Holding

The Supreme Court held that the High Court's grant of bail to respondent No.1 was illegal and perverse, and therefore set aside the bail order.

Summary

The Supreme Court examined the bail granted by the Nagpur Bench of the Bombay High Court to respondent No.1, who was accused of conspiracy, cheating, forgery and criminal breach of trust in a massive financial scam involving a cooperative society. The prosecution alleged that the respondent withdrew approximately ₹9 crore from the society, received financial assistance, and used the funds to purchase properties in the name of the society's president. The High Court had released the respondent on bail, reasoning that the allegations were merely accusations and that the respondent was not a member of the society. The Supreme Court held that the trial court failed to consider crucial factors such as the nature of the offence, the respondent's role, the risk of evidence tampering, and the interests of the victims, rendering the bail order perverse and illegal. Consequently, the Court set aside the bail order, directed the respondent to surrender, and allowed the appeal.

Issues considered

The appropriateness of granting bail to the accused under Section 439 of the CrPC in light of the seriousness of the offences and the material evidence indicating his involvement.
Whether the High Court correctly applied the relevant bail principles, including consideration of the nature of the accusation, role of the accused, risk of tampering with evidence or witnesses, and potential prejudice to the victims.

Legislation cited

Code of Criminal Procedure, 1973s. 437, s. 439
Indian Penal Code, 1860s. 120-B, s. 409, s. 420, s. 467, s. 468, s. 471
Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999s. 3

Subjects

BailGrant of bailRejection of bailMisappropriation of fundsFinancial irregularitiesConspiracyPossibilities/chances of tampering with the evidence and/or witnessesNature of accusationsRole of accusedSupervening circumstancesEconomic offence

Judgment

[2024] 8 S.C.R. 753 : 2024 INSC 636

Manik Madhukar Sarve & Ors.
v.
Vitthal Damuji Meher & Ors.
(Criminal Appeal No. 3573 of 2024)
28 August 2024
[Hima Kohli and Ahsanuddin Amanullah,* JJ.]

Issue for Consideration
Respondent no.1 was released on bail by the High Court for offences
punishable under Sections 409, 420, 467, 468, 471 and 120-B of
the Penal Code, 1860 and Section 3 of the Maharashtra Protection
of Interest of Depositors (in Financial Establishments) Act, 1999.

Headnotes†
Code of Criminal Procedure, 1973 – s.439 – Bail – The case
of the prosecution is that one accused viz. K (President of a
Society), in connivance with the co-accused, misappropriated
an amount of ₹79,54,26,963/- – Further case of the prosecution
that respondent no.1 is a co-conspirator and a close friend of
the alleged mastermind K – It was stated in the charge-sheet
that respondent no.1 was paid an amount of ₹9,69,28,500/-
which was withdrawn from the Society and paid to him as
financial assistance – Thereafter, respondent no.1 purchased
five immovable properties in name of K – During investigation,
respondent no.1 was arrested – However, the High Court
released him on bail – Correctness:
Held: The Courts while granting bail are required to consider
relevant factors such as nature of the accusation, role ascribed
to the accused concerned, possibilities/chances of tampering with
the evidence and/or witnesses, antecedents, flight risk etc. – The
Single Judge of the High Court, in the impugned order, has simply
proceeded on the premise that there were only allegations made
by some persons against the respondent no.1 and he was not
a member of the Society which had committed such financial
irregularities – The impugned order goes on to state that respondent
no.1 was not involved in the affairs of the Society nor was he
responsible for the irregularities alleged – At the present stage,
where the charge-sheet stands filed, it emerges that there is some

* Author
754 [2024] 8 S.C.R.

