Central Bureau of Investigation Versus T. Gangi Reddy @ Yerra Gangi Reddy

Central Bureau of Investigation Versus T. Gangi Reddy @ Yerra Gangi Reddy

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले


REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 37 OF 2023
The State Through
Central Bureau of Investigation …Appellant(s)
Versus
T. Gangi Reddy @ Yerra Gangi Reddy …Respondent(s)
J U D G M E N T
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 16.03.2022 passed by the High Court of Andhra
Pradesh at Amravati in Criminal Petition No. 788 of 2022 by which the
High Court has dismissed the said petition preferred by the appellant –
Central Bureau of Investigation (C.B.I.) filed under Section 439(2) of the
Code of Criminal Procedure (Cr.P.C.), to cancel the bail that was
granted to the respondent herein – original Accused No. 1 and wherein
the High Court has held that once the respondent No. 1 – Accused No.
1, was released on default bail under Section 167(2) Cr.P.C., thereafter
it is not permissible to consider the case for cancellation of bail on
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merits, the Investigating Agency – C.B.I. has preferred the present
appeal.
2. While considering the issue involved in the present appeal,
namely, whether in a case where the accused is released on default bail
thereafter, cancellation of the bail application can be considered on
merits, the chronological dates and events are required to be referred to,
which are as under:-
2.1 The deceased Shri Y.S. Vivekananda Reddy, a former M.L.A.;
former Member of Lok Sabha; former Member of A.P. Legislative
Council; and holding other posts was found dead in his house on
15.03.2019. Initially a case under Section 174 Cr.P.C. was registered by
the local police, i.e., Police Station, Pulivendula in Crime No.84 of 2019.
Subsequently, a case under Section 302 read with Section 120-B of the
Indian Penal Code (I.P.C.) was registered. Special Investigation Team
(S.I.T.) was constituted by the State. The S.I.T. took over the
investigation. During the course of investigation, the concerned State
Police Agency arrested the respondent herein – original Accused No. 1
(A-1) on 28.03.2019 and he was remanded to judicial custody. The
statutory period of 90 days lapsed on 26.06.2019. On the very next day
of lapsing of 90 days, respondent herein – original Accused No. 1 filed a
bail application for default bail under Section 167(2) of the Cr.P.C. The
respondent herein was allowed the default bail by the learned JMFC,
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Pulivendula on 27.06.2019. The respondent herein – original accused
No. 1 was released on bail as per the said order.
2.2 That subsequently and pursuant to the order passed by the High
Court dated 11.03.2020 passed in Writ Petition No. 3144 of 2019 and
Writ Petition No. 1639 of 2020, investigation in the above crime was
entrusted to the appellant – C.B.I. The C.B.I. then took up the
investigation in the said case. The C.B.I. filed the F.I.R. No.
RC-04(S)/2020/SC-II/ND on 09.07.2020. The investigation revealed that
a conspiracy was hatched up by A-1 to A-4 along with some other
persons to kill the deceased and there were some influenced persons
behind the said conspiracy.
2.3 The C.B.I. filed the initial / first chargesheet on 26.10.2021 and
named A1 to A4. That thereafter the CBI filed an application before the
Special Court under Section 439(2) Cr.P.C. for cancelation of the bail
granted to the respondents, which came to be dismissed by the learned
Trial Court vide order dated 30.11.2021.
2.4 That thereafter the C.B.I. filed a supplementary chargesheet
against the accused D. Siva Shankar Reddy (A-5) under Sections 201
and 120-B read with 302 & 201 I.P.C. and also against the respondent
herein – original Accused No. 1 under Sections 201, 506 and 120-B read
with 201 I.P.C. That thereafter the C.B.I. conducted the further
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investigation and continued the investigation and recorded the statement
of approver A-4. That thereafter the C.B.I. filed the Criminal Petition No.
788 of 2022 before the High Court under Section 439(2) Cr.P.C. for
cancellation of bail granted to the respondent herein – Accused No. 1.
2.5 By the impugned judgment and order, the High Court has rejected
the said petition mainly on the ground that once the respondent No. 1 –
original Accused No. 1 was released on default bail under Section
167(2) Cr.P.C., thereafter, the bail cannot be cancelled on merits.
2.6 Feeling aggrieved and dissatisfied with the impugned judgment
and order passed by the High Court refusing to cancel the bail under
Section 439(2) Cr.P.C., the C.B.I. has preferred the present appeal.
