Bail Can't Be Granted Or Cancelled Based On Fulfilment Of Monetary Settlement With Complainant: Delhi High Court
Can't turn custody into a means of enforcing a monetary bargain, Court said.
The Delhi High Court has held that an accused's liberty cannot be made conditional upon fulfilment of a monetary settlement with the complainant, observing that a financial undertaking cannot be allowed to turn custody into a means of enforcing a monetary bargain.
Justice Sanjeev Narula made the observations while setting aside both an order granting bail to a man accused in a bank fraud case and the subsequent order cancelling his bail for failure to comply with a settlement under which he had undertaken to repay the bank.
The Court directed the Sessions Court to reconsider the accused's bail application afresh on merits, independently of the settlement and the payment of Rs. 45 lakh made pursuant to it.
The case arose from an FIR registered by the Economic Offences Wing in 2018 against accused Gurmeet Singh for the offences under Sections 406, 419, 420, 468, 471 and 120B of the IPC.
The case related to a Rs. 50 lakh cash-credit facility sanctioned by Punjab National Bank to M/s Dashmesh Enterprises.
The prosecution alleged that the facility was obtained on the basis of forged documents and a guarantee purportedly executed in the name of a person who had died in 2013.
The petitioner was arrested in August 2022 and was granted regular bail by the Sessions Court in November 2022. The bail order recorded that the parties had arrived at a settlement, under which Rs. 45 lakh was paid to the bank and the accused had undertaken to repay the remaining amount within six months. The bail was expressly made subject to adherence to the settlement terms.
After no further payment was made, the bank sought cancellation of bail. The Sessions Court cancelled the bail in October 2023 on the ground that the accused had failed to comply with the settlement.
Setting aside the order, the High Court held that non-fulfilment of a monetary settlement cannot, by itself, be a ground either for granting or cancelling bail.
Applying the principles laid down by the Supreme Court, Justice Narula found that the original bail order could not be sustained because the Sessions Court had not examined the ordinary considerations governing bail under Section 439 of CrPC.
“There is no assessment of the material attributed to the Petitioner, the necessity of his continued custody, the possibility of his absconding, the risk of his influencing witnesses or tampering with evidence, his antecedents, or any other circumstance germane to the grant of bail. Instead, the settlement and the payment made pursuant to it became the effective basis of the order. In substance, therefore, the financial arrangement displaced the judicial assessment which the application required,” the Court said.
The Court also found the subsequent cancellation order unsustainable. It noted that there was no finding that the accused, after being released, had absconded, attempted to evade proceedings, intimidated witnesses, tampered with evidence, obstructed the trial or otherwise abused the liberty granted to him.
“Cancellation followed because the settlement was not performed,” the Court said.
“The two questions are legally distinct: whether a settlement is enforceable between the parties is one matter; whether an undertrial may be deprived of liberty is quite another,” it added.
The Court said that the appropriate course is to have the bail application of the accused reconsidered on its own merits, rather than enforce the undertaking through incarceration.
While ordering the bail plea be decided afresh, the Court directed that the settlement, the Rs. 45 lakh payment and the alleged breach of the settlement shall not by themselves constitute grounds for granting or refusing bail, nor can the accused's liberty be made conditional upon fulfilment of any monetary obligation arising from the settlement.
“In undertaking the fresh consideration, the Sessions Court shall have regard, inter alia, to the nature and gravity of the accusations; the material attributed specifically to the Petitioner; the present stage of the proceedings; the status of the investigation; the necessity, if any, of custodial detention at this stage; the period for which the Petitioner has remained at liberty pursuant to orders of Court; his conduct during that period, including whether there has been any specific instance of misuse of liberty; and such other considerations as are germane to an application for regular bail,” the Court said.
It directed that the restored bail application be taken up expeditiously and preferably decided within four weeks.
Until then, Justice Narula ordered, the interim protection already enjoyed by the accused will continue, subject to conditions including his participation in the trial, appearance when required, not leaving India without permission, and not influencing witnesses or tampering with evidence.
“The Court has consciously refrained from issuing any direction regarding the refund of the sum of INR 45,00,000/- already paid by the Petitioner to the Bank pursuant to the settlement. It shall, however, be open to the Petitioner to seek a direction for its refund, if so advised, at the time of adjudication of the bail application, which request shall be considered by the Sessions Court in accordance with law,” the judge concluded.
Title: GURMEET SINGH @ HARPREET SINGH v. STATE OF NCT OF DELHI & ANR