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material indicative of the involvement of respondent no.1 in the
withdrawal of ₹9,00,00,000/-, based on the records and cash-
book entries and other book of accounts though he had invested
amounts only to the tune of about ₹2,38,00,000/- – Even the
Forensic Audit Report exhibits material to this effect – Investigation
also indicates that out of the monies withdrawn from the Society’s
account by the respondent no.1, investments were later made in
property in the name of his relatives – Further, the High Court has
completely lost sight of the fact that the deposits in/to the Society
were made by people having meagre earnings without anything
else to fall back upon – Tentatively speaking, it seems that the
President of the Society systematically siphoned off these funds,
with the aid of other office-bearers as also through respondent
no.1 – Upon circumspect consideration of the attendant facts and
circumstances, the discretion exercised by the Single Judge of the
High Court to grant bail to the respondent no.1 was not in tune
with the principles that conventionally govern exercise of such
power – Thus, the impugned order u/s. 439(1), CrPC granting bail
to the respondent no.1 cannot be sustained. [Paras 18, 19, 22, 26]

Case Law Cited
Ajwar v. Waseem [2024] 5 SCR 575 : 2024 SCC OnLine SC 974;
State of Haryana v. Dharamraj [2023] 11 SCR 705 : 2023 SCC
OnLine 1085 – relied on.
Niranjan Singh v. Prabhakar Rajaram Kharote [1980] 3 SCR 15 :
(1980) 2 SCC 559; Vilas Pandurang Pawar v. State of Maharashtra
[2012] 8 SCR 270 : (2012) 8 SCC 795; Atulbhai Vithalbhai Bhanderi
v. State of Gujarat [2023] 4 SCR 239 : 2023 SCC OnLine SC
560 – referred to.

List of Acts
Code of Criminal Procedure, 1973; Penal Code, 1860; Maharashtra
Protection of Interest of Depositors (in Financial Establishments)
Act, 1999.

List of Keywords
Bail; Grant of bail; Rejection of bail; Misappropriation of funds;
Financial irregularities; Conspiracy; Possibilities/chances of
tampering with the evidence and/or witnesses; Nature of
accusations; Role of accused; Supervening circumstances;
Economic offence.
[2024] 8 S.C.R. 755

Manik Madhukar Sarve & Ors. v. Vitthal Damuji Meher & Ors.

Case Arising From
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 3573
of 2024
From the Judgment and Order dated 13.10.2021 of the High Court
of Judicature at Bombay at Nagpur in CRLA (BA) No. 867 of 2021
Appearances for Parties
Ms. Mrinal Gopal Elker, Ms. Shruti Verma, Advs. for the Appellants.
Manoj K. Mishra, Umesh Dubey, Jeevesh Prakash, Vishal, Ms.
Madhulika, Amulya Dev, Samrat Krishanrao Shinde, Siddharth
Dharmadhikari, Aaditya Aniruddha Pande, Bharat Bagla, Sourav
Singh, Aditya Krishna, Ms. Preet S. Phanse, Adarsh Dubey, Advs.
for the Respondents.
Judgment / Order of the Supreme Court
Judgment
Ahsanuddin Amanullah, J.
Leave granted.
2. The present appeal arises from the final judgment and order dated
13.10.20211 (hereinafter referred to as the “Impugned Order”),
passed by a learned Single Judge of the High Court of Judicature at
Bombay, Nagpur Bench (hereinafter referred to as the “High Court”)
in Criminal Application (BA) No.867/2021, whereby and whereunder
respondent no.1 was released on bail in connection with Crime
No.217/2019 registered with Police Station Kotwali, Nagpur for
offences punishable under Sections 409, 420, 467, 468, 471 and
120-B of the Indian Penal Code, 1860 (hereinafter referred to as
the “IPC”) and Section 3 of the Maharashtra Protection of Interest
of Depositors (in Financial Establishments) Act, 1999 (hereinafter
referred to as the “MPID Act”). Be it noted, we have dismissed
connected petitions vide common Order dated 07.05.2024 in S.L.P.
(Crl.) Nos.3946/2022 and 3938/2022. On even date, judgment was
reserved in the instant appeal.

1 Operative portion pronounced in Open Court on 13.10.2021, however the detailed Order was uploaded
on the High Court’s official website on 30.10.2021.
756 [2024] 8 S.C.R.