3. At this stage, it is required to be noted that in the meantime, the
daughter and wife of the deceased filed a writ petition under Article 32 of
the Constitution of India before this Court seeking transfer of the trial
arising out of the present F.I.R. from C.B.I. Special Court, Kadapa,
Andhra Pradesh to C.B.I. Special Court, Hyderabad or C.B.I. Special
Court, New Delhi and also to direct the C.B.I. for duly completing the
investigation in the aforesaid F.I.R. in the time bound manner. By a
detailed judgment and order dated 29.11.2022, this Court has allowed
the said writ petition on the allegations of tampering with the evidence
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and the witnesses and even pressurizing the C.B.I. Officers by filing
false complaints against them.
4. Therefore, the short question which is posed for the consideration
of this Court is:-
Whether after an accused is released on default bail under
Section 167(2) Cr.P.C., under which circumstances, his bail can be
cancelled and whether bail can be cancelled on merits having
found committed non-bailable crime on conclusion of the
investigation and filing the chargesheet?
5. Shri K.M. Nataraj, learned ASG appearing on behalf of the C.B.I.
has vehemently submitted that as such release of an accused on default
bail under Section 167(2) Cr.P.C., cannot be said to be releasing the
accused on merits. It is submitted that an accused is released on default
bail under Section 167(2) Cr.P.C. on failure of the investigating agency
to conclude the investigation within the time stipulated under the Cr.P.C.
It is submitted that therefore, on filing of the chargesheet and curing the
defects, it is always open for the Court to consider the application for
cancellation of bail on merits on that basis and to consider the
seriousness of the offence.
5.1 It is vehemently submitted that Section 167(2) Cr.P.C. fixes the
outer limit within which the investigation has to be completed and if the
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same is not completed within the period prescribed, the accused has a
right to be released on bail, if he is prepared to and does furnish bail. It
is submitted that as per clause (a)(ii) of sub-section (2) of Section 167,
he is deemed to be released under the provisions of Chapter XXXIII of
the Cr.P.C. It is submitted that Chapter XXXIII of the Cr.P.C. includes
Sections 437 and 439 whereunder the Court is empowered to cancel the
bail granted to an accused in terms of Section 437(5) and Section
439(2). It is submitted that therefore, though the bail is granted under
proviso to sub-section (2) of Section 167 Cr.P.C., by virtue of deeming
fiction, the same can be cancelled by the Court in terms of
Section 437(5) and Section 439(2) Cr.P.C.
5.2 It is submitted that the purpose of the proviso to Section 167(2) is
to impress upon the need for expeditious investigation within the
prescribed time limit and to prevent laxity in that behalf. The object is to
inculcate a sense of its urgency and on default the Magistrate shall
release the accused if he is ready and does furnish bail. It is submitted
that therefore, an order for release on bail under proviso to Section
167(2) Cr.P.C. is not an order on merits but an order on default of the
prosecuting agency. It is submitted that the deeming fiction under the
proviso to Section 167(2) cannot be interpreted to go to the length of
converting an order of bail not on merit as if passed on merit. It is
submitted that therefore, such an order could be nullified for special
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reasons after the defect/default has been cured, i.e., after filing of the
chargesheet. It is submitted that therefore, since the bail was granted
due to default of the investigating agency and without the Court
adverting to the merits of the case, the merits brought about in the
chargesheet and attending circumstance would be relevant.
5.3 It is further submitted that in the present case the bail was granted
to the respondent herein under proviso to Section 167(2) on the default
of the State Police in completing the investigation within the prescribed
limit and the lackadaisical approach of the State Police was also the
reason for transfer of the investigation to the appellant – C.B.I.
5.4 Shri K.M. Nataraj, learned ASG appearing on behalf of the
appellant – C.B.I. has vehemently relied upon the Three Judge Bench
decision of this Court in the case of Aslam Babalal Desai Vs. State of
Maharashtra, (1992) 4 SCC 272 in support of his submission that as
observed and held by this Court on the special grounds being made out
that the accused has committed very serious offences; committed nonbailable crimes and he deserves to be in custody, even in a case where
the accused is released on default bail under Section 167(2) Cr.P.C., his
bail can be cancelled. Heavy reliance is placed on the observations
made by Justice A.M. Ahmadi (as he then was) in paragraph 14. He has
also taken us to the observations made by Justice M.M. Punchhi (as he
then was) in paragraphs 23 and 28 (though dissenting view but
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concurring with the observations with respect to Section 167(2) Cr.P.C.).
He has also taken us to the observations made by the then Justice K.
