2025 (6) TMI 1792 - SCH - GST

Supreme Court cancels bail orders tainted by Rs 2.5 crore deposit offer that bypassed merit consideration

Kundan Singh Versus The Superintendent Of CGST And Central Excise

Kundan Singh Versus The Superintendent Of CGST And Central Excise - TMI 1. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered by the Court in this judgment are:- Whether voluntary monetary deposits offered by counsel during bail applications can preclude the Court from considering the merits of the bail application.- Whether conditions involving substantial monetary deposits imposed as part of bail orders amount to onerous or excessive conditions, thereby rendering the bail orders illegal or invalid.- The propriety and legality of modifying bail conditions post-grant of bail, especially concerning the timing and amount of monetary deposits.- The consequences of a party reneging on voluntary monetary offers made through counsel during bail proceedings, including the authority of counsel to bind the party in such matters.- The appropriate judicial response when bail is granted based on such monetary undertakings but later challenged as onerous or unauthorized.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Effect of Voluntary Monetary Deposits on Bail Application MeritsRelevant Legal Framework and Precedents: It is a well-established principle that bail is a right subject to judicial discretion and that the Court must consider the merits of the case before granting bail. The practice of offering monetary deposits as a condition for bail is recognized but must not be used as a subterfuge to bypass substantive judicial scrutiny.Court's Interpretation and Reasoning: The Court noted a troubling trend where parties, through their counsel, offer substantial monetary deposits upfront to secure bail, effectively foreclosing the Court's consideration of the merits. This practice is viewed as improper because it circumvents the judicial process and places undue emphasis on monetary conditions rather than legal merits.Key Evidence and Findings: In the present case, the petitioner's counsel voluntarily submitted a willingness to deposit Rs. 2.50 crores, which influenced the High Court to grant bail without further discussion on merits.Application of Law to Facts: The Court emphasized that such voluntary offers should not be allowed to preclude judicial examination of bail applications. The Court expressed strong disapproval of this practice, stating that it undermines the sanctity of the judicial process.Treatment of Competing Arguments: The petitioner argued that the counsel lacked authority to make such monetary offers, but the Court rejected this contention, noting that no such objection was raised in the modification application, which only sought deferment of part of the deposit.Conclusions: The Court concluded that voluntary monetary offers by counsel should not be used as a tool to bypass judicial scrutiny and that courts must consider bail applications on their merits irrespective of such offers.Issue 2: Legality and Onerous Nature of Monetary Conditions Imposed in Bail OrdersRelevant Legal Framework and Precedents: The principle that 'excessive bail is no bail' is well recognized. Conditions imposed for bail must not be onerous or excessive, and what constitutes onerousness depends on the facts and circumstances of each case.Court's Interpretation and Reasoning: The Court acknowledged that while monetary conditions may be imposed, they must be reasonable and not tantamount to denial of bail. In this case, the High Court imposed a condition requiring an immediate deposit of Rs. 50 lakhs before release and the balance within 10 days, which was later sought to be modified.Key Evidence and Findings: The petitioner's modification petition cited personal hardships (pregnancy of wife, ill-health of father) as reasons for inability to comply with the initial deposit timeline.Application of Law to Facts: The High Court modified the condition to allow the entire deposit, including the initial Rs. 50 lakhs, to be made within 10 days post-release. The Supreme Court found this condition to be onerous and the modification insufficiently justified.Treatment of Competing Arguments: The petitioner argued the conditions were onerous and illegal; the prosecution opposed bail entirely. The Court balanced these views but emphasized that imposing onerous monetary conditions undermines the right to bail.Conclusions: The Court held that the monetary conditions imposed were excessive and that such onerous conditions should not be imposed to secure bail.Issue 3: Authority of Counsel to Bind Parties by Monetary Offers and Consequences of RenegingRelevant Legal Framework and Precedents: Generally, counsel have authority to make submissions and offers on behalf of their clients, including monetary undertakings in bail matters, unless expressly disclaimed.Court's Interpretation and Reasoning: The Court found it unacceptable for parties to approbate and reprobate-i.e., to seek bail by offering monetary deposits through counsel and later claim lack of authority or that conditions are onerous to avoid compliance.Key Evidence and Findings: The petitioner's counsel initially offered the deposit voluntarily; subsequently, the petitioner sought modification without denying the offer but requesting deferment of the initial deposit.Application of Law to Facts: The Court emphasized the sanctity of judicial process and the need to prevent parties from playing 'ducks and drakes' with the Court by reneging on counsel's undertakings.Treatment of Competing Arguments: The petitioner's argument of lack of authority was rejected as inconsistent with the pleadings and conduct in the modification petition.Conclusions: The Court deprecated the practice of reneging on counsel's monetary offers and held that such conduct cannot be condoned.Issue 4: Appropriate Judicial Remedy and Interim ReliefRelevant Legal Framework and Precedents: When bail orders are found to be based on improper conditions or practices, courts may set aside such orders and remit the matter for fresh consideration. Interim protection may be granted to prevent miscarriage of justice.Court's Interpretation and Reasoning: The Court set aside both the original bail order and the modification order, remitting the matter to the High Court for fresh consideration uninfluenced by prior observations.Key Evidence and Findings: Despite the setting aside, the petitioner had already secured release based on the High Court's order.Application of Law to Facts: Ordinarily, the petitioner would be required to surrender and face custody again. However, considering the personal circumstances cited, the Court granted limited interim protection from surrender on the same bond until the High Court hears the matter afresh.Treatment of Competing Arguments: The Court balanced the petitioner's rights under Article 21 with the need to uphold judicial sanctity and process.Conclusions: The Court restored the matter to the High Court with directions for expeditious and merit-based disposal and granted interim protection to the petitioner from surrender pending fresh consideration.3. SIGNIFICANT HOLDINGS- 'Excessive bail is no bail and onerous conditions ought not to be imposed while bail is granted.'- 'When parties move applications for anticipatory bail or for regular bail, voluntary offer is made by their counsel that the parties would deposit substantial amounts to show the bona fide and secure their liberty. The Courts' hearing the bail applications are thereby foreclosed from considering the merits of the matter.'- 'We strongly deprecate this practice. If the offer for monetary deposit had not been made, at the outset, the High Court may have considered the case on merits and may have granted or may not have granted relief to the petitioner.'- 'We are conscious of his rights under Article 21 of the Constitution of India, but we have to be equally conscious of the sanctity of the judicial process and cannot allow parties to play ducks and drakes with the Court.'- 'The only conclusion possible is that both, the original bail order... and the order of modification... will have to be set aside and the matter be remitted to the High Court for fresh consideration on merits uninfluenced by any of the observations of this Court.'- The Court established the core principle that monetary conditions for bail must not be used as a tool to circumvent judicial scrutiny and must be reasonable, not onerous.- The final determination was to set aside the bail and modification orders and remit the matter for fresh consideration, granting interim protection to the petitioner pending such consideration.