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BRIEF FACTS:
3. The case of the prosecution is that one accused viz. Khemchand
Meharkure is the President of Jai Shriram Urban Credit Co-operative
Society Limited (hereinafter referred to as the “Society”) and he,
in connivance with the co-accused, misappropriated an amount
of ₹79,54,26,963/- (Rupees Seventy Nine Crores Fifty Four Lakhs
Twenty Six Thousand Nine Hundred and Sixty Three). Also, it is
projected in the charge-sheet that statements of 798 depositors
further revealed that their deposits aggregating ₹29,06,18,748/-
(Rupees Twenty Nine Crores Six Lakhs Eighteen Thousand Seven
Hundred and Forty Eight) were not returned and the amount was
misappropriated. The appellants herein are some of the depositors,
who purportedly fell victim to the Society. The financial irregularities
have been categorized by the prosecution under twenty-three
different heads.
4. It is the further case of the prosecution that the respondent no.1 is a co-
conspirator and a close friend of the alleged mastermind, Khemchand
Meharkure. Respondent No.1 deposited an amount of ₹2,38,39,071/-
(Rupees Two Crores Thirty Eight Lakhs Thirty Nine Thousand and
Seventy One) with the Society in his name and in the names of his
family members. As stated in the chargesheet, the respondent no.1
was paid an amount of ₹9,69,28,500/- (Rupees Nine Crores Sixty Nine
Lakhs Twenty Eight Thousand Five Hundred) which was withdrawn
from the Society and paid to him as financial assistance, upon the
directions of the alleged mastermind, Khemchand Meharkure. It is
further alleged that the respondent no.1 purchased five immovable
properties for approximately ₹10,00,00,000/- (Rupees Ten Crores)
in the name of Khemchand Meharkure.
5. During investigation, respondent no.1 was arrested on 28.04.2021.
The High Court vide the Impugned Order has released him on bail
noting that the material on record is not sufficient to establish his
complicity.
SUBMISSIONS BY THE APPELLANTS:
6. Learned counsel for the appellants submitted that the High Court
erred in not appreciating the role of the respondent no.1/accused as
stated in the charge-sheet and record of the case. It is submitted that
the respondent no.1 and his family members were the ones to whom
the amount was given by the Society’s office-bearers. Respondent
[2024] 8 S.C.R. 757

Manik Madhukar Sarve & Ors. v. Vitthal Damuji Meher & Ors.

No.1 is the one who majorly benefitted from the scam, therefore, the
High Court ought not to have released the respondent no.1.
7. It was submitted that as per the charge-sheet, amount worth
₹79,54,26,963/- (Rupees Seventy Nine Crores Fifty Four Lakhs
Twenty Six Thousand Nine Hundred and Sixty Three) has been
illegally disposed of by the perpetrators of the crime. Such huge
amount was siphoned off by indulging in irregularities and illegal
activities. Our attention was drawn towards the Forensic Audit Report
wherein it has been revealed that the President of the Society colluded
with the respondent no.1/accused and relatives of respondent no.1/
accused invested an amount of ₹2,38,39,071/- (Rupees Two Crores
Thirty Eight Lakhs Thirty Nine Thousand and Seventy One) against
which he was given financial assistance of ₹9,69,28,500/- (Rupees
Nine Crores Sixty Nine Lakhs Twenty Eight Thousand and Five
Hundred), which amount was not refunded.
8. Learned counsel further pointed out that the impugned order did not
take into consideration the statements of the Society’s staff recorded
during investigation. It was advanced that the High Court ought to
have appreciated that the chances of the respondent no.1, as also
the other co-accused enlarged on bail, influencing material witnesses
such as the Society’s staff etc. cannot be ruled out. Therefore, it was
submitted that this was a fit case, where bail granted by the High
Court ought to be cancelled by this Court.
SUBMISSIONS ON BEHALF OF RESPONDENTS NO. 2 AND 3/
STATE:
9. Learned counsel for the State/official respondents adopted the
arguments of the appellants and prayed for cancellation of the bail
granted to the respondent no.1. Learned counsel drew our attention
to the statements of the clerks employed with the Society. A perusal
of the statement of one Prashant Savai would show that he worked
as a Clerk with the Society since 2006 to 2014. He stated that
the respondent no.1 in the year, 2013 deposited ₹2,38,00,000/-
(Rupees Two Crores Thirty Eight Lakhs) with the Society. He
received ₹3,25,000/- (Rupees Three Lakhs Twenty Five Thousand)
as interest from the Society. The same was paid to the respondent
no.1 by way of cash. No entry was recorded in the cashbook and/
or other books of accounts maintained by the Society. But a note-
sheet was prepared by the Society. He further stated that an amount
of ₹3,50,00,000/- (Rupees Three Crores Fifty Lakhs) was paid to
758 [2024] 8 S.C.R.

