In a significant ruling impacting the interpretation of anticipatory bail jurisprudence in economic offences, the Supreme Court of India has categorically held that anticipatory bail cannot be granted as a matter of routine in cases involving serious financial frauds and economic crimes. The apex court set aside multiple High Court orders granting anticipatory bail to several accused in the Adarsh Group financial scandal being investigated by the Serious Fraud Investigation Office (SFIO).
A Bench comprising Justices Bela M. Trivedi and Prasanna B. Varale delivered the judgment in a batch of criminal appeals filed by the SFIO against various orders of the High Court, which had granted anticipatory bail to accused persons despite the gravity of charges and repeated evasion of the judicial process by the respondents.
Factual Matrix of the Anticipatory Bail Case:
The Ministry of Corporate Affairs had, in 2018, ordered the SFIO to investigate the affairs of 125 companies under the Adarsh Group umbrella, led by Mukesh Modi and his associates. Investigations revealed that funds to the tune of over ₹4,000 crores were siphoned off from Adarsh Credit Cooperative Society Limited (ACCSL), which had collected deposits from over 20 lakh members across the country. The fraud involved granting illegal loans to shell companies within the Adarsh Group, in clear violation of cooperative society laws and company law provisions.
A complaint was filed in 2019 before the Special Court at Gurugram, naming 181 accused, including directors and associates of the Adarsh Group. Despite summons and bailable warrants, many accused failed to appear before the court, prompting the issuance of non-bailable warrants and proclamation orders under Section 82 of the CrPC.
SC’s Observations:
The Supreme Court, in its detailed verdict, observed that the respondents made deliberate attempts to stall the criminal proceedings. “These were not mere procedural lapses but clear obstruction of justice,” the bench noted.
The Court underscored that economic offences form a distinct class due to their impact on public trust and the financial fabric of society. Referring to past precedents including P. Chidambaram vs Directorate of Enforcement and Y.S. Jagan Mohan Reddy vs CBI, the bench affirmed that anticipatory bail should be an exception, not the norm, especially in financial fraud cases.
Justice Trivedi, writing the judgment, stated, “When non-bailable warrants have been issued or proclamation proceedings are initiated, the accused forfeits the right to claim anticipatory bail. Rule of law demands obedience to legal processes—not attempts to evade them.”
The Court criticized the High Courts for issuing “cryptic and perverse” orders granting bail, without examining the mandatory twin conditions under Section 212(6) of the Companies Act, 2013. It emphasized that High Courts must treat non-bailable warrants and proclamation proceedings with seriousness and not as mere formalities.
Legal Position Reaffirmed:
The judgment reaffirms:
- Anticipatory bail is not a fundamental right under Article 21 of the Constitution.
- Economic offences are to be treated with gravity and require a stricter approach.
- Courts must consider the conduct of the accused, including efforts to evade the law.
- Orders granting bail in such cases without fulfilling statutory conditions are unsustainable in law.
Outcome:
The apex court allowed 14 out of 16 appeals filed by the SFIO and directed the accused to surrender before the Special Court within one week. It clarified that their bail applications, if filed, shall be decided strictly in accordance with law.
Three appeals—pertaining to Mahesh Dutt Sharma, Akshat Singh, and Naveen Kumar—were dismissed since no non-bailable warrants or proclamation proceedings were issued against them, and bail was granted by the Special Court itself.
Implications:
This landmark judgment is expected to influence future bail decisions in economic offence cases, especially those involving large-scale fraud, corporate misconduct, and money laundering. It sends a clear message that legal evasion will not be tolerated and anticipatory bail cannot be used as a tool to derail criminal trials.
Legal experts have lauded the ruling for reinforcing judicial discipline and underlining the seriousness with which economic crimes must be addressed in modern India.