Ramaswamy (concurring view made in paragraphs 39 and 40). Relying
upon the above observations made in the aforesaid paragraphs by the
respective Hon’ble Judges, it is submitted that as observed and held by
this Court, grant of default bail under the proviso to sub-section (2) of
Section 167 Cr.P.C. is deemed to be released in terms of Chapter XXXIII
of the Cr.P.C. and, therefore, the default bail, once granted, can be
cancelled by the Court for the reasons germane to the cancellation of
bail under Section 437(5) or Section 439(2) of the Cr.P.C.
5.5 Relying upon the above decision and the observations made
therein, it is submitted that since the bail was granted due to default of
the investigating agency and without the Court adverting to the merits of
the case, the merits brought about in the chargesheet and attending
circumstance would be relevant.
5.6 Shri K.M. Nataraj, learned ASG has further submitted that in the
present case, even the case is made out under Section 439(2) Cr.P.C. to
cancel the bail in view of the changed circumstances and the
observations made by this Court in the subsequent order passed in the
Writ Petition (Criminal) No. 169 of 2022) by which this Court transferred
the trial from the C.B.I. Special Court, Kadapa, Andhra Pradesh to the
C.B.I. Special Court, Hyderabad. It is submitted that this Hon’ble Court
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has transferred the trial on the ground that the witnesses are being
threatened and/or influenced and there is no possibility of having fair trial
if the same is conducted in the State of Andhra Pradesh. However, as
the High Court has not at all considered anything on merits, we do not
propose to go into the said aspect at this stage and opine anything on
the aforesaid.
5.7 Shri Nataraj, learned ASG has also heavily relied upon the
subsequent decision of this Court in the case of Abdul Basit Alias Raju
and Ors. Vs. Mohd. Abdul Kadir Chaudhary and Anr., (2014) 10 SCC
754 (paragraphs 13 and 14) in support of his submission that the bail
granted under Section 167(2) Cr.P.C. can be cancelled on an application
by the prosecuting agency.
5.8 Making above submissions, it is prayed to allow the present appeal
and cancel the bail granted in favour of the respondent herein – original
Accused No. 1 on merits considering the chargesheet and considering
the seriousness of the offences alleged to have been committed by the
accused and considering the gravity of the offences.
5.9 Learned ASG appearing on behalf of the C.B.I. has also tried to
submit on merits as well as on the post-bail conduct of the respondent
herein – Accused No. 1. However, as the High Court has not at all
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considered the aforesaid aspects, we do not propose to enter into the
merits and/or post-bail conduct of the respondent /accused at this stage.
6. Present appeal is vehemently opposed by Shri B. Adinarayana
Rao, learned Senior Advocate appearing on behalf of the respondent.
6.1 It is vehemently submitted by the learned senior counsel appearing
on behalf of the respondent – original Accused No. 1 that as per the
settled position of law, mere subsequent filing of the chargesheet cannot
be a ground to cancel the bail granted to the respondent under Section
167(2) Cr.P.C. It is submitted that therefore in the present case, the
High Court has rightly refused to cancel the default bail/bail on
subsequent filing of the chargesheet by the C.B.I. It is further submitted
that as such in the present case the respondent – original Accused No. 1
was chargesheeted by the State Police Agency / S.I.T. much prior to the
C.B.I. was entrusted with the investigation.
6.2 It is submitted that even thereafter and after the C.B.I. took over
the investigation and filed the chargesheet, the C.B.I. then filed the
application before the learned Trial Court for cancellation of the bail
under Section 439(2), which came to be dismissed by the Trial Court. It
is submitted that therefore, mere subsequent filing of the chargesheet
cannot be a ground to cancel the bail granted in favour of the
respondent – original Accused No. 1, once he was released on default
10
bail on non-conclusion of the investigation and non-filing of the
chargesheet within the stipulated time.
6.3 It is submitted that as per the catena of decisions of this Court as
such to release the accused on bail on non-filing of the chargesheet
within the stipulated time as mentioned under Section 167(2) Cr.P.C. is
an indefeasible right accrued in favour of the accused. It is submitted
that once in exercise of such right available when the accused is
released on bail under Section 167(2) Cr.P.C., the same cannot be
taken away and/or cancelled on subsequent filing of the chargesheet.
Learned senior counsel appearing on behalf of the respondent – original
Accused No. 1 has heavily relied upon the decision of this Court in the
case of Mohamed Iqbal Madar Sheikh and Ors. Vs. State of
Maharashtra, (1996) 1 SCC 722 (paragraph 10).
6.4 Making above submissions and relying upon the decisions in the
case of Mohamed Iqbal Madar Sheikh and Ors. (supra), it is prayed to
dismiss the present appeal.
