2022 (2) TMI 1158 - HC - GST

High Court reduces oppressive Rs. 40 lakh bail conditions to personal bond plus sureties for default bail case

The HC modified default bail conditions for a petitioner who successfully argued that prosecution failed to file challan within the statutory period. The ... Default bail under the proviso to sub-section (2) of Section 167 Cr.P.C. - conditions of bail being oppressive, harsh or exploitative - modification of bail conditions by a higher court - financial incapacity as a relevant factor in assessing bail conditions - effect of failure to furnish bail on the indefeasible right to default bailConditions of bail being oppressive, harsh or exploitative - modification of bail conditions by a higher court - default bail under the proviso to sub-section (2) of Section 167 Cr.P.C. - Whether the modified conditions of default bail imposed by the Additional Sessions Judge were oppressive and required judicial modification. - HELD THAT: - The Court found that where conditions imposed as a pre-condition to default bail are so onerous as to negate the practical benefit of the bail, they may be liable to modification. The Apex Court decision relied upon by the respondent was held inapplicable to the present factual matrix because that decision did not consider a challenge to allegedly exploitative bail conditions of the kind present here. The petitioner's counsel, on instructions, represented that the petitioner lacked means to comply with the modified conditions imposed by the Additional Sessions Judge (personal bonds and substantial bank guarantees/FDR). Accepting that representation as a prima facie showing of inability to comply, the High Court concluded the impugned modified conditions would effectively deprive the petitioner of the benefit of default bail and therefore were oppressive. The Court accordingly substituted reasonable conditions (personal bonds and three sureties, two local, of Rs.10 lakhs each) and quashed the requirement to furnish the larger bank guarantee/FDR imposed earlier. [Paras 5, 6, 7, 8]Modified the impugned bail conditions as being oppressive; directed that the petitioner be admitted on personal bonds and three sureties (two local) of Rs.10 lakhs each and set aside the requirement to furnish the larger bank guarantee/FDR.Financial incapacity as a relevant factor in assessing bail conditions - effect of failure to furnish bail on the indefeasible right to default bail - Whether the petitioner's demonstrable lack of financial resources is a relevant consideration and whether the petitioner made sufficient disclosure to justify modification. - HELD THAT: - The Court emphasised that prima facie lack of financial empowerment is a relevant factor in determining whether bail conditions are exploitative and whether they negate the effect of default bail. Although the petitioner was expected to disclose tangible evidence of impecuniosity, the petitioner's counsel made a candid, on instruction statement at the bar that the petitioner could not meet the onerous conditions but was prepared to furnish the reduced security proposed. The Court accepted this representation as sufficient for the limited purpose of modifying the conditions and held that the substituted, reasonable conditions would make the default bail efficacious without unjustly curtailing personal liberty. [Paras 6, 7, 8]Held that financial incapacity is a relevant consideration; accepted petitioner's on record representation of inability to comply and modified conditions accordingly.Final Conclusion: The High Court, finding the modified conditions imposed by the Additional Sessions Judge to be oppressive and to nullify the benefit of default bail, accepted the petitioner's representation of financial inability and substituted reasonable bail conditions (personal bonds and three sureties, two local, of Rs.10 lakhs each), quashing the requirement for the larger bank guarantee/FDR; petition disposed of. Issues Involved:1. Default bail under Section 167(2) Cr.P.C.2. Imposition of bail conditions by the Chief Judicial Magistrate and Additional Sessions Judge.3. Petitioner's challenge to the bail conditions as harsh, oppressive, and exploitative.4. Arguments regarding the financial incapacity of the petitioner to meet bail conditions.5. Legal precedents and principles concerning default bail and personal liberty.Detailed Analysis:1. Default Bail under Section 167(2) Cr.P.C.:The petitioner was accused of offenses under Clause (b), (c), and (l) of Sub Section 1 of Section 132 of the CGST Act, 2017, punishable under Section 132(1)(i). The Inspector of CGST Commissionerate, Ludhiana, failed to file a report/challan within the statutory period, leading the petitioner to seek default bail under Section 167(2) Cr.P.C. The Chief Judicial Magistrate, Ludhiana, granted default bail but imposed stringent conditions.2. Imposition of Bail Conditions by the Chief Judicial Magistrate and Additional Sessions Judge:The Chief Judicial Magistrate imposed conditions that the petitioner found harsh. The petitioner challenged these conditions before the Additional Sessions Judge, Ludhiana, who modified them, requiring the petitioner to furnish personal bail bonds of Rs. 40 lakhs each with two sureties in the same amount and a bank guarantee/FDR of Rs. 20 lakhs.3. Petitioner's Challenge to Bail Conditions:The petitioner, still aggrieved, filed the instant petition seeking further modification of the bail conditions, arguing they were harsh, oppressive, and exploitative, thus negating the benefit of default bail.4. Arguments Regarding Financial Incapacity:The petitioner's counsel argued that the modified conditions were beyond the petitioner's financial capacity, rendering the default bail ineffective. The counsel for the respondent contended that the conditions were neither oppressive nor harsh, citing the Supreme Court's judgment in 'Uday Mohanlal Acharya vs. State of Maharashtra.'5. Legal Precedents and Principles:The court examined the Supreme Court's judgment, emphasizing personal liberty under Article 21 of the Constitution and the statutory right to default bail under Section 167(2) Cr.P.C. The judgment highlighted that any further detention beyond the statutory period without filing a challan would violate Article 21. The court noted that the Supreme Court did not address the issue of harsh bail conditions in the cited case.Conclusion:The court found that the petitioner had not provided tangible evidence of financial incapacity but accepted the counsel's statement regarding the petitioner's inability to meet the bail conditions. The court concluded that the conditions were harsh, oppressive, and exploitative, thus negating the benefit of default bail. The court deemed it fit to modify the conditions, requiring the petitioner to furnish personal and three surety bonds of Rs. 10 lakhs each, with two sureties being local. The condition of furnishing an FDR/bank guarantee of Rs. 40 lakhs was quashed.Disposition:The petition was disposed of with the modified conditions, and any pending miscellaneous applications were also disposed of.