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the respondent no.1 by a witness. He also stated that he prepared
receipts of the payment handed over to the respondent no.1 by way
of cash. The Society also prepared a note-sheet in which an amount
of ₹9,69,00,000/- (Nine Crores Sixty Nine Lakhs) is shown as having
been paid to the respondent no.1.
10. It was submitted that the statement of one Anil Nagdeve would show
that he prepared vouchers and also the Fixed Deposit and made
necessary entries in the cash-book; however, no such entries are
reflected in the books of accounts of the Society. Another witness,
Arun Kathane has specifically stated that the respondent no.1 used
to visit the Society and was in constant touch with the President.
11. It was submitted that the Bank Statements of the respondent no.1
came to be seized from the Vidarbh Konkan Gramin Bank. Entries
of ₹37,50,000/- (Rupees Thirty Seven Lakhs and Fifty Thousand)
and ₹5,00,000/- (Rupees Five Lakhs) are shown as credited in the
account of the respondent no.1. As per the Forensic Audit Report,
the said figure matches with the saving account. According to the
Forensic Audit Report, cash deposit of the amount of ₹45,28,500/-
(Rupees Forty Five Lakhs Twenty Eight Thousand and Five Hundred)
is also shown in the name of the respondent no. 1. An amount of
₹85,75,150/- (Rupees Eighty Five Lakhs Seventy Five Thousand One
Hundred and Fifty) and ₹32,90,850/- (Rupees Thirty Two Lakhs Ninety
Thousand Eight Hundred and Fifty) is also shown in the name of the
wife of the respondent no.1. It is further noted during investigation
that the said amount is not reflected for the purposes of income-tax.
Similarly, respondent no.1 and the Society’s President executed Sale
Deed(s) and purchased various properties in cash. It is averred that
later on, they applied for correction in the Sale Deed by making
modification that the amount was inadvertently shown to be paid in
cash but in fact the payment(s) is/were made through cheque(s).
12. It was submitted that a money trail has been unearthed between
the respondent no.1 and the Society. Therefore, it was prayed that
the privilege of bail granted to him by the High Court be cancelled.
SUBMISSIONS BY RESPONDENT NO.1/ACCUSED:
13. At the outset, learned counsel for the respondent no.1 submitted
that the said respondent is innocent and not involved in the alleged
crime. It was stated that he has been falsely implicated by the police.
It was submitted that there is absolutely no evidence to incriminate
[2024] 8 S.C.R. 759

Manik Madhukar Sarve & Ors. v. Vitthal Damuji Meher & Ors.

Respondent No.1 in the subject-case. Therefore, in any event, on
the basis of the allegations made, no case at all, as alleged vide
Crime No.217/2019 is made out against respondent no.1.
14. It was submitted that there is no substantial material on record,
except disclosure statements of witnesses in police custody, to
prove any kind of agreement between respondent no.1 and the
main accused/President of the Society. It was pointed out that the
main accused, referred to as the President/Chairman of the Society
in the charge-sheet, has been released on bail by the High Court
vide order dated 22.08.2022. Referring to this order, it was urged
that the High Court had raised doubts on the existence of material
evidence relating to criminal conspiracy and held that “considering
the number of witnesses and voluminous charge sheet there is no
point in keeping the applicant in jail for an uncertain period.”
15. It was submitted that the alleged loan has never been transferred
to the respondent no.1. There is no electronic evidence, except
mere statements of the three witnesses. Learned counsel advanced
that these statements could not be treated as gospel truth. It has
not been proved that respondent no.1 was the beneficiary of the
alleged scam. Moreover, there is no worthwhile evidence to suggest
that respondent no.1/his family purchased the properties to the
tune of the alleged loan amount or used the alleged loan amount
to purchase any properties. Even according to the Forensic Audit
Report, respondent no.1, including his family cumulatively, had
received no more than a ₹1,28,00,000/- (Rupees One crore Twenty
Eight Lakh) loan. Consequently, there are contradictions regarding
alleged receipt of the loan amount in question.
16. It was further submitted that the authenticity of the aforesaid Forensic
Audit Report is also under challenge as the handwriting/specimen of
the respondent no.1 has been sent for forensic examination, report
whereof is still awaited. Further, it was submitted that respondent
no.1 was never associated in the affairs of the Society and had never
held any position in the Society.
17. Lastly, it was submitted that respondent no.1 is a senior citizen
and has complicated age-related medical issues, for which he is
undergoing treatment due to the severity of the condition(s). Hence,
it is submitted that there are no chances of his absconding. It was
stated that investigation is complete and charge-sheet has been
filed much prior in time to the grant of bail. Stating that no prejudice
760 [2024] 8 S.C.R.

