Supreme Court Cancel Default Bail: Ongoing Investigation of Other Accused No Ground Of Bail U/S 167(2) Cr.P.C.

In a significant ruling, the Supreme Court of India overturned the decisions of the High Court and the Special Court in the case of Central Bureau of Investigation vs. Kapil Wadhawan & Anr (2024 INSC 58), which had earlier granted default bail to the respondents under Section 167(2) of the Criminal Procedure Code (Cr.P.C.).

The apex court, led by Justice Bela M. Trivedi and Justice Pankaj Mithal, highlighted the criticality of a complete chargesheet in determining the entitlement to statutory bail. The bench clarified, “Once the chargesheet has been filed, the question of grant of bail has to be considered and decided only with reference to the merits of the case.” This observation underlines the court’s stringent stance on the prerequisites for granting default bail.

The case stemmed from the CBI’s appeal challenging the High Court’s order which upheld the grant of default bail to Kapil Wadhawan and another respondent. The respondents were implicated in a large-scale financial fraud, accused of conspiring to cheat a consortium of banks led by the Union Bank of India. The CBI arrested the respondents in July 2022, and a chargesheet was filed within the stipulated time frame.

In its detailed judgement, the Supreme Court underscored the necessity of a complete investigation as per Section 173 Cr.P.C. before considering default bail. The court noted, “The benefit of proviso appended to sub-section (2) of Section 167 of the Code would be available to the offender only when a chargesheet is not filed and the investigation is kept pending against him.”

Setting aside the orders of the lower courts, the Supreme Court directed that the respondents, if released on default bail pursuant to the impugned orders, shall be taken into custody. However, the court was careful to state that the observations made in this judgement should not influence other proceedings, if any, pending before the Special Court or High Court.

Date of Decision: 24th January 2024

CENTRAL BUREAU OF INVESTIGATION VS KAPIL WADHAWAN & ANR