HC's Power To Grant Interim Relief, Stay On Coercive Steps To Protect Personal Liberty Must Be Preserved Subject To Guidelines: Supreme Court

The bench of Justices Chandrachud, M. R. Shah and Sanjiv Khanna was considering the contours of the power of quashing under section 482, CrPC and the power to grant interim relief by way of bail/anticipatory bail, stay on coercive steps i.e. a stay on arrest and investigation.

"But this judicial discretion has to be exercised with care, in a manner so as to not stultify the prosecution", added Justice Chandrachud.

"We know that the door cannot be closed completely. But to what extent it is to be opened is the question", noted Justice Khanna on Wednesday.

"Suppose, a person believes that no offence is made out? When a matter is before a court, the court has to examine it. It has to issue notice. Suppose, the court says that there will be no interim stay, then the person will move an anticipatory bail plea. Will it not result in conflicting judgements then? If the High Court has the power to grant interim bail or interim anticipatory bail, why it should not be exercised?", asked Justice Khanna to Senior Advocate K.V. Vishwanath, for the petitioner-company.

"In Arnab Goswami, it was noted that the bar is there on enlarging one on bail even under 226, if the court is not interfering on the plea for quashing. If the court feels that it is a matter which warrants interference, the bail can be granted", advanced Mr. Vishwanath.

"How should the court decide if it wishes to entertain it or dismiss it at the outset?", asked Justice Khanna.

"The moment an FIR is filed, it is immediately followed by a 482 petition. No time is given to the police to investigate the allegations in the FIR! There are situations and situations like this!", pointed out Justice Shah.

"In cases of physical violence, there is no problem. But the real problem arises in economic offences. There are civil offences which are made economic offences!", reflected Justice Khanna.

"Tomorrow, a closure report may come to be filed, stating that it is a civil case. Then, the de facto complainant has other remedies. But to say that no investigation at all can take place…?", advanced Mr Vishwanath.

"What should be the parameters? There is some doubt...", asked Justice Khanna.

"There is sufficient play in the joints. There is Bhajan Lal, Habeeb Jeelani, Arnab Goswami and Ravuri (judgment of Justices Chandrachud and Shah of March 9). Your Lordships have said that the power under 482 is to be exercised in the 'rarest of the rare' cases. This is a phrase which is used in connection with the award of the death penalty! This 'rarest of rare' phraseology was introduced because it is something which is to be knocked off at the threshold! Now, Your Lordships may say that this list of cases is not exhaustive", replied Mr. Vishwanath.

"Jeelani has been misunderstood. We looked at it very, very closely in Arnab Goswami", commented Justice Chandrachud.

In the Arnab Goswami decision, penned by Justice Chandrachud, the top court had noted that the Bombay High Court's reliance on Jeelani was misplaced as the ruling in Jeelani arose in a situation where the High Court had declined to entertain a petition for quashing an FIR under Section 482 but nonetheless directed the investigating agency not to arrest the accused during the pendency of the investigation.

"This was held to be impermissible by this Court. On the other hand, this Court clarified that the High Court if it thinks fit, having regard to the parameters for quashing and the self- restraint imposed by law, has the jurisdiction to quash the investigation ―and may pass appropriate interim orders as thought apposite in law. Clearly therefore, the High Court in the present case has misdirected itself in declining to enquire prima facie on a petition for quashing whether the parameters in the exercise of that jurisdiction have been duly established and if so whether a case for the grant of interim bail has been made out", it was held in the Arnab Goswami case.

As regards Ravuri, Justice Chandrachud explained, "What we found wrong was that the High Court said that there would be no arrest at all till the final report under section 173, CrPC is filed, even though the petition for quashing was dismissed"

Continuing his submissions, Mr Vishwanath advanced,

"Permitting the investigation will not result in miscarriage of justice. It is because the police started misusing the registration of FIR with arrest that FIR has become a stigma and that is why people started rushing to the court. Otherwise, Lalitha Kumari says that FIR registration is to protect the accused as much as it is to set the law in motion. A number of rights enure to the accused also on the lodging of the FIR– the statements recorded are hit by section 161, CrPC, there is Article 20(3) against self-incrimination…The other extreme is that the police does not register the FIR at all. If an offence is disclosed, they have to look into it!"

"Just like the courts must not interfere too readily, a hands-off approach also will not work. The power is there, and in a case warranting interference, it may be exercised. But where Your Lordships are not interfering at all, where you are not granting a stay, to grant bail might not seem correct. The power of interim relief is a part of the power to quash", he submitted.

"We have to balance between the rights of the accused and the investigation", observed Justice Chandrachud.

