1. Investigation into corporate fraud — Complaint under Companies Act and IPC — Issuance of non-bailable warrants and proclamation proceedings — Grant of anticipatory bail by High Court. (Para 3 , 4 , 5 )
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2025 Supreme(SC) 622
SUPREME COURT OF INDIA
BELA M. TRIVEDI, PRASANNA B. VARALE, JJ.
Serious Fraud Investigation Office – Appellant
Versus
Aditya Sarda – Respondent
Criminal Appeal No. 1872 of 2025 (@ Special Leave Petition (Criminal) No. 13956 of 2023) With Criminal Appeal No. 1875 of 2025 (@ SLP (CRL.) No. 14033 of 2023) CRIMINAL APPEAL NO. 1876 of 2025 (@ SLP (CRL.) No. 15318 of 2023) CRIMINAL APPEAL NO. 1878 of 2025 (@ SLP (CRL.) NO. 15322 of 2023) Criminal Appeal No. 1879 of 2025 (@ SLP (CRL.) NO. 13960 of 2023) Criminal Appeal No. 1885 of 2025 (@ SLP (CRL.) NO. 15326 of 2023) Criminal Appeal No. 1886 of 2025 (@ SLP (CRL.) NO. 15333 OF 2023) Criminal Appeal No. of 2025 (@ SLP (CRL.) NO. 14128 OF 2023) Criminal Appeal No. of 2025 (@ SLP (CRL.) NO. 13965 of 2023) Criminal Appeal No. of 2025 (@ SLP (CRL.) NO. 13975 of 2023) Criminal Appeal No. of 2025 (@ SLP (CRL.) NO. 13983 OF 2023) Criminal Appeal No. of 2025 (@ SLP (CRL.) NO. 13976 of 2023) Criminal Appeal No. of 2025 (@ SLP (CRL.) NO. 13971 OF 2023) Criminal Appeal No. of 2025 (@ SLP (CRL.) NOS.13973-13974 of 2023) Criminal Appeal No. of 2025 (@ SLP (CRL.) NO. 15311 of 2023) Criminal Appeal No. OF 2025 (@ SLP (CRL.) NO. 13978 of 2023)
Decided On ; 09-04-2025
Advocates appeared:
For the Petitioner: Mr. Padmesh Mishra, Adv. Mr. Hari Kishan, Adv. Mr. Sudarshan Lamba, AOR Mr. Amrish Kumar, AOR
For the Respondent: M/S. Ars Associates, AOR Mr. Abhishek Singh, AOR Mr. Amit Bhalla, Adv. Mr. Aniruddh Joshi, Adv. Mr. Umang Shankar, AOR Mr. Siddharth Dave, Sr. Adv. Mr. Aditya Samaddar, AOR Mr. Sumit Kumar, AOR Mr. Gautam Awasthi, AOR Mr. Arjun Sharma, Adv. Mr. Upendra Pratap Singh, AOR Mr. Rohan Ganpathy, AOR Mr. Jawaid Hussain Khan, Adv. Mr. V. Elanchezhiyan, AOR Mr. Rajat Mittal, AOR Ms. Sadapurna Mukherjee, Adv. Mr. Davesh Bhatia, AOR
For the Petitioner: Mr. Padmesh Mishra, Adv. Mr. Hari Kishan, Adv. Mr. Sudarshan Lamba, AOR Mr. Amrish Kumar, AOR
For the Respondent: M/S. Ars Associates, AOR Mr. Abhishek Singh, AOR Mr. Amit Bhalla, Adv. Mr. Aniruddh Joshi, Adv. Mr. Umang Shankar, AOR Mr. Siddharth Dave, Sr. Adv. Mr. Aditya Samaddar, AOR Mr. Sumit Kumar, AOR Mr. Gautam Awasthi, AOR Mr. Arjun Sharma, Adv. Mr. Upendra Pratap Singh, AOR Mr. Rohan Ganpathy, AOR Mr. Jawaid Hussain Khan, Adv. Mr. V. Elanchezhiyan, AOR Mr. Rajat Mittal, AOR Ms. Sadapurna Mukherjee, Adv. Mr. Davesh Bhatia, AOR
IMPORTANT POINTS
(1) Anticipatory bail – Anticipatory bail should not be granted as a matter of routine, particularly in serious economic offences, involving large scale fraud, public money or complex financial crimes – Privilege of pre-arrest bail should be granted only in exceptional cases – Right of anticipatory bail is not a part of Article 21 of Constitution of India.
(2) Anticipatory bail – Economic offences stand as a different class as they affect economic fabric of society – In economic offences, accused is not entitled to anticipatory bail.
