IN SLP (CRL) 2358 OF 2023- SC- The process of criminal law cannot be used for arm twisting and money recovery, willingness of accused to deposit money as bail condition must be considered only in cases involving public money and not in private cases: Supreme Court
Justice S. Ravindra Bhat and Justice Dipankar Datta [04-07-2023]

Read More: Ramesh Kumar v. The State Of NCT Of Delhi

Simran Singh

New Delhi, July 5, 2023: The Supreme Court has expressed it dismay and disapproval of the disquieting trend and practice that has emerged over the past few years which is blatantly followed by the Courts asking the accused to deposit money as a condition for granting anticipatory bail for the offence of cheating under Section 420 of Indian Penal Code, 1860 (IPC) which have created an understanding and impression that bail could be easily secured by depositing money.

The Division Bench comprising of Justice S. Ravindra Bhat and Justice Dipankar Datta stated that the same situation results in such cheating cases being unwittingly converted into process for recovery of money. “Law regarding exercise of discretion while granting a prayer for bail under section 438 of the Cr. PC having been authoritatively laid down by this Court, we cannot but disapprove the imposition of a condition of the nature under challenge.”

The Top Court stated that it had multiple times found in the past several months that upon FIR being lodged inter alia under Section 420 of IPC, judicial proceedings initiated by persons, accused of cheating, to obtain orders under Section 438 of the Code of Criminal Procedure, 1973 (CrPC) were unwittingly being transformed into processes for recovery of the quantum of money allegedly cheated and the Courts were driven to impose conditions to deposit payment as a pre-requisite for grant of pre-arrest bail. It pointed out Sub-section (2) of section 438 of the CrPC did empower the High Court or the Court of Sessions to impose such conditions. “However, a reading of the precedents laid down by this Court makes the position of law clear that the conditions to be imposed must not be onerous or unreasonable or excessive.”

The Bench was of the view that "In the context of grant of bail, all such conditions that would facilitate the appearance of the accused before the investigating officer/court, unhindered completion of investigation/trial and safety of the community assume relevance. However, inclusion of a condition for payment of money by the applicant for bail tends to create an impression that bail could be secured by depositing money alleged to have been cheated. That is really not the purpose and intent of the provisions for grant of bail".

In the matter at hand, an appeal was filed against a pre-arrest bail condition imposed by the High Court. The appellant was named as accused in an FIR for cheating offence lodged over alleged defaults in a development agreement. The High Court granted bail subject to the condition of the appellant depositing INR 22 lakh with the Trial Court following an undertaking given by the appellant. However, the appellant could not meet the condition. Aggrieved by the refusal of the High Court to extend the time to fulfil the condition, the appellant moved the Supreme Court, challenging it as onerous. The State opposed the appeal by saying that the appellant volunteered to make the payment himself.

The Supreme Court reminded the High Courts and Sessions Courts not to be swayed by such considerations put forth by the counsels on behalf of the accused while moving an application under section 438, CrPC. "It is considered appropriate to remind the high courts and the sessions courts not to be unduly swayed by submissions advanced by counsel on behalf of the accused in the nature of undertakings to keep in deposit/repay any amount while seeking bail under section 438 of the Cr. PC. and incorporating a condition in that behalf for deposit/payment as a pre-requisite for grant of bail”

In the context of grant of bail, the Court stated that all such conditions that would facilitate the appearance of the accused before the Investigating Officer/Court, unhindered completion of investigation/trial and safety of the community assumed relevance.

The Bench, at the same time, clarified it may not be understood to have laid down the law that in no case should willingness to make payment/deposit by the accused be considered before grant of an order for bail. "In exceptional cases such as where an allegation of misappropriation of public money by the accused is levelled and the accused while seeking indulgence of the court to have his liberty secured/restored volunteers to account for the whole or any part of the public money allegedly misappropriated by him, it would be open to the concerned court to consider whether in the larger public interest the money misappropriated should be allowed to be deposited before the application for anticipatory bail/bail is taken up for final consideration.”

After all, no court should be averse to putting public money back in the system if the situation was conducive therefor, the Bench added. "We are minded to think that this approach would be in the larger interest of the community. However, such an approach would not be warranted in cases of private disputes where private parties complain of their money being involved in the offence of cheating.”

The Supreme Court refereed to the case of Gurbaksh Singh Sibbia v. State of Punjab in which it held that “the Courts should lean against the imposition of unnecessary restrictions on the scope of section 438 CrPC when no such restrictions have been imposed by the legislature.” It further referred to the precedents in Mahesh Chandra v. State of UP, Sumit Mehta v. NCT of Delhi, and Dilip Singh v State of MP which frowned upon onerous conditions imposed by Courts for bail. The recent decision in Bimla Tiwari v. State of Bihar, the Court reiterated that the process of criminal law could not be used for arm twisting and money recovery.

The Court was of the view that the willingness of the accused to deposit money as bail condition must be considered only in cases involving public money and not in private cases. It clarified that its observations should not be understood to have laid down the law that in no case should willingness to make payment/deposit by the accused be considered before grant of an order for bail. Only in exceptional cases where an allegation pertains to the misappropriation of public money, it is open to the court to consider such conditions in the public interest. "However, such an approach would not be warranted in cases of private disputes where private parties complain of their money being involved in the offence of cheating.”

The Bench was of the view that the criminal law could not pressed into service to settle civil dispute and opined that even if the appellant had undertaken to make payment, it should not have weighed in the mind of the High Court. It held that the High Court fell in grave error in imposing such conditions and remitted the matter to the High Court and directed reconsideration of the application for pre-arrest bail on its own merits.

The Court allowed the appeal filed by Ramesh Kumar against the Delhi High Court's order to deposit Rs 22 lakh as a condition precedent for grant of bail in a cheating case. "Even if the appellant had undertaken to make payment, which we are inclined to believe was a last ditch effort to avert losing his liberty, such undertaking could not have weighed in the mind of the High Court to decide the question of grant of anticipatory bail. The tests for grant of anticipatory bail are well delineated and stand recognised by passage of time. The High Court would have been well-advised to examine whether the appellant was to be denied anticipatory bail on his failure to satisfy any of such tests.”

The court also said if at all the offence alleged against the appellant is proved resulting in his conviction, he would be bound to suffer penal consequences but despite such conviction he may not be under any obligation to repay the amount allegedly received from the complainant. It remanded the matter back to the High Court to examine it afresh on its own merits by August 31, 2023. The court also ordered that the appellant’s liberty would not be infringed by the investigating officer till the High Court decided the matter.