1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO………………… OF 2023

[ARISING OUT OF SLP(Crl.) NO.2358 OF 2023]

RAMESH KUMAR …APPELLANT

VS.

THE STATE OF NCT OF DELHI …RESPONDENT

JUDGMENT

DIPANKAR DATTA, J.

Leave granted.

2. A disquieting trend emerging over the years which has gained pace

in recent times necessitates this opinion. 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 (“the IPC”, hereafter), judicial proceedings initiated by

persons, accused of cheating, to obtain orders under Section 438 of the

Signature Not Verified
Code of Criminal Procedure, 1973 (“the Cr. PC”, hereafter) are unwittingly
Digitally signed by
Nisha Khulbey
Date: 2023.07.04
16:31:53 IST
Reason:
being transformed into processes for recovery of the quantum of money

allegedly cheated and the courts driven to impose conditions for

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deposit/payment as pre-requisite for grant of pre-arrest bail. The present

case is no different from the others and it is considered appropriate to

remind the high courts and the sessions courts not to be unduly swayed

by submissions advanced by counsel on behalf of the accused in the

nature of undertakings to keep in deposit/repay any amount while seeking

bail under section 438 of the Cr. PC. and incorporating a condition in that

behalf for deposit/payment as a pre-requisite for grant of bail.

3. The bare facts relevant for a decision on this appeal, gathered from

the impugned judgment of the Delhi High Court, are these. The appellant

before us is the owner of an immovable property. With an intention to re-

develop the same, he had entered into three agreements with one

Ashwani Kumar (“the builder”, hereafter) dated 10 th and 19th December,

2018 and 30th January, 2019. In terms of the agreement dated 19 th

December, 2018, the builder was required to construct a multi-storied

building in which the appellant would have ownership rights in respect of

the 3rd floor and the upper floor, apart from Rs.55,00,000/- (Rupees fifty-

five lakh) to be paid to him by the builder, whereas the builder would have

rights to deal with the 1st and the 2nd floors together with other rights as

described therein. In pursuance of the aforesaid agreement, the builder

entered into an agreement to sell and purchase/bayana dated 14 th

December, 2018 with Vinay Kumar and Sandeep Kumar (“the

complainants”, hereafter) in respect of the 2 nd floor of the proposed

building (without roof rights) but other rights as described therein for a

sum of Rs. 60,00,000/- (Rupees sixty lakh). The complainants had

allegedly paid to the builder Rs. 11,00,000/- (Rupees eleven lakh) [Rs.
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1,00,000/- (Rupees one lakh) as token money and Rs. 10,00,000/- (Rupees

ten lakh) as earnest money], at the time of execution of the agreement

dated 14th December, 2018. Thereafter, on the instructions of the builder,

the complainants on different dates allegedly made payments of

additional amounts to the appellant as well as the builder, in cash as well

as by cheques, totaling to Rs. 35,00,000/- (Rupees thirty-five lakh).

4. Allegedly, the complainants failed to comply with the terms and

conditions of the agreement dated 14th December, 2018 triggering

institution of a civil suit by the builder against the complainants seeking

cancellation of such agreement and forfeiture of the amount of Rs.

13,00,000/- (Rupees thirteen lakh). This was purportedly upon invocation

of clause 8 of the said agreement. It is also a matter of record that the

builder has instituted another civil suit inter alia against the appellant for

specific performance of the agreements dated 10 th and 19th December,

2018. However, from the materials on record, we have failed to ascertain

the dates of institution of the civil suits.

5. The complainants were not handed over possession of the second

floor which they intended to purchase. As late as on 18 th November, 2021,

the complainants sought to put the investigative machinery in motion by

lodging a complaint with the Station House Officer, Police Station Gulabi

Bagh, Delhi. The said complaint was registered as FIR No.322 of 2021

under sections 420/406/34 of the IPC. Therein, the appellant, the builder

and a broker were shown as accused.

