Recently, the Division Bench of the Supreme Court disapproved the on-going trend of Courts imposing certain pre-requisite conditions of depositing money as a requirement for granting pre arrest bail in cases involving the offences of cheating.

The Hon’ble Apex Court observed a disquieting trend in many cases, wherein subsequent to registering FIRs against persons accused of cheating and in order to obtain anticipatory bail under Section 438 of the Criminal Procedure Code, the cases were unwittingly being transformed into processes for recovery of the quantum of money allegedly cheated and the Courts seemed to be imposing conditions for deposit/payments as pre-requisite for grant of pre arrest bail.

The Hon’ble Court observed that, “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”.

The Hon’ble Bench further opined that only in exceptional cases, such as where an allegation of misappropriation of public money has been alleged against an accused who, while seeking indulgence of the court to have his liberty secured, volunteers to account for the whole or any part thereof of the public money allegedly misappropriated, it would be open to the courts to consider in public interest whether such money should be allowed to be deposited before an application for anticipatory or regular bail is taken up for final hearing on merits.

This observation was made in an Appeal filed by one Ramesh Kumar, the owner of an immovable property in Delhi for the development of which he had entered in to three agreements with a builder, one Ashwani Kumar. In terms of the agreement dated 19.12.2018, the builder was required to construct a multi storied building in which the Appellant, Ramesh Kumar would have ownership rights in respect of the 3rd floor and the upper floor, apart from the Rs.55 lakhs which is to be paid to him by the builder. Whereas the builder would have rights to deal with the 1st and 2nd floors together with other rights described in the said agreement.

In pursuance of the agreement dated 19.12.2018, the builder entered into an agreement to sell and purchase dated 14.12.2018 with one Vinay Kumar and one Sandip Kumar (the complainants) in respect to the 2nd floor of a proposed building for a sum of Rs. 60 lakhs. The complainants had allegedly paid Rs. 11 Lakhs to the builder which included token money as well as earnest money, at the time of the execution of the agreement dated 14.12.2018. Thereafter, on the instructions of the builder, the complainants on different dates allegedly made payments of additional amounts to the appellant as well as the builder in cash and in cheques totaling to Rs. 35 lakhs.

Due to a failure in complying with certain conditions of the agreement dated 14.12.2018, a civil suit was filed by the builder against the complainants seeking cancellation of the agreement and forfeiture of the amount of Rs. 13 lakhs. The builder had also instituted another civil suit against the appellant for specific performance of agreements dated 10th and 19th December, 2018.

Since the complainants were not handed possession of the second floor which they intended to purchase and since the complainants had affected payment of substantial amount of money to the appellant and the builder, the complainants felt cheated and they lodged a complaint which was registered as an FIR for an office punishable under Sections 406, 420 and section 34 of the Indian Penal Code, 1860.

Apprehending arrest, the appellant moved the Sessions Court seeking pre arrest bail. Initially interim protection was granted to the appellant from arrest which was subjected to his cooperation in the investigation. However, by an order dated January 28, 2022, the application was rejected. Aggrieved by the said order, the appellant approached the Delhi High Court wherein anticipatory bail was granted to the appellant subject to certain conditions including that of depositing an amount of Rs. 22 lakhs. Since the appellant was unable to arrange such a huge sum of money, he again moved the High Court seeking extension of time, for which three days was granted to deposit the amount of Rs. 22 Lakhs failing which his bail shall be cancelled.

Feeling aggrieved by the order passed by the Delhi High Court, the appellant moved the Hon’ble Apex Court challenging the condition imposed by the Hon’ble High Court of depositing Rs. 22 lakhs with the trial court.

After hearing the Appellant, the Supreme Court considered it 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 Criminal Procedure Code and incorporating a condition in that behalf for deposit/repayment as a pre-requisite for grant of bail.

The Apex Court also noted that Sub Section (2) of section 438 of the Criminal Procedure Code does empower the high courts or the court of sessions to impose such conditions while making a direction under sub section (1) as it may think fit in the light of the facts of the particular case and such directions may include the conditions as in clause (i) to (iv). However, the conditions to be imposed must not be onerous or unreasonable or excessive. In the context 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 assumes relevance.

The Hon’ble Supreme Court while remanding the matter back to the High Court directing reconsideration of the pre arrest bail of the appellant, opined that the High Court fell in grave error in proceeding on the basis of the undertaking given by the appellant and imposing payment of such an excessive amount of Rs. 22 Lakhs as a condition precedent for grant of bail.

By - Soumya Kamat