7. Shri Siddhartha Dave, learned Senior Advocate appearing on
behalf of the proposed impleader –daughter of the deceased has
supported Shri Nataraj, learned ASG and has submitted that looking to
the seriousness of the charges alleged against the respondent herein –
original Accused No. 1 and that looking to the gravity of the offence and
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in view of the post-bail conduct of the accused after he was released on
bail, considered by this Court while deciding Writ Petition (Criminal) No.
169 of 2022, it is prayed to cancel the bail granted in favour of the
respondent herein – original Accused No. 1. He has also relied upon the
decision of this Court in the case of Rakesh Kumar Paul Vs. State of
Assam, (2017) 15 SCC 67 (paragraphs 15 and 49) by submitting that as
observed by this Court in the said decision, in case the accused is
released on default bail, it does not prohibit or otherwise prevent the
arrest or re-arrest of the accused on cogent grounds in respect of the
subject charge and upon arrest or re-arrest, the accused is entitled to
petition for grant of regular bail which application should be considered
on its own merit.
8. Having heard the learned counsel appearing for the respective
parties, the short question, which is posed for the consideration of this
Court is whether the bail granted under the proviso to sub-section (2) of
Section 167 Cr.P.C. for failure to complete the investigation within the
period prescribed therein can be cancelled after the presentation of a
chargesheet and if the said question is answered in affirmative, then, on
what grounds and circumstances, the bail can be cancelled?
8.1 At the outset, it is required to be noted and it cannot be disputed
that when an accused is released on default bail under proviso to subsection (2) of Section 167 Cr.P.C., he is released on furnishing the bail
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bond by him on the failure of the investigating agency to complete the
investigation and file the chargesheet within the stipulated time
mentioned therein. The proviso to sub-section (2) of Section 167 fixes
the outer limit within which the investigation must be completed and if
the same is not completed within the period prescribed therein, the
accused has a right to be released on bail if he is prepared to and does
furnish bail. Considering proviso to Section 167(2) Cr.P.C., it cannot be
disputed that a person released on bail (default bail) is deemed to be
released under provisions of Chapter XXXIII of the Cr.P.C., which
includes Section 437 and 439 also. The object and purpose of proviso
to Section 167(2) Cr.P.C. is to impress upon the need for expeditious
investigation within the prescribed time limit and to prevent laxity in that
behalf. The object is to inculcate a sense of its urgency and on default
the Magistrate shall release the accused if he is ready and does furnish
bail. Thus, it cannot be said that order of release on bail under proviso
to Section 167(2) Cr.P.C. is an order on merits. An accused is released
on bail under proviso to Section 167(2) Cr.P.C. on the failure of the
prosecuting agency. Therefore, the deeming fiction under Section
167(2) Cr.P.C. cannot be interpreted to the length of converting the order
of bail not on merits as if passed on merits. Keeping in view the above,
the issue involved in the present appeal is required to be considered.
9. While considering the issue involved, some observations made by
this Court in the case of Aslam Babalal Desai (supra) and Abdul Basit
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Alias Raju and Ors. (supra) are required to be referred to. Speaking
for the Bench, Justice A.M. Ahmadi (as he then was) has observed in
paragraphs 14 and 15 as under:-
“14. We sum up as under:
The provisions of the Code, in particular Sections 57
and 167, manifest the legislative anxiety that once a
persons's liberty has been interfered with by the police
arresting him without a court's order or a warrant, the
investigation must be carried out with utmost urgency and
completed within the maximum period allowed by the
proviso (a) to Section 167(2) of the Code. It must be
realised that the said proviso was introduced in the Code
by way of enlargement of time for which the arrested
accused could be kept in custody. Therefore, the
prosecuting agency must realise that if it fails to show a
sense of urgency in the investigation of the case and omits
or defaults to file a charge-sheet within the time prescribed,
the accused would be entitled to be released on bail and
the order passed to that effect under Section 167(2) would
be an order under Section 437(1) or (2) or Section 439(1)
of the Code. Since Section 167 does not empower
cancellation of the bail, the power to cancel the bail can
only be traced to Section 437(5) or Section 439(2) of the
Code. The bail can then be cancelled on considerations
which are valid for cancellation of bail granted under
Section 437(1) or (2) or Section 439(1) of the Code. The
fact that the bail was earlier rejected or that it was secured
by the thrust of proviso (a) to Section 167(2) of the Code
then recedes in the background. Once the accused has
been released on bail his liberty cannot be interfered with
lightly i.e. on the ground that the prosecution has
subsequently submitted a charge-sheet. Such a view would
introduce a sense of complacency in the investigating
agency and would destroy the very purpose of instilling a
sense of urgency expected by Sections 57 and 167(2) of
the Code. We are, therefore, of the view that once an
accused is released on bail under Section 167(2) he cannot
be taken back in custody merely on the filing of a chargesheet but there must exist special reasons for so doing
besides the fact that the charge-sheet reveals the
commission of a non-bailable crime. The ratio of Rajnikant
14
case [(1989) 3 SCC 532] to the extent it is inconsistent
herewith does not, with respect, state the law correctly.
