6 min readNew DelhiMar 6, 2026 08:00 AM ISTThe CBI had claimed that during 1994–95, the accused fraudulently procured the disbursement of an LIC loan of Rs 1 lakh against a fictitious policy. (Image generated using AI)Chhattisgarh High Court news: Holding that strong suspicion cannot take the place of proof in a case involving the sanction of a Rs 1 lakh loan against a fictitious policy, the Chhattisgarh High Court recently acquitted two accused, including an LIC assistant, nearly 20 years after the CBI probed the loan fraud case.Justice Rajani Dubey was hearing the appeal of two accused, Avinash Pandit and Arun Vasant Bapat, challenging the sentence awarded to them by a special trial court in 2005. Justice Rajani Dubey was hearing the appeal of the accused Avinash Pandit and Arun Bapat.“Suspicion, however strong, cannot take the place of proof. In the absence of cogent and legally admissible evidence regarding conspiracy and any active role of appellants, the prosecution has failed to establish the foundational facts essential for sustaining charges under…the Indian Penal Code and …the Prevention of Corruption Act, 1988,” the high court said in its February 26 order.Case: Loan fraud case of 1994-95The CBI claimed that during 1994–95, the accused persons conspired and fraudulently procured sanction and disbursement of a Life Insurance Corporation of India (LIC) loan of Rs 1 lakh in favour of one Anju Pandit against a fictitious policy.It is alleged that one of the accused conspired with Arun Vasant Bapat – who was then posted as an assistant at the LIC’s Bilaspur branch – fabricated policy documents, forged signatures and falsely showed transfer of the policy from Ambikapur to Bilaspur, thereby cheating LIC.After completion of the investigation, the chargesheet was filed against the accused person, and the special trial court framed charges against them.The trial court, after going through the evidence placed on record, convicted and sentenced the accused persons. Both the accused were sentenced to undergo rigorous imprisonment for a period of one year with a fine of Rs 200.On failure to pay the fine, they were directed to undergo further rigorous imprisonment for a period of two years for the offences of cheating and forgery each.Also Read | Mule accounts, Rs 64 lakh trail: Chhattisgarh High Court denies bail to 3 accused in interstate cyber fraud case‘Failed to prove case’The CBI has failed to prove the charges against the accused person beyond a reasonable doubt, the court noted.The case rests merely on suspicion without any solid, reliable or legally admissible evidence establishing forgery, conspiracy, or involvement of the accused in the said offence.It was placed on record that the charges were framed against the accused Arun Vasant Bapat and Avinash Pandit under the various provisions of the Indian Penal Code (IPC) and the Prevention of Corruption Act, 1988.The main allegation of the prosecution is that the accused persons, acting in furtherance of a criminal conspiracy, fabricated and forged insurance policies and misrepresented them as “genuine transfer” policies, based on which the accused dishonestly withdrew and misappropriated the funds.It is noted that the CBI has only been able to establish that at the relevant time, the accused, Arun Vasant Bapat, was working as an assistant with the LIC.Also Read | ‘Must apply parity’: Why Chhattisgarh High Court granted bail to ex-CMO official in Rs 2,883 crore liquor ‘scam’It was also placed on record that certain cheques were issued in favour of policyholders in respect of policies shown as transferred.However, upon enquiry, it was revealed that several policies were dead policies and were never actually transferred from the Ambikapur branch to the Bilaspur branch.The CBI itself shows that the LIC office procedure involved several stages of checking and verification, with multiple safeguards before any policy transaction was completed and yet no clear evidence was produced to show how the appellants bypassed those safeguards or personally forged any document.The special trial court’s order of conviction and sentence is set aside, and the accused are acquitted of all the charges levelled against them.‘Weak prosecution case’Appearing for the accused person, advocate D N Prajapati said that the trial court had gravely erred in law and on the facts in convicting his client.It was further submitted that the findings of guilt are against the weight of evidence and rest on conjectures and surmises.It was also pointed out that the evidence placed on record, including the lack of authority of the branch manager to sanction the loan, and the handwriting expert’s opinion not supporting the prosecution’s case, was overlooked.He prayed to set aside the said order of the trial court.Also Read | 38 students, 1 wrong code: Kerala High Court saves Class 10 CBSE Board exam candidates from ‘clerical’ nightmare‘Legal, reasoned finding’On the contrary, representing the CBI, advocate B Gopa Kumar submitted that the trial court has rightly appreciated the evidence placed on record and returned findings of guilt based on proved acts and surrounding circumstances.Kumar further pointed out that the trial court has duly considered all evidence placed on record and found no perversity or illegality.He stated that the said order is legal, reasoned and warrants no interference.It was further alleged that the accused person utilised the policy numbers of lapsed or dead policies, in respect of which the policyholders had failed to deposit the required instalments, and on that basis fraudulently prepared fixed payment vouchers, pursuant to which payments were dishonestly released.Richa Sahay is a Legal Correspondent for The Indian Express, where she focuses on simplifying the complexities of the Indian judicial system. A law postgraduate, she leverages her advanced legal education to bridge the gap between technical court rulings and public understanding, ensuring that readers stay informed about the rapidly evolving legal landscape. Expertise Advanced Legal Education: As a law postgraduate, Richa possesses the academic depth required to interpret intricate statutes and constitutional nuances. Her background allows her to provide more than just summaries; she offers context-driven analysis of how legal changes impact the average citizen. Specialized Beat: She operates at the intersection of law and public policy, focusing on: Judicial Updates: Providing timely reports on orders from the Supreme Court of India and various High Courts. Legal Simplification: Translating dense "legalese" into accessible, engaging narratives without sacrificing factual accuracy. Legislative Changes: Monitoring new bills, amendments, and regulatory shifts that shape Indian society. ... 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