The Supreme Court emphasised that anticipatory bail should not be granted to persons accused of serious economic fraud under Section 212(6) read along with Section 447 (Punishment for fraud) of the Companies Act, 2013.
The Punjab and Haryana High Court granted anticipatory bail to individuals accused by the Serious Fraud Investigation Office (SFIO). The SFIO was conducting an investigation into the allegation of fraud in the Adarsh Group. The SFIO had filed a criminal complaint alleging serious economic offences under the Companies Act and the Indian Penal Code, 1860. Anticipatory bail was granted under Section 438 of the Code of Criminal Procedure, 1973.
The Supreme Court held that the High Court’s decision to grant anticipatory bail had disregarded the mandatory statutory conditions for bail in fraud cases. The High Court did not ensure that the Public Prosecutor’s opposition was properly considered. It also did not demonstrate that there were reasonable grounds to believe that the accused were not guilty of committing fraud. The judges also noted that the High Court had overlooked the accused’s conduct of evading legal processes under the Companies Act. The top court upheld the bail conditions.
Serious Fraud Investigation Office v Aditya Sarda
9 April 2025
Citations: 2025 INSC 477 | 2025 SCO.LR 4(9)
Bench: Justices B.M. Trivedi and P.B. Varale
Key words/phrases: Section 212(6)—Section 447—Companies Act, 2013—grant of anticipatory bail in cases of fraud—no reasonable ground to believe innocence—accused shows history of misconduct—restrictive bail conditions upheld.
Read the Judgement here.
Case Comment
Held, In the instant case, the Special Court considering the seriousness of the alleged offences had initially issued bailable warrants, however, the Respondents kept on avoiding the execution of such warrants and did not appear before the Special Court though fully aware about the pendency of the complaint proceedings against them. The Special Court therefore had to pass detailed orders from time to time for the issuance of non-bailable warrants, and thereafter had also initiated the Proclamation proceedings under Section 82 of the Code, for requiring respondents to appear before it. The High Court however without paying any heed to the proceedings conducted by the Special Court against the respondents, and ignoring the well settled legal position, granted anticipatory bail to the Respondents vide the impugned orders. As discussed earlier, the said Orders being perverse and untenable at law, cannot be allowed to be sustained, and deserve to be set aside.
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