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The Supreme Court on Tuesday disapproved a "disquieting trend", emerging over the years, in which the court asked the accused in cheating cases to deposit money as a condition of pre-arrest bail, creating an impression that that bail could be secured by depositing money alleged to have been cheated. 

"Law regarding exercise of discretion while granting a prayer for bail under section 438 of the Cr. PC having been authoritatively laid down by this Court, we cannot but disapprove the imposition of a condition of the nature under challenge," a bench of Justices S Ravindra Bhat and Dipankar Datta said.

The court said the disquieting trend, which emerged over the years and gained pace in recent times, necessitated it to deal with the matter.

The bench pointed out it has been found by us in multiple cases in the past several months that upon First Information Reports being lodged inter alia under section 420 of the Indian Penal Code, 1860, judicial proceedings initiated by persons, accused of cheating, to obtain orders under Section 438 of the Code of Criminal Procedure, 1973 are unwittingly being transformed into processes for recovery of the quantum of money allegedly cheated and the courts driven to impose conditions for deposit/payment as pre-requisite for grant of pre-arrest bail. 

It pointed out Sub-section (2) of section 438 of the CrPC does empower the high court or the court of sessions to impose such conditions.

"However, a reading of the precedents laid down by this Court makes the position of law clear that the conditions to be imposed must not be onerous or unreasonable or excessive," the bench said. 

In the context of grant of bail, all such conditions that would facilitate the appearance of the accused before the investigating officer/court, unhindered completion of investigation/trial and safety of the community assume relevance, it said.

"However, inclusion of a condition for payment of money by the applicant for bail tends to create an impression that bail could be secured by depositing money alleged to have been cheated. That is really not the purpose and intent of the provisions for grant of bail," the bench said.

The bench, at the same time, clarified it may not be understood to have laid down the law that in no case should willingness to make payment/deposit by the accused be considered before grant of an order for bail. 

"In exceptional cases such as where an allegation of misappropriation of public money by the accused is levelled and the accused while seeking indulgence of the court to have his liberty secured/restored volunteers to account for the whole or any part of the public money allegedly misappropriated by him, it would be open to the concerned court to consider whether in the larger public interest the money misappropriated should be allowed to be deposited before the application for anticipatory bail/bail is taken up for final consideration," the bench said.

After all, no court should be averse to putting public money back in the system if the situation is conducive therefor, the bench added.

"We are minded to think that this approach would be in the larger interest of the community. However, such an approach would not be warranted in cases of private disputes where private parties complain of their money being involved in the offence of cheating," the bench said.

The court allowed an appeal filed by Ramesh Kumar against the Delhi High Court's order to deposit Rs 22 lakh as a condition precedent for grant of bail in a cheating case, saying the High Court fell in grave error in proceeding on the basis of the undertaking of the appellant, also having regard to nature of dispute which is predominantly civil in nature.

"Even if the appellant had undertaken to make payment, which we are inclined to believe was a last ditch effort to avert losing his liberty, such undertaking could not have weighed in the mind of the High Court to decide the question of grant of anticipatory bail. The tests for grant of anticipatory bail are well delineated and stand recognized by passage of time. The High Court would have been well-advised to examine whether the appellant was to be denied anticipatory bail on his failure to satisfy any of such tests," the bench said.

The court also said if at all the offence alleged against the appellant is proved resulting in his conviction, he would be bound to suffer penal consequences but despite such conviction he may not be under any obligation to repay the amount allegedly received from the complainant.

It remanded the matter back to the High Court to examine it afresh on its own merits by August 31, 2023.

The court also ordered that the appellant’s liberty would not be infringed by the investigating officer till the HC decided the matter.

Case Title: RAMESH KUMAR VS. THE STATE OF NCT OF DELHI