It is definitely in the fitness of things that while taking economic offences cases very seriously, the Supreme Court in a most learned, laudable, landmark, logical and latest judgment titled Serious Fraud Investigation Office vs Aditya Sarda in Criminal Appeal @ Special Leave Petition (Criminal) No. 13956 of 2023 and cited in Neutral Citation No.: 2025 INSC 477 in the exercise of its criminal appellate jurisdiction that was pronounced as recently as on April 9, 2025 has minced just no words to reiterate that since economic offences are a ‘class apart’, they must be viewed seriously and anticipatory bail should be granted sparingly in such cases.
We need to note that a Bench of Apex Court comprising of Hon’ble Ms Justice Bela M Trivedi and Hon’ble Mr Justice Prasanna B Varale made the key observation while setting aside the anticipatory bail that had been granted to various persons accused in the Adarsh Group of Companies scam by the Punjab and Haryana High Court between March and April 2023. The top court made no bones to hold unequivocally that individuals accused of such offences, especially those who evade the law or obstruct the execution of warrants, should not be granted anticipatory bail.
At the very outset, this robust, rational, remarkable and recent judgment authored by Hon’ble Ms Justice Bela M Trivedi for a Bench of the Apex Court comprising of herself and Hon’ble Mr Justice Prasanna B Varale sets the ball in motion by first and foremost putting forth in para 2 that:
This batch of sixteen Appeals being interconnected with each other and arising out of the proceedings being CIS No. COMA/5/2019 pending before the Special Judge, Gurugram, are being decided by this common judgment.
To put things in perspective, the Bench envisages in para 3 stating that:
In these cases, there is a brazen attempt made on the part of the respondents-accused to stall the criminal proceedings initiated against them, in respect of the serious economic offences allegedly committed by them, by not respecting the summons/warrants issued by the Special Court from time to time and thereby causing obstruction in the administration of justice. A few basic common facts necessary for deciding the present appeals may be stated as under:
- The Appellant i.e. Serious Fraud Investigation Office (SFIO) is a statutory body constituted and established under Section 211 of the Companies Act of 2013. The Ministry of Corporate Affairs (MCA) vide the order dated 20.06.2018 in exercise of its powers conferred under Section 212(1)(c) of the Companies Act, 2013 and Section 43(2) and (3)(c)(i) of Limited Liability Partnership Act, 2008 directed the SFIO to inquire and investigate into the affairs of 125 Companies of Adarsh Group (hereinafter referred to as CIUs). On 25.02.2019, the MCA further ordered to investigate into the affairs of 20 other companies and two persons.
- On 09.05.2019, the SFIO, on completion of the investigation submitted an Investigation report to the MCA recommending prosecution against the respondents for the various offences under the Companies Act (1956 and 2013) and of the IPC. Accordingly, on 18.05.2019, a Criminal Complaint being COMA/5/2019, came to be filed by the SFIO in the Special Court at Gurugram impleading 181 Accused including the respondents in the instant Appeals, under Section 439(2) read with Section 436(1)(a), (d) and (2) read with Section 212 of the Companies Act, 2013, read with Section 621(1) of the Companies Act, 1956, read with Section 50 of the Limited Liability Partnership Act, 2008, read with Section 193 of the Code of Criminal Procedure, seeking taking of cognizance and prosecution of the Accused named therein for the offences committed by them jointly and severally, under the various provisions of the Companies Act and the Indian Penal Code as mentioned therein.
- It has been alleged in the complaint that one Adarsh Credit Cooperative Society Limited (ACCSL) was a Multi-State Credit Cooperative Society, founded by one Mukesh Modi, and was managed and controlled by him and his family and his associates.
- The said society accepted the deposits from its members, who were mostly low to middle income individuals. The ACCSL had 800+ branches, 20 lakhs members, 3.7 lakhs advisors and Rs.9253 crores of outstanding deposits as on 31.05.2018. It is further alleged that the controllers of the Society i.e. Mukesh Modi, Rahul Modi and others got incorporated around 125 companies (Adarsh Group of Companies), and started controlling the said Companies by either becoming themselves as the directors or making their members and associates as the directors of the said Companies. On the completion of the investigation it was found that the funds to the tune of Rs.1700 crores were given by the ACCSL as illegal loans to its own controlled 70 Adarsh Group of Companies (CUIs) and certain other companies belonging to the other groups of persons, contrary to settled the position that a company could not be a member of a multistate credit cooperative society and therefore loans could not have been given to such companies by the ACCSL. It is further alleged that total amount of Rs.4120 crores were the outstanding balance as on 31.03.2018 against such illegal loans given by the ACCSL.
- It is also further alleged by the SFIO that the illegal loans obtained from ACCSL by the Companies belonging to Adarsh Group and Ridhi Sidhi Group were on the basis of forged financial/loan documents submitted/signed by the directors of the Companies belonging to the Adarsh Group. The said directors had siphoned off the said funds/loans obtained from the ACCSL in connivance of the other accused. The directors had signed off balance sheets of the companies showing the said funds obtained ACCSL as loans taken from a financial institution.
