It is most significant to observe right at the outset that the Supreme Court in a most learned, laudable, landmark and latest judgment titled Ramesh Kumar v. The State of NCT of Delhi in Criminal Appeal No. of 2023 (Arising out of SLP (Crl.) No. 2358 of 2023) that was pronounced as recently as on July 4, 2023 has deprecated in no uncertain terms the practice of imposing pre-condition of paying an alleged cheated amount to get anticipatory bail. It must be noted that the Bench of Apex Court comprising of Hon’ble Mr Justice S Ravindra Bhat and Hon’ble Mr Justice Dipankar Datta did not shy away from pointing out most forcefully that:
It is considered appropriate to remind the high courts and the sessions courts not to be unduly swayed by submissions advanced by counsel on behalf of the accused in the nature of undertakings to keep in deposit/repay any amount while seeking bail under Section 438 of the Cr. PC and incorporating a condition in that behalf for deposit/payment as a pre-requisite for grant of bail. We thus see clearly that the Apex Court Bench dismisses the appeal. Very rightly so!

At the very outset, this brief, brilliant, bold and balanced judgment authored by Hon’ble Mr Justice Dipankar Datta for a Bench of Apex Court comprising of Hon’ble Mr Justice S Ravindra Bhat and himself sets the ball in motion by first and foremost putting forth in para 2 that:
A disquieting trend emerging over the years which has gained pace in recent times necessitates this opinion. It has been found by us in multiple cases in the past several months that upon First Information Reports being lodged inter alia under section 420 of the Indian Penal Code, 1860 (the IPC, hereafter), judicial proceedings initiated by persons, accused of cheating, to obtain orders under Section 438 of the Code of Criminal Procedure, 1973 (the Cr. PC, hereafter) are unwittingly being transformed into processes for recovery of the quantum of money allegedly cheated and the courts driven to impose conditions for deposit/payment as pre-requisite for grant of pre-arrest bail. The present case is no different from the others and it is considered appropriate to remind the high courts and the sessions courts not to be unduly swayed by submissions advanced by counsel on behalf of the accused in the nature of undertakings to keep in deposit/repay any amount while seeking bail under section 438 of the Cr. PC. and incorporating a condition in that behalf for deposit/payment as a pre-requisite for grant of bail.

To put things in perspective, the Bench envisages in para 3 that:
The bare facts relevant for a decision on this appeal, gathered from the impugned judgment of the Delhi High Court, are these. The appellant before us is the owner of an immovable property. With an intention to redevelop the same, he had entered into three agreements with one Ashwani Kumar (the builder, hereafter) dated 10th and 19th December, 2018 and 30th January, 2019. In terms of the agreement dated 19th December, 2018, the builder was required to construct a multi-storied building in which the appellant would have ownership rights in respect of the 3rd floor and the upper floor, apart from Rs.55,00,000/- (Rupees fifty five lakh) to be paid to him by the builder, whereas the builder would have rights to deal with the 1st and the 2nd floors together with other rights as described therein.

In pursuance of the aforesaid agreement, the builder entered into an agreement to sell and purchase/bayana dated 14th December, 2018 with Vinay Kumar and Sandeep Kumar (the complainants, hereafter) in respect of the 2nd floor of the proposed building (without roof rights) but other rights as described therein for a sum of Rs. 60,00,000/- (Rupees sixty lakh). The complainants had allegedly paid to the builder Rs. 11,00,000/- (Rupees eleven lakh) [Rs. 1,00,000/- (Rupees one lakh) as token money and Rs. 10,00,000/- (Rupees ten lakh) as earnest money], at the time of execution of the agreement dated 14th December, 2018. Thereafter, on the instructions of the builder, the complainants on different dates allegedly made payments of additional amounts to the appellant as well as the builder, in cash as well as by cheques, totaling to Rs. 35,00,000/- (Rupees thirty-five lakh).

As it turned out, the Bench discloses in para 4 that:
Allegedly, the complainants failed to comply with the terms and conditions of the agreement dated 14th December, 2018 triggering institution of a civil suit by the builder against the complainants seeking cancellation of such agreement and forfeiture of the amount of Rs. 13,00,000/- (Rupees thirteen lakh). This was purportedly upon invocation of clause 8 of the said agreement. It is also a matter of record that the builder has instituted another civil suit inter alia against the appellant for specific performance of the agreements dated 10th and 19th December, 2018. However, from the materials on record, we have failed to ascertain the dates of institution of the civil suits.

As we see, the Bench then points out in para 5 that:
The complainants were not handed over possession of the second floor which they intended to purchase. As late as on 18th November, 2021, the complainants sought to put the investigative machinery in motion by lodging a complaint with the Station House Officer, Police Station Gulabi Bagh, Delhi. The said complaint was registered as FIR No.322 of 2021 under sections 420/406/34 of the IPC. Therein, the appellant, the builder and a broker were shown as accused.

