View That Default Bail Cannot Be Cancelled On Merits Will Reward Lethargic Investigation : Supreme Court

The question that arose in the case was whether default bail can be cancelled after presentation of chargesheet, when it was granted for not filing it within 90 days as per the CrPC.

There is no absolute bar that once a person is released on default bail, it cannot be cancelled on merits and grounds like not cooperating with the investigation, observed a bench comprising Justices MR Shah and CT Ravikumar while directing the Telangana High Court to decide on merits the CBI's plea for cancellation of bail granted to Erra Gangi Reddy in connection with the YS Vivekananda Reddy murder case.

A case for cancellation of default bail can be considered by the court if -

1. the defects for which default bail was granted is cured;
2. special and strong reasons are made out from the chargesheet filed subsequent to the enlargement that the accused has committed a non-bailable crime; and
3. considering the grounds set out in Section 437(5) and Section 439(2) bail can be cancelled on merits;

Mere filing of the chargesheet is not enough to seek cancellation of default bail.

"Court cannot be compelled to not consider the gravity of the offence or examine the merits of the case when accused was not released on merits earlier....Mere non filing of chargesheet will not be enough when strong case is made out", Justice MR Shah read out the operative part of the judgment while remanding the matter to the High Court.

Factual Background

Y.S. Vivekananda Reddy, an Indian National Congress leader, was brutally murdered and found at his residence in Kadapa, Andhra Pradesh on 15 March 2019. Though initially, a case under Section 174 CrPC was registered, eventually a case under Section 302 read with Section 120B IPC was registered. The State constituted a Special Investigation Team (SIT), which took over the investigation. During the investigation, T.Gangi Reddi was arrested and remanded to judicial custody. After 90 days in judicial custody, he filed for default bail under Section 167 CrPC and the same was allowed by the JMFC, Pulivendula on 27.06.2019. Later, as per the orders of the Andhra Pradesh High Court, CBI was entrusted with the investigation. The final chargesheet was filed on 26.10.2021. It named 4 people including T. Gangi Reddi. In view of the same, the CBI moved the Special Court seeking cancellation of bail granted to Reddi. Thereafter it conducted further investigation, and eventually approached the Andhra Pradesh High Court seeking cancellation of bail. The High Court dismissed the petition on the ground that once Reddi was released on default bail under Section 167(2) CrPC the bail cannot be cancelled on merits. Challenging the order of the High Court the Special Leave Petition has been filed before the Apex Court. The Supreme Court had reserved verdict on the CBI's plea on January 5 after hearing Additional Solicitor General KM Nataraj for CBI and Senior Advocate B. Adinarayana Rao for Reddy.

Issue before the Supreme Court

Whether after an accused is released on default bail under Section 167(2) Cr.P.C., under which circumstances, his bail can be cancelled and whether bail can be cancelled on merits having found committed non-bailable crime on conclusion of the investigation and filing the chargesheet?

Analysis by the Supreme Court

At the threshold, the Court noted that when an accused is released on default bail under proviso to Section 167(2) he is released upon furnishing bail bond, because of failure on the part of the investigating agency to complete the investigation and file the chargesheet within the stipulated ninety time. The proviso envisages that the default bail granted would be deemed to be released under provisions of Chapter XXXII CrPC including Section 437 (When bail may be taken in case of non-bailable offence) and Section 439 (Special powers of High Court or Court of Session regarding bail). However, the Court was convinced that bail granted under proviso to Section 167(2) is not an order on merits. Therefore, it observed that the deemed fiction could not have been interpreted to mean that the default bail order is passed on merits. Referring to judgments of the Apex Court, particularly in Aslam Babalal Desai v. State of Maharashtra (1992) 4 SCC 272 and Abdul Basit Alias Raju And Ors. v. Mohd. Abdul Kadir Chaudhary And Anr. (2014) 10 SCC 754 where it had been held that merits which come out in the ‘chargesheet and attending circumstances’ are relevant and on the basis of the same bail can be cancelled but only when strong grounds are made demonstrating commission of non-bailable offence by the prosecution from the chargesheet and not merely on the fact that the chargesheet has been filed subsequent to the enlargement on bail.

The Court noted that the accused has relied upon its judgment in Mohamed Iqbal Mader Sheikh And Ors. v. State of Maharashtra (1996) 1 SCC 722. However, it clarified that no contrary view was actually taken in this judgment. In fact it supported the observations in Aslam Babalal Desai. It had held that, order granting default bail shall be deemed to be under Section 437 and Section 439 and the order can be cancelled when a case for cancellation is made out under Section 437(5) and Section 439(2) CrPC.

