Summary
The Supreme Court cancelled bail granted by the High Court to an alleged co-conspirator in a large credit co-operative society fraud under the IPC and the Maharashtra Protection of Interest of Depositors Act. The High Court ignored material in the charge-sheet and forensic audit linking him to about Rs. 9 crore withdrawn from the society, made unwarranted prima facie remarks on conspiracy, overlooked the harm to small depositors, and imposed only routine conditions.
Issues
- Whether the High Court properly exercised its discretion under Section 439(1) CrPC in granting bail to respondent no. 1 in an economic offence affecting a large number of depositors.
- On what basis a superior court may set aside an order granting bail, as distinct from cancelling bail for supervening circumstances.
Provisions considered
- Section 439(1), Code of Criminal Procedure, 1973The section, quoted in the judgment, empowers the High Court or Court of Session to release an accused in custody on bail. The Court held that this discretion is wide but not unfettered. A grant of bail that is illegal, perverse, or that ignores relevant material and the gravity of the offence can be set aside by the superior court, and the Single Judge's exercise of the power here did not meet the governing principles. (¶¶ 18, 19, 21, 26)
- Section 3, Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999One of the offences in the FIR, together with Sections 409, 420, 467, 468, 471 and 120-B IPC. The Court treated the case as an economic offence against depositors of meagre means, which called for closer scrutiny and, if bail was granted, stricter conditions. (¶¶ 2, 24, 25)
Held
- When granting bail the court must weigh the nature and gravity of the accusation, the role of the accused, the manner of the offence, antecedents, the risk of tampering with evidence or influencing witnesses, flight risk, and whether release is desirable overall. A superior court may interfere with an order granting bail that is unreasoned, perverse, illegal, based on irrelevant material, or that ignores relevant material or the gravity of the offence. This is distinct from cancelling bail for supervening circumstances or misconduct after release. (¶¶ 19, 20, 21)
- The High Court proceeded as if there were only bare allegations and the accused was not a member of the society. Having said that no finding on the sufficiency of the conspiracy material was needed, it then recorded without basis that the sufficiency of that material was extremely debatable. (¶¶ 22, 23)
- Once the charge-sheet was filed there was material, including cash book entries, the society's records and the forensic audit report, indicating that respondent no. 1 was involved in the withdrawal of about Rs. 9 crore against deposits of about Rs. 2.38 crore. It also indicated that he was a close associate of the society's President and that withdrawn money was invested in property in relatives' names. The High Court also lost sight of the fact that the depositors were people of meagre means. The Court deliberately avoided discussing the evidence in detail. (¶¶ 23, 24)
- In economic offences affecting many people, where the material shows an active role by the accused, a court granting regular or anticipatory bail should impose suitably strict and additional conditions. The High Court imposed only the usual conditions. (¶ 25)
- The High Court's discretion was not exercised in line with settled principles. Although the accused had spent about six months in custody, his release could lead to dissipation of properties allegedly bought with society funds, and the interests of the victims had to be weighed. (¶ 26)
- Because bail was being cancelled almost three years after it was granted, the accused was given liberty to apply for bail later or on a change of circumstances. Any such application is to be decided on its own merits, and the Court's observations are confined to testing the legality of the bail order. (¶ 27)
Result
Appeal allowed. The High Court's bail order of 13.10.2021 was set aside and respondent no. 1 directed to surrender within three weeks. He was given liberty to seek bail later or on a change of circumstances, and the authorities were directed to provide appropriate medical care. The trial court is to proceed uninfluenced by the observations.