Introduction:
In a significant ruling on October 31, 2025, the Orissa High Court, presided over by Justice Gourishankar Satapathy, refused to grant bail to Biju Janata Dal (BJD) youth leader Soumya Sankar Chakra alias Raja Chakra and co-accused Susanta Kumar Samal in a case involving the alleged misappropriation of approximately ₹175 crores of public funds. The case, titled Susanta Kumar Samal v. State of Odisha and Soumya Sankar Chakra @ Raja v. State of Odisha (BLAPL Nos. 7534 and 7952 of 2025), pertains to the alleged large-scale embezzlement of funds from the Gandhamardan Loading Agency and Transporting Co-operative Society Ltd., an organization meant for undertaking developmental works in the mine-affected areas of Gandhamardan, Putulipani, and Khandadhar. The Court observed that given the massive financial irregularities, the petitioners’ criminal antecedents, and the potential to influence witnesses, it was not appropriate to release them on bail at this stage when the trial had not yet commenced. Referring to the Supreme Court rulings in Y.S. Jagan Mohan Reddy v. CBI (2013) and CBI v. Ramendu Chattopadhyay (2019), Justice Satapathy underscored that courts must exercise extreme caution while granting bail in cases involving large-scale financial frauds of public money.
Arguments of the Petitioners:
Senior Advocate Ashok Parija, appearing for petitioner Susanta Kumar Samal, and Advocate C. Kanungo representing Soumya Sankar Chakra, argued that the prosecution’s case was based entirely on documentary evidence, all of which were already in the custody of the investigating agency. They contended that no purpose would be served by keeping the petitioners incarcerated during the long-drawn trial, especially considering the voluminous nature of documents and the large number of witnesses proposed to be examined. The defense maintained that the allegations of embezzlement were exaggerated and arose from mere commercial transactions between private entities. They submitted that both petitioners were engaged in legitimate business operations through Shankar Roadways and Shankar Minerals, and that the financial transactions in question were part of regular business dealings rather than misappropriation.
Counsel for Raja Chakra further argued that the prosecution had failed to establish any direct evidence linking the alleged withdrawals or fund transfers to personal gain or criminal conspiracy. They pointed out that payments made from the Society’s account were in connection with transportation and logistical contracts undertaken for the benefit of local communities. The petitioners argued that the entire matter had been given a political hue due to Raja Chakra’s association with the ruling political party, Biju Janata Dal, and his prominence as a youth leader. They claimed that the investigation had been influenced by political motives aimed at tarnishing their public image.
The petitioners also highlighted that the trial was yet to commence, and considering the magnitude of the case, it would likely take years for the proceedings to conclude. In this context, they invoked the principle of bail, not jail, emphasizing that continued pre-trial detention would amount to punishment without conviction. Furthermore, the defense submitted that there was no risk of evidence tampering, as the documents were secured by the authorities and all bank records were traceable. The petitioners also assured the Court that they would fully cooperate with the investigation and comply with any conditions imposed if granted bail.
Counsel for Susanta Samal added that while the petitioner had drawn several cheques from the Society’s account, the same were executed with proper authorization for developmental activities in the mine-affected areas. He argued that mere withdrawals, without evidence of personal enrichment, could not amount to criminal misappropriation. They further contended that the statements of the Block Development Officers (BDOs) and the Regional Manager of the Odisha Mining Corporation (OMC) were general in nature and did not conclusively prove that the developmental work had not been carried out. The defense also pointed out that Samal had a clean record except for the present allegations and posed no flight risk, asserting that he should be considered for bail on grounds of parity and fairness.
Arguments of the Prosecution:
Appearing for the State, Additional Public Prosecutor Mr. Partha Sarathi Nayak strongly opposed the bail pleas, arguing that the case involved the misappropriation of an enormous sum of public money—₹175 crores—intended for developmental works in areas affected by mining activities. The prosecution alleged that the petitioners had diverted funds meant for public welfare into their personal or related business accounts. It was submitted that between 2017 and 2024, the petitioners used their positions to fraudulently siphon off funds from the Gandhamardan Loading Agency and Transporting Co-operative Society Ltd., an entity created for the benefit of local villagers and rehabilitation of mine-affected communities.