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6. It is worthwhile to note from the FIR that despite there being an

agreement to sell executed by and between the builder and the

complainants, the complainants had made payment of Rs. 17,00,000/-

(Rupees seventeen lakh) by issuing cheques favouring the appellant

allegedly on the instructions of the builder.

7. Since the complainants had effected payment of substantial amount

of money to the appellant and the builder having failed to deliver

possession of the second floor of the proposed building, the complainants

felt cheated and urged the police to investigate the crime committed inter

alia by the appellant and the builder.

8. Apprehending arrest, the appellant moved the relevant criminal

court [MACT-02 (CENTRAL)] seeking an order under section 438 of the Cr.

PC. Initially, on 30th November, 2011, the Presiding Officer granted interim

protection from arrest to the appellant, subject to his cooperating with the

investigating agency, upon being informed by the investigating officer

that no agreement was executed by and between the appellant and the

complainants. However, for reasons assigned in the subsequent order

dated 18th January, 2022, the application was dismissed by the Presiding

Officer and interim protection earlier granted to the appellant was

withdrawn.

9. In the background of the aforesaid facts and circumstances, the

appellant approached the High Court seeking an order under section 438

of the Cr. PC. Similar approach was made by the builder. The High Court

by its common order dated 24 th November, 2022 granted bail to the

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appellant and the builder, subject to certain conditions. One of the

conditions imposed by the High Court for grant of bail reads as follows:

“(e) as undertaken, the petitioners/builder Ashwani Kumar shall

deposit a sum of Rs. 13,00,000/- (Rs. Thirteen lacs only) and the
owner Ramesh Kumar shall deposit a sum of Rs. 22,00,000/- (Rs.
Twenty-two lacs), with the learned Trial Court, in the form of FDR in
the name of the Court initially for a period of one year with an
automatic renewal clause, within 4 weeks.”
The undertaking referred to in the aforesaid extract is traceable to

paragraph 6 of the impugned judgment, reading as follows:

“6.0. In rebuttal, Ld. Counsel for the petitioners submitted

that the petitioners are ready to join investigation and explain. Ld.
Counsel also submitted that without prejudice to their respective
rights and contentions, the builder undertakes to deposit a sum of
Rs. 13 lacs within 8 weeks and owner Ramesh Kumar is ready to
deposit a sum of Rs. 22 lacs with the Court.”

10. Expressing his difficulty in arranging for funds to deposit Rs.

22,00,000/- (Rupees twenty-two lakh), the appellant had applied before

the High Court under section 482 of the Cr. PC seeking extension of time

to make the requisite deposit. By an order dated 8 th February, 2023, the

said application was disposed of by the High Court granting extension of

time by 3 (three) days, failing which it was directed that anticipatory bail

granted to the appellant shall automatically stand revoked.

11. The appellant is aggrieved by the aforesaid condition [clause(e) of

paragraph 9.0. of the impugned judgment and order] imposed by the High

Court and is now before us seeking revocation of the same while urging

that the other part of the order be maintained.

12. According to counsel for the appellant, the condition imposed is

onerous and is not called for having regard to the satisfaction recorded by
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the High Court in paragraph 8.0. that the appellant has joined

investigation and that both the appellant and the builder are ready to

provide any clarification/explanation for the purpose of completion of

investigation. It is further contended on behalf of the appellant that he is a

victim of a conspiracy hatched by and between the builder and the

complainants with the result that he is still unable to enjoy his own

property which was required to be redeveloped by the builder within the

time stipulated in the relevant agreement. Finally, it has been contended

on behalf of the appellant that having regard to the decision of this Court

in Munish Bhasin vs. State (NCT of Delhi) 1, the impugned condition

imposed for grant of bail requiring deposit of Rs.22,00,000/- (Rupees

twenty-two lakh) in the form of FDR in the Trial Court is bad in law and

liable to be set aside.

