Accused Who Conceal Themselves and Obstruct Justice Cannot Seek Shelter Under Anticipatory Bail: Supreme Court Cancels Pre-Arrest Bail in ₹4,120 Crore Corporate Fraud Case

"Granting anticipatory bail is certainly not the rule. The respondents-accused, who have continuously avoided due process of law, by concealing themselves and thereby attempting to derail the proceedings, would not be entitled to the anticipatory bail." — In a powerful reaffirmation of the rule of law and judicial discipline, the Supreme Court of India allowed appeals filed by the SFIO and quashed anticipatory bail granted to multiple individuals accused in the massive ₹4,120 crore financial scam involving the Adarsh Credit Cooperative Society Limited (ACCSL). The bench comprising Justice Bela M. Trivedi and Justice Prasanna B. Varale came down heavily on the conduct of the accused who had repeatedly evaded court summons and non-bailable warrants, and observed that grant of bail to such absconding individuals is legally impermissible and contrary to public interest.

The Court found the High Court’s orders granting anticipatory bail perverse, holding that the twin conditions under Section 212(6) of the Companies Act were not satisfied and that the accused had consistently obstructed the administration of justice.

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The facts of the case arose from a detailed investigation conducted by the Serious Fraud Investigation Office (SFIO), following a directive from the Ministry of Corporate Affairs in June 2018. The SFIO unearthed an intricate scheme involving 125 shell companies used by the promoters of ACCSL — particularly the Modi family — to siphon public deposits through fraudulent loans and forged documentation.

In 2019, the SFIO filed a criminal complaint before the Special Court in Gurugram against 181 accused, including several directors of the Adarsh Group of Companies and their associates. The Special Court took cognizance of the complaint under Section 447 of the Companies Act, 2013 and relevant provisions of the IPC, and issued bailable warrants, which escalated to non-bailable warrants (NBWs) and proclamation proceedings under Section 82 CrPC after the accused repeatedly failed to appear.

Despite these facts, and after their anticipatory bail applications had been denied by the Special Court, several of the accused obtained anticipatory bail from the High Court in March and April 2023 — a move challenged by the SFIO before the Supreme Court.

The apex court found this deeply problematic. "The High Court has passed the impugned orders in utter disregard of the mandatory conditions contained in Section 212(6) of the Companies Act, and also ignoring the conduct of the respondents-accused. Such orders… would fall into the category of perverse orders and therefore untenable at law."

The Court noted that Section 212(6) of the Companies Act imposes stringent twin conditions on the grant of bail for offences under Section 447 — the prosecution must be given an opportunity to oppose bail, and the court must record satisfaction that the accused is not guilty and not likely to reoffend.

“The restrictive conditions of bail are mandatory in nature. They are applicable even in anticipatory bail proceedings,” the Court reiterated, citing the decision in Vijay Madanlal Choudhary v. Union of India (2023) 12 SCC 1.

None of the High Court orders granting bail addressed these statutory safeguards, the Court pointed out.

“In none of the impugned orders, the High Court has bothered to look into the proceedings conducted, and the detailed orders passed by the Special Court for securing the presence of the Respondents.”

The Supreme Court refused to entertain arguments that the accused were unaware of the proceedings or summons. It observed that they had already filed anticipatory bail applications before the Special Court and were fully aware of the complaint. Their failure to appear and deliberate concealment from law enforcement amounted to obstruction of justice.

“If he is creating hindrances in the execution of warrants or is concealing himself… he must not be granted the privilege of anticipatory bail.”

“When a court issues a non-bailable warrant or initiates proclamation proceedings, the accused must submit to the authority of law. He cannot, in defiance, invoke the court’s extraordinary jurisdiction under Section 438 CrPC.”

The Court relied on decisions such as P. Chidambaram v. Directorate of Enforcement, Y.S. Jagan Mohan Reddy v. CBI, and the recent Srikant Upadhyay v. State of Bihar to hold that anticipatory bail in economic offences must be granted only in exceptional cases, and not where accused are absconding or deliberately avoiding judicial process.

The Court allowed the appeals in 14 cases, setting aside the anticipatory bail orders passed by the High Court. The accused were directed to surrender before the Special Court within one week, and it was clarified that any future bail application would be considered strictly in accordance with law, without any influence from the High Court’s earlier orders.

However, the appeals in three cases were dismissed — namely those of Akshat Singh, Naveen Kumar, and Mahesh Dutt Sharma — because either no proclamation was issued, or bail had already been granted by the Special Court, not the High Court.

In strong closing remarks, the Court emphasized the importance of judicial discipline and the rule of law: “If the Rule of Law is to prevail in the society, every person would have to abide by the law, respect the law and follow the due process of law.”

“Granting anticipatory bail to such accused, who are absconding and delaying the trial process by hook or crook, would amount to rewarding disobedience and weakening the justice delivery mechanism.”

This judgment stands as a decisive warning against the misuse of anticipatory bail, especially in high-profile white-collar crimes. The Supreme Court has made it unequivocally clear that obstructing justice, absconding, and failing to submit to lawful process disentitles a person from the discretionary relief of anticipatory bail.

In a country where financial crimes are increasingly complex and far-reaching, the Court’s call for strict enforcement of statutory bail restrictions under Section 212(6) ensures that economic offenders are held accountable and the integrity of judicial proceedings remains uncompromised.

Date of Decision: April 9, 2025