Section 438 CrPC: Supreme Court Says Anticipatory Bail Cannot Be Made Conditional On Money Deposit

The Supreme Court has said judicial proceedings under Section 438 of the CrPC [corresponding to Section 482 of the BNSS] for anticipatory bail cannot be transformed into processes for recovery of money allegedly cheated.

A Bench of Justices Ujjal Bhuyan and Atul S Chandurkar said courts should not impose conditions requiring an accused to deposit or pay money as a prerequisite for bail in private disputes. Such conditions create an impression that bail can be secured by depositing money, which is not the intent of the law.

Court made the observations while allowing an appeal filed by Renu Mehta and another against a condition imposed by the Punjab and Haryana High Court requiring them to deposit Rs 4 crore for anticipatory bail.

Can courts require money to be deposited for anticipatory bail?

No, the Supreme Court held, particularly in cases involving private disputes.

The Bench said that while courts have the discretion to impose necessary, just and efficacious conditions while granting anticipatory bail under Section 438 of the CrPC, they cannot impose harsh, onerous or excessive conditions that frustrate the object of bail.

Such conditions should be limited to those that facilitate the appearance of the accused before the investigating officer or the trial court, it said.

"Such conditions may only be considered in exceptional public interest cases, such as large-scale misappropriation of public funds," Court said.

Why did the Supreme Court set aside the Rs 4 crore condition?

The appellants were accused in a 2022 FIR registered at Police Station Phase-1, S.A.S. Nagar (Mohali), under Sections 406, 420 and 120-B of the Indian Penal Code, 1860 [corresponding to Section 316(2), Section 318(4) and Section 61 of the Bharatiya Nyaya Sanhita, respectively].

According to the FIR, the appellants had allegedly duped the informants of a substantial sum of money that they had invested through them for the purchase of an industrial estate in Mohali, Punjab.

The informants had also instituted a suit for specific performance, which was pending before the Civil Judge, Senior Division, S.A.S. Nagar-Mohali. The high court had noted that the allegations and materials disclosed a dispute having a predominantly civil flavour.

By its December 22, 2025 order, the high court granted the appellants anticipatory bail but imposed a condition requiring them to deposit Rs 4 crore.

The Supreme Court had earlier stayed the condition. It had, however, directed the appellants to file an undertaking before the trial court that they would not transfer the properties any further.

The appellants argued that once the high court had accepted that the dispute was primarily civil in nature and granted them anticipatory bail, it could not have imposed the condition requiring them to deposit the money.

On the other hand, counsel for the complainants submitted that one of the women complainants was now more than 90 years old and that it was an admitted fact that she had been duped by the appellants. Although the transaction had taken place around 15-16 years ago, she was still awaiting justice, counsel submitted.

The counsel said the high court had imposed the deposit condition after considering the plight of the informants and to balance the interests of both sides.

It was also argued that courts have the discretion to impose conditions while granting regular or anticipatory bail and, therefore, no interference was warranted.

What has the Supreme Court said about money-deposit conditions in bail cases?

The Bench referred to its earlier decisions cautioning courts against imposing irrelevant or excessive conditions for bail.

In Munish Bhasin (2009), the Supreme Court had observed that while exercising discretion under Section 438 of the CrPC, neither the high court nor the sessions court would be justified in imposing "freakish conditions". Although courts can impose necessary, just and efficacious conditions, an accused cannot be subjected to irrelevant conditions, it had held.

The Bench also referred to its 2023 decision in Ramesh Kumar, where the Supreme Court had noted a growing trend in cases involving Section 420, IPC. It observed that judicial proceedings under Section 438, CrPC were being unwittingly transformed into processes for recovery of the amount allegedly cheated, with courts imposing conditions for deposit or payment of money as a prerequisite for pre-arrest bail.

The Supreme Court had then clarified that conditions facilitating the appearance of the accused before the investigating officer or trial court would be relevant. However, requiring an accused to pay money for bail creates an impression that bail can be secured by depositing the money allegedly cheated, which is not the purpose of the provision.

Are there any exceptions to the rule?

Yes. The Supreme Court clarified that money-deposit conditions may be considered in exceptional cases involving a larger public interest.

For instance, where an accused is alleged to have misappropriated public money and voluntarily offers to make good the amount allegedly misappropriated, a court may consider whether the money should be deposited before deciding the bail application.

However, such an approach would not be warranted in private disputes where private parties allege that their money was involved in an offence of cheating, Court said.

The Bench also referred to Subhelal Alias Sushil Sahu v State of Chhattisgarh (2025), which concerned a cryptocurrency scam in which nearly 2,000 investors had allegedly lost money.

Considering the peculiar facts of that case and the interests of a large number of depositors, the Supreme Court had directed the accused to deposit Rs 35 lakh before the trial court.

The apex court had clarified that it generally condemns the imposition of such conditions, but the peculiar facts of that case had compelled it to impose the condition.

In the present case, however, the Bench said the decision in Subhelal Alias Sushil Sahu would not apply.

"When the high court came to the conclusion that a case for anticipatory bail is made out, it ought not to have imposed such a condition as a pre-condition for bail," the Bench held.

The Supreme Court accordingly set aside the high court's condition requiring the appellants to deposit Rs 4 crore as a condition for grant of anticipatory bail.

Since the investigation had been completed, Court directed the prosecution to submit the charge sheet within two weeks, after which the parties could avail their respective remedies in accordance with law.

Court also noted that, in the civil suit, the trial court had already directed in 2024 that the defendants, who are the appellants in the present case, should not alienate the suit property any further.

Case Title: Renu Mehta & And Vs State of Punjab & Ors

Bench: Justices Ujjal Bhuyan and Atul S Chandurkar

Date of Judgment: July 28, 2026