Summary
In a batch of sixteen appeals by the SFIO arising from its complaint against the Adarsh Group accused for fraud under Section 447 of the Companies Act, 2013, the Supreme Court set aside High Court orders granting anticipatory bail to accused who had evaded bailable and non-bailable warrants and against whom proclamation proceedings under Section 82 CrPC had been initiated. Anticipatory bail is an exceptional remedy, especially in serious economic offences; an accused who conceals himself after warrants or proclamation is ordinarily not entitled to it, and the orders ignored the mandatory twin conditions of Section 212(6) of the Companies Act. Three appeals were dismissed where no non-bailable warrant had issued or the Special Court itself had granted anticipatory bail.
Issues
- Whether the High Court was justified in granting anticipatory bail to accused in a serious economic offence case who had avoided execution of bailable and non-bailable warrants issued by the Special Court and against whom proclamation proceedings under Section 82 CrPC had been initiated.
- Whether the mandatory twin conditions for bail in Section 212(6) of the Companies Act, 2013 apply to anticipatory bail for offences under Section 447 and whether the High Court could ignore them.
- Whether, in a complaint case where the accused were not arrested during investigation, the Special Court taking cognizance was bound to issue summons rather than warrants under Section 204 CrPC.
Provisions considered
- Section 212(6), Companies Act, 2013An offence under Section 447 is cognizable and no accused may be released on bail unless the Public Prosecutor has been heard and, if he opposes, the court is satisfied there are reasonable grounds to believe the accused is not guilty and not likely to offend on bail. Following Vijay Madanlal Choudhary on the similar conditions in Section 45 PMLA, the Court held these twin conditions mandatory and applicable to anticipatory bail; the High Court's orders disregarded them and were perverse. (¶¶ 11, 24, 26)
- Section 447, Companies Act, 2013Punishment for fraud involving at least ten lakh rupees or one per cent of turnover, with a minimum of three years where public interest is involved; the SFIO complaint alleged this offence against the respondents for illegal loans of about Rs. 1700 crores obtained from a multi-state credit cooperative society on forged documents, and cognizance was taken by the Special Court. (¶¶ 3, 12, 24, 26)
- Sections 211 and 212(1)(c), Companies Act, 2013The SFIO is a statutory body under Section 211, and the Central Government assigned investigation into the affairs of 125 Adarsh Group companies to it in the public interest under Section 212(1)(c), together with Section 43 of the Limited Liability Partnership Act, 2008. (¶¶ 3, 11, 24)
- Section 82, Code of Criminal Procedure, 1973Where a court has reason to believe that a person against whom a warrant is issued has absconded or is concealing himself so that the warrant cannot be executed, it may publish a proclamation; the Special Court was fully justified in initiating proclamation proceedings on 25.03.2022 against respondents who, knowing of the complaint, concealed themselves, and the High Court should have weighed that fact seriously, not casually (Prem Shankar Prasad). (¶¶ 5, 9, 13, 22, 23, 29)
- Section 204, Code of Criminal Procedure, 1973In a warrant case the court taking cognizance has a discretion to issue a warrant or a summons; rejecting the argument based on Tarsem Lal that only summons could issue because the accused were not arrested during investigation, the Court held there is no straitjacket rule and, following Inder Mohan Goswami and Poosu, even a non-bailable warrant may issue when the accused is unlikely to appear voluntarily or cannot be found. (¶¶ 14, 16, 17, 28)
- Section 438, Code of Criminal Procedure, 1973The power to grant anticipatory bail is extraordinary and must be exercised sparingly and only in exceptional cases, more so in economic offences (P. Chidambaram, Jagan Mohan Reddy, Nimmagadda Prasad, Srikant Upadhyay); once a warrant of arrest or proclamation issues the applicant is ordinarily not entitled to invoke it, though the court retains power in extreme, exceptional cases. (¶¶ 15, 18, 19, 20, 21, 23, 27)
Held
- Economic offences constitute a class apart, involving deep-rooted conspiracies and loss of public funds, and must be viewed seriously; the law aids only the abiding and not its resistants. Once a chargesheet is filed or, in a complaint case, summons or warrant issues, the accused is bound to submit to the authority of law, and one who hinders execution of warrants or conceals himself must not be granted the privilege of anticipatory bail, particularly where the court taking cognizance found him prima facie involved in serious economic offences. (¶¶ 18, 19, 20, 21, 23)
- Where the court has reason to believe that a person against whom a warrant has issued has absconded or is concealing himself, it is justified in initiating proclamation proceedings under Section 82 CrPC; High Courts must consider the issuance of non-bailable warrants and initiation of proclamation proceedings seriously and not casually when deciding anticipatory bail applications of such accused. (¶¶ 22, 23, 29)
- The twin conditions in Section 212(6) of the Companies Act, 2013 for release on bail of a person accused under Section 447 are mandatory and apply to anticipatory bail proceedings as well; High Court orders granting anticipatory bail in utter disregard of those conditions and of the accused's conduct in evading warrants and proclamation are perverse and untenable in law, and cryptic bail orders that do not advert to the facts or such restrictive conditions are liable to be set aside (Kanhaiya Prasad). (¶¶ 24, 25, 26)
- Accused are duty bound to cooperate with the trial court and to remain present when required; avoiding execution of summons or warrants, disobeying court orders and delaying proceedings by hook or crook amounts to interference with and obstruction of the administration of justice. Judicial time of a Magistrate's court is as valuable as that of the High Court or Supreme Court. After a warrant of arrest or proclamation, anticipatory bail may be granted only in exceptional cases, and accused who continuously conceal themselves to derail proceedings are not entitled to it. (¶ 27)
- Under Section 204 CrPC, in a complaint case which appears to be a warrant case, the court taking cognizance has a discretion to issue a warrant or summons; there is no rule that summons must first issue merely because the accused was not arrested during investigation. Whether attendance is best secured by a bailable or non-bailable warrant rests in the court's judicial discretion, having regard to the nature and seriousness of the offence, circumstances peculiar to the accused, the possibility of absconding and the larger public interest. (¶¶ 16, 17, 28)
- The respondents' plea that they were unaware of the proceedings was falsified by their own anticipatory bail applications before the Special Court; having made themselves unavailable at the addresses they furnished during investigation after those applications were rejected, they could not justify their non-appearance. Appeals were not entertained where no non-bailable warrant or proclamation had issued against the accused, or where the Special Court itself had granted anticipatory bail and the High Court had declined to cancel it. (¶¶ 7, 9)
Result
Fourteen appeals allowed; the High Court's orders dated 29.03.2023 and 20.04.2023 granting anticipatory bail set aside; the respondents-accused to surrender before the Special Court within one week, with their bail applications to be decided by the Special Court in accordance with law and no opinion expressed on merits. Appeals concerning Akshat Singh, Naveen Kumar and Mahesh Dutt Sharma dismissed.