Headnote:
(A) Criminal Procedure Code, 1973 – Section 204 [Bhartiya Nagarik Suraksha Sanhita, 2023 – Section 227] – Issuance of Process – In complaint cases, when a warrant or summons issued by Court for bringing accused before it, is not executed and if Court is satisfied that person will not voluntarily appear in Court or police authorities are unable to find the person to serve him with a summons; or when it is considered that person could harm someone if not placed into custody immediately, concerned Court could issue non-bailable warrant to bring him to Court – Just as liberty is precious for an individual so is interest of society in maintaining law and order – Both are extremely important for survival of a civilised society – In a complaint case, which appears to be a warrant case, Court taking cognizance of offence, has discretion to issue warrant or summons as it thinks fit, for causing accused to be brought or to appear before it – Court is empowered to issue even a non-bailable warrant to bring a person to Court, when it is reasonable for Court to believe that the person will not voluntarily appear in Court or police authorities are unable to find the person to serve him with summons. (Paras 16, 17 and 28)
(B) Criminal Procedure Code, 1973 – Section 438 [Bhartiya Nagarik Suraksha Sanhita, 2023 – Section 482] – Anticipatory bail – Grant of – Anticipatory bail should not be granted as a matter of routine, particularly in serious economic offences, involving large scale fraud, public money or complex financial crimes – Privilege of pre-arrest bail should be granted only in exceptional cases – Right of anticipatory bail is not a part of Article 21 of Constitution of India – When warrant of arrest is issued or proclamation proceedings are initiated, accused would not be entitled to invoke, except in exceptional cases, extraordinary power of court to grant anticipatory bail – Economic offences stand as a different class as they affect economic fabric of society – In economic offences, accused is not entitled to anticipatory bail. (Para 18)
(C) Criminal Procedure Code, 1973 – Section 438 [Bhartiya Nagarik Suraksha Sanhita, 2023 – Section 482] – Anticipatory bail in economic offences – Economic offences constitute a class apart as they have deep rooted conspiracies involving huge loss of public funds and such offences need to be viewed seriously – Law aids only abiding and certainly not its resistants – When after investigation, charge-sheet is submitted in court, or in a complaint case, summons or warrant is issued to accused, he is bound to submit himself to authority of law – If he is creating hindrances in execution of warrants or is concealing himself and does not submit to authority of law, he must not be granted privilege of anticipatory bail, particularly when Court taking cognizance has found him prima facie involved in serious economic offences or heinous offences – In such cases when court has reason to believe that person against whom warrant has been issued has absconded or is concealing himself so that warrant could not be executed, concerned court would be perfectly justified in initiating proclamation proceedings against him under Section 82 Cr.P.C. – High Courts should also consider factum of issuance of non-bailable warrants and initiation of proclamation proceedings seriously and not casually, while considering anticipatory bail application of such accused. (Paras 23)
(D) Criminal Procedure Code, 1973 – Sections 438 and 82[Bhartiya Nagarik Suraksha Sanhita, 2023 – Sections 482 and 84] – Companies Act, 2013 – Section 447 – Anticipatory bail in economic offences – When warrant of arrest is issued or proclamation proceedings are initiated, accused would not be entitled to invoke, except in exceptional cases, extraordinary power of court to grant anticipatory bail – Granting anticipatory bail is certainly not the rule – Respondents- accused, who have continuously avoided to follow due process of law, by avoiding attendance in Court, by concealing themselves and thereby attempting to derail proceedings, would not be entitled to anticipatory bail – If Rule of Law is to prevail in society, every person would have to abide by law, respect law and follow due process of law – Special Court considering seriousness of alleged offences had initially issued bailable warrants, however, Respondents kept on avoiding execution of such warrants and did not appear before Special Court though fully aware about pendency of complaint proceedings against them – Impugned orders passed by High Court granting anticipatory bail to accused – respondents set aside – Respondents directed to surrender before Special Court. (Paras 27, 29 and 30)
Facts of the case:
In these cases, there is a brazen attempt made on part of respondents-accused to stall criminal proceedings initiated against them, in respect of serious economic offences allegedly committed by them, by not respecting the summons/warrants issued by Special Court from time to time and thereby causing obstruction in the administration of justice.
Findings of Court:
Respondents- accused are directed to surrender themselves before Special Court in one week from today. Their bail applications as and when filed by them shall be decided by Special Court in accordance with law.
Result : Appeals partly allowed.
Legal Category Hierarchy
- crime and sentencing
- practice and procedure
Table of Contents
2. Whether anticipatory bail is permissible despite absconding and non-execution of warrants — Whether the High Court ignored mandatory restrictive bail conditions under Section 212(6), Companies Act. (Para 9 , 28 )
3. Economic offences affect societal fabric — Anticipatory bail is an extraordinary remedy — Absconding persons defying legal process are ineligible for pre-arrest bail — Mandatory twin conditions for bail. (Para 9 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 26 , 27 )
4. Persons absconding in serious economic offences are ineligible for anticipatory bail, particularly where mandatory restrictive conditions under Section 212(6) of the Companies Act are not satisfied. (Para 23 , 24 , 26 , 27 )
5. Impugned High Court orders granting anticipatory bail set aside — Respondents directed to surrender before the Special Court. (Para 30 , 31 )