13. The appeal has been opposed by counsel for the State. According to

him, the impugned condition was imposed because the appellant through

his counsel had volunteered to keep in deposit Rs. 22,00,000/- (Rupees

twenty-two lakh) without prejudice to his rights and contentions. Now that

the High Court had proceeded to make its order based on such

undertaking and also that the appellant had applied for extension of time

which was granted, it is not an appropriate case where this Court should

interfere in the exercise of its jurisdiction.

14. Having heard the parties and on perusal of the materials on record,

there seems to be little doubt that the appellant had volunteered to

deposit Rs. 22,00,000/- (Rupees twenty-two lakh) without prejudice to his

1 (2009) 4 SCC 45
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rights and contentions and that he had also applied for extension of time

to make such deposit which was also granted; but having failed to arrange

for sufficient funds, he is questioning the condition imposed by the High

Court for grant of pre-arrest bail.

15. In course of hearing before the High Court, a status report had been

submitted with regard to the progress of investigation. Such report

disclosed that the construction of the proposed building had progressed

only up to the 1st floor and obviously, therefore, the 2 nd and the 3rd floors

were still not in existence. From such status report, it is therefore clear

that neither was the floor which the complainants intended to purchase is

complete nor the floors in respect whereof the appellant could exercise his

rights were in existence.

16. A striking feature of the case is that although the appellant through

his counsel had undertaken to deposit a sum of Rs. 22,00,000/- (Rupees

twenty-two lakh) with the trial court, the FIR version is that the appellant

had received separate cheques in his name for a total amount of

Rs.17,00,000/- (Rupees seventeen lakh) [Rs. 5,00,000/- (Rupees five lakh)

on 20th December, 2018, Rs. 2,00,000/- (Rupees two lakh) on 28 th

December, 2018, Rs. 4,00,000/- (Rupees four lakh) on 28 th December,

2018, Rs. 1,00,000/- (Rupees one lakh) on 28 th December, 2018, and

Rs.5,00,000/- (Rupees five lakh) on 21st February, 2019]. That the

appellant had received through cheques a total amount of Rs.17,00,000/-

(Rupees seventeen lakh) was also noticed by the Presiding Officer while

dismissing the appellant’s application by the order dated 18 th January,

2022. However, there can be no doubt that counsel on behalf of the

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appellant had submitted before the High Court that he was ready to

deposit a sum Rs. 22,00,000/- (Rupees twenty-two lakh), which prima

facie happens to be in excess of what the appellant is alleged to have

received from the complainants by cheques drawn in his favour on the

instructions of the builder. We are not concerned at this stage with alleged

payments made by the complainants to the builder.

17. Legality of the impugned condition is what we are now tasked to

examine and decide.

18. It would be appropriate at this stage to note certain precedents in

the field governing the discretion of the courts to grant anticipatory bail.

19. We start with Gurbaksh Singh Sibbia and others vs. State of

Punjab2, a Constitution Bench decision of this Court. It was held there as

follows:

“26. We find a great deal of substance in Mr Tarkunde’s submission

that since denial of bail amounts to deprivation of personal liberty,
the court should lean against the imposition of unnecessary
restrictions on the scope of Section 438, especially when no such
restrictions have been imposed by the legislature in the terms of
that section. Section 438 is a procedural provision which is
concerned with the personal liberty of the individual, who is entitled
to the benefit of the presumption of innocence since he is not, on
the date of his application for anticipatory bail, convicted of the
offence in respect of which he seeks bail. An over-generous infusion
of constraints and conditions which are not to be found in Section
438 can make its provisions constitutionally vulnerable since the
right to personal freedom cannot be made to depend on compliance
with unreasonable restrictions. The beneficent provision contained
in Section 438 must be saved, not jettisoned. No doubt can linger
after the decision in Maneka Gandhi [Maneka Gandhi v. Union of
India, (1978) 1 SCC 248], that in order to meet the challenge of
Article 21 of the Constitution, the procedure established by law for
depriving a person of his liberty must be fair, just and reasonable.
Section 438, in the form in which it is conceived by the legislature,

2 (1980) 2 SCC 565

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is open to no exception on the ground that it prescribes a procedure

which is unjust or unfair. We ought, at all costs, to avoid throwing it
open to a Constitutional challenge by reading words in it which are
not to be found therein.”