The Court noted that if the argument that once default bail is granted it cannot be cancelled is accepted it would be a travesty of justice as if investigating officers are hand in gloves with the accused persons, they might chose not to file the chargesheet within the stipulated time period and permit the accused to be enlarged on default bail. It was concerned that the acceptance of the argument of Reddi’s counsel may ‘lead to giving a premium to illegality and/or dishonesty’.

“the Courts will be loathe for such an interpretation, as that would frustrate the justice. The Courts have the power to cancel the bail and to examine the merits of the case in a case where the accused is released on default bail and released not on merits earlier. Such an interpretation would be in furtherance to the administration of justice.”

Case Details

State through CBI v. T. Gangi Reddy @ Yerra Gnagi Reddy| 2023 LiveLaw (SC) 37 | SLP (Crl) No. 9573/2022 | Justice M.R. Shah and Justice C.T. Ravikumar

For Appellant(s) Mr. K. M. Nataraj, ASG Mr. Sharath Nambiar, Adv. Mr. Vinayak Sharma, Adv. Mr. Anuj S. Udupa, Adv. Mr. Nakul Chengappa K.K., Adv. Mr. Arvind Kumar Sharma, AOR

For Respondent(s) Mr. B. Adinarayana Rao, Sr. Adv. Mr. Sumanth Nookala, AOR Mr. Sai Vamsi Krishna, Adv. Ms. Jesal Wahi, AOR

Headnotes:

Code of Criminal Procedure, 1973; proviso to Section 167(2) -Default bail can be cancelled on merits - there is no absolute bar that once a person is released on default bail under Section 167(2) Cr.P.C., his bail cannot be cancelled on merits and his bail can be cancelled on other general grounds like tampering with the evidence/witnesses; not cooperating with the investigating agency and/or not cooperating with the concerned Trial Court etc [Para 11]

Code of Criminal Procedure, 1973; proviso to Section 167(2)-in a case where an accused is released on default bail under Section 167(2) Cr.P.C., and thereafter on filing of the chargesheet, a strong case is made out and on special reasons being made out from the chargesheet that the accused has committed a non-bailable crime and considering the grounds set out in Sections 437(5) and Section 439(2), his bail can be cancelled on merits and the Courts are not precluded from considering the application for cancelation of the bail on merits. However, mere filing of the chargesheet is not enough, but as observed and held hereinabove, on the basis of the chargesheet, a strong case is to be made out that the accused has committed non-bailable crime and he deserves to be in custody [Para 13]

Code of Criminal Procedure, 1973; proviso to Section 167(2) - grant of default bail - the bail so granted is not on merits - when an accused is released on default bail they are released on furnishing the bail bond by them on the failure of the investigating agency to complete the investigation and file the chargesheet within the stipulated time mentioned therein - the object and purpose of proviso to Section 167(2) Cr.P.C. is to impress upon the need for expeditious investigation within the prescribed time limit and to prevent laxity - the object is to inculcate a sense of its urgency and on default the Magistrate shall release the accused if he is ready and does furnish bail - it cannot be said that order of release on bail under proviso to Section 167(2) Cr.P.C. is an order on merits. [Paragraph 8.1]

Code of Criminal Procedure, 1973; proviso to Section 167(2) - grant of default bail - deemed to be released under provisions of Chapter XXXIII of the Cr.P.C., which includes Section 437 and 439 also - deeming fiction under Section 167(2) Cr.P.C. cannot be interpreted to the length of converting the order of default bail, which is not on merits as if passed on merits. [Paragraph 8.1]

Code of Criminal Procedure, 1973; proviso to Section 167(2) - grant of default bail - the merits brought out in the chargesheet and attending circumstances are relevant, as the bail was granted due to default of the investigating officer without Court's adverting to the merits but strong grounds are necessary to cancel the bail and mere filing of the chargesheet itself is not sufficient. [Paragraph 9.2, 9.4, 9.7]

Code of Criminal Procedure, 1973; proviso to Section 167(2) - grant of default bail - order granting bail shall be deemed to be under Section 437(1) or (2) or Section 439(1) of the Cr.P.C. and that order can be cancelled when a case for cancellation is made out under Section 437(5) or 439(2) Cr.P.C. [Paragraph 9.6, 9.7]

Code of Criminal Procedure 1973;proviso to Section 167(2) -To hold that default bail cannot be cancelled on merits will be giving premium to lethargic investigation-In a given case, even if the accused has committed a very serious offence, may be under the NDPS or even committed murder(s), still however, he manages through a convenient investigating officer and he manages not to file the chargesheet within the prescribed time limit mentioned under Section 167(2) Cr.P.C. and got released on default bail, it may lead to giving a premium to illegality and/or dishonesty- Such an interpretation frustrates the course of justice [Para 12]