15. Even where two views are possible, this being a
matter belonging to the field of criminal justice involving the
liberty of an individual, the provision must be construed
strictly in favour of individual liberty since even the law
expects early completion of the investigation. The delay in
completion of the investigation can be on pain of the
accused being released on bail. The prosecution cannot be
allowed to trifle with individual liberty if it does not take its
task seriously and does not complete it within the time
allowed by law. It would also result in avoidable difficulty to
the accused if the latter is asked to secure a surety and a
few days later be placed behind the bars at the sweet will
of the prosecution on production of a charge-sheet. We
are, therefore, of the view that unless there are strong
grounds for cancellation of the bail, the bail once granted
cannot be cancelled on mere production of the chargesheet. The view we are taking is consistent with this Court's
view in the case of Bashir [(1977) 4 SCC 410]
and Raghubir [(1986) 4 SCC 481] but if any ambiguity has
arisen on account of certain observations in Rajnikant
case [(1989) 3 SCC 532] our endeavour is to clear the
same and set the controversy at rest.”
9.1 Justice K. Ramaswamy (as he then was) in his concurring
judgment has observed in paragraphs 39 and 40 as under:-
“39. Undoubtedly, by operation of the proviso to
Section 167(2) of the Code, the accused is entitled to bail
due to default by the investigating officer in completing the
investigation and laying the charge-sheet within the
prescribed period of 90/60 days and not on merits. The
fiction of law under the proviso applying the provisions in
Chapter XXXIII is to serve the purpose of law, namely not
only the release of the accused on taking the requisite
bond and conditions to be incorporated therein as
envisaged in the said Chapter, but also the power of the
court to cancel the bail and to take the accused into
detention for the grounds mentioned under the relevant
provisions in Sections 437(5) and 439(2) of the Code. The
Legislature is aware of the pre-existing practice of not filing
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the charge-sheet within 15 days as envisaged under subsection (2) of Section 167 of the old Code and the
consequences as well. The doubtful procedure of seeking
further detention on securing order of remand under
Section 344 of the old Code and Section 309 of the present
Code was to be put to an end to, while preserving the
power to the court to cancel the bail, if circumstances
warrant to take the accused into custody. At the earliest
this Court in Matabar Parida case [(1975) 2 SCC 220] also
took note of the fact that even under Section 167(2)
proviso, it might not be possible to complete the
investigation into grave crimes within the outer limit of the
time set out in the proviso. In the light of the statutory
animation to have the accused released from detention on
expiry of 90/60 days if the accused shall be prepared to
and does furnish bail, the consequences are inevitable and
the release is a statutory paradise to the criminals not by
judicial fiat but legislative mandate.
40. The purpose of interpretation is to sustain the
law. The court must interpret the words or the language in
the statute to promote public good and misuse of power is
interdicted. Criminal law primarily concerns social
protection and prescribes rules of behaviour to be observed
by all. Law punishes for deviance, transgression, violation
or omission. Liberty of the individual and security and order
in the society or public order are delicate and yet
paramount considerations. Undue emphasis on either
would impede harmony and hamper public good as well as
disturb social weal and peace. To keep the weal balanced,
must be the prime duty of the Judiciary. The purpose of the
proviso to Section 167(2) read with Chapter XXXIII of the
Code is to impress upon the need for expeditious
completion of the investigation by the police officer within
the prescribed limitation and to prevent laxity in that behalf.
On its default the Magistrate shall release the accused on
bail if the accused is ready and does furnish the bail. At the
same time during investigation or trial the power of the
court to have the bail cancelled and have the accused
taken into custody are preserved. But as interpreted by this
Court on the happening of the catalyst act i.e. expiry of
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90/60 days the hammer of release on default would fall.