6. Is anticipatory bail granted as a matter of course in serious economic offences?
No. Economic offences are a class apart affecting the economic fabric of society. Anticipatory bail is an extraordinary remedy to be exercised sparingly and only in exceptional circumstances, not as a matter of routine. (Para 18 , 19 , 20 , 23 )
7. Can a person who has absconded or avoided the execution of warrants be granted anticipatory bail?
Generally, no. The law aids only those who abide by it. Persons continuously defying court orders, concealing themselves, and avoiding the due process of law are not entitled to the extraordinary power of anticipatory bail. (Para 21 , 22 , 23 , 27 )
8. What are the mandatory conditions for granting bail for offences under Section 447 of the Companies Act?
Under Section 212(6), bail is permitted only if the Public Prosecutor is given an opportunity to oppose the application and the court is satisfied there are reasonable grounds to believe the accused is not guilty and unlikely to commit further offences. (Para 11 , 24 )
9. Must a court always issue a summons before a warrant in a complaint case?
No. Under Section 204 CrPC, the court has discretion to issue either a warrant or summons. Non-bailable warrants may be issued if the court believes the person will not voluntarily appear or cannot be found. (Para 16 , 17 , 28 )
JUDGMENT :
BELA M. TRIVEDI, J.
1. Leave granted.
2. This batch of sixteen Appeals being interconnected with each other and arising out of the proceedings being CIS No. COMA/5/2019 pending before the Special Judge, Gurugram, are being decided by this common judgment.
3. In these cases, there is a brazen attempt made on the part of the respondents-accused to stall the criminal proceedings initiated against them, in respect of the serious economic offences allegedly committed by them, by not respecting the summons/warrants issued by the Special Court from time to time and thereby causing obstruction in the administration of justice. A few basic common facts necessary for deciding the present appeals may be stated as under:-
(i) The Appellant i.e. Serious Fraud Investigation Office (SFIO) is a statutory body constituted and established under Section 211 of the Companies Act of 2013. The Ministry of Corporate Affairs (MCA) vide the order dated 20.06.2018 in exercise of its powers conferred under Section 212 (1)(c) of the Companies Act, 2013 and Section 43(2) and (3)(c)(i) of Limited Liability Partnership Act, 2008 directed the SFIO to inquire and investigate into the affairs of 125 Companies of Adarsh Group (hereinafter referred to as “CIUs”). On 25.02.2019, the MCA further ordered to investigate into the affairs of 20 other companies and two persons.
(ii) On 09.05.2019, the SFIO, on completion of the investigation submitted an Investigation report to the MCA recommending prosecution against the respondents for the various offences under the Companies Act (1956 and 2013) and of the IPC. Accordingly, on 18.05.2019, a Criminal Complaint being COMA/5/2019, came to be filed by the SFIO in the Special Court at Gurugram impleading 181 Accused including the respondents in the instant Appeals, under Section 439(2) read with Section 436(1)(a), (d) and (2) read with Section 212 of the Companies Act, 2013, read with Section 621(1) of the Companies Act, 1956, read with Section 50 of the Limited Liability Partnership Act, 2008, read with Section 193 of the Code of Criminal Procedure, seeking taking of cognizance and prosecution of the Accused named therein for the offences committed by them jointly and severally, under the various provisions of the Companies Act and the Indian Penal Code as mentioned therein.
(iii) It has been alleged in the complaint that one Adarsh Credit Cooperative Society Limited (ACCSL) was a Multi-State Credit Cooperative Society, founded by one Mukesh Modi, and was managed and controlled by him and his family and his associates.
(iv) The said society accepted the deposits from its members, who were mostly low to middle income individuals. The ACCSL had 800+ branches, 20 lakhs members, 3.7 lakhs advisors and Rs.9253 crores of outstanding deposits as on 31.05.2018. It is further alleged that the controllers of the Society i.e. Mukesh Modi, Rahul Modi and others got incorporated around 125 companies (Adarsh Group of Companies), and started controlling the said Companies by either becoming themselves as the directors or making their members and associates as the directors of the said Companies. On the completion of the investigation it was found that the funds to the tune of Rs.1700 crores were given by the ACCSL as illegal loans to its own controlled 70 Adarsh Group of Companies (CUIs) and certain other companies belonging to the other groups of persons, contrary to settled the position that a company could not be a member of a multi- state credit cooperative society and therefore loans could not have been given to such companies by the ACCSL. It is further alleged that total amount of Rs.4120 crores were the outstanding balance as on 31.03.2018 against such illegal loans given by the ACCSL.
(v) It is also further alleged by the SFIO that the illegal loans obtained from ACCSL by the Companies belonging to Adarsh Group and Ridhi Sidhi Group were on the basis of forged financial/loan documents submitted/signed by the directors of t