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has been caused to the smooth running of the trial so as to invoke
the intervention of this Court, it was prayed that the instant appeal
be dismissed.
ANALYSIS, REASONING AND CONCLUSION:
18. Having given our anxious thought to the controversy, we find that the
exercise of discretion by the learned Single Judge in the impugned
order under Section 439(1)2 of the Code of Criminal Procedure, 1973
(hereinafter referred to as the “Code”), granting bail to the respondent
no.1 cannot be sustained.
19. Courts while granting bail are required to consider relevant factors
such as nature of the accusation, role ascribed to the accused
concerned, possibilities/chances of tampering with the evidence and/
or witnesses, antecedents, flight risk et al. Speaking through Hima
Kohli, J., the present coram in Ajwar v Waseem, 2024 SCC OnLine
SC 974, apropos relevant parameters for granting bail, observed:
“26. While considering as to whether bail ought to be
granted in a matter involving a serious criminal offence,
the Court must consider relevant factors like the nature of
the accusations made against the accused, the manner in
which the crime is alleged to have been committed, the
gravity of the offence, the role attributed to the accused,
the criminal antecedents of the accused, the probability
of tampering of the witnesses and repeating the offence,
if the accused are released on bail, the likelihood of the
accused being unavailable in the event bail is granted, the
possibility of obstructing the proceedings and evading the
courts of justice and the overall desirability of releasing

2 “439. Special powers of High Court or Court of Session regarding bail.—(1) A High Court or Court of
Session may direct—
(a) that any person accused of an offence and in custody be released on bail, and if the offence is of
the nature specified in sub-section (3) of Section 437, may impose any condition which it considers
necessary for the purposes mentioned in that sub-section;
(b) that any condition imposed by a Magistrate when releasing any person on bail be set aside or
modified:
Provided that the High Court or the Court of Session shall, before granting bail to a person who is
accused of an offence which is triable exclusively by the Court of Session or which, though not so triable,
is punishable with imprisonment for life, give notice of the application for bail to the Public Prosecutor
unless it is, for reasons to be recorded in writing, of opinion that it is not practicable to give such notice:
Provided further that the High Court or the Court of Session shall, before granting bail to a person who is
accused of an offence triable under sub-section (3) of Section 376 or Section 376-AB or Section 376-DA
or Section 376-DB of the Indian Penal Code (45 of 1860), give notice of the application for bail to the
Public Prosecutor within a period of fifteen days from the date of receipt of the notice of such application.”
[2024] 8 S.C.R. 761

Manik Madhukar Sarve & Ors. v. Vitthal Damuji Meher & Ors.

the accused on bail. (Refer: Chaman Lal v. State of U.P.; 3
Kalyan Chandra Sarkar v. Rajesh Ranjan alias Pappu
Yadav (supra); 4 Masroor v. State of Uttar Pradesh; 5
Prasanta Kumar Sarkar v. Ashis Chatterjee; 6 Neeru Yadav
v. State of Uttar Pradesh; 7 Anil Kumar Yadav v. State (NCT
of Delhi); 8 Mahipal v. Rajesh Kumar @ Polia (supra).9
27. It is equally well settled that bail once granted, ought
not to be cancelled in a mechanical manner. However,
an unreasoned or perverse order of bail is always open
to interference by the superior Court. If there are serious
allegations against the accused, even if he has not misused
the bail granted to him, such an order can be cancelled
by the same Court that has granted the bail. Bail can also
be revoked by a superior Court if it transpires that the
courts below have ignored the relevant material available
on record or not looked into the gravity of the offence
or the impact on the society resulting in such an order.
In P v. State of Madhya Pradesh (supra)10 decided by a
three judges bench of this Court [authored by one of us
(Hima Kohli, J)] has spelt out the considerations that must
weigh with the Court for interfering in an order granting
bail to an accused under Section 439(1)of the CrPC in
the following words:
“24. As can be discerned from the above decisions,
for cancelling bail once granted, the court must
consider whether any supervening circumstances
have arisen or the conduct of the accused post grant
of bail demonstrates that it is no longer conducive
to a fair trial to permit him to retain his freedom by
enjoying the concession of bail during trial [Dolat
Ram v. State of Haryana, (1995) 1 SCC 349 : 1995