Later filing of the charge-sheet (challan) is not by itself
relevant to have the bail cancelled on committing the
accused for trial or taking cognizance of the offence. As
emphasised by this Court in Bashir [(1977) 4 SCC 410]
and Raghubir [(1986) 4 SCC 481] cases, on curing the
defect by filing the charge-sheet (challan) if the prosecution
seeks to have the bail cancelled on the ground that there
are reasonable grounds to believe that the accused has
committed a non-bailable offence and that it is necessary to
arrest and commit him into custody, prima facie at that
stage, strong grounds indeed are necessary. For
cancellation of the bail after filing of the charge-sheet the
factum of dismissal of the bail on the earlier occasion is not
relevant. But during investigation some strong prima facie
evidence and gravity and magnitude of the crime or the
manner in which the crime was committed and other
attending circumstances may be relevant as prima facie
grounds to have a fresh look to cancel the bail. The
grounds for cancellation of the bail in Chapter XXXIII are,
dehors the merits in the matter, namely, necessity due to
the conduct of the accused and abuse of liberty i.e.
obstruction of the smooth investigation or suborning
witnesses or attempting to tamper the evidence,
threatening the witnesses with dire consequences or
making or attempting to remove himself beyond the reach
of the court to hamper the smooth trial, etc. are
independent of the merits in the matter. Cancellation of the
bail would be necessitated by the conduct of the accused
himself after the release. I agree with brother Punchhi, J.
that it might be possible to abuse the proviso by deliberate
delay in completing the investigation to facilitate the release
of the accused on bail. I also agree that merits brought out
in the charge-sheet and attending circumstances are
relevant, as the bail was granted due to default of the
investigating officer without court's adverting to the merits
but strong grounds are necessary to cancel the bail. To that
extent brother Ahmadi, J. also laid emphasis, namely,
strong grounds are to be made out in the charge-sheet.
With respect I agree with brother Ahmadi's emphasis that
filing the charge-sheet (challan) itself is not sufficient.
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However, I lay emphasis that the High Court or the Court of
Sessions should consider the merits of the case. With
respect, K.J. Shetty, J., laid emphasis on the subsequent
filing of the charge-sheet and the power for cancellation
under Sections 437 and 439 of the Code. Unfortunately,
the ratio in Parida [(1975) 2 SCC 220] and Bashir [(1977) 4
SCC 410] cases was not brought to the notice of the
learned Judge, which was directly on the point and for the
reasons stated I find it difficult to agree with the learned
Judge in that respect. I am in full agreement with the view
expressed by brother Ahmadi, J. and the order proposed
by him.”
9.2 In a concurring judgment, Justice K. Ramaswamy (as he then was)
has concurred with some of the observations made by Justice M.M.
Punchhi (as he then was) made in a dissenting judgment that it might be
possible to abuse the proviso to Section 167(2) Cr.P.C. by deliberate
delay in completing the investigation to facilitate the release of the
accused on bail. However, thereafter has agreed with the view that the
merits brought out in the chargesheet and attending circumstances are
relevant, as the bail was granted due to default of the investigating
officer without Court's adverting to the merits but strong grounds are
necessary to cancel the bail and mere filing of the chargesheet itself is
not sufficient.
9.3 Justice M.M. Punchhi (as he then was) in his dissenting judgment
has observed in paragraphs 23, 25, 26, 27 and 28 as under:-
“23. The mere circumstance that Section 167(2)
ordains that every person released on bail under this subsection shall be deemed to be so released under the
provisions of Chapter XXXIII for the purposes of that
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Chapter does not ipso facto mean that the bail order
assumes the content and character of bail orders on merit,
of the kind conceived of in sub-sections (1) and (2) of
Section 437 or sub-section (1) of Section 439 of the Code.
The deeming requirement of Section 167(2) puts the
release on bail of such person as if under the provisions of
Chapter XXXIII but only for the purposes of that Chapter. In
other words, it means that by this fiction the provision is to
be read as a part of Chapter XXXIII so that it invites the
purposes of that chapter such as filling of bonds, provision
of sureties etc., as also permitting cancellation of bail. It is
on the thrust of such inclusion that cancellation under
Section 437(5) can be attempted as if fictionally the bail
order had been passed under sub-sections (1) and (2) of
Section 437 but not on considerations as if the bail order
was on merit. Fiction of this kind cannot be permitted to go
to the length of converting an order of bail not on merit as if
passed on merit.
