An economic offence is a rampant and pervasive social wrongdoing; each country on the planet is confronting this socio-economic challenge in one or the other form. It is the most consequential threat to a nation’s economy at large and law in particular. It's anything but another attempt to satisfy an individual’s greed over need from the very commencement of society.
Socio-economic offences are carried out by experts in corporate field, finance managers, business persons, organised crime syndicates and duly appointed public servants after analysing loopholes in the system and with utilization of modern technology in course of execution of their authority and proficient business exercises in which they have aptitude to take genuine advantage of money, causing a threat to lawful functioning of the society. In criminal demonstrations related to money matters, an act which seems calm, well-planned and cultivated gets converted into an assault on public money and well-being of the society at large. The wrongdoers in criminal offences are just worried about their own monetary benefit at the expense of irredeemable and grave squandering to the fellow citizens. Wealth has become an equivalence of societal domination, even at the cost of economic misfortune to the entire society. The accused in a white-collar crime is often a compelling individual with status, position, standing and means accordingly making it probable that he may impact investigation and arraignment differently. He is in position to allure the witnesses and alter the evidence. White-collar crimes have a long-lasting effect on the society in general; economy and society in particular. In this sort of wrongdoing, for the most part, evidence is not promptly accessible, and with the recent experience, the recognition of colossal economic offences is followed by abscondence of the parties accused. For the law enforcement agencies, it becomes a Herculean task to conduct interrogation and gather evidence since tampering of evidence is easy given the nexus of the accused parties with the system. In such circumstances, the need of impartiality and fair play requires distinctive modus operandi to lift the veil off of economic offences.
One way is to keep the accused parties in custody for longer period, so that there will be minimum hinderance and maximum efficiency in primary interrogation. For that purpose, bail ought not be allowed in the same way as conceded in the event of regular offences. But the discretionary power of the court ought not be diminished in denial of bail in bailable offences including socio-economic offences only dependent on the appearance that 'Right to Bail' is supreme as it streams from Article 21 of the Constitution.
Economic Offences and Laws in India
The law that governs socio-economic offences is a mixture of different laws to a great extent, and is, loaded with procedural postponements and means of escape. A considerable lot of the wrongdoers have used the irregularity of the bail framework in India to prompt the court to award bail in support of themselves prior to leaving the country. These provisos permitted tax evaders and loan debtors to prevaricate the law and delay, or inconclusively hold off, the seizure of their assets against their debts. The common crimes against human body are reactive in nature and are by and large a reflection of disdain or vengeance. Socio-economic offences or the white-collar crimes are conceived out of sheer covetousness, ravenousness, or whim and are smooth and non-violent in character. The shortfall of terribleness, power or viciousness gives the overall population a feeling that these violations are of lesser gravity as compared to the other societal crimes like murder or assault. It isn't hard to comprehend regarding why socio-economic and white-collar offences are not seen in a similar gravity by an individual when contrasted with the governing law which entails rigorous punishment. Economic or finance and trade -related violations are generally not submitted against explicit individual citizen; however, they are against the whole general public and are a state crime.
The Supreme Court highlighted the difference between the perception of the society toward traditional crimes and economic offences in the case of State of Gujrat v. Mohanlal Jitamalji Porwal and Anr., as:
“[…] the entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even-handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest […]”
Money laundering, illegal tax evasion, chit funds scams, stock market manipulations, bad debts etc., every one of these variables either straightforwardly or by implication influences the development of the economy. When we analyse the various offences under the term economic offence, each one of these offences are somehow connected with money and its equivalents.
As per the National Crime Records Bureau (NCRB), the historical backdrop of these offences can be followed back from mid-2000 to date that is rising consistently. Numerous tricks around the law and monetary offences thereof are attempted by various people, banking foundations, chit funds, and so on during these years. How it can influence the country's GDP and above all, how the offenders escape is in news from time-to-time. The quantity of cases detailed by the NCRB is in Lakhs. Presently, the numbers are in crores and if we partake Rs.10,000/- misappropriation of money in each case, strangely the sum of misappropriated money per year is well around close to the District Budget (approx.) of a state.
