2024 (7) TMI 1172 - SC - Money Laundering

Power of the High Court or Sessions Court to grant an interim order of stay of operation of an order granting bail till the disposal of the application for cancellation of bail under Sub-Section (2) of Section 439 of the Code of Criminal Procedure, 1973 - Sub-Section (3) of Section 483 of Bharatiya Nagarik Suraksha Sanhita, 2023 - HELD THAT - When a person is arrested, the rights guaranteed by Article 21 of the Constitution of India get substantially curtailed. The law permits arrests of the accused as provided in the CrPC or the BNSS. The effect of the grant of bail under the provisions of Sections 437 and 439 of the CrPC (Sections 480 and 483 of the BNSS) is that the liberty of the undertrial accused is restored pending the trial, subject to the accused complying with the conditions of bail. When the High Court or Sessions Court stays such an order, it amounts to taking away the liberty granted under the order of bail. When an application for cancellation of bail is filed, the High Court or Sessions Court should be very slow in granting drastic interim relief of stay of the order granting bail. The undertrial is not a convict. An interim relief can be granted in the aid of the final relief, which could be finally granted in proceedings. After cancellation of bail, the accused has to be taken into custody. Hence, it cannot be said that if the stay is not granted, the final order of cancellation of bail, if passed, cannot be implemented. If the accused is released on bail before the application for stay is heard, the application/proceedings filed for cancellation of bail do not become infructuous. The interim relief of the stay of the order granting bail is not necessarily in the aid of final relief. An exparte stay of the order granting bail, as a standard rule, should not be granted. The power to grant an exparte interim stay of an order granting bail has to be exercised in very rare and exceptional cases where the situation demands the passing of such an order - Liberty granted to an accused under the order granting bail cannot be lightly and causally interfered with by mechanically granting an exparte order of stay of the bail order. The exparte order staying the order of bail passed without considering merits cannot continue to operate for one year without the appellant getting a hearing on the issue of continuation of the interim order. All Courts have to be sensitive about the most important fundamental right conferred under our Constitution, which is the right to liberty under Article 21. The appellant has made out a case in terms of Section 45(1)(ii) of the PMLA on the power to grant bail - There are no allegation of the misuse of liberty granted under the bail order in the said application. The impugned orders passed by the High Court granting the stay of the order granting bail, is set aside - appeal allowed.

Issues Involved
The issues involved in these appeals concern the power of the High Court or Sessions Court to grant an interim order of stay on the operation of an order granting bail until the disposal of the application for cancellation of bail under Sub-Section (2) of Section 439 of the Code of Criminal Procedure, 1973 (CrPC).

Issue-wise Detailed Analysis

Power to Grant Interim Stay of Order Granting Bail
1. Legal Framework and Context:
The primary issue is whether the High Court or Sessions Court has the authority to grant an interim stay on an order granting bail until the application for cancellation of bail is resolved. This power is derived from Sub-Section (2) of Section 439 of the CrPC and the corresponding provision in the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).

2. Grounds for Cancellation of Bail:
As per the Supreme Court's decision in Gulabrao Baburao Deokar, the High Court or Sessions Court can cancel bail if the order granting bail is unjustified, illegal, or perverse. This includes circumstances where the accused has breached the terms and conditions of bail or otherwise misconducted themselves. The power to cancel bail inherently includes the power to stay the order granting bail if a strong prima facie case is made out.

3. Exceptional Cases for Granting Stay:
The Court emphasized that an interim stay on an order granting bail should be granted only in exceptional cases. Such cases include situations where the bail order is passed without recording any reasons or where there is evidence of the accused tampering with evidence or threatening witnesses. The Court must record brief reasons for granting such a stay, ensuring the decision is not made arbitrarily.

4. Exparte Stay Orders:
The Court advised against granting exparte stay orders as a standard rule. Such orders should only be issued in rare and exceptional cases, and the Court must immediately hear the accused on the continuation of the stay. The liberty granted to an accused under a bail order should not be lightly interfered with.

On Facts of the Case
1. Chronology of Events:
The appellant was arrested on 20th January 2023, and his first bail application was rejected on 10th March 2023. A supplementary complaint was filed on 17th March 2023, naming the appellant as an accused. The Special Court granted regular bail on 17th June 2023. The respondent applied for cancellation of bail, and the High Court granted an interim stay on 23rd June 2023 without hearing the appellant's counsel or recording reasons.

2. Procedural Delays and Recusals:
The application for cancellation of bail was listed multiple times, with several judges recusing themselves, causing significant delays. The interim stay continued for nearly a year without the appellant being heard on the merits of the stay.

3. Violation of Right to Liberty:
The Court noted that the exparte stay order granted without considering the merits and the subsequent delays violated the appellant's right to liberty under Article 21 of the Constitution. The stay order was mechanically extended without proper judicial scrutiny.

4. Detailed Order Granting Bail:
The Special Court's order granting bail was detailed and considered the material on record. The High Court's stay order lacked a strong prima facie case for cancellation of bail, making it unjustified.

Conclusion
The Supreme Court concluded that:
a. The power to grant an interim stay of an order granting bail should be exercised only in exceptional cases with a strong prima facie case.
b. Exparte stay orders should be rare and must be followed by an immediate hearing of the accused.
c. The High Court's orders granting the stay of the bail order were set aside, and the appellant's bail was reinstated pending the hearing of the application for cancellation of bail.

The appeals were allowed, and the findings were specific to the legality of the stay order, leaving the merits of the cancellation application open for the High Court's decision.

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