The Supreme Court has strongly criticized the growing practice of parties offering to deposit large sums of money as a condition for bail and later seeking modification of those undertakings. In Kundan Singh vs. Superintendent of CGST and Central Excise (SLP (Crl.) No. 9111 of 2025), the Court set aside the bail and modification orders passed by the Madras High Court and remanded the matter for fresh consideration, declaring that such conduct compromises the integrity of judicial proceedings.
The bench comprising Justice K.V. Viswanathan and Justice Nongmeikapam Kotiswar Singh was hearing a special leave petition challenging a Madras High Court order dated 14.05.2025 that had modified an earlier bail condition based on a voluntary monetary offer by the petitioner.
Background of the Case
The petitioner, Kundan Singh, was arrested on 27.03.2025 for alleged offences under Sections 132(1)(a), 132(1)(i), and 132(5) of the Central Goods and Services Tax Act, 2017. The prosecution alleged tax evasion to the tune of ₹13.73 crores.
When the bail plea was heard by the Madras High Court, the petitioner’s counsel stated that ₹2.86 crores had already been deposited and further offered to deposit an additional ₹2.5 crores, without prejudice to the petitioner’s defence. Based on this submission, the High Court granted bail on 08.05.2025 with a direction to deposit ₹50 lakhs before release and the remaining ₹2 crores within ten days thereafter.
Later, citing the ill health of the petitioner’s father and pregnancy of his wife, the petitioner sought modification of the condition requiring deposit of ₹50 lakhs prior to release. The High Court, through its order dated 14.05.2025, allowed the entire amount of ₹2.5 crores to be deposited within ten days post-release.
Supreme Court’s Analysis and Observations
The Supreme Court expressed concern that such voluntary monetary offers at the stage of bail are being used to circumvent a merits-based judicial determination. The bench stated:
“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… are thereby foreclosed from considering the merits of the matter…”
The Court observed that after securing bail based on these offers, parties often return with pleas that the conditions are onerous or that counsel lacked authority to make the offers. In strong terms, the bench held:
“We strongly deprecate this practice… Today the petitioner is approbating and reprobating… we cannot allow parties to play ducks and drakes with the Court.”
The Court underlined that such a practice undermines the sanctity of judicial proceedings and is unacceptable even while recognizing the fundamental rights of the petitioner under Article 21 of the Constitution.
Final Directions
The Supreme Court set aside the bail and modification orders dated 08.05.2025 and 14.05.2025 respectively. The matter was remanded to the Madras High Court for fresh consideration on merits, uninfluenced by any earlier observations.
The Court also granted limited interim protection to the petitioner, allowing him to remain on bail on the strength of the bond already executed, until the matter is taken up by the High Court after remand.
The Chief Justice of the Madras High Court has been requested to place the matter before an appropriate bench by or before 30.06.2025 and dispose of it expeditiously in accordance with law.
