Cancellation Of Bail Justified Where Court Fails To Consider Relevant Factors Like Nature Of Accusation, Material Collected During Investigation: Supreme Court

The Supreme Court of India has observed that where a Court while considering an application for bail fails to consider the relevant factors, an Appellate Court may justifiably set aside the order granting bail.

According to the Bench, the Appellate Court is required to consider whether the order granting bail suffers from a non­-application of mind or a prima facie view from the evidence available on record. 

A Bench comprising Justice MR Shah and Justice Sanjiv Khanna made the observation while considering an appeal challenging the Delhi High Court's order granting bail to a person accused of engaging in the business of multi­commodity trading of agricultural and non­- commodities agricultural and for the offences under Sections 409, 420, 467, 468, 471 and 120B IPC. 

The Bench has held that the High Court's order is unsustainable as the High Court while releasing the accused respondent on bail has not exercised the jurisdiction judiciously and has not considered the relevant factors which are required to be considered while grant of bail.

The Bench observed that it appears that the High Court has directed to release the accused on bail mainly on the ground that the case arises out of a commercial transaction and is based on documents already seized

However, all allegations and the material collected during the course of the investigation which are part of the charge­sheet and supplementary charge­ sheet were not taken note of by the High Court. Further, the High Court has not at all taken note of the reasoning given by the the Sessions Court while rejecting the bail application of accused.

The Court has observed that the High Court has completely lost sight of the basic principles enumerated by the Supreme Court through various decisions.

The Bench has pointed out that the High Court has not at all considered the modus operandi adopted by the accused in commission of serious offence of siphoning and/or transferring the huge sum to another company through shell companies. Further, the High Court has also not taken into consideration the status report filed by the I.O. in which in detail it has been pointed out how systematically the accused have committed the offence and misappropriated/siphoned off the huge sum through shell companies.

The Bench further observed that the High Court has not at all considered the relevant factors including the nature and gravity of accusation; the modus operandi and the manner in which the offences have been committed through shell companies and creating the false/forged documents and/or misusing the PAN Cards, Aadhar Cards and KYCs of the employees and showing them as Directors of the fake and shell companies.

The Bench relied on Supreme Court's judgement in the case of Mahipal vs. Rajesh Kumar alias Polia and Another, (2020) where it was held that though the Court does not ordinarily interfere with the order of the High Court granting bail, however, where the discretion of the High Court to grant bail has been exercised without due application of mind and in contravention of the directions of this Court, such an order of granting bail is liable to be set aside.

The Bench also relied on the case of Neeru Yadav vs. State of UP & Anr., (2016) where Supreme Court had laid down the factors to be considered by the Court while dealing with an application for grant of bail.

The Bench therefore concluded that the High Court has not adverted to the relevant considerations and has granted the bail mechanically by observing that the case arises out of a commercial transaction.

The Court has quashed and set aside the impugned judgment and order passed by the High Court the respondent accused on bail deserves and directed the accused to surrender before the concerned Court/Jail Authority forthwith.

Case Title: Centrum Financial Services Limited vs State of NCT of Delhi and Anr.

Citation : 2022 LiveLaw (SC) 103

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