Bail in Traditional Offences vs Bail in Socio-economic Offences
“The issue of bail is one of liberty, justice, public safety and burden of the public treasury, all of which insist that a developed jurisprudence of bail is integral to a socially sensitized judicial process”. – Justice V.R. Krishna Iyer in Gudikanti Narasimhulu vs. Public Prosecutor case (1977)
The Law Lexicon defines bail as the security for the appearance of the accused person on which he is released pending trial or investigation. What is contemplated by bail is to "procure the release of a person from legal custody, by undertaking that he/she shall appear at the time and place designated and submit him/herself to the jurisdiction and judgment of the court”.
Right to freedom, Right to life and personal liberty have been shielded by the constitutional provision of Fundamental Rights. In fact, it is the basis of all the modern democracies in the world. The accused individual when applies for bail from the court, he is basically looking for the option to be at freedom from the court. Individual Freedom is an exceptionally valuable worth of sacred framework perceived under Article 21, to such an extent that the significant force to discredit it is an extraordinary trust and shrewdness exercisable, not nonchalantly or then again casually yet judicially, with due worry for the expense to the individual and the society. Denying somebody of his individual freedom as cherished under Article 21 is an exceptionally precarious matter and admissible just when the law approving it is sensible, fair and outfitted to the objectives of the restoration of law and order and well-being of the society. Reasonable care hypothesizes wise consideration and predicates that denial of opportunity by refusal of bail is not for arbitrary purpose yet for the dual interests of accused individual and the society s/he is a part of. Consequently, it is adequately sensible to reason that under the Indian criminal procedure, right of bail straightforwardly hints to the right of individual freedom and is dealt with, for the most part, as total in instance of bailable offences.
At the point when an individual applies for regular bail, the court concerned commonly records that application following a couple of days so it can investigate the case journal which must be acquired from the police/investigating/enforcement agency and meanwhile, the charged/accused is put in custody. Regardless of whether he is delivered a bail from there on, his character might be discoloured for long in the public arena. The reputation of an individual is his significant resource, and is an aspect of his privilege under Article 21.
Anticipatory bail is a primum remedium in cognizable and non-bailable offences. The bail taken in advance of the arrest, i.e., anticipatory bail is a provision of relief to the offender who is an expectant arrestee given as in Sec. 438 of Cr.P.C. The avoidance of arrest frees the accused from being taken into custody for interrogation, and that’s why, an arrest becomes essential for the investigating agencies to build a strong case based on the charges levelled against the accused by the complainant. The Supreme Court termed anticipatory bail as a ‘blanket order’ in Dukhishyam Benupani, Asstt. Director, Enforcement Directorate (FERA) v. Arun Kumar Bajoria holding that:
“[…]it is not the function of the court to monitor investigation processes so long as such investigation does not transgress any provision of law. It must be left to the investigating agency to decide the venue, the timings and the questions and the manner of putting such questions to persons involved in such offence. A blanket order fully insulating a person from arrest would make his interrogation a mere ritual.”
Here, the Court’s comprehension of anticipatory bail intends to signify the negative influence of the grant of bail on overall investigation process. In Vaman Narain Ghiya v. State of Rajasthan, Hon’ble Supreme Court emphasized that balance is to be maintained between the personal liberty of the accused and the investigational right of the police. An accused is not detained in custody with the object of punishing him on the assumption of his guilt.
During the interrogation after arrest, the accused offender is questioned to link his participation to the alleged crime and to ensure the availability of the accused for viable investigation, especially custodial interrogation, the accessibility under the watchful eye of the court is necessary for the cooperation in preliminary enquiry and discipline in behaviour of the accused in the event of bail.