The prosecution presented detailed findings from the financial investigation, revealing that ₹12.90 crore had been withdrawn from the Society’s accounts through self-cheques by Susanta Samal, allegedly on instructions from Raja Chakra. Furthermore, around ₹1.60 crore was transferred directly to the accounts of Shankar Roadways, a firm owned by Raja Chakra. Additionally, a massive sum of ₹9.39 crore was transferred to the account of a petrol pump, whose owner categorically denied supplying any fuel to the Society. The petrol pump owner instead claimed that Raja Chakra had taken fuel for his private agencies and used the Society’s cheques to pay for it, thereby demonstrating clear misappropriation of funds.
The prosecution emphasized that despite several claims of developmental works being undertaken, reports from the Block Development Officers of Banspal and Keonjhar Sadar, and the Regional Manager of OMC, confirmed that no such periphery development projects had been executed. The prosecution argued that the magnitude of financial irregularities, coupled with the long duration of the fraudulent activities spanning seven years, clearly indicated premeditated criminal conspiracy and systematic siphoning of public funds.
Highlighting the seriousness of the offense, the prosecution further submitted that the petitioner Raja Chakra had fourteen prior criminal antecedents, reflecting his propensity for unlawful activities. Similarly, the co-accused Samal had one previous criminal record. The prosecution contended that the release of such individuals on bail could seriously jeopardize the fairness of the upcoming trial, as they were influential persons capable of tampering with witnesses and obstructing justice. It was also argued that in financial crime cases, particularly those involving misuse of public funds, the possibility of recurrence of similar offenses is high if the accused are released prematurely.
Citing the judgments of the Supreme Court in Y.S. Jagan Mohan Reddy v. CBI (2013) and CBI v. Ramendu Chattopadhyay (2019), the prosecution argued that when public funds are misappropriated on a large scale, courts must adopt a cautious approach in granting bail, as such offenses have far-reaching social and economic implications. The prosecution concluded that considering the gravity of the crime, the influence of the accused, and the ongoing investigation, granting bail would be detrimental to the administration of justice.
Court’s Judgment:
After hearing both sides and analyzing the materials collected by the investigating agency, Justice Gourishankar Satapathy delivered a reasoned order refusing bail to both petitioners. The Court began by acknowledging the principle that bail is the rule and jail is the exception but clarified that this principle cannot be applied mechanically in cases involving massive financial frauds affecting public welfare. The Court observed that the case before it was not an ordinary financial dispute but a deliberate and organized embezzlement of huge sums of money that were meant for the upliftment and rehabilitation of communities adversely affected by mining operations.
The Court noted that approximately ₹175 crores had been misappropriated from the Gandhamardan Loading Agency and Transporting Co-operative Society Ltd. over seven financial years, from 2017–18 to 2023–24. The funds were meant for periphery development, yet official reports confirmed no such projects had materialized. Justice Satapathy remarked that this indicated an alarming breach of public trust and a grave offense against society at large.
Taking into account the documentary evidence, the Court observed that substantial sums were transferred to Shankar Roadways and other accounts connected to the petitioners. The transfer of ₹9.39 crore to a petrol pump account, despite the owner’s admission that no fuel was supplied, was seen as a clear instance of financial irregularity. The Court also found that the petitioners had failed to provide any credible explanation for the large sums credited to their personal or business accounts.
Justice Satapathy emphasized that the magnitude of the alleged fraud, the systematic diversion of funds, and the extended period over which the activities took place demonstrated the petitioners’ deep involvement in the crime. The Court found merit in the prosecution’s concern regarding witness intimidation, particularly given the fourteen prior criminal cases against Raja Chakra and one against Samal. The Court observed that their release could seriously prejudice the trial, as material witnesses were yet to be examined and the investigation was ongoing.
Relying on Y.S. Jagan Mohan Reddy v. CBI and CBI v. Ramendu Chattopadhyay, the Court reiterated that in cases of large-scale economic offenses, especially those involving public money, the impact on society is profound and extends beyond mere monetary loss. The Court stated that such crimes corrode public confidence in institutions and governance, and therefore, granting bail in such circumstances must be approached with utmost caution.
The Court held:
“Taking into account the magnitude of the financial fraud and the propensity of the petitioners for the alleged crime and considering the totality of the materials collected by the investigating agency, this Court considers it undesirable to grant bail to the petitioners at this stage, especially when the trial is yet to commence and material witnesses are yet to be examined.”
Accordingly, both bail applications were dismissed. The Court clarified that the petitioners could renew their request for bail at a later stage once a substantial part of the trial has been completed.