20. This Court in Mahesh Candra vs. State of U.P.3 was dealing with

a case where the relevant high court had directed payment of Rs.2,000/-

(Rupees two thousand) to be made to the victim (daughter-in-law) as a

condition for grant of anticipatory bail. It was ruled by this Court as

follows:

“3. As a condition for grant of anticipatory bail, the High Court

has recorded the undertaking of the petitioners to pay the victim
daughter-in-law a sum of Rs 2000 per month and failure to do so
would result in vacation of the order granting bail. […] We fail to
understand how they can be made liable to deposit Rs 2000 per
month for the maintenance of the victim. Moreover, while deciding
a bail application, it is not the jurisdiction of the court to decide
civil disputes as between the parties. We, therefore, remit the
matter to the High Court to consider the bail application afresh on
merit and to pass an appropriate order without imposing any
condition of the nature imposed by the impugned order.”

21. This Court in Munish Bhasin (supra), referred to by counsel for the

appellant, had the occasion to observe as follows:

“10. It is well settled that while exercising discretion to release an

accused under Section 438 of the Code neither the High Court nor
the Sessions Court would be justified in imposing freakish
conditions. There is no manner of doubt that the court having
regard to the facts and circumstances of the case can impose
necessary, just and efficacious conditions while enlarging an
accused on bail under Section 438 of the Code. However, the
accused cannot be subjected to any irrelevant condition at all.
***
12. While imposing conditions on an accused who approaches the
court under Section 438 of the Code, the court should be
extremely chary in imposing conditions and should not transgress

3 (2006) 6 SCC 196

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its jurisdiction or power by imposing the conditions which are not

called for at all. There is no manner of doubt that the conditions to
be imposed under Section 438 of the Code cannot be harsh,
onerous or excessive so as to frustrate the very object of grant of
anticipatory bail under Section 438 of the code.
13. In the instant case, the question before the Court was whether
having regard to the averments made by Ms Renuka in her
complaint, the appellant and his parents were entitled to bail under
Section 438 of the Code. When the High Court had found that a
case for grant of bail under Section 438 was made out, it was not
open to the Court to direct the appellant to pay Rs. 3,00,000 for
past maintenance and a sum of Rs. 12,500 per month as future
maintenance to his wife and child. In a proceeding under Section
438 of the Code, the Court would not be justified in awarding
maintenance to the wife and child.”

22. Sumit Mehta vs. State (NCT of Delhi) 4 arises out of a decision of

the High Court granting anticipatory bail but inter alia on the condition

that the appellant, accused of commission of offences punishable under

sections 420/467/468/471 of the IPC, deposits an amount of

Rs.1,00,00,000/- (Rupees one crore) in fixed deposit in the name of the

complainant. The point that fell for consideration is captured in paragraph

6, which reads as follows:

“6. The only point for consideration in this appeal is whether the
condition of depositing an amount of Rs 1,00,00,000 in fixed deposit
for anticipatory bail is sustainable in law and whether such condition
is outside the purview of Section 438 of the Code?”

After hearing the parties, this Court made the following pertinent

observations:

“11. While exercising power under Section 438 of the Code, the
court is duty-bound to strike a balance between the individual’s
right to personal freedom and the right of investigation of the police.
For the same, while granting relief under Section 438(1), appropriate
conditions can be imposed under Section 438(2) so as to ensure an
uninterrupted investigation. The object of putting such conditions
4 (2013) 15 SCC 570
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should be to avoid the possibility of the person hampering the