During the custody period, an individual is arrested and taken to the authorities which are the enforcement or investigating agencies with the order issued by the court and not as an arbitrary act followed by the fear of punishment. Along with the custody procedure, when such an individual is awarded with bail and the authority is contended with his behaviour, regardless of whether he will be charged later or not, his personal liberty will be intact, although with some conditions. Observing that the arrest is a part of the investigation intended to secure several purposes, in Adri Dharan Das v. State of W.B, the Supreme Court held as under:
“[…] Ordinarily, arrest is a part of the process of investigation intended to secure several purposes. The accused may have to be questioned in detail regarding various facets of motive, preparation, commission and aftermath of the crime and the connection of other persons, if any, in the crime. There may be circumstances in which the accused may provide information leading to discovery of material facts. It may be necessary to curtail his freedom in order to enable the investigation to proceed without hindrance and to protect witnesses and persons connected with the victim of the crime, to prevent his disappearance, to maintain law and order in the locality. For these or other reasons, arrest may become an inevitable part of the process of investigation. The legality of the proposed arrest cannot be gone into in an application under Section 438 of the Code. The role of the investigator is well defined and the jurisdictional scope of interference by the court in the process of investigation is limited. The court ordinarily will not interfere with the investigation of a crime or with the arrest of the accused in a cognizable offence. An interim order restraining arrest, if passed while dealing with an application under Section 438 of the Code will amount to interference in the investigation, which cannot, at any rate, be done under Section 438 of the Code […]”
There might be circumstances in which the accused may lead to information prompting disclosure of material proofs and significant evidence. The award of anticipatory bail may hamper the primary interrogation. In 2011, the Hon'ble Supreme Court in Sanjay Chandra vs CBI opined that:
“[…] the grant or refusal to grant bail lies within the discretion of the Court. The grant or denial is regulated, to a large extent, by the facts and circumstances of each particular case. But at the same time, right to bail is not to be denied merely because of the sentiments of the community against the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment, to relieve the State of the burden of keeping him, pending the trial, and at the same time, to keep the accused constructively in the custody of the Court, whether before or after conviction, to assure that he will submit to the jurisdiction of the Court and be in attendance thereon whenever his presence is required […]”
Pre-arrest bail is to maintain a balance between the accused person’s entitlement to personal liberty and the privilege of the enforcement agency to investigate the accused with respect to the material so far gathered and to gather ample evidence which may prompt recuperation of important data helpful to frame the charges. Observing that economic offences constitute a class apart, in Y.S. Jagan Mohan Reddy v. CBI, the Supreme Court held as:
“[…] Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country […]”
Further, the Apex Court underlined the need to visit the provision of bail in economic offences different than the regular bail as:
“[…] While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations […]”
The case State of Bihar v. Amit Kumar dealt with the media-exposed Bihar Topper Scam. In 2016, the result of Bihar Intermediate School Board Examination saw a few students from a single school getting place in top 10 rankings. Tv channel reporters met these students and interviewed them which led to uncovering the fact that not only those students didn't have adequate information to top the Board Examination; but they were not even capable of passing the examination. In light of scathing media reports, students whose names were part of the merit list were called for an interview before the Schools Complex Committee. Subsequently a written complaint was lodged by the Director of Secondary Education. Consequently, an FIR was registered before the Police Station Under Section 420, 465, 468, 471, 120B of Indian Penal Code, 1860. Thereafter, investigation was conducted which revealed fraudulent practices prevailing in Intermediate Examination involving students and management of the said College resulting in the arrest of the Respondent. The police discovered that the management of a college along with the students were involved and at the event of raid, a big amount of cash and kind was recuperated. Notwithstanding it, number of answer sheets, letter-heads and elastic stamps of a few specialists, hall tickets, unlawful weapons were found. The Respondent is the Principal of the college and he moved a bail request in High Court which was allowed by the court. State appealed against the bail in the Supreme Court which put away the request for the High Court and held that:
‘[…] if any undeserving candidates are allowed to top exams by corrupt means, not only will the society be deprived of deserving candidates, but it will be unfair for those students who have honestly worked hard for one whole year and are ultimately disentitled to a good rank by fraudulent practices prevalent in those examinations. It is well settled that socio-economic offences constitute a class apart and need to be visited with a different approach in the matter of bail.7 Usually socio-economic offence has deep rooted conspiracies affecting the moral fiber of the society and causing irreparable harm, needs to be considered seriously […]”
The legislative goal behind the incorporation of bail is to shield a person's very own freedom as well as to shield him from the chance of being embarrassed in the eyes of the society, given the media activism and from being exposed to police custody in naivety. In any case, the court should likewise keep in mind that a criminal offence in general is not only an offence against an individual, rather the social well-being is in question. Consequently, a sensitive equilibrium is needed to be set up between the two rights - protecting the freedom of an individual and the social well-being. It can't be said that refusal to grant anticipatory bail would add up to forswearing of the rights gave upon the appealing party under Article 21 of the Constitution of India.
