SC flags ‘disquieting trend’ of accused giving undertaking to deposit cheated amount to secure bail

The Supreme Court on Tuesday highlighted the emergence of a “disquieting trend”, where those accused of cheating give an undertaking to deposit the amount they have cheated their victims of to secure bail, and reminded courts not to be “unduly swayed” by such prayers.

A bench of Justices S Ravindra Bhat and Dipankar Datta remanded back to the Delhi High Court a matter in which it had granted bail to a man accused of cheating in a case related to a property dispute with a precondition that he will deposit Rs 22 lakh he had allegedly cheated.

“It has been found by us in multiple cases in the past several months that upon FIRs being lodged inter alia under section 420 of the IPC, judicial proceedings initiated by persons, accused of cheating, to obtain orders under Section 438 of the CrPC are unwittingly being transformed into processes for recovery of the quantum of money allegedly cheated and the courts driven to impose conditions for deposit/payment as pre-requisite for grant of pre-arrest bail,” the bench said.

Calling it a “disquieting trend” which has gained pace in recent times”, the court said, “It is considered appropriate to remind the high courts and the sessions courts not to be unduly swayed by submissions advanced by counsel on behalf of the accused in the nature of undertakings to keep in deposit/repay any amount while seeking bail under section 438 of the CrPC (bail) and incorporating a condition in that behalf for deposit/payment as a pre-requisite for grant of bail.”

The bench said the inclusion of the condition of payment by an accused for seeking bail tends to create an impression that the relief could be secured by depositing money alleged to have been cheated.

“That is really not the purpose and intent of the provisions for grant of bail. We may, however, not be understood to have laid down the law that in no case should willingness to make payment/deposit by the accused be considered before grant of an order for bail,” it said.

The bench said in exceptional cases, such as where an allegation of misappropriation of public money has been levelled against an accused who, while seeking indulgence of the court to have his liberty secured, volunteers to account for the whole or any part of the public money allegedly misappropriated, it would be open to court to consider in public interest whether such money should be allowed to be deposited before an application for anticipatory or regular bail is taken up for final consideration.

“After all, no court should be averse to putting public money back in the system if the situation is conducive. Therefore we are minded to think that this approach would be in the larger interest of the community. However, such an approach would not be warranted in cases of private disputes where private parties complain of their money being involved in the offence of cheating,” the bench said.

The top court made the remarks on an appeal filed by Ramesh Kumar, the owner of an immovable property in Delhi, for the development of which he had entered into three agreements with a builder named Ashwani Kumar.

In terms of the agreement dated December 19, 2018, the builder was required to construct a multi-storey building in which the Ramesh Kumar would have ownership rights in respect of the 3rd floor and the upper floor, apart from Rs 55 lakh to be paid to him by the builder, whereas the builder would have rights to deal with the 1st and the 2nd floors together with other rights as described therein.

In pursuance of the agreement, the builder entered into an agreement to sell and purchase/bayana dated December 14, 2018 with Vinay Kumar and Sandeep Kumar (complainants) was signed in respect of the 2nd floor of the proposed building (without roof rights) for a sum of Rs 60 lakh.

As a dispute arose between the parties over payment, the matter reached courts after the complainants lodged an FIR alleging cheating by Ramesh Kumar and others.

Apprehending arrest, Ramesh Kumar, the owner of the property moved the relevant criminal court seeking bail and the trial court initially granted interim protection from arrest, subject to his cooperating with the investigation.

The trial court, however, by an order dated January 18, 2022 dismissed Ramesh Kumar’s application for bail and withdrew the interim protection granted to him.

He then challenged the order of the trial court before the high court, which on November 24, 2022 granted bail to him and the builder, subject to certain conditions including that of depositing an amount of Rs 22 lakh with the trial court.

Unable to arrange the amount, Ramesh Kumar again moved the high court seeking extension of time for making the deposit.

The high court granted him three days to deposit the amount and warned his bail shall be cancelled if he failed to deposit the money.

Feeling aggrieved, Ramesh Kumar moved the top court challenging the condition imposed by the high court on the issue of deposit.

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The top court said, ” the High Court ought to have realized that having regard to the nature of dispute between the parties, which is predominantly civil in nature, the process of criminal law cannot be pressed into service for settling a civil dispute.”

“Under the circumstances, we hold that the High Court fell in grave error in proceeding on the basis of the undertaking of the appellant and imposing payment of Rs 22 lakh as a condition precedent for grant of bail,” the Supreme Court said.

It remitted the matter to the high court and directed re-consideration of the application for pre-arrest bail. The apex court asked the HC to decide the matter on its own merits in light of its observations as early as possible but preferably before August 31, 2023.

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