- The Special Court vide the detailed Order dated 03.06.2019 took the cognizance of all the offences alleged against the accused including the respondents, under the Companies Act and under the IPC, and summoned all the accused including the respondents herein by issuing bailable warrants in the sum of Rs.10,000/- with one surety in the like amount with the direction to appear on 30.07.2019.
- There being some clerical/typographical errors found in the order dated 03.06.2019, the Special Court corrected the cognizance order vide the order dated 11.07.2019. Since the respondents-accused allegedly did not allow the said bailable warrants issued by the Special Court to be executed on them, by hiding themselves and not making themselves available at the given residential addresses, in collusion with the process servers, the Special Court had to issue non-bailable warrants against the respondents from time to time by passing detailed orders. In some of the cases, the Special Court also initiated proclamation of offenders proceedings against the accused.
Most sagaciously, the Bench expounds in para 23 holding that:
In view of the above settled legal position, it is no more res integra that economic offences constitute a class apart, as they have deep rooted conspiracies involving huge loss of public funds, and therefore such offences need to be viewed seriously. They are considered as grave and serious offences affecting the economy of the country as a whole and thereby posing serious threats to the financial health of the country. The law aids only the abiding and certainly not its resistants. When after the investigation, a chargesheet is submitted in the court, or in a complaint case, summons or warrant is issued to the accused, he is bound to submit himself to the authority of law. If he is creating hindrances in the execution of warrants or is concealing himself and does not submit to the authority of law, he must not be granted the privilege of anticipatory bail, particularly when the Court taking cognizance has found him prima facie involved in serious economic offences or heinous offences. In such cases when the court has reason to believe that the person against whom the warrant has been issued has absconded or is concealing himself so that warrant could not be executed, the concerned court would be perfectly justified in initiating the proclamation proceedings against him under Section 82 Cr.P.C. The High Courts should also consider the factum of issuance of non-bailable warrants and initiation of proclamation proceedings seriously and not casually, while considering the anticipatory bail application of such accused.
Most significantly, the Bench encapsulates in para 27 what constitutes the cornerstone of this notable judgment postulating that:
In none of the impugned orders, the High Court has bothered to look into the proceedings conducted, and the detailed orders passed by the Special Court for securing the presence of the Respondents – Accused. It cannot be gainsaid that the judicial time of every court, even of Magistrate’s Court is as precious and valuable as that of the High Courts and the Supreme Court. The accused are duty bound to cooperate the trial courts in proceeding further with the cases and bound to remain present in the Court as and when required by the Court. Not allowing the Courts to proceed further with the cases by avoiding execution of summons or warrants, disobeying the orders of the Court, and trying to delay the proceedings by hook or crook, would certainly amount to interfering with and causing obstruction in the administration of justice. As held in Srikant Upadhay’s case (supra), when warrant of arrest is issued or proclamation proceedings are initiated, the accused would not be entitled to invoke, except in exceptional cases, the extraordinary power of the court to grant anticipatory bail. Granting anticipatory bail is certainly not the rule. The respondents-accused, who have continuously avoided to follow the due process of law, by avoiding attendance in the Court, by concealing themselves and thereby attempting to derail the proceedings, would not be entitled to the anticipatory bail. If the Rule of Law is to prevail in the society, every person would have to abide by the law, respect the law and follow the due process of law.
Most remarkably, the Bench propounds in para 29 holding that:
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.
For sake of clarity, the Bench then clarifies in para 30 holding that:
In that view of the matter, the respective impugned orders dated 29.03.2023 and 20.04.2023 passed by the High Court granting anticipatory bail to the concerned accused who are the respondents in these Appeals, are set aside. The respondents-accused are directed to surrender themselves before the Special Court in one week from today. It is needless to mention that their bail applications as and when filed by them shall be decided by the Special Court in accordance with law. We clarify that we have not expressed any opinion on the merits of the case.
All told, we thus see that the Supreme Court has made it indubitably clear that anticipatory bail should be granted sparingly in economic offences. It was also made clear by the top court that the anticipatory bail cannot be granted as a matter of routine particularly in cases where the accused has avoided summons and concealed their presence to obstruct legal proceedings. The Apex Court also made it crystal clear that the grant of anticipatory bail in such circumstances is certainly not the rule especially when the accused have shown no intent to cooperate with the Trial Court. We thus see that the Apex Court proceeded to allow the SFIO’s appeals and directed the accused to surrender before the Special Court within a week. Very rightly so!
Sanjeev Sirohi, Advocate,
s/o Col (Retd) BPS Sirohi, A 82, Defence Enclave,
Sardhana Road, Kankerkhera, Meerut - 250001, Uttar Pradesh