"Like you said, there is a difference between the registration of the FIR for investigation and arrest. The latter needs a stricter standard. Of course, Sections 438 and 439 (CrPC, anticipatory bail and bail) are there, but can it be said that in all cases, bail cannot be granted? In the Supreme Court, we may dismiss a plea but we grant liberty to take appropriate recourse. We also say that one day notice be given. It is our way of saying that a liberal approach be taken and that the application must be heard", noted Justice Khanna.

"We also say that if you surrender before the competent court within two weeks, you can apply for regular bail. We add that it will be considered expeditiously. Sometimes, we say that the Court may consider the bail on the same day also. There are some cases of a family dispute, where some family members have been roped in unnecessarily, so though we don't exercise the power, we tell the Court to decide the petition on the same day", added Justice Chandrachud.

"Section 41(1)(a) (of the CrPC) says that the police officer 'may' arrest (a person believed to have committed a cognisable offence). The court has construed it to mean that the person need not necessarily be arrested. But whether there is to be arrest or not, unless it is an anticipatory bail plea, it is not a power which the High Court will normally exercise", continued the judge.

"Also, the person is not remedy-less even after 482 for quashing is dismissed. There is still 438", noted Justice Shah.

"Then, in all cases of 482, there will also be a 438. Virtually, we will end up in the same position", said Justice Khanna.

"(Under 482), the judge does not pass any order on the anticipatory bail application or the bail application. He just grants protection", explained Justice Shah.

"When the High Court entertains 482 for quashing, and it is of the opinion that a prima facie ground for quashing is made out, it may grant interim protection. We said so in Arnab Goswami that there is an exceptional power under 482 and 226. But it cannot be that without expressing any opinion, the High Court stays the investigation (as in the case at hand), even though anticipatory bail was sought one year ago and ad-interim anticipatory bail has come to be granted on several occasions by the lower court. A year later, they come to the High Court and it stays the arrest as well as the investigation", noted Justice Chandrachud.

"Stay of the investigation is very, very serious. It should not be granted unless there is something extraordinary", added Justice Khanna. "Yes, only in the 'rarest of the rare' cases", concurred Justice Shah.

"In this case, there was a 438 application before the sessions court. The sessions court grants ad interim bail. Then, there was an adjournment after adjournment for one year. As this period of one year is to end, you move 482. Then, there is stay on any coercive steps. Coercive steps means arrest and investigation. If you resort to these stratagems, it hurts the investigation", noted Justice Chandrachud.

"Also, the number of 482 matters before High Courts is very great. Besides, 482 matters may come up for hearing after months or even years. The evidence may be destroyed in the meanwhile", remarked Justice Shah. "In Allahabad and in Bombay, it takes several years", agreed Justice Chandrachud.

"We don't want to deprive the High Court of the power. It is a valuable power for personal liberty. It must be preserved, subject to guidelines. The problem is the manner of misuse of criminal justice administration- by the accused, or by the complainant, or even within the political realm", continued Justice Chandrachud.

"Like a breach of contract does not necessarily presuppose a case of fraud, but there is invocation of section 420, IPC. This results in a misuse of power", added Justice Khanna.

"Unfortunately, this is the hard reality. In a lot of states, the civil justice administration is inadequate so everything is given a criminal colour. Even in cases of breach of injunction, there are criminal complaints. I used to tell lawyers in Allahabad, that there is Order 39 Rule 2A (of the CPC). The answer I got was that it is ineffective. So ultimately, the judiciary has to strike a balance", said Justice Chandrachud.

The bench had yesterday expressed concern regarding the rising trend among High Courts across the country to routinely grant interim relief by way of a stay on any coercive action pending a writ petition or a plea under section 482, CrPC for quashing of criminal proceedings.

The bench was hearing an SLP arising out of a September, 2020 order of the Bombay High Court on a writ petition. While granting time for the filing of a reply affidavit with additional documents, the High Court had in the interim directed that no coercive measures be adopted against the present respondents (director of a real estate development company and his business partners) in respect of the FIR registered by the present petitioner (Neeharika Infrastructure Pvt Ltd) with the Economic Offences Wing for alleged offences under Sections 406, 420, 465, 468, 471 and 120B of the IPC.

On October 12 last year, a bench headed by Justice Chandrachud had issued notice on the SLP, and granted an ad-interim stay on the aforesaid direction of the HC. The bench had recorded that three orders were passed by the Additional Sessions Judge, City Sessions Court, Mumbai on 15 October 2019 under Section 438 of the CrPC granting interim protection from arrest to the respondents. Moreover, the protection which was granted by the Sessions Court was extended from time to time and nearly a year thereafter, a writ petition was moved before the Bombay High Court in which a blanket order has been passed on 28 September 2020.