2023 (4) TMI 1302 - SC - Indian Laws

SC cancels anticipatory bail for accused in illegal gratification case citing prima facie evidence

SC set aside HC's grant of anticipatory bail to an accused in illegal gratification case. HC had observed doubt regarding acceptance of illegal ... Grant of anticipatory bail - demand of illegal gratification - High Court observed that there is a doubt regarding the acceptance of illegal gratification, as it was deposited in the account of Vardhman in Dhara Angadia firm and there is no evidence with respect to acceptance of the amount by Respondent No. 1. HELD THAT:- The time-tested principles are that no straitjacket formula can be applied for grant or refusal of anticipatory bail. The judicial discretion of the Court shall be guided by various relevant factors and largely it will depend upon the facts and circumstances of each case. The Court must draw a delicate balance between liberty of an individual as guaranteed Under Article 21 of the Constitution and the need for a fair and free investigation, which must be taken to its logical conclusion. Arrest has devastating and irreversible social stigma, humiliation, insult, mental pain and other fearful consequences. Regardless thereto, when the Court, on consideration of material information gathered by the Investigating Agency, is prima facie satisfied that there is something more than a mere needle of suspicion against the Accused, it cannot jeopardise the investigation, more so when the allegations are grave in nature. The CBI has produced the case diary which contains the statement made by Smit Thakkar, who handles Dhara Angadia firm. He has clearly stated that Malav Mehta was the owner of Vardhman account and had informed him that 30 lakhs rupees would be deposited in his account on 4th October, 2022, which in turn had to be sent to someone else. The purported recording of conversation between the complainant and Respondent No. 1 wherein Respondent No. 1 thanked the complainant, after the deposit of amount in the Vardhman account, is a reasonable link to connect Respondent No. 1 with the deposit of illegal gratification in Dhara Angadia firm, thereby prima facie showing acceptance thereof. From the material placed on record, it seems that prima facie, the allegations against Respondent No. 1 cannot be brushed aside lightly at this stage. There appears to be a well-organised syndicate comprising officers and officials of the Income Tax Department, businessmen and Hawala traders, who are in tandem. Such a nexus needs to be unearthed through an unimpaired and unobstructed investigation - It is true that cancellation of bail must be done only for cogent and overwhelming reasons. Nevertheless, setting aside an unjustified order granting bail is distinct from cancellation of bail. This Court would not, invariably intervene into the judicial discretion exercised by the High Court while granting bail to an Accused. All that to be ensured is that the High Court exercises its discretion judiciously, cautiously and strictly in conformity with the basic principles laid down by this Court from time to time in a series of decisions. Thus, howsoever hard or harsh it may be, the High Court ought to have refrained itself from extending protection against arrest to Respondent No. 1 in exercise of its discretionary jurisdiction Under Section 438 of the Code of Criminal Procedure. Assuming Respondent No. 1 had some valid apprehensions that the actions of ACB (State Police) were actuated with extraneous reasons, he can no longer say so once the investigation has been transferred to CBI - there are no allegation of personal vendetta, victimisation, bias or ulterior motive against the Central Agency. In any case, CBI is expected to carry out a free, fair and dispassionate investigation with faithful observance to the rights of an Accused, who is subjected to custodial interrogation. The impugned judgment and order of the High Court dated 19th December, 2022 is set aside and the anticipatory bail application of Respondent No. 1 is dismissed. As a consequence thereto, the order dated 30th December, 2022 passed by the Special Judge, CBI Court No. 3 partly allowing CBI's application for remand is also set aside - appeal disposed off. Issues Involved:1. Grant of anticipatory bail.2. Allegations of corruption and illegal gratification.3. Necessity of custodial interrogation.4. Compliance with Section 17A of the Prevention of Corruption Act, 1988.5. Judicial discretion in granting bail.Summary:1. Grant of Anticipatory Bail:The Supreme Court set aside the High Court's order granting anticipatory bail to Respondent No. 1, an IRS officer accused of demanding and accepting a bribe. The High Court had granted bail on the basis that there was doubt regarding the acceptance of illegal gratification and no direct evidence linking Respondent No. 1 to the bribe amount. The Supreme Court found this reasoning flawed, noting that prima facie evidence, including recorded conversations and statements, indicated a link between Respondent No. 1 and the illegal gratification.2. Allegations of Corruption and Illegal Gratification:The case involved allegations that Respondent No. 1 demanded a bribe of Rs. 30 lakhs from the complainant, a businessman, to settle a tax-related matter. The complainant recorded the demand and subsequent acknowledgment of the bribe payment by Respondent No. 1. The bribe was deposited in an account linked to an Angadia firm, and Respondent No. 1 allegedly acknowledged the payment in a recorded WhatsApp call.3. Necessity of Custodial Interrogation:The Supreme Court emphasized the need for custodial interrogation to uncover the larger conspiracy involving other Income Tax officials and businessmen. The Court noted that Respondent No. 1 evaded arrest, destroyed evidence, and did not cooperate with the investigation, which warranted custodial interrogation to ensure a thorough investigation.4. Compliance with Section 17A of the Prevention of Corruption Act, 1988:Respondent No. 1 argued that the investigation was vitiated due to non-compliance with Section 17A, which requires prior approval for investigating public servants. The Supreme Court rejected this argument, stating that the proviso to Section 17A exempts cases involving acceptance of undue advantage from requiring prior approval. The Court clarified that the investigation did not revolve around any recommendations or decisions made by Respondent No. 1 in his official capacity.5. Judicial Discretion in Granting Bail:The Supreme Court reiterated the principles governing the grant of anticipatory bail, emphasizing the need to balance individual liberty with the necessity of a fair and free investigation. The Court found that the High Court failed to exercise its discretion judiciously and did not consider the gravity of the allegations and the need for custodial interrogation. The Supreme Court set aside the High Court's order, noting that the allegations against Respondent No. 1 were serious and warranted a thorough investigation without the protection of anticipatory bail.Conclusion:The Supreme Court allowed the appeals, set aside the High Court's order granting anticipatory bail, and dismissed Respondent No. 1's anticipatory bail application. The Court emphasized that its observations were prima facie and would not influence the consideration of any future regular bail application by Respondent No. 1.