Calcutta, March 4: A Barasat court today turned down a plea by Delhi police to cancel the bail of Calcutta businessman Shibaji Panja, saying there was no reason to believe that he had "misused the liberty" granted to him by a Barrackpore court.

Panja was arrested on February 21 at Calcutta airport on a fraud charge after he returned from a trip to Dhaka with the chief minister. He was granted bail a day later by the additional chief judicial magistrate's court in Barrackpore till March 10. The economic offences wing of Delhi police had filed the bail cancellation petition in the district and sessions court in Barasat.

Delhi police sources said the force was planning to move Calcutta High Court next week.

Lawyers representing Panja today said in court that the businessman had contacted the investigating officer of Delhi police after being told that the agency had filed a plea seeking cancellation of the bail.

"The look-out notice did not accompany a non-bailable arrest warrant when he was taken into custody. So there was no substance for accusation against my client when he was being arrested. In such a case, the lower court (in Barrackpore) has exercised the right discretion in granting him bail," said Soumyajit Raha, one of Panja's lawyers.

The police sources said there was no representation in the Barrackpore court when Panja was produced on February 22 because a team couldn't reach Calcutta within 24 hours of his arrest.

"The February 22 order granting bail is somewhat self-contradictory," said Mandeep Singh Vinaik, the advocate representing IFCI Factors that lodged a case against Panja. "The order mentions there is not enough documents, including the FIR, against the accused and then goes on to grant bail to the accused."

An FIR against Panja was drawn up in July last year following a complaint by Jivan Kumar, senior vice-president of IFCI Factors, the government-run financial institution that had reportedly provided a short-term assistance of Rs 18 crore to RP Infosystem Ltd, where Panja was a director.

Delhi police have alleged that all receipts, including the invoices that were submitted by Panja while taking the loan, were fake.

"Since not a single penny has been recovered, it is important to take Panja into custody and interrogate him to find out how many people are involved," said one of the lawyers representing Delhi police. "No goods were actually manufactured (with the loan) and even the transport operators, who were mentioned, don't exist."

The sources in Delhi police said they would consult their bosses and move the high court next week, seeking cancellation of the bail. "In the meantime, Panja will have to contact us, adhering to the order of the ACJM of Barrackpore," a source said.