XXXXXXXX
25. The emphasised words are reflective of the view
that the Court could at that stage after the challan is filed
be of the opinion that there appear sufficient grounds for
entertaining the view that the accused had committed a
non-bailable offence and that it was necessary that he
should be arrested and committed to custody. Besides the
afore-mentioned ground for cancellation, a ground
singularly sufficient and special to an order-on-default, the
Court may also arrest and commit to custody such person
on other grounds judicially noted and others relevant; such
as tampering of evidence etc. The later hinted grounds are
those grounds which normally weigh with a Court while
cancelling a merited bail under Section 437(5) when the
bail in strictu sensu has been granted on merit under subsections (1) and (2) of Section 437. But a deemed bail
under Chapter XXXIII, under the thrust of Section 167(2),
as is discernible, appears to me on a different footing,
permitting cancellation of bail not only on the well-known
grounds for cancellation of bail but also on the special
singular ground on the Court's entertaining the view that
19
there are sufficient grounds that the accused had
committed a non-bailable offence and that it was necessary
that he should be arrested and committed to custody. The
seeming diversity in Bashir case [(1977) 4 SCC 410] crops
up only if it is understood that it takes a bail order under
Section 167(2), as if an order on merit under sub-sections
(1) and (2) of Section 437. But if the fiction, as it appears to
me, extends to the extent of the bail order being treated as
if passed under Chapter XXXIII and that too under subsections (1) and (2) of Section 437 read with the provisions
of Section 167(2) as part and parcel of that chapter so that
the bail order remains an order passed on default and not
on merit, the tangency disappears. And even if this aspect
is ignored, Bashir case [(1977) 4 SCC 410] goes on to add
a singular and special ground for cancellation of bail
granted under Section 167(2) over and above the other
well-known grounds for cancellation of bail granted under
sub-sections (1) and (2) of Section 437 of the Code. The
provision employable in that event again is Section 437(5)
of the Code, notwithstanding the text of the provision, for
besides that there is no other provision with the Court.
26. The existence of such special ground for
cancellation of bail, over and above the well-known
grounds for cancellation of bail, granted under Section
167(2) of the Code was re-affirmed and repeated in a
decision of this Court by a two-member Bench in Raghubir
Singh v. State of Bihar [(1986) 4 SCC 481] at page 826 by
stating as follows: (SCC p. 502, para 22)
“Where bail has been granted under the proviso
to Section 167(2) for the default of the
prosecution in not completing the investigation
in 60 days, after the defect is cured by the filing
of a charge-sheet, the prosecution may seek to
have the bail cancelled on the ground that there
are reasonable grounds to believe that the
accused has committed a non-bailable offence
and that it is necessary to arrest him and
commit him to custody. In the last mentioned
20
case, one would expect very strong grounds
indeed.”
The strong grounds referred in the context obviously are
grounds on merits of the case, which are reflective from the
formal accusation put in the challan which the accused has
to face at the trial.
27. Raghubir Singh case [(1986) 4 SCC 481] was
followed by a decision of a vacation Judge of this Court
in Rajnikant Jivanlal Patel v. Intelligence Officer, NCB, New
Delhi [(1989) 3 SCC 532]. It was observed at page 536 as
follows: (SCC p. 536, paras 13 and 14)
“An order for release on bail under proviso (a)
to Section 167(2) may appropriately be termed
as an order-on-default. Indeed, it is a release
on bail on the default of the prosecution in filing
charge-sheet within the prescribed period. The
right to bail under Section 167(2) proviso (a)
thereto is absolute. It is a legislative command
and not court's discretion. If the investigating
agency fails to file charge-sheet before the
expiry of 90/60 days, as the case may be, the
accused in custody should be released on
bail. But at that stage, merits of the case are
not to be examined. Not at all. In fact, the
Magistrate has no power to remand a person
beyond the stipulated period of 90/60 days. He
must pass an order of bail and communicate
the same to the accused to furnish the requisite
bail bonds.
The accused cannot, therefore, claim any
special right to remain on bail. If the
investigation reveals that the accused has
committed a serious offence and charge-sheet
is filed, the bail granted under proviso (a) to
Section 167(2) could be cancelled.”
(emphasis supplied)
21
28. On analysis of the case law above discussed I
have rather come to the conclusion that a compulsive bail
order made by a court under Section 167(2) of the Code
being one not on merit, when required to be cancelled after
the filing of the challan, would not involve any review of a
decision made on merit. Such bail is cancellable if the court
has reason to entertain the belief that the accused has
committed a non-bailable offence and that it is necessary to
arrest him and commit him to custody. The occasion to
grant or refuse bail on merit becomes available to the court
after the filing of the challan because earlier thereto merit of
bail could not figure at the time of the grant of compulsive
bail. The goal of the court in any event is to strike a judicial
balance depending on the exigencies of the situation
keeping in view amongst others the claims of personal
liberty and the larger interests of the State. It cannot be
overlooked that a bail order under Section 167(2) of the
Code could even be managed through a convenient
investigating officer, however heinous be the crime. The
court would have to grant bail under the mandate of law,
debarred as it is to see to the merits of the case at that
stage. To say that thenceforth the court is for ever shut to
see to the merits of the case, though it otherwise has
power to cancel bail, is to deprive it of its elementary
function to administer justice and weigh the claims on merit
inter se. I would rather loathe for such an interpretation as
that would frustrate justice, and would on the other hand let
the court have the power to cancel bail, for once examining
the merits of the case in such a situation.”
