Bail Plea Cannot Be Turned Into Recovery Proceedings Against Accused: Punjab & Haryana High Makes Interim Bail Absolute In Cheating Case

The Punjab & Haryana High Court has observed that in cheating cases where bail is sought by the accused, the Court cannot impose a condition to deposit the allegedly misappropriated amount before granting bail. 

Acknowledging the ruling of the Supreme Court in Dilip Singh v. State of Madhya Pradesh and another (2021)  Justice Suvir Sehgal granted interim bail and said, "no pre-condition for deposit of alleged cheated amount can be imposed nor can a bail petition be converted into recovery proceedings."

These observations came in a bail application filed under Section 439 CrPC by the accused was booked under Sections 420 (cheating), 465, 467, 468, and 471 of the IPC. 

It was alleged that the accused, who was then working as a director in SERA Cue Labs Pvt. Ltd., had committed fraud and forged documents in the company where the complainant was also a director.

According to FIR, in connivance with the others Bhardwaj withdrew amount of Rs. 7 lakhs into his account and he had allegedly signed various Franchisee Agreements without the knowledge of the complainant.

The counsel for the petitioner argued that an examination of the allegations levelled in the FIR showed that the criminal complaint was the result of a business dispute and had deliberately been given a criminal colour.

It was submitted that the complainant owed money to the accused, for which a civil suit for recovery had been instituted by the petitioner, and was pending. 

On the other hand, the State counsel submitted that the petitioner had been specifically named in the FIR and there were allegations of cheating as well as forgery of documents against him. It was submitted that the counsel was given categoric instructions to state that recovery of defrauded money is to be effected from the petitioner. 

Considering the submissions, the Court noted that the offences allegedly committed by the petitioner were triable by a Magistrate and that the investigation against him was complete.

It was noted that the petitioner was on interim bail for more than four years and there was no allegation that he had misused his liberties. The court observed that the dispute primarily pertained to the affairs of a limited company and the complainant as well as the accused had been involved in its affairs.

While opining that the interim bail granted to the petitioner deserved to be confirmed, the Court rejected the State's claim that some recovery had to be effected from him, placing reliance on Apex Court's decision in Dilip Singh v State of Madhya Pradesh and another (2021).

In Dilip Singh's case, the Supreme Court while setting aside the order of the High Court to deposit  Rs. 41 lakh as a pre-condition to bail, had observed that "a criminal court, exercising jurisdiction to grant bail/anticipatory bail, is not expected to act as a recovery agent to realise the dues of the complainant, and that too, without any trial."

In the light of the above, the interim bail was made absolute and the plea was disposed of.

Advocates Nikhil Ghai and Prabhdeep S.Bindra appeared for the petitioner.

A.P.S. Tung, DAG, Punjab.

Anmol Jeevan Singh Gill, Advcoate for the complainant.

Citation: 2023 LiveLaw (PH) 253

Title: Arun Bhardwaj v. State of Punjab

Click here to read/download the order.