Bail Condition | Seeking Pre-Deposit Of Bank Guarantee For Grant Of Bail Is Unsustainable: Supreme Court

The Supreme Court has set aside an order whereby a pre-condition of furnishing bank guarantee was imposed on the accused by the Trial Court and the High Court while granting bail. The Bench has regarded such practice to be unsustainable and bad.

The Bench comprising of Justice Krishna Murari and Justice Ahsanuddin Amanullah, while adjudicating an appeal filed in Makhijani Pushpak Harish v The State of Gujarat, has declined to divert from its stand taken in previous similar matters, wherein the Court has held that condition of pre-deposit cannot be imposed while granting bail.

BACKGROUND FACTS

The Superintendent (Prevention) of Central GST and Central Excise filed a complaint against Mr. Makhijani Pushpak Harish (“Appellant”) under Section 69 and Section 132(1)(a) of the Central Goods and Services Act, 2017 (“CGST Act”). In view of the complaint, the Appellant was arrested.

The Appellant filed an application under Section 437 of the Code of Criminal Procedure, 1973 (“Cr.PC”) seeking bail before the Trial Court. The Trial Court granted bail to the Appellant while imposing certain conditions, one of the bail conditions being pre-deposit of Rs. 3 Crores in the form of Bank Guarantee by the Appellant.

The Appellant approached the High Court challenging the bail condition of pre-depositing Rs. 3 Crores worth Bank Guarantee. On 12.01.2023, the High Court modified the condition of furnishing bank guarantee of an amount of Rs.3 crore by reducing it to Rs.1.5 crore. The Appellant filed an appeal before the Supreme Court against the High Court’s order.

SUPREME COURT VERDICT

Condition of pre-deposit of Bank Guarantee unsustainable

The Bench opined that pre-condition of deposit of an amount or furnishing a bank guarantee has been the subject matter of consideration in a number of cases, wherein condition of pre-deposit has been held to be bad.

Reference was made to identical matters in Subhash Chouhan Vs. Union of India, Criminal Appeal No. 186/2023 and Anatbhai Ashokbhai Shah Vs. State of Gujarat & Ors, Criminal Appeal No. 523/2023, whereby the Court has set aside orders passed by the High Court imposing a condition of deposit while granting bail to the appellants therein. Further, in Subhash Chouhan Vs. Union of India, the Additional Solicitor General appearing for the Union of India/State had stated on record that such a condition cannot be imposed while granting bail.

Accordingly, the Bench held as under:

“Facts of the present case being identical to the facts of the aforesaid two Criminal appeals, we see no reason to deviate from the view taken in the aforesaid two cases.Following the reasons given in the aforesaid judgments and orders, we are of the considered opinion that pre-condition of furnishing bank guarantee imposed by the High Court is not liable to be sustained and is hereby set aside.

The rest of the conditions imposed for grant of bail by the Chief Judicial Magistrate and upheld by the High Court are hereby sustained.”

The pre-condition of furnishing Bank Guarantee has been declared unsustainable and has accordingly been set aside by the Bench. The remaining conditions imposed by Trial Court have been upheld. The Bench has directed the Appellant to be released on bail.

Case Title: Makhijani Pushpak Harish v The State of Gujarat

Citation: 2023 LiveLaw (SC) 345

Counsel for Appellant: Mr. Bharat Rai Chandani, Adv. Mr. Deepak Kumar Khokhar, Adv. Mr. Aneesh Mittal, AOR Mrs. Sonia Abrol, Adv.

Counsel for Respondent: Ms. Deepanwita Priyanka, Adv. Ms. Swati Ghildiyal, AOR Ms. Devyani Bhatt, Adv.

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