Securing bail in socio-economic offences
Dissimilar to the pre-arrest stage, the application of regular bail is a phase where the alleged offender has effectively been captured and he is in judicial custody or police custody. In non-bailable offenses, bail is not a right and the grant relies on the decision of the adjudicator. In this way, for non-bailable cases, until the bail is justified with reasonable grounds, the odds of getting the bail granted are essentially low. In India, the phase of bail is additionally frequently treated as a phase of disciplinary action against the accused. Further, we have some rigid conditions in laws that penalise white collar crimes which request that bail ought not be allowed except if the charged can establish that he is not liable for the offence and that he has enough evidence to prove his innocence beyond reasonable doubt. Whether the accused has committed the offence or not decides his culpability and to get the grant of bail, the accused offender needs to lead the proof even before the prosecution has set up its charge. By and large, the Hon’ble Supreme Court held that award of anticipatory bail is not to be given as an part of rule, particularly in the matter of socio-economic offences which comprise a class separated in light of the fact that at the phase of anticipatory bail, it might disappoint the enforcement agency in cross-examining the accused and in gathering useful data and furthermore materials which may have been disguised and hidden from the system.
The Court, while allowing the regular bail, is to think about the conditions, the elements like the truthfulness of the allegation, seriousness of the charges and legal provisions for penalisation, if there should arise an occurrence of conviction. In the case of State v. Captain Jagjit Singh, the Supreme Court enumerated relevant factors as:
“[…] should then have taken into account the various considerations, such as, nature and seriousness, of the offence, the character of the evidence, circumstances which are peculiar to the accused, a reasonable possibility of the presence of the accused not being secured at the trial, reasonable apprehension of witnesses being tampered with, the larger interests of the public or, the State, similar other considerations, which arise when, court is asked for bail in a non-bailable offence […]”
Thus, the procurement of substantial proof to establish the case, sensible protection offered to the witnesses and the complainant and indemnification of the damages in the eyes of the court at the very first instance is to be contemplated. As a result, Triple Test i.e., ‘necessity test’ for pre-arrest bail, i.e., abscondence, tampering the evidence and the possibility of influencing the witnesses is a method applied by the court to decide the grant of regular bail. Other factors can also be added to this test based on where the offence has occurred as well as issues arising out of the nature of the offence.