Therefore, as such, even Justice Punchhi, had concurred with the
other Hon’ble Judges taking the view that every person released on bail
under sub-section (2) of Section 167 Cr.P.C. shall be deemed to be so
released under the provisions of Chapter XXXIII for the purposes of that
Chapter and does not ipso facto mean that the bail order assumes the
content and character of bail orders on merit, of the kind conceived of in
22
sub-sections (1) and (2) of Section 437 or sub-section (1) of Section 439
of Cr.P.C.
9.4 Thus, as per the law laid down by this Court in the case of Aslam
Babalal Desai (supra), (i) release of accused on default bail
under Section 167(2) Cr.P.C. is not on merits, but on the failure of
the investigating agency in completing the investigation and filing
the chargesheet within the stipulated time prescribed therein;
(ii) That every person released on bail under Section 167 (2)
Cr.P.C. shall be deemed to be so released under the provisions of
Chapter XXXIII Cr.P.C., which includes Sections 437(5) and
439(2);
(iii) That the bail in favour of a person, who is released on default
bail under Section 167(2) Cr.P.C. cannot be cancelled on mere
filing of the chargesheet, but can be cancelled on making out a
special and strong ground that commission of non-bailable crime is
disclosed from the chargesheet.
9.5 In the case of Abdul Basit Alias Raju and Ors. (supra) after
considering the decision of this Court in the case of Aslam Babalal
Desai (supra), it is observed and held in paragraphs 13 and 14 as
under:-
23
“13. It is trite that Section 167(2) creates a deeming
fiction whereby the release of a person is equated to his
release under Chapter XXXIII of the Code. However, an
order for release on bail under proviso (a) to Section 167(2)
is not an order on merits but an order-on-default of the
prosecuting agency. Such an order could be nullified for
special reasons after the defect/default has been cured.
The accused cannot, therefore, claim any special right to
remain on bail. If the investigation reveals that the accused
has committed a serious offence and charge-sheet is filed,
the bail granted under proviso (a) to Section 167(2) could
be cancelled on an application by the prosecuting agency.
14. Under Chapter XXXIII, Section 439(1) empowers
the High Court as well as the Court of Session to direct any
accused person to be released on bail. Section 439(2)
empowers the High Court to direct any person who has
been released on bail under Chapter XXXIII of the Code be
arrested and committed to custody i.e. the power to cancel
the bail granted to an accused person. Generally the
grounds for cancellation of bail, broadly, are, (i) the
accused misuses his liberty by indulging in similar criminal
activity, (ii) interferes with the course of investigation, (iii)
attempts to tamper with evidence or witnesses, (iv)
threatens witnesses or indulges in similar activities which
would hamper smooth investigation, (v) there is likelihood
of his fleeing to another country, (vi) attempts to make
himself scarce by going underground or becoming
unavailable to the investigating agency, (vii) attempts to
place himself beyond the reach of his surety, etc. These
grounds are illustrative and not exhaustive. Where bail has
been granted under the proviso to Section 167(2) for the
default of the prosecution in not completing the
investigation in sixty days after the defect is cured by the
filing of a charge-sheet, the prosecution may seek to have
the bail cancelled on the ground that there are reasonable
grounds to believe that the accused has committed a nonbailable offence and that it is necessary to arrest him and
commit him to custody. However, in the last mentioned
case, one would expect very strong grounds indeed.
(Raghubir Singh v. State of Bihar [(1986) 4 SCC 481.)”
24
9.6 Now, so far as the reliance placed upon the decision of this Court
in the case of Mohamed Iqbal Madar Sheikh and Ors. (supra) relied
upon by the learned senior counsel appearing on behalf of the
respondent – original Accused No. 1 is concerned, at the outset, it is
required to be noted that in the said decision, this Court has not taken a
contrary view than the view taken in the case of Aslam Babalal Desai
(supra). In the case of Mohamed Iqbal Madar Sheikh and Ors.
(supra), it was a case of refusing to release the accused on default bail.
While releasing the accused on default bail, thereafter, this Court
observed that if the accused is released on bail because of the default in
completion of the investigation, then, no sooner the chargesheet is filed,
the order granting bail to such accused cannot be cancelled. However,
thereafter, it is observed in paragraph 10 that the bail of such accused
who has been released, because of the default on the part of the
investigating officer to