investigation. Thus, any condition, which has no reference to the
fairness or propriety of the investigation or trial, cannot be
countenanced as permissible under the law. So, the discretion of the
court while imposing conditions must be exercised with utmost
restraint.
12. The law presumes an accused to be innocent till his guilt is
proved. As a presumably innocent person, he is entitled to all the
fundamental rights including the right to liberty guaranteed under
Article 21 of the Constitution.
13. We also clarify that while granting anticipatory bail, the courts
are expected to consider and keep in mind the nature and gravity of
accusation, antecedents of the applicant, namely, about his
previous involvement in such offence and the possibility of the
applicant to flee from justice. It is also the duty of the court to
ascertain whether accusation has been made with the object of
injuring or humiliating him by having him so arrested. It is needless
to mention that the courts are duty-bound to impose appropriate
conditions as provided under sub-section (2) of Section 438 of the
Code.
14. Thus, in the case on hand, fixed deposit of Rs 1,00,00,000 for a
period of six months in the name of the complainant and to keep the
FDR with the investigating officer as a condition precedent for grant
of anticipatory bail is evidently onerous and unreasonable. It must
be remembered that the court has not even come to the conclusion
whether the allegations made are true or not which can only be
ascertained after completion of trial. Certainly, in no words are we
suggesting that the power to impose a condition of this nature is
totally excluded, even in cases of cheating, electricity pilferage,
white-collar crimes or chit fund scams, etc.

15. The words ‘any condition’ used in the provision should not be
regarded as conferring absolute power on a court of law to impose
any condition that it chooses to impose. Any condition has to be
interpreted as a reasonable condition acceptable in the facts
permissible in the circumstance and effective in the pragmatic
sense and should not defeat the order of grant of bail. We are of the
view that the present facts and circumstances of the case do not
warrant such extreme condition to be imposed.”

23. We may next take note of two decisions of this Court of recent

origin.
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24. In Dilip Singh vs. State of Madhya Pradesh5, this Court sounded

a note of caution in the following words:

“3. By imposing the condition of deposit of Rs 41 lakhs, the High

Court has, in an application for pre-arrest bail under Section 438 of
the Criminal Procedure Code, virtually issued directions in the
nature of recovery in a civil suit.
4. It is well settled by a plethora of decisions of this Court that
criminal proceedings are not for realisation of disputed dues. It is
open to a court to grant or refuse the prayer for anticipatory bail,
depending on the facts and circumstances of the particular case.
The factors to be taken into consideration, while considering an
application for bail are the nature of accusation and the severity of
the punishment in the case of conviction and the nature of the
materials relied upon by the prosecution; reasonable apprehension
of tampering with the witnesses or apprehension of threat to the
complainant or the witnesses; reasonable possibility of securing
the presence of the accused at the time of trial or the likelihood of
his abscondence; character, behaviour and standing of the
accused; and the circumstances which are peculiar or the accused
and larger interest of the public or the State and similar other
considerations. A criminal court, exercising jurisdiction to grant
bail/anticipatory bail, is not expected to act as a recovery agent to
realise the dues of the complainant, and that too, without any
trial.”

25. Yet again in Bimla Tiwari vs. State of Bihar 6, this is what the

Court said:

“9. We have indicated on more than one occasion that the process
of criminal law, particularly in matters of grant of bail, is not akin to
money recovery proceedings but what has been noticed in the
present case carries the peculiarities of its own.
10. We would reiterate that the process of criminal law cannot be
utilised for arm-twisting and money recovery, particularly while
opposing the prayer for bail. The question as to whether pre-arrest
bail, or for that matter regular bail, in a given case is to be granted
or not is required to be examined and the discretion is required to
be exercised by the Court with reference to the material on record
and the parameters governing bail considerations. Putting it in
other words, in a given case, the concession of pre-arrest bail or
regular bail could be declined even if the accused has made
payment of the money involved or offers to make any payment;
5 (2021) 2 SCC 779
6 (2023) SCC OnLine SC 51
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conversely, in a given case, the concession of pre-arrest bail or

regular bail could be granted irrespective of any payment or any
offer of payment.
11. We would further emphasize that, ordinarily, there is no
justification in adopting such a course that for the purpose of being
given the concession of pre-arrest bail, the person apprehending
arrest ought to make payment. Recovery of money is essentially
within the realm of civil proceedings.”