In Sanjay Chandra v. CBI case, Supreme Court struck a balance between ‘necessity test’ and ‘personal liberty’ as:
“[…] From the earliest times, it was appreciated that detention in custody pending completion of trial could be a cause of great hardship. From time to time, necessity demands that some unconvicted persons should be held in custody pending trial to secure their attendance at the trial but in such cases, “necessity” is the operative test. In this country, it would be quite contrary to the concept of personal liberty enshrined in the Constitution that any person should be punished in respect of any matter, upon which, he has not been convicted or that in any circumstances, he should be deprived of his liberty upon only the belief that he will tamper with the witnesses if left at liberty, save in the most extraordinary circumstances […]”
Some of the grounds considered by courts to grant or deny Bail are as follows:
1. Gravity of the Offence
The prosecution generally argues that the charges sought to be levelled against the accused are serious and grave in nature and hence bail should be denied. The Supreme Court, in 2017, in the case of Rohit Tandon vs. Directorate of Enforcement in which the accused was involved in illegal possession and supply of new currency after demonetization, has refused to grant bail, given the gravity of the offence, admission of substantial evidence against the accused and absence of reasonable ground to establish the innocence of the accused. The Court said that:
“[…] We have independently examined the materials relied upon by the prosecution and also noted the inexplicable silence or reluctance of the Appellant in disclosing the source from where such huge value of demonetized currency and also new currency has been acquired by him. The prosecution is relying on statements of 26 witnesses/accused already recorded, out of which 7 were considered by the Delhi High Court. These statements are admissible in evidence, in view of Section 50 of the Act of 2002. The same makes out a formidable case about the involvement of the Appellant in commission of a serious offence of money-laundering. It is, therefore, not possible for us to record satisfaction that there are reasonable grounds for believing that the Appellant is not guilty of such offence. Further, the Courts below have justly adverted to the antecedents of the Appellant for considering the prayer for bail and concluded that it is not possible to hold that the Appellant is not likely to commit any offence ascribable to the Act of 2002 while on bail. Since the threshold stipulation predicated in Section 45 has not been overcome, the question of considering the efficacy of other points urged by the Appellant to persuade the Court to favour the Appellant with the relief of regular bail will be of no avail […]”
In the case of Sunil Dahiya vs State (Govt Of NCT Of Delhi), the complainants have invested monies into the projects of the applicant accused to the tune of around 600 crores which have been siphoned off by the accused by colluding, conspiring, ganging up with his family members and illegally benefitting from the complainants' money on the false pretext of providing lucrative returns. The accused had invited applications for investment in two projects for construction of IT parks, one in Gurgaon and the other in Manesar. The complainants have filed applications in each of the aforesaid Bail Applications, seeking permission to intervene in the matter on behalf of the "Investors Sanghars Samiti", with a view to oppose the grant of bail to the applicant/ accused. While rejecting the bail application, Delhi High Court has stated that:
“[…] The grant of regular bail in a case involving cheating, criminal breach of trust by an agent, of such a large magnitude of money, affecting a very large number of people would also have an adverse impact not only in the progress of the case, but also on the trust of the criminal justice system that people repose. It would certainly not be safe for the society. In case the applicant accused is granted regular bail, it is also likely that he may tamper with the evidence/witnesses, or even threaten them considering that the stake for the accused is high. It is also very much likely that looking to the high stakes, the nature and extent of his involvement, and his resources, he may flee from justice […]”
The arguments presented by the applicant’s counsel surmised upon the order of the Supreme Court in the case of Sanjay Chandra v. Central Bureau of Investigation that ‘the right to automatic bail under section 436 stems from the fundamental right of personal liberty as enshrined under Article 21 of the constitution’. The court however rejected this view by highlighting a difference between traditional offences and economic and other offences against the state. The court promulgated that even an individual’s liberty can be curtailed (reasonably) if it is pertinent to the court that such liberty will come at the expense of the larger interest of the society.