3 [2004] Supp. 3 SCR 584 : (2004) 7 SCC 525
4 (2004) 7 SCC 528
5 [2009] 6 SCR 1030 : (2009) 14 SCC 286
6 [2010] 12 SCR 1165 : (2010) 14 SCC 496
7 [2014] 12 SCR 453 : (2014) 16 SCC 508
8 [2017] 11 SCR 195 : (2018) 12 SCC 129
9 [2019] 14 SCR 529 : (2020) 2 SCC 118
10 [2022] 15 SCR 211
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SCC (Cri) 237]. To put it differently, in ordinary
circumstances, this Court would be loathe to interfere
with an order passed by the court below granting bail
but if such an order is found to be illegal or perverse
or premised on material that is irrelevant, then such
an order is susceptible to scrutiny and interference
by the appellate court.””
(emphasis supplied)
20. In State of Haryana v Dharamraj, 2023 SCC OnLine 1085,
speaking through one of us (Ahsanuddin Amanullah, J.), the Court,
while setting aside an order of the Punjab and Haryana High Court
granting (anticipatory) bail, discussed and reasoned:
“7. A foray, albeit brief, into relevant precedents is warranted.
This Court considered the factors to guide grant of bail
in Ram Govind Upadhyay v. Sudarshan Singh, (2002) 3
SCC 598 and Kalyan Chandra Sarkar v. Rajesh Ranjan,
(2004) 7 SCC 528. In Prasanta Kumar Sarkar v. Ashis
Chatterjee, (2010) 14 SCC 496, the relevant principles
were restated thus:
‘9. … It is trite that this Court does not, normally,
interfere with an order passed by the High Court
granting or rejecting bail to the accused. However, it
is equally incumbent upon the High Court to exercise
its discretion judiciously, cautiously and strictly in
compliance with the basic principles laid down in a
plethora of decisions of this Court on the point. It is
well settled that, among other circumstances, the
factors to be borne in mind while considering an
application for bail are:
(i) whether there is any prima facie or reasonable
ground to believe that the accused had committed
the offence;
(ii) nature and gravity of the accusation;
(iii) severity of the punishment in the event of
conviction;
(iv) danger of the accused absconding or fleeing,
if released on bail;
[2024] 8 S.C.R. 763

Manik Madhukar Sarve & Ors. v. Vitthal Damuji Meher & Ors.