26. 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. Assuming that there is substance in the allegation

of the complainants that the appellant (either in connivance with the

builder or even in the absence of any such connivance) has cheated the

complainants, the investigation is yet to result in a charge-sheet being

filed under section 173(2) of the Cr. PC, not to speak of the alleged

offence being proved before the competent trial court in accordance with

the settled procedures and the applicable laws. Sub-section (2) of section

438 of the Cr. PC does empower the high court or the court of sessions to

impose such conditions while making a direction under sub-section (1) as

it may think fit in the light of the facts of the particular case and such

direction may include the conditions as in clauses (i) to (iv) thereof.

However, a reading of the precedents laid down by this Court referred to

above makes the position of law clear that the conditions to be imposed

must not be onerous or unreasonable or excessive. 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.

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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. We may, however,

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.

After all, no court should be averse to putting public money back in the

system if the situation is conducive therefor. 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.

27. Turning to the facts here, what we find is that the version in the FIR,

even if taken on face value, discloses payment through cheques of

Rs.17,00,000/- (Rupees seventeen lakh) in the name of the appellant and

not Rs.22,00,000/- (Rupees twenty-two lakh). We have not been able to

comprehend how the High Court arrived at the latter figure as payable by
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the appellant and why the appellant’s counsel as well agreed with such

figure. Prima facie, there appears to be some sort of a calculation error.

Also, prima facie, there remains some doubt as regards the conduct of the

appellant in receiving cheques from the complainants without there being

any agreement inter se. Be that as it may, the High Court ought to have

realized that having regard to the nature of dispute between the parties,

which is predominantly civil in nature, the process of criminal law cannot

be pressed into service for settling a civil dispute. 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. It

does seem that the submission made by counsel on behalf of the

appellant before the High Court had its own effect, although it was far

from being a relevant consideration for the purpose of grant of bail.

28. It also does not appear from the materials on record that the

complainants have instituted any civil suit for recovery of money allegedly

paid by them to the appellant. If at all the offence alleged against the

appellant is proved resulting in his conviction, he would be bound to suffer

penal consequence(s) but despite such conviction he may not be under

any obligation to repay the amount allegedly received from the

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complainants. This too is an aspect which the High Court exercising

jurisdiction under section 438 of the Cr. PC did not bear in mind.

29. Under the circumstances, we hold that the High Court fell in grave

error in proceeding on the basis of the undertaking of the appellant and

imposing payment of Rs.22,00,000/- (Rupees twenty-two lakh) as a

condition precedent for grant of bail.

30. We are not unmindful of the fact that the High Court was led by the

appellant himself to an order granting bail with imposition of the

impugned condition; hence, we are inclined to remit the matter to the

High Court in line with the approach adopted by this Court in Mahesh

Chandra (supra) and direct re-consideration of the application for pre-

arrest bail and a decision on its own merits in the light of the observations

made herein, as early as possible but preferably within 31 st August, 2023.

It is ordered accordingly.

31. Till such time further orders are passed by the High Court, the

appellant’s liberty shall not be infringed by the investigating officer. In the

meanwhile, however, the appellant shall be bound to cooperate with the

investigating officer, as and when he is called upon to do so.

32. Before concluding, we need to dispose of IA 94276 of 2023. It is an

application for intervention at the instance of the complainants, who seek

to assist the Court on the ground that any order passed on the appeal

without giving opportunity of hearing to them would cause grave

prejudice.
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33. We hold that at this stage, the complainants have no right of

audience before this Court or even the High Court having regard to the

nature of offence alleged to have been committed by the appellant unless,

of course, a situation for compounding of the offence under Section 420,

IPC, with the permission of the Court, arises.

34. The appeal stands disposed of on terms as aforesaid. The

application for intervention stands dismissed.

35. There shall be no order as to costs.

……………………………………J
(S. RAVINDRA BHAT)

……………………………………J
(DIPANKAR DATTA)
NEW DELHI;
JULY 04, 2023.
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