BRIEF FACTS OF THE CASE
- DGGI had alleged that M/s Anmol Tradex Pvt. Ltd. ("Company") had fraudulently availed input tax credit (ITC) based on non-genuine invoices from the suppliers who were involved in circular trading and the issuance of fake Invoices.
- Sudhir Gulati ("Respondent"), Director of the Company was arrested on 21.09.2020 when he appeared before the officers of DGGI pursuant to the summons issued. The investigation officers further examined him while he was in judicial custody.
- The Respondent had applied for bail u/s 437 of the CrPC, which was granted by the Chief Metropolitan Magistrate (CMM) vide a detailed order dated 17.10.2020.
- The DGGI challenged the said order before the Hon'ble Delhi
High Court on the following grounds, namely
- The CMM did not emphasize whether a prima facie case existed against the Respondent
- The Respondent was non-cooperative during the investigation
- Being an influential person with money and financial power, there exists a grave possibility that he will obstruct the investigation, intimidate crucial witnesses, and manipulate or destroy evidence.
- The Respondent negated the arguments made by DGGI and submitted that the Petition was filed after an unexplained and unjustified gap of one year post the Order of CMM. The respondent had always co-operated with the Authority, and there was no likelihood of his tampering with the evidence or absconding.
- The Order of the Chief Metropolitan Magistrate dated 17.10.2020
was a reasoned order backed by cogent legal reasoning and a
thorough examination of the facts and evidence on record. It
outlined the threefold objects of a pretrial detention, namely
- The accused may hamper the investigation and recovery of weapons/ documents used in the alleged crime.
- The accused may forewarn the other co-accused who are absconding.
- The accused, having a previous criminal antecedent, may commit similar offences, thereby endangering the life and property of the public at large.
- The Bail Order appreciated that in absence of the risk of the accused fleeing the course of justice, imprisonment during the trial period is uncalled for. Refusal to bail leads to restriction on personal liberty, which is guaranteed by Article 21 of the Constitution.
- The allegations made by DGGI with respect to the Respondent being noncooperative were not backed by any evidence (like videography). Further, CMM also took note of various other factors, such as the fact that the Respondent was a sexagenarian who had earlier undergone heart bypass surgery and that his wife was suffering from cancer. Since the Respondent had no previous history of criminal activity, and the co-accused involved in the larger alleged evasion were already granted Bail, the CMM saw no reason to withhold Bail.
- The Hon'ble Delhi High Court in its Order distinguished the challenge to the Bail Order on merits vis-à-vis the cancellation of the order due to violation of bail conditions.
- It was held that the Bail Order can be recalled where there has been an arbitrary and or improper exercise of discretion in granting the bail. The Order can be revoked only where the Order is perverse, illegal, or unjustified.
- On the other hand, cancellation of Bail is triggered when there is a violation of conditions that were imposed while granting Bail1.
- It was observed that the present case involves the plea on the
part of the Petitioner DGGI to recall the Bail Order. The Court
observed that the Bail Order was reasonable and justified based on
the following reasoning
- The evidence being documentary/ electronic, there is no likelihood of the same being tampered with.
- There was nothing to show that the Respondent was a flight Risk or could influence the witness.
- The Respondent was in judicial custody of the applicant for 28 days, and the Applicant DGGI had not yet filed a Complaint for offences u/s 132.
- The Applicant had failed to demonstrate how the grant of Bail was not judicious and that the Respondent had abused the liberty so granted.
- For the aforesaid reasoning, the Hon'ble High Court dismissed the Petition and upheld the Bail Order of the CMM.
- The Hon'ble Court's judgement brings out the subtle difference between revocation of bail and cancellation of bail and the instances under which the Department can claim such remedy. The bail can be revoked where it is proved without doubt that the discretion has been exercised perversely, while the bail can be cancelled only if the conditions attached to it have been violated. The inordinate delay in challenging the order and concluding the investigation also impacted the Department's stance.
- In the absence of any substantial new evidence, a Bail order cannot be revoked or cancelled. The Apex Court in Dolat Ram v. State of Haryana [(1995) 1 SCC 349], while observing as under, held that a bail cancellation calls for cogent and overwhelming circumstances:
"Generally speaking, the grounds for cancellation of bail, broadly (illustrative and not exhaustive) are: interference or attempt to interfere with the due course of administration of Justice or evasion or attempt to evade the due course of justice or abuse of the concession granted to the accused in any manner. The satisfaction of the court, on the basis of material placed on the record of the possibility of the accused absconding is yet another reason justifying the cancellation of bail. However, bail once granted should not be cancelled in a mechanical manner without considering whether any supervening circumstances have rendered it no longer conducive to a fair trial to allow the accused to retain his freedom by enjoying the concession of bail during the trial."
- Thus, the Department or State can invoke or seek the remedy of cancellation only where they can establish the dire circumstances and the conduct of the accused, that have a direct impact on the investigation.
Footnote
1 Mahipal vs. Rajesh Kumar @ Polia and Anr, (2020) 2 SCC 118 Deepak Yadav vs. State of U.P., (2022) 8 SCC 559small>
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