such power is absolutely
essential to prevent patent miscarriage of justice and for
correcting some grave error that might be committed by the
subordinate courts even in such cases, the High Court should
be loath to interfere, at the threshold, to throttle the
prosecution in exercise of its inherent powers.
27.5. Where there is an express legal bar enacted in any of
the provisions of the Code or any specific law in force to the
very initiation or institution and continuance of such criminal
proceedings, such a bar is intended to provide specific
protection to an accused.
27.6. The Court has a duty to balance the freedom of a
person and the right of the complainant or prosecution to
investigate and prosecute the offender.
27.7. The process of the court cannot be permitted to be used
for an oblique or ultimate/ ulterior purpose.
27.8. Where the allegations made and as they appeared from
the record and documents annexed therewith to
predominantly give rise and constitute a “civil wrong” with
no “element of criminality” and does not satisfy the basic
ingredients of a criminal offence, the court may be justified in
quashing the charge. Even in such cases, the court would not
embark upon the critical analysis of the evidence.
27.9. Another very significant caution that the courts have to
observe is that it cannot examine the facts, evidence and
materials on record to determine whether there is sufficient
material on the basis of which the case would end in a
conviction; the court is concerned primarily with the
allegations taken as a whole whether they will constitute an
offence and, if so, is it an abuse of the process of court
leading to injustice.
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27.10. It is neither necessary nor is the court called upon to
hold a full-fledged enquiry or to appreciate evidence
collected by the investigating agencies to find out whether it
is a case of acquittal or conviction.
27.11. Where allegations give rise to a civil claim and also
amount to an offence, merely because a civil claim is
maintainable, does not mean that a criminal complaint
cannot be maintained.
27.12. In exercise of its jurisdiction under Section 228 and/or
under Section 482, the Court cannot take into consideration
external materials given by an accused for reaching the
conclusion that no offence was disclosed or that there was
possibility of his acquittal. The Court has to consider the
record and documents annexed therewith by the prosecution.
27.13. Quashing of a charge is an exception to the rule of
continuous prosecution. Where the offence is even broadly
satisfied, the Court should be more inclined to permit
continuation of prosecution rather than its quashing at that
initial stage. The Court is not expected to marshal the
records with a view to decide admissibility and reliability of
the documents or records but is an opinion formed prima
facie.
27.14. Where the charge-sheet, report under Section 173(2)
of the Code, suffers from fundamental legal defects, the Court
may be well within its jurisdiction to frame a charge.
27.15. Coupled with any or all of the above, where the Court
finds that it would amount to abuse of process of the Code or
that the interest of justice favours, otherwise it may quash the
charge. The power is to be exercised ex debito justitiae i.e. to
do real and substantial justice for administration of which
alone, the courts exist.
***
27.16. These are the principles which individually and
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consideration as precepts to exercise of extraordinary and
wide plenitude and jurisdiction under Section 482 of the
Code by the High Court. Where the factual foundation for an
offence has been laid down, the courts should be reluctant
and should not hasten to quash the proceedings even on the
premise that one or two ingredients have not been stated or
do not appear to be satisfied if there is substantial
compliance with the requirements of the offence.”
11. It, thus, entails that this Court has to be circumspect while dealing with
quashing of proceedings, particularly, once a charge has been framed and
interference at this stage is warranted only in rare and exceptional cases,
wherein, even if the entire material placed by the prosecution is accepted at
face value, no offence is made out, or where continuation of the proceedings
would amount to a patent abuse of the process of the Court or result in grave
miscarriage of justice. In such a scenario, the prosecution must be permitted
to proceed with the trial for taking things to their logical conclusion.
12. Based thereon, this Court proceeds to determine if the charges framed
against the petitioner can be sustained or not.
13. The role attributed to the petitioner in the charge sheet is reproduced as
under:
“… …The investigation has revealed that, neither Branch
Manager had sent the compliance certificate of terms and
conditions of the loan to ZLCC nor accused ZLCC members
sought any explanation of Branch Manager for non
compliance. The Bank shall also check as to whether the
funds are used for the purpose for which loan is sanctioned
but no Bank Official ensured regarding the end use of funds.
In this case the loan amount has been siphoned out by the
borrower within 20 days between 26.04.2013 to 15.05.2013
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through the account of various fake firms opened in the
name of various impersonators, companies against
accommodation entries and self withdrawal from CVPOD
account of M/s Shree Balaji Overseas as mentioned below:-
XXX XXX XXX
There after the said CVPOD account was used for rotating
the funds of other bogus firms. Documents related to the
Bank accounts of above mentioned parties were obtained
from different Banks to trace the concerned parties. Some
persons were traced after great efforts as some of them used
fake names, expired, the addresses given were either fake or
they were not available at the given addresses. Some
genuine accounts have been used for arranging
accommodation entries. The details of the persons whose
photographs have beer used for the purpose of
impersonation to get the accounts opened of the above
mentioned firms/companies are as follows:-
i. Lalit Kumar (A-9) and Shyam Lal (A-10)- Both are
directors in M/s. Kabir Enterprises Pvt. Ltd. which received
Rs. 8750166/-from the CVPOD account of M/s. Shree Balaji
Overseas. Relevant record of ROC office through B.D.
Joshi, UDC has confirmed the fact … …”
14. A perusal of the chargesheet and the material supplied therewith
reveals that the borrower firm, in whose favour the loan was sanctioned, as
well as its alleged proprietor, were fictitious and non-existing entities since
inception and the said borrower firm had been brought into existence solely
as an instrumentality to defraud the Bank. In such circumstances, the
existence of any bona fide and genuine business relationship between the said
borrower firm and the Company is indeed doubtful. In fact, no plausible
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explanation emerges from the record to justify that the admitted transfer of
Rs.87,50,166/- directly from the loan account of the borrower firm to the
account of the Company. Consequently, at this stage, the said transfer cannot
be lightly brushed aside as an ordinary business transaction done by the
Company, particularly, whence such a substantial amount was transferred
within a week of the loan disbursal and when the other firms to which the
fund were transferred were found to be sham and had been opened through
impersonation with the objective of siphoning off the loan proceeds.
15. In view of the aforesaid, there is something broader than what meets
the eye and which requires further probing, more so, when the Company was
only used as an instrument/ conduit to receive and utilize the ill-gotten fund.
Since, the petitioner herein was admittedly one of the Director in the
Company when the said fund was transferred, in the absence of any
unimpeachable evidence/ material to the contrary, there is indeed strong
suspicion regarding his (active) role/ involvement in the alleged siphoning
off the loan proceeds, which needs to be probed in trial and for which charges
have to be framed against him.
16. Lastly, as it is the case of the prosecution that the Company has no
independent role to play and was only used as conduit to commit the
siphoning off the loan proceeds, there was no requirement of arraigning it as
an accused and consequently, the question of fastening vicarious liability
upon the petitioner on the basis of his designation as a Director does not even
arise and as such, the reliance placed by the petitioner upon various decisions
of the Hon’ble Supreme Court is of no assistance.
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17. As such, keeping in view of the aforesaid analysis and reasoning, the
present petition is dismissed and the charges framed against the petitioner
vide the impugned order dated 07.09.2022 passed by the learned Special
Judge (PC Act) (CBI)-07, Rouse Avenue Court, New Delhi in CC
No.375/2019 are sustained.
18. Accordingly, the present petition along with the pending application, if
any, is dismissed.
SAURABH BANERJEE, J
FEBRUARY 18, 2026/Ab/GA
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