(v) character, behaviour, means, position and
standing of the accused;
(vi) likelihood of the offence being repeated;
(vii) reasonable apprehension of the witnesses
being influenced; and
(viii) danger, of course, of justice being thwarted
by grant of bail.’
8. In Mahipal v. Rajesh Kumar alias Polia, (2020) 2 SCC
118, this Court opined as under:
‘16. The considerations that guide the power of an
appellate court in assessing the correctness of an
order granting bail stand on a different footing from
an assessment of an application for the cancellation
of bail. The correctness of an order granting bail is
tested on the anvil of whether there was an improper
or arbitrary exercise of the discretion in the grant of
bail. The test is whether the order granting bail is
perverse, illegal or unjustified. On the other hand,
an application for cancellation of bail is generally
examined on the anvil of the existence of supervening
circumstances or violations of the conditions of bail
by a person to whom bail has been granted. …’
9. In Bhagwan Singh v. Dilip Kumar @ Deepu @ Depak,
2023 INSC 761, this Court, in view of Dolat Ram v. State
of Haryana, (1995) 1 SCC 349; Kashmira Singh v. Duman
Singh, (1996) 4 SCC 693 and X v. State of Telangana,
(2018) 16 SCC 511, held as follows:
‘13. It is also required to be borne in mind that when
a prayer is made for the cancellation of grant of bail
cogent and overwhelming circumstances must be
present and bail once granted cannot be cancelled
in a mechanical manner without considering whether
any supervening circumstances have rendered it in
conducing to allow fair trial. This proposition draws
support from the Judgment of this Court in Daulat Ram
v. State of Haryana, (1995) 1 SCC 349, Kashmira
Singh v. Duman Singh (1996) 4 SCC 693 and XXX
v. State of Telangana (2018) 16 SCC 511.’
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10. In XXX v. Union Territory of Andaman & Nicobar
Islands, 2023 INSC 767, this Court noted that the
principles in Prasanta Kumar Sarkar (supra) stood
reiterated in Jagjeet Singh v. Ashish Mishra, (2022) 9
SCC 321.
11. The contours of anticipatory bail have been elaborately
dealt with by 5-Judge Benches in Gurbaksh Singh Sibbia v.
State of Punjab, (1980) 2 SCC 565 and Sushila Aggarwal
v. State (NCT of Delhi), (2020) 5 SCC 1. Siddharam
Satlingappa Mhetre v. State of Maharashtra, (2011) 1 SCC
694 is worthy of mention in this context, despite its partial
overruling in Sushila Aggarwal (supra). We are cognizant
that liberty is not to be interfered with easily. More so,
when an order of pre-arrest bail already stands granted
by the High Court.
12. Yet, much like bail, the grant of anticipatory bail is to
be exercised with judicial discretion. The factors illustrated
by this Court through its pronouncements are illustrative,
and not exhaustive. Undoubtedly, the fate of each case
turns on its own facts and merits.”
(emphasis supplied)
21. In Ajwar (supra), this Court also examined the considerations for
setting aside bail orders in terms below:
“28. The considerations that weigh with the appellate Court
for setting aside the bail order on an application being
moved by the aggrieved party include any supervening
circumstances that may have occurred after granting relief
to the accused, the conduct of the accused while on bail,
any attempt on the part of the accused to procrastinate,
resulting in delaying the trial, any instance of threats being
extended to the witnesses while on bail, any attempt on
the part of the accused to tamper with the evidence in
any manner. We may add that this list is only illustrative
and not exhaustive. However, the court must be cautious
that at the stage of granting bail, only a prima facie case
needs to be examined and detailed reasons relating to
the merits of the case that may cause prejudice to the
accused, ought to be avoided. Suffice it is to state that
[2024] 8 S.C.R. 765

Manik Madhukar Sarve & Ors. v. Vitthal Damuji Meher & Ors.

the bail order should reveal the factors that have been
considered by the Court for granting relief to the accused.
29. In Jagjeet Singh (supra)11, a three-Judges bench of
this Court, has observed that the power to grant bail under
Section 439 Cr. P.C. is of wide amplitude and the High Court
or a Sessions Court, as the case may be, is bestowed with
considerable discretion while deciding an application for
bail. But this discretion is not unfettered. The order passed
must reflect due application of judicial mind following well
established principles of law. In ordinary course, courts
would be slow to interfere with the order where bail has been
granted by the courts below. But if it is found that such an
order is illegal or perverse or based upon utterly irrelevant
material, the appellate Court would be well within its power
to set aside and cancel the bail. (Also refer: Puran v. Ram
Bilas12; Narendra K. Amin (Dr.) v. State of Gujarat13)”
(emphasis supplied)
22. The learned Single Judge, in the impugned order, has simply
proceeded on the premise that there were only allegations made by
some persons against the respondent no.1 and he was not a member
of the Society which had committed such financial irregularities.
Moreover, we find that the learned Single Judge, whilst noting that
“no positive finding need be recorded on the sufficiency of the said
material to establish conspiracy, which issue will be addressed by
the trial Court, after the evidence is adduced”, has without any basis
thought it fit to record that in his “prima facie opinion, it is extremely
debatable whether such material is sufficient to establish conspiracy.”
23. The impugned order goes on to state that respondent no.1 was not
involved in the affairs of the Society nor was he responsible for the
irregularities alleged. At the present stage, where the charge-sheet
stands filed, it emerges that there is some material indicative of the
involvement of respondent no.1 in the withdrawal of ₹9,00,00,000/-
(Rupees Nine Crores), based on the records and cash-book entries
and other book of accounts though he had invested amounts only

11 (2022) 9 SCC 321
12 (2001) 9 SCC 338
13 [2008] 6 SCR 1149 : (2008) 13 SCC 584
766 [2024] 8 S.C.R.

Digital Supreme Court Reports

to the tune of about ₹2,38,00,000/- (Rupees Two Crores Thirty Eight
Lakhs). Even the Forensic Audit Report exhibits material to this effect.
24. We bear in mind the submission that respondent no.1 was a close
associate of the President of the Society with regular business/other
dealings between the two. Investigation also indicates that out of
the monies withdrawn from the Society’s account by the respondent
no.1, investments were later made in property in the name of his
relatives. Further, the High Court has completely lost sight of the
fact that the deposits in/to the Society were made by people having
meagre earnings without anything else to fall back upon. Tentatively
speaking, it seems that the President of the Society systematically
siphoned off these funds, with the aid of other office-bearers as also
through respondent no.1. We consciously refrain from elaborately
discussing/detailing the evidence or our views thereon following the
dicta in Niranjan Singh v Prabhakar Rajaram Kharote, (1980) 2
SCC 559; Vilas Pandurang Pawar v State of Maharashtra, (2012)
8 SCC 795 and Atulbhai Vithalbhai Bhanderi v State of Gujarat,
2023 SCC OnLine SC 560.
25. In cases where the allegations coupled with the materials brought
on record by the investigation and in the nature of economic offence
affecting a large number of people reveal the active role of the
accused seeking anticipatory or regular bail, it would be fit for the
Court granting such bail to impose appropriately strict and additional
conditions. In the present case, even that has not been done as the
High Court has imposed usual conditions simpliciter:
“8. The applicant be released on bail in connection with
Crime 217/2019, registered with Police Station Kotwali,
Nagpur, for offences punishable under sections 409, 420,
467, 478, 471, 120-B of Indian Penal Code, Section 3 of
the Maharashtra Protection of Interest of Depositors (in
Financial Establishments) Act, on executing PR bond of
Rs. 16,000/- (Rupees Sixteen Thousand) with one solvent
surety of the like amount.
9. The applicant shall attend Economic Offences Wing,
Nagpur as and when required by the Investigating Officer.
10. The applicant shall not, directly or indirectly, make any
attempt to influence the witnesses or otherwise tamper
with the evidence.
[2024] 8 S.C.R. 767

Manik Madhukar Sarve & Ors. v. Vitthal Damuji Meher & Ors.

11. The applicant shall not leave the country without the
permission of the trial Court.”
(emphasis supplied)
26. The High Court, we have no hesitation in saying so, erred in law.
Ergo, for reasons recorded above and upon circumspect consideration
of the attendant facts and circumstances, we hold that the discretion
exercised by the learned Single Judge of the High Court to grant
bail to the respondent no.1 was not in tune with the principles that
conventionally govern exercise of such power, a plurality of which
stand enunciated in the case-law supra. Moreover, though respondent
no.1 had already suffered incarceration for a period of about six
months at the time when bail was granted, yet in view of the nature
of the alleged offence, his release on bail can seriously lead to
dissipation of the properties where investments have allegedly been
made out of Society funds. At the end of the day, the interests of
the victims of the scam have also to be factored in.
27. Accordingly, the appeal succeeds. The impugned order stands set
aside. Respondent No.1 is directed to surrender within a period of
three weeks from today, failing which the trial Court shall proceed
in accordance with law. We clarify that the observations made
hereinabove are limited to the aspect of testing the legality of the
impugned order. They shall not be treated as definitive/conclusive
regarding respondent no.1 or any other accused. The trial Court in
seisin shall proceed uninfluenced and in accordance with law. Given
the peculiar circumstances, where bail is being cancelled after a
period of almost 3 years, it is deemed appropriate to grant liberty to
the respondent no.1 to apply for bail at a later period or in the event
of a change in circumstances. Needless to state, such application, if
and when preferred, shall be considered on its own merits, without
being prejudiced by the instant judgment. The authorities concerned
are directed to render appropriate care and assistance as regards
the medical condition of the respondent no.1.

Result of the case: Appeal allowed.

†
Headnotes prepared by: Ankit Gyan