Stay of bail granted till disposal of cancellation of bail application
2. The issue involved in these appeals concerns the power of the High Court or Sessions Court to grant an interim order of stay of operation of an order granting bail till the disposal of the application for cancellation of bail under subsection (2) of Section 439 of the Code of Criminal Procedure, 1973 (for short, ‘the CrPC’). Sub Section (3) of Section 483 of Bharatiya Nagarik Suraksha Sanhita, 2023 (for short, ‘the BNSS’) is the corresponding provision of subsection (2) of Section 439 of the CrPC. The same issue arises in other proceedings adopted for challenging an order of grant of bail.
Appellant did not cooperate with investigation hence arrested
3. On 1st December 2020, the Central Bureau of Investigation registered a crime against two companies and two individuals for the offences punishable under Section 120B read with Sections 420,467,468 and 471 of the Indian Penal Code and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. The subject matter of offence, inter alia, was the loan account of Jay Polychem India Ltd. On 23rd February 2021, the respondent Enforcement Directorate registered an Enforcement Case Information Report (ECIR) for an offence punishable under Section 4 of the Prevention of Money Laundering Act (for short, ‘the PMLA’). Eleven persons were shown as accused in ECIR. However, the appellant was not shown as an accused. On 30th October 2021, the respondent filed a complaint before the Special Court under Section 44(1)(b) of PMLA. Even in the complaint, the appellant was not shown as an accused. From 31st October 2020 to 20th January 2023, the respondent called the appellant for investigation several times. Though the appellant cooperated, on 20th January 2023, the appellant was arrested.
5. On 2nd May 2024, the application for cancellation of bail was adjourned to 9th July 2024. On 3rd May 2024, the appellant applied to vacate the stay order. The application was listed on 22nd May 2024. The application for vacating stay could not be heard due to paucity of time. The learned Single Judge passed an order directing that the main application shall be heard on 9th July 2024 which was the date earlier fixed. The learned Judge, however, granted liberty to apply for interim bail.
6. Aggrieved by the first order granting stay passed on 23rd June 2023 and the second order dated 22nd May 2024 granting liberty to the appellant to apply for interim bail, these appeals have been preferred. This Court, by the order dated 7th June 2024, stayed the order of stay dated 23rd June 2023 and clarified that the appellant would be entitled to benefit of the order dated 17th June 2023 passed by the Special Court granting bail. Accordingly, the appellant has been enlarged on bail.
Consideration of submisstions
Grounds for cancellation of bail
9. Regarding the grounds available for cancellation of bail under Section 439(2), we can conveniently refer to a decision of this Court in the case of Gulabrao Baburao Deokar [(2013) 16 SCC 190]. In paragraph 27 of the said decision, it was held thus:
“27. Thus, it could certainly be said that the order passed by the Sessions Judge was an order passed in breach of the mandatory requirement of the proviso to Section 439(1) CrPC. It is also an order ignoring the material on record, and therefore without any justification and perverse. As held by this Court in Puran v. Rambilas [(2001) 6 SCC 338: 2001 SCC (Cri) 1124], the High Court does have the power under Section 439(2) CrPC to set aside an unjustified, illegal or perverse order granting bail. This is an independent ground for cancellation as against ground of the accused misconducting himself.” (emphasis added)
As held in the case of Puran v. Rambilas [(2001) 6 SCC 338], apart from the ground that the accused has committed breaches of terms and conditions on which bail is granted, if he has otherwise misconducted himself, the High Court or Sessions Court can exercise power under Section 439(2) of CrPC to cancel the bail. Bail can be cancelled if the bail order is wholly unjustified, patently illegal, or perverse. Once it is held that there is a power vesting in the High Court or Sessions Court to cancel bail by exercising power under Section 439(2) of CrPC, it follows that the power to stay an order granting bail is implicit in the Court dealing with the applications. The question is about the contours of the exercise of power to grant a stay.
High Court or Sessions court should be very slow in granting stay of order granting bail
10. When a person is arrested, the rights guaranteed by Article 21 of the Constitution of India get substantially curtailed. The law permits arrests of the accused as provided in the CrPC or the BNSS. The effect of the grant of bail under the provisions of Sections 437 and 439 of the CrPC (Sections 480 and 483 of the BNSS) is that the liberty of the undertrial accused is restored pending the trial, subject to the accused complying with the conditions of bail. When the High Court or Sessions Court stays such an order, it amounts to taking away the liberty granted under the order of bail. When an application for cancellation of bail is filed, the High Court or Sessions Court should be very slow in granting drastic interim relief of stay of the order granting bail. The reason is when a Court competent to grant bail finds the accused entitled to be enlarged on bail unless the said order is set aside on the limited grounds of cancellation available under subsection (2) of Section 439 of CrPC or any other proceedings, the accused who has been granted bail cannot be normally deprived of his right to liberty guaranteed under Article 21 of the Constitution. Even if the order granting bail is not stayed, the accused can always be taken into custody if the bail is finally cancelled.
