The Supreme Court on Wednesday ruled that persons who defy the rule of law and obstruct judicial proceedings by avoiding court summons or warrants are not entitled to the privilege of pre-arrest bail, especially in cases involving serious economic offences. It warned that such conduct amounts to “obstruction in the administration of justice” and undermines the authority of courts.
“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,” held a bench of justices Bela M Trivedi and PB Varale.
The bench made these observations while setting aside anticipatory bail orders granted by the Punjab and Haryana high court in connection with a Ponzi scheme allegedly orchestrated by Mukesh Modi and his family through the Adarsh Credit Co-operative Society Ltd.
The top court was considering a batch of 17 appeals arising from criminal proceedings before a special court in Gurugram. The accused was booked following an investigation by the Serious Fraud Investigation Office (SFIO) under directions from the Ministry of Corporate Affairs. The probe revealed that the cooperative society floated over 100 shell companies, all linked to Modi’s family, siphoning off huge amounts collected from investors. Advocate Padmesh Mishra represented SFIO in the top court.
The court said the accused consistently evaded the judicial process despite the issuance of non-bailable warrants and initiation of proclamation proceedings. “The law aids only the abiding and certainly not its resistants,” noted the bench, adding: “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.”
While declaring that “granting anticipatory bail is certainly not the rule,” the bench said the privilege cannot be granted to those “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.”
The judges called out what they described as a “brazen attempt” by the accused to “stall the criminal proceedings… by not respecting the summons/warrants issued by the special court from time to time.”
Citing previous judgments, the court reiterated that economic offences “constitute a class apart” due to their complex conspiracies and the scale of public funds involved. “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 bench observed.
The court particularly took note of the mandatory “twin conditions” under Section 212(6) of the Companies Act, which apply to offences under Section 447 — relating to fraud — and bar bail unless the public prosecutor is heard and the court believes the accused is not guilty and unlikely to commit the offence again.
The apex court termed the high court’s orders of March and April 2023 as “perverse” and “untenable at law,” asserting that they ignored the seriousness of the charges and the accused’s non-cooperation.
Setting aside the anticipatory bail granted to the 14 accused by the Punjab and Haryana high court on March 29 and April 20, 2023, the Supreme Court directed them to surrender before the special court within one week. “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,” the bench added.
In the other three petitions, SFIO’s lawyer Mishra chose not to contest because two of them were granted bail by the special court while in the third case, no warrant or proclamation proceedings were initiated for defiance of court summons or notices.