1997 (11) TMI 428 - SC - Companies Law

Supreme Court annuls pre-arrest bail order emphasizing minimal judicial interference in investigations

Dukhishyam Benupani Versus Arun Kumar Bajoria

The Supreme Court set aside the impugned order by the Division Bench of the High Court and annulled the pre-arrest bail order granted by the City Sessions ... Anticipatory bail to the respondent granted - Held that:- Appeal allowed. No doubt that the Division Bench of the High Court has gone ostensibly wrong in passing the impugned order. When perusing the files concerning the allegations against the respondent (which the Directorate had made available to us) we strongly feel that any further loss of time would further impair the effectiveness of the inquiry and/ or investigation into those allegations. Considering the nature and seriousness of the allegations as well as the largeness of the amount involved no doubt that the order granted by the City Sessions Judge should not remain alive. Issues:1. Challenge to anticipatory bail order by Enforcement Directorate under FERA.2. Refusal of interim relief by High Court despite writ petition challenging summons.3. Grant of ad interim bail order by City Sessions Judge and subsequent revision by High Court.4. Impugned order by Division Bench of High Court directing interrogation and restrictions on arrest.5. Appeal against pre-arrest bail order affecting effectiveness of inquiry into FERA violations.6. Defense of respondent on grounds of interrogation cooperation and health condition.7. Judicial interference with investigation process and monitoring by Division Bench.8. Considerations for pre-arrest bail order different from post-arrest bail application.9. Failure to consider serious aspects by City Sessions Judge and High Court Division Bench.10. Setting aside of impugned order and annulment of pre-arrest bail order by Supreme Court.Detailed Analysis:1. The case involved a challenge by the Enforcement Directorate under FERA against an anticipatory bail order granted to the respondent by a sessions judge. The High Court's intervention further complicated the situation, leading to the Directorate seeking relief from the Supreme Court through a special leave petition.2. Despite the Directorate issuing summons to the respondent for interrogation, the respondent approached the High Court challenging the summons and seeking interim relief. The High Court refused to grant interim relief, prompting the respondent to file for ad interim bail in the City Sessions Court, which was granted with conditions.3. The appellant challenged the ad interim bail order before the High Court, which directed the City Sessions Court to make a final decision. The City Sessions Judge eventually ruled in favor of the respondent, leading to the appellant filing for cancellation of the bail order under section 439(2) of the Code.4. The Division Bench of the High Court passed an impugned order directing the Directorate to interrogate the respondent at a specified location and time, while also restricting arrest until pending applications were decided. Despite requests for modification, the Division Bench did not act, prompting the appellant to approach the Supreme Court.5. The appellant argued that the pre-arrest bail order would hinder the Directorate's inquiry into serious FERA violations by the respondent, citing past violations and pending cases. The Supreme Court noted the potential impact on the inquiry's effectiveness due to the bail order.6. The respondent's defense included cooperation during interrogation sessions and a claim of being a sick person entitled to pre-arrest bail. However, the Court found these arguments insufficient to justify the bail order given the nature of the allegations and the amount involved.7. The Supreme Court criticized the High Court's interference with the investigation process, stating that such supervision was unwarranted and could impede the inquiry. The Court emphasized the importance of allowing investigating agencies to conduct inquiries without undue judicial monitoring.8. The Court highlighted the distinction between considerations for pre-arrest bail orders and post-arrest bail applications, citing previous judgments to support this distinction and the need for careful evaluation in such cases.9. The City Sessions Judge and the High Court Division Bench were faulted for not adequately considering serious aspects such as the respondent's past violations and the High Court's previous refusals to grant relief. The Court found the oversight concerning and indicative of a flawed decision-making process.10. Ultimately, the Supreme Court set aside the impugned order by the Division Bench and annulled the pre-arrest bail order passed by the City Sessions Judge, disposing of the appellant's petition in those terms and allowing the appeal.