2. Custodial presence is not required anymore
The Sanjay Chandra v. CBI case stems from the infamous 2G Spectrum fraud which shook the nation with its severity. The allegations against accused Sanjay Chandra were that he entered into criminal conspiracy with accused A. Raja, R.K. Chandolia and other accused persons during September 2009 to get UAS licence for providing telecom services to otherwise an ineligible company to get UAS licences. He was the Managing Director of M/s Unitech Wireless (Tamil Nadu) Limited and was looking after the business of telecom through 8 group companies of Unitech Limited. The first-come-first- served procedure of allocation of UAS Licences and spectrum was manipulated by the accused persons in order to benefit M/s Unitech Group Companies. The accused was facing trial in respect of the offences under Sections 420-B, 468,471 and 109 of Indian Penal Code and Section 13(2) read with 13(i)(d) of Prevention of Corruption Act, 1988. Bail has been refused first by the Special Judge, CBI, New Delhi and subsequently, by the High Court. Both the courts have listed the factors, on which they think, are relevant for refusing the bail applications, but the Supreme Court granted the accused bail and held that:
“[…] We are conscious of the fact that the accused are charged with economic offences of huge magnitude. We are also conscious of the fact that the offences alleged, if proved, may jeopardize the economy of the country. At the same time, we cannot lose sight of the fact that the investigating agency has already completed investigation and the charge sheet is already filed before the Special Judge, CBI, New Delhi. Therefore, their presence in the custody may not be necessary for further investigation […]”
While making a decision on an application for bail, an elaborate discussion of the evidence and presenting the documentation of merits is to be kept away from the court. This necessity comes from the rule that no accused ought to have the feeling that his case has been pre-judged. The possibility of a case with charges is merely the need of the hour. Elaborate investigation or thorough investigation of the merits is not needed. (Niranjan Singh and Anr. v. Prabhakar Rajram Kharote and Or). It was reiterated by the court in P. Chidambaram v. Directorate of Enforcement (Criminal Appeal 1340 2019) case, popularly known as the INX Media case. It refers to an ongoing high-profile money laundering investigation in India. It involves allegation of irregularities in foreign exchange clearances given to INX Media group for receiving overseas investment in 2007. P. Chidambaram was union finance minister at the time. His son Karti Chidambaram has been implicated by the investigating agencies and P. Chidambaram was taken into custody as co-accused. When he applied for anticipatory bail in Delhi High Court, the court did not grant him the bail. He had to apply for regular bail in the Supreme Court as a result. In P. Chidambaram vs Directorate of Enforcement (Criminal Appeal No. 1831 2019) case. The court granted regular bail to the co-accused taking into account factors other than gravity of the case, such as the age and ailments of the accused as well as his availability for interrogation purposes, as he stayed in the custody for 105 days. The Court held that:
“[…] the anticipatory bail had been declined earlier and the Appellant was available for custodial interrogation for more than 45 days. In addition to the custodial interrogation if further investigation is to be made, the Appellant would be bound to participate in such investigation as is required by the Respondent. Further it is noticed that one of the co-Accused has been granted bail by the High Court while the other co-Accused is enjoying interim protection from arrest. The Appellant is aged about 74 years and as noted by the High Court itself in its order, the Appellant has already suffered two bouts of illness during incarceration and was put on antibiotics and has been advised to take steroids of maximum strength. In that circumstance, the availability of the Appellant for further investigation, interrogation and facing trial is not jeopardized and he is already held to be not a 'flight risk' and there is no possibility of tampering the evidence or influencing/intimidating the witnesses. Taking these and all other facts and circumstances including the duration of custody into consideration the Appellant in our considered view is entitled to be granted bail […]”
There is no straight jacket formula for consideration of grant of bail to an accused. It all depends upon the facts and circumstances of each case. The Government's interest in preventing crime by arrestees is both legitimate and compelling. So also is the cherished right of personal liberty envisaged Under Article 21 of the Constitution. Section 439 of The Code of Criminal Procedure, 1973, which is the bail provision, places responsibility upon the courts to uphold procedural fairness before a person's liberty is abridged. Although 'bail is the Rule and jail is an exception' is well established in our jurisprudence, we have to measure competing forces present in facts and circumstances of each case before enlarging a person on bail (The State of Bihar and Ors. vs. Amit Kumar). There are no set guidelines and no resolute standard overseeing the activity of the prudence of the Courts and there cannot be an unyielding equation in the matter of giving bail. The circumstantial realities and conditions of each case will administer the legal activity in allowing or declining bail. The response to the inquiry whether to allow bail or not relies on an assortment of conditions, the aggregate impact of which should go into the legal decision. Any one single situation can't be treated as a universal legitimacy or as an essential ingredient in the award or refusal of bail. The bone of contention between the prosecution and the defence in cases involving socio-economic offences lies in a number of factors which are subjective in nature and the Indian courts have taken different stands while deciding the bail application.
Authors: Prateek Som Advocate, Supreme Court of India (Standing Counsel, Haryana) and Aparna Bhosale Intern & Law student from University of Delhi