Supreme Court Says Patna HC Exceeded Bail Jurisdiction By Directing Sahara Chief Subrata Roy To Return Investments

A Bench comprising Justices A.M. Khanwilkar and J.B. Pardiwala was perturbed that the High Court in an anticipatory bail application under Section 438 Cr.P.C. had exceeded its jurisdiction and passed orders, inter alia, directing the Sahara Group to come up with a plan for return of the investment of the investors before the next date of hearing, and also sought Roy's presence before the Court for the said purpose.

The present petition impugns two interim orders of the Patna High Court, passed on 11.02.2022 and 27.04.2022. In the latter order, the Single Judge of the High Court noted that the Sahara Group through different entities have been collecting investments from the public at large even a month back (from the date of the order) and their contention that they do not have money is not reasonable. In view of the same, it observed that Sahara Group is duty bound to return the maturity amount to the investors and honour their commitment. Accordingly, the direction with respect to the return of investment was made by the High Court, but while exercising jurisdiction under Section 438 Cr.P.C.

The Bench clarified that it is not expressing the opinion that the High Court cannot pass such orders in exercise of power under other/relevant provisions of the law, but the same, definitely, cannot be done while exercising power under Section 438 Cr.P. C. in an application for anticipatory bail.

"Let the High Court exercise other jurisdiction. We have no problem. Not Section 438…We are not here observing that the High Court cannot do it at all, it has to do in a proper manner, not in Section 438."

The Counsel for the respondent defended the order passed by the High Court. He apprised the Bench that Patna High Court had passed such sweeping orders in all economic offence cases and Roy is no exception.

"Now the question is whether the High Court as a Constitutional Court has power to pass such an order. This is a sweeping order for all economic offence. It is not just him (Roy)."

Expressing dissatisfaction, Justice Khanwilkar stated that the power under Section 438 is a limited one and does not permit any further inquiry than what is relevant for the issue of bail.

"This is absolutely wrong trend. In application of bail you start inquiring about issues not related to bail. Either you grant bail or you don't. It is not an PIL that the High Court is hearing…Section 438 is limited power. It cannot be done under Section 438. We are not saying beyond that."

Senior Advocate, Mr. Kapil Sibal appearing for Roy added that even Reserve Bank of India (RBI) has assailed the impugned order.

"RBI has been made a party. They have said that it cannot be done."

As the Counsel for the respondent reiterated his defence, Justice Khanwilkar interdicted stating -

"My limited experience of 22 years is that this is going beyond your jurisdiction. We are only on that. Let them do it in some other jurisdiction…"

He added that the role of the High Court was to decide on the anticipatory bail and not delve into the issue of returning the investments of the investors.

Justice Khanwilkar further remarked -

"If such an order was to be passed by Sessions Court, the High Court would have come down heavily on such a judge and even asked him to go to the judicial academy."

Justice Pardiwala pointed out that the application being one for anticipatory bail, the High Court ought not to have emphasised on the presence of Roy, who was a third party to the proceeding.

"Three applicants came for anticipatory bail. How can it say that for the purpose of deciding the application the presence of this individual is necessary."

The Counsel for the respondent submitted that mentioning of a wrong provision ought not to affect the order of the High Court.

Justice Khanwilkar clarified that -

"It is not wrong provision, it is wrong jurisdiction."

He told the Counsel that the Single Judge of the High Court, himself, could not have initiated a suo moto Public Interest Litigation, which falls under the domain of the Chief Justice of the High Court. Therefore, in all respects the jurisdiction was exceeded.

"That judge couldn't have started suo moto PIL that is for the Chief Justice of the High Court."

As RBI's petition had been de-tagged on a previous occasion. The Bench, in order to avoid any confusion in the matter, gave notice to the RBI and adjourned the matter until 14 July, 2022.

In May, the Supreme Court had stayed the warrant issued by the High Court for the production of Roy.

[Case Title: Subrata Roy Sahara v. Pramod Kumar Saini And Ors. SLP (Crl) No. 4877-78 of 2022]