Anticipatory bail in a grave economic offence was set aside after serious investigative material and no support from default bail.

Anticipatory bail under Section 438 requires a careful judicial assessment of the facts and the seriousness of the alleged offence. Where the investigation disclosed a large-scale foreign exchange fraud and material sufficient to justify further inquiry, the earlier grant of anticipatory bail was an improper exercise of discretion and was set aside. The release of co-accused on default bail under Section 167(2) did not create any entitlement for the respondent, particularly where the respondent had contributed to delay and the agency still required his interrogation. Relief was therefore declined in the serious economic offence case.

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Issues: (i) Whether anticipatory bail under Section 438 of the Code was rightly granted on the facts of a grave economic offence investigation; (ii) Whether the release of co-accused on the expiry of the investigation period under Section 167(2) of the Code could justify grant of anticipatory bail to the respondent.

Issue (i): Whether anticipatory bail under Section 438 of the Code was rightly granted on the facts of a grave economic offence investigation.

Analysis: The relief under Section 438 of the Code depends on a prudent and cautious exercise of judicial discretion. On the material available, the respondent was found to be implicated in a large-scale foreign exchange fraud involving a serious economic offence. The material collected in investigation was sufficient to show a case for the investigating agency to proceed further, and the earlier grant of anticipatory bail was based on an improper appreciation of the facts and the nature of the offence.

Conclusion: The grant of anticipatory bail was unjustified and unsustainable.

Issue (ii): Whether the release of co-accused on the expiry of the investigation period under Section 167(2) of the Code could justify grant of anticipatory bail to the respondent.

Analysis: The co-accused were enlarged on bail because the investigation was not completed within the statutory period under the proviso to Section 167(2) of the Code. That circumstance did not confer any entitlement on the respondent to anticipatory bail, especially when the respondent had himself contributed to the delay in completing the investigation and the agency still required his interrogation.

Conclusion: The release of co-accused on default bail did not support the respondent's request for anticipatory bail.

Final Conclusion: The appellate court set aside the order granting anticipatory bail and declined relief to the respondent, holding that the discretion under Section 438 was wrongly exercised in a serious economic offence case.

Ratio Decidendi: Anticipatory bail must be granted only on a careful and judicious assessment of the facts, and it is unwarranted where the investigation discloses serious material implicating the applicant in a grave economic offence; default bail granted to others under Section 167(2) does not by itself justify anticipatory bail.

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