Higher Court Reverses Bail Decision for Economic Offense, Orders Surrender and Fresh Application

The higher court found the trial court's order granting bail to be perverse and arbitrary due to overlooking the seriousness of the economic offense and not adequately considering the evidence. The order was set aside, directing the accused to surrender within two weeks for a fresh bail application to be considered on its merits. The application for cancellation of bail was partly allowed, emphasizing the need for a proper assessment of economic offenses involving significant sums and conspiracies.

---

---

Issues Involved:
1. Maintainability of the application for cancellation of bail.
2. Grounds for cancellation of bail.
3. Legality and correctness of the trial court’s order granting bail.

Issue-wise Detailed Analysis:

1. Maintainability of the Application for Cancellation of Bail:
The respondent's counsel contended that the application for cancellation of bail was not maintainable, arguing that an appeal should have been filed instead. However, the applicant's counsel submitted that the application was filed under Section 439(2) of the Cr.P.C., which allows an aggrieved party to approach a higher court to set aside an order for cancellation of bail. The court concluded that the application was maintainable on the grounds presented.

2. Grounds for Cancellation of Bail:
The applicant argued that the trial court did not provide reasons while granting bail, making the order perverse and arbitrary. It was also submitted that the respondent misused his liberty by not cooperating with the investigation. The respondent's counsel countered that the bail was granted after a correct appreciation of the law and that the respondent had been cooperating with the investigation, including depositing Rs. 25 Lakhs as part payment of the GST amount. The court noted that one of the grounds for cancellation of bail is when a perverse order is passed in a serious crime without giving any reason, which is against the principles of law.

3. Legality and Correctness of the Trial Court’s Order Granting Bail:
The court examined whether the bail granted to the accused was liable to be canceled. The trial court's order was based on the accused's undertaking to compound the offense under Section 138 of the GST Act. However, the court noted that the trial court overlooked the seriousness of the offense and the provisions of Section 138(2) of the CGST Act. The court emphasized that economic offenses, especially those involving large sums of money and deep-rooted conspiracies, should be viewed seriously. The trial court failed to discuss the merits and demerits of the prima facie evidence available on record and granted bail merely based on the accused's undertaking, which was deemed a grave error.

Final Judgment:
The court found that the trial court's order was perverse and arbitrary, requiring correction. The impugned order dated 25/09/2020 was set aside, and the accused was directed to surrender before the trial court within two weeks. The trial court was instructed to hear the fresh bail application and decide on its merits without being influenced by the current observations. The application for cancellation of bail was partly allowed.

---