Cancellation of bail does not become infructuous if accused released before the stay petition is heard
11. While issuing notice on an application for cancellation of bail, without passing a drastic order of stay, if the facts so warrant, the High Court can, by way of an interim order, impose additional bail conditions on the accused, which will ensure that the accused does not flee. However, an order granting a stay to the operation of the order granting bail during the pendency of the application for cancellation of bail should be passed in very rare cases. The reason is that when an undertrial is ordered to be released on bail, his liberty is restored, which cannot be easily taken away for the asking. The undertrial is not a convict. An interim relief can be granted in the aid of the final relief, which could be finally granted in proceedings. After cancellation of bail, the accused has to be taken into custody. Hence, it cannot be said that if the stay is not granted, the final order of cancellation of bail, if passed, cannot be implemented. If the accused is released on bail before the application for stay is heard, the application/proceedings filed for cancellation of bail do not become infructuous. The interim relief of the stay of the order granting bail is not necessarily in the aid of final relief.
12. The Court dealing with the application for cancellation of bail can always ensure that notice is served on the accused as soon as possible and that the application is heard expeditiously. An order granting bail can be stayed by the Court only in exceptional cases when a very strong prima facie case of the existence of the grounds for cancellation of bail is made out. The prima facie case must be of a very high standard. By way of illustration, we can point out a case where the bail is granted by a very cryptic order without recording any reasons or application of mind. One more illustration can be of a case where material is available on record to prove serious misuse of the liberty made by the accused by tampering with the evidence, such as threatening the prosecution witnesses. If the High Court or Sessions Court concludes that an exceptional case is made out for the grant of stay, the Court must record brief reasons and set out the grounds for coming to such a conclusion.
Court should not grant exparte stay of the order granting bail
13. An exparte stay of the order granting bail, as a standard rule, should not be granted. The power to grant an exparte interim stay of an order granting bail has to be exercised in very rare and exceptional cases where the situation demands the passing of such an order. While considering the prayer for granting an exparte stay, the concerned Court must apply its mind and decide whether the case is very exceptional, warranting the exercise of drastic power to grant an exparte stay of the order granting bail. Liberty granted to an accused under the order granting bail cannot be lightly and causally interfered with by mechanically granting an exparte order of stay of the bail order. Moreover, the Court must record specific reasons why it concluded that it was a very rare and exceptional case where a very drastic order of exparte interim stay was warranted. Moreover, since the issue involved is of the accused’s right to liberty guaranteed by Article 21 of the Constitution, if an exparte stay is granted, by issuing a short notice to the accused, the Court must immediately hear him on the continuation of the stay.
17. There may be good reasons for three learned Judges to have recused themselves. But surely, the exparte order staying the order of bail passed without considering merits cannot continue to operate for one year without the appellant getting a hearing on the issue of continuation of the interim order. All Courts have to be sensitive about the most important fundamental right conferred under our Constitution, which is the right to liberty under Article 21.
Conclusion
20. Our conclusions are as under:
a. In an application made under Section 439(2) of the CrPC or Section 483(3) of the BNSS or other proceedings filed seeking cancellation of bail, the power to grant an interim stay of operation of order to bail can be exercised only in exceptional cases when a very strong prima facie case of the existence of the grounds for cancellation of bail is made out. While granting a stay of an order of grant of bail, the Court must record brief reasons for coming to a conclusion that the case was an exceptional one and a strong prima facie case is made out;
b. As a normal rule, the exparte stay of the bail order should not be granted. The said power can be exercised only in rare and very exceptional cases where the situation demands the passing of such drastic order. Where such a drastic exparte order of stay is passed, it is the duty of the Court to immediately hear the accused on the prayer for continuation of the interim relief. When the Court exercises the power of granting exparte ad interim stay of an order granting bail, the Court is duty bound to record reasons why it came to the conclusion that it was a very rare and exceptional case where a drastic order of exparte interim stay was warranted.
21. Therefore, the appeals must succeed. We set aside the impugned orders by which the High Court granted the stay of the order granting bail. We make it clear that pending the hearing of application for cancellation of bail, the order dated 17th June, 2023 passed by the Special Court will continue to operate. We make it clear that all the contentions on the merits of the application for cancellation of bail are expressly left open to be decided by the High Court. The findings recorded in the judgment are only for considering the legality and validity of the order of stay on the order granting bail.
Party
Parvinder Singh Khurana … Appellant versus Directorate of Enforcement … Respondent – Criminal Appeal Nos. 3059 3062 of 2024 (@ Special Leave Petition (Crl.) Nos. 80078010 of 2024) – July 23, 2024 – 2024 INSC 546
