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        Money Laundering

        2024 (7) TMI 1172 - SC - Money Laundering

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        Interim stay of bail pending cancellation is permissible only in rare, exceptional cases on strong prima facie grounds. The power to cancel bail under Section 439(2) CrPC and the corresponding BNSS provision includes an incidental power to stay the operation of a bail ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Interim stay of bail pending cancellation is permissible only in rare, exceptional cases on strong prima facie grounds.

                          The power to cancel bail under Section 439(2) CrPC and the corresponding BNSS provision includes an incidental power to stay the operation of a bail order, but because bail restores liberty under Article 21, such interim restraint is a drastic measure. It may be granted only in rare and exceptional cases on a very strong prima facie showing for cancellation, with brief reasons recorded; ex parte stay should not be the normal course. On the facts, the stay was passed without hearing the accused or recording reasons and was continued despite repeated listings, while the cancellation application disclosed no misuse of liberty. The ex parte stay was therefore unjustified and set aside, leaving the cancellation merits open.




                          Issues: (i) Whether the High Court or Sessions Court can grant an interim stay of an order granting bail pending disposal of an application for cancellation of bail, and if so, in what circumstances; (ii) Whether an ex parte stay of the bail order was justified on the facts.

                          Issue (i): Whether the High Court or Sessions Court can grant an interim stay of an order granting bail pending disposal of an application for cancellation of bail, and if so, in what circumstances.

                          Analysis: The power to cancel bail under Section 439(2) of the Code of Criminal Procedure, 1973 and the corresponding provision in Section 483(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 includes the incidental power to stay the operation of a bail order. Since grant of bail restores the accused's liberty under Article 21 of the Constitution of India, an interim stay of that liberty is a drastic measure. Such stay can be granted only in exceptional cases on a very strong prima facie showing of grounds for cancellation, and brief reasons must be recorded. As a normal rule, an ex parte stay should not be granted.

                          Conclusion: The power exists, but it is to be exercised only in rare and exceptional cases on strong prima facie grounds, with reasons.

                          Issue (ii): Whether an ex parte stay of the bail order was justified on the facts.

                          Analysis: The stay order was passed without hearing the accused, without recording reasons, and then continued for an extended period despite repeated listings and adjournments. The bail order itself was a detailed order considering the material and the respondent's cancellation application contained no allegation of misuse of liberty. The facts did not disclose a rare or exceptional case warranting ex parte stay of bail.

                          Conclusion: The ex parte stay was unjustified and liable to be set aside.

                          Final Conclusion: The stay orders on the grant of bail were invalid, the original bail order was restored to operate pending cancellation proceedings, and the merits of cancellation were left open for decision by the High Court.

                          Ratio Decidendi: An interim stay of a bail order pending cancellation proceedings may be granted only in rare and exceptional cases on a strong prima facie showing of cancellation grounds, and an ex parte stay should not be made as a normal rule.


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