Most significantly, what constitutes the true nucleus of this notable judgment is then laid bare in para 26 wherein it is propounded that:
Law regarding exercise of discretion while granting a prayer for bail under section 438 of the Cr. PC having been authoritatively laid down by this Court, we cannot but disapprove the imposition of a condition of the nature under challenge. Assuming that there is substance in the allegation of the complainants that the appellant (either in connivance with the builder or even in the absence of any such connivance) has cheated the complainants, the investigation is yet to result in a charge-sheet being filed under section 173(2) of the Cr. PC, not to speak of the alleged offence being proved before the competent trial court in accordance with the settled procedures and the applicable laws. Sub-section (2) of section 438 of the Cr. PC does empower the high court or the court of sessions to impose such conditions while making a direction under sub-section (1) as it may think fit in the light of the facts of the particular case and such direction may include the conditions as in clauses (i) to (iv) thereof. However, a reading of the precedents laid down by this Court referred to above makes the position of law clear that the conditions to be imposed must not be onerous or unreasonable or excessive. In the context of grant of bail, all such conditions that would facilitate the appearance of the accused before the investigating officer/court, unhindered completion of investigation/trial and safety of the community assume relevance. However, inclusion of a condition for payment of money by the applicant for bail tends to create an impression that bail could be secured by depositing money alleged to have been cheated. That is really not the purpose and intent of the provisions for grant of bail. We may, however, not be understood to have laid down the law that in no case should willingness to make payment/deposit by the accused be considered before grant of an order for bail. In exceptional cases such as where an allegation of misappropriation of public money by the accused is levelled and the accused while seeking indulgence of the court to have his liberty secured/restored volunteers to account for the whole or any part of the public money allegedly misappropriated by him, it would be open to the concerned court to consider whether in the larger public interest the money misappropriated should be allowed to be deposited before the application for anticipatory bail/bail is taken up for final consideration. After all, no court should be averse to putting public money back in the system if the situation is conducive therefor. We are minded to think that this approach would be in the larger interest of the community. However, such an approach would not be warranted in cases of private disputes where private parties complain of their money being involved in the offence of cheating.

It cannot be glossed over that the Bench then points out in para 27 that, Turning to the facts here, what we find is that the version in the FIR, even if taken on face value, discloses payment through cheques of Rs.17,00,000/- (Rupees seventeen lakh) in the name of the appellant and not Rs.22,00,000/- (Rupees twenty-two lakh). We have not been able to comprehend how the High Court arrived at the latter figure as payable by the appellant and why the appellant’s counsel as well agreed with such figure. Prima facie, there appears to be some sort of a calculation error. Also, prima facie, there remains some doubt as regards the conduct of the appellant in receiving cheques from the complainants without there being any agreement inter se. Be that as it may, the High Court ought to have realized that having regard to the nature of dispute between the parties, which is predominantly civil in nature, the process of criminal law cannot be pressed into service for settling a civil dispute. Even if the appellant had undertaken to make payment, which we are inclined to believe was a last ditch effort to avert losing his liberty, such undertaking could not have weighed in the mind of the High Court to decide the question of grant of anticipatory bail. The tests for grant of anticipatory bail are well delineated and stand recognized by passage of time. The High Court would have been well-advised to examine whether the appellant was to be denied anticipatory bail on his failure to satisfy any of such tests. It does seem that the submission made by counsel on behalf of the appellant before the High Court had its own effect, although it was far from being a relevant consideration for the purpose of grant of bail.

Do note, the Bench also hastens to add in para 28 stating that:
It also does not appear from the materials on record that the complainants have instituted any civil suit for recovery of money allegedly paid by them to the appellant. If at all the offence alleged against the appellant is proved resulting in his conviction, he would be bound to suffer penal consequence(s) but despite such conviction he may not be under any obligation to repay the amount allegedly received from the complainants. This too is an aspect which the High Court exercising jurisdiction under section 438 of the Cr. PC did not bear in mind.

As a corollary, the Bench holds in para 29 that:
Under the circumstances, we hold that the High Court fell in grave error in proceeding on the basis of the undertaking of the appellant and imposing payment of Rs.22,00,000/- (Rupees twenty-two lakh) as a condition precedent for grant of bail.

It also cannot be glossed over that the Bench enunciates in para 30 that:
We are not unmindful of the fact that the High Court was led by the appellant himself to an order granting bail with imposition of the impugned condition; hence, we are inclined to remit the matter to the High Court in line with the approach adopted by this Court in Mahesh Chandra (supra) and direct re-consideration of the application for pre-arrest bail and a decision on its own merits in the light of the observations made herein, as early as possible but preferably within 31st August, 2023. It is ordered accordingly.

For sake of clarity, the Bench clarifies in para 31 that:
Till such time further orders are passed by the High Court, the appellant’s liberty shall not be infringed by the investigating officer. In the meanwhile, however, the appellant shall be bound to cooperate with the investigating officer, as and when he is called upon to do so.

Adding more, the Bench mandates in para 33 that:
We hold that at this stage, the complainants have no right of audience before this Court or even the High Court having regard to the nature of offence alleged to have been committed by the appellant unless, of course, a situation for compounding of the offence under Section 420, IPC, with the permission of the Court, arises.

What’s more, the Bench directs in para 34 that:
The appeal stands disposed of on terms as aforesaid. The application for intervention stands dismissed.

Finally, the Bench concludes by holding in para 35 that:
There shall be no order as to costs.

In essence, we thus see quite distinctly that the Apex Court has deprecated the practice of imposing pre-condition of paying alleged cheated amount to get anticipatory bail. So naturally, it is most definitely the bounden duty of the High Courts and the District Courts to pay heed to what the Apex Court has directed in this leading case and comply with it in similar such cases. No denying it!

Sanjeev Sirohi, Advocate,
s/o Col (Retd) BPS Sirohi, A 82, Defence Enclave,
Sardhana Road, Kankerkhera, Meerut - 250001, Uttar Pradesh