Cancellation of bail for serious economic offence upheld where discretion ignored prima facie material and fake invoicing allegations.

An application under section 439(2) CrPC for cancellation of bail was held maintainable. The bail order was found vulnerable because it had been granted mainly on the accused's willingness to compound the offence and make payment, without adequate consideration of the seriousness of the alleged economic offence, fake invoicing allegations, and prima facie material on record. The court treated this as a perverse exercise of discretion and reiterated that cancellation may follow where bail is granted in disregard of material circumstances in a serious crime, particularly where cogent and overwhelming reasons are required.

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Issues: Whether the application for cancellation of bail was maintainable and whether the order granting bail called for interference.

Analysis: The application under section 439(2) of the Code of Criminal Procedure, 1973 was held maintainable. On merits, the bail order was found to have been granted principally on the accused's stated readiness to compound the offence and make payment, without adequate reasons addressing the seriousness of the alleged economic offence, the large-scale fake invoicing, and the prima facie material on record. The Court treated such an approach as a perverse exercise of discretion warranting correction. The Court also noted that cancellation of bail may be ordered where a bail order is passed ignoring material on record in a serious crime, and that cogent and overwhelming circumstances are required when bail is already granted.

Conclusion: The impugned bail order was set aside and the matter was directed to be reconsidered afresh by the trial court. The application was therefore allowed only to that extent, in favour of the Revenue.

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