DATE: 09/04/2025
COURT: Supreme Court of India
BENCH: Justice Bela M. Trivedi and Justice Prasanna B. Varale
FACTS:
The Ministry of Corporate Affairs (MCA), through an official Order, directed the Serious Fraud Investigation Office (SFIO), herein referred to as the Appellant, to conduct a thorough inquiry and investigation into the affairs of 125 companies belonging to the Adarsh Group, categorized as Companies Under Investigation (CIUs). In addition to this, the MCA also mandated the SFIO to investigate the affairs of 20 other associated companies and two individuals who were allegedly involved in the irregularities.
Upon the conclusion of its investigation, the SFIO submitted a comprehensive Investigation Report to the MCA. Based on the findings, the SFIO recommended initiating prosecution against the concerned parties for a range of offences punishable under various provisions of the Companies Act as well as the Indian Penal Code (IPC). Acting upon this recommendation, a Criminal Complaint was duly filed before the jurisdictional Special Court, naming 181 accused individuals, including the Respondents.
The Special Court, after examining the complaint and supporting material, took cognizance of the offences and issued summons to all the accused persons. However, in the case of the Respondents, they allegedly evaded the execution of the bailable warrants issued by the Court. It was alleged that they deliberately concealed themselves and avoided appearing at their registered residential addresses, in active collusion with the process servers responsible for executing the Court’s orders.
Due to this continued non-cooperation and evasion by the Respondents, the Special Court was compelled to issue non-bailable warrants against them on multiple occasions, each time through detailed and reasoned Orders. In several instances, the Court even initiated proceedings under the proclamation of offenders, seeking to declare the Respondents as absconders. As of now, the criminal proceedings against the accused persons, including the Respondents, are actively pending before the Special Court.
ISSUES:
The main pertaining to this case is to decide the criminal liability of the against the respondents to whom the non-bailable warrants were issued.
JUDGEMENT WITH REASONING:
The Supreme Court set aside the impugned orders dated 29.03.2023 and 20.04.2023 passed by the High Court, which had granted anticipatory bail to the respondents-accused. The Court directed the respondents to surrender before the Special Court within one week from the date of the judgment. It was clarified that their applications for regular bail shall be considered in accordance with the law, and no opinion was expressed on the merits of the case. The appeals filed by the SFIO in SLP (Crl.) No.13956/2023 and connected matters were allowed, except for three appeals which were dismissed.
The Court emphasized that economic offences form a distinct category of crimes involving complex conspiracies and significant financial loss to the public and the economy. Such offences are to be treated seriously due to their potential to destabilize the financial integrity of the nation. The Court observed that the respondents-accused not only avoided compliance with bailable warrants but also concealed themselves to obstruct the legal process. In such circumstances, anticipatory bail should not be granted, especially when the Special Court has taken cognizance of the offences and initiated non-bailable warrant and proclamation proceedings under Section 82 CrPC.
Further, the Court noted that Section 212(6) of the Companies Act imposes mandatory twin conditions for granting bail in cases involving offences under Section 447, which are cognizable and non-bailable. These conditions were not adequately considered by the High Court while granting anticipatory bail. The High Court failed to give due weight to the conduct of the respondents and the seriousness of the charges. The Supreme Court held that the orders granting anticipatory bail were perverse and contrary to settled legal principles, particularly as laid down in Vijay Madanlal Choudhary v. Union of India and Union of India v. Kanhaiya Prasad, and therefore, could not be sustained in law.
ANALYSIS:
This case underscores the judiciary’s stringent approach towards economic offences and the obligation of the accused to cooperate with the legal process. The Supreme Court highlighted the gravity of financial crimes, especially those involving large-scale corporate frauds like in the case of the Adarsh Group. It was noted that the respondents had actively evaded legal procedures, including bailable warrants and subsequent non-bailable warrants, thereby obstructing the course of justice. The Court emphasized that in situations where accused persons demonstrate willful non-compliance and concealment, such conduct cannot be rewarded with anticipatory bail, as it undermines the authority of the judicial system. The decision reiterates that economic offences, due to their wide-reaching impact on public trust and financial stability, must be treated as a distinct and serious category of crime.
Moreover, the judgment reinforces the statutory framework under Section 212(6) of the Companies Act, which imposes strict conditions for the grant of bail in cases involving serious corporate fraud. The Supreme Court criticized the High Court for overlooking these mandatory provisions and for failing to consider the respondents’ persistent non-cooperation. In doing so, the Court reaffirmed precedents such as Vijay Madanlal Choudhary and Kanhaiya Prasad, making it clear that the judicial discretion in granting bail—especially anticipatory bail—must be exercised judiciously, taking into account the nature of the offence and the conduct of the accused. The ruling thereby serves as a strong reminder that respect for judicial orders and due process is non-negotiable, particularly in cases involving economic offences with national implications.
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