Default bail and economic offence bail under company law remain restricted once complaint is filed and statutory conditions are unmet.

Once a complaint is filed within the prescribed period, the right to default bail under Section 167(2) CrPC is treated as extinguished, and any defect in a later remand endorsement does not revive that statutory right. The note further states that post-filing custody is custody under the court, so a grievance about an allegedly non-speaking remand order must be pursued through other remedies rather than default bail. On merits, the article explains that allegations of large-scale diversion and misappropriation in a Companies Act prosecution attract the stricter approach applied to economic offences, and bail remains controlled by the twin conditions in Section 212(6), including the need for reasonable grounds to deny release.

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Issues: (i) Whether the applicants were entitled to default bail on the ground that, after filing of the complaint, the remand order was only an endorsement on the production warrant and judicial custody beyond 15 days was illegal for want of a speaking order. (ii) Whether the applicants were entitled to bail on merits in view of the allegations under the Companies Act, 2013 and the restrictive bail conditions under Section 212(6) of the Companies Act, 2013.

Issue (i): Whether the applicants were entitled to default bail on the ground that, after filing of the complaint, the remand order was only an endorsement on the production warrant and judicial custody beyond 15 days was illegal for want of a speaking order.

Analysis: The complaint had been filed within the statutory period, so the right to default bail under Section 167(2) of the Code of Criminal Procedure, 1973 stood extinguished. The post-complaint custody was treated as custody under the court, and the Court held that any defect or irregularity in the remand endorsement after filing of the complaint did not revive the right to default bail. The Court distinguished the authorities relied upon by the applicants and held that the 15-day limit and requirement of a reasoned remand order were applicable in the investigation stage, not as a basis for default bail after filing of the complaint. Any grievance regarding illegal custody would have to be pursued by other legal remedies.

Conclusion: The applicants were not entitled to default bail on the basis of the alleged illegality in remand after filing of the complaint.

Issue (ii): Whether the applicants were entitled to bail on merits in view of the allegations under the Companies Act, 2013 and the restrictive bail conditions under Section 212(6) of the Companies Act, 2013.

Analysis: The allegations disclosed a serious economic offence involving large-scale diversion and misappropriation of funds. The Court applied the settled principle that economic offences are a distinct class and that bail must be assessed with reference to the nature of accusations, the evidence, the severity of punishment, the likelihood of tampering with evidence, and the possibility of influencing witnesses. The Court also noted that the twin conditions under Section 212(6) of the Companies Act, 2013 were not satisfied, as there were reasonable grounds to believe that the applicants were not entitled to bail on the facts shown by the prosecution material.

Conclusion: The applicants were not entitled to bail on merits.

Final Conclusion: The bail applications failed both on the plea of default bail and on merits, and the applicants were not released.

Ratio Decidendi: Once a complaint or charge sheet is filed within the prescribed time, the right to default bail under Section 167(2) of the Code of Criminal Procedure, 1973 ceases, and any post-filing defect in remand does not by itself furnish a statutory basis for bail; in economic offences, bail remains subject to the governing statutory restrictions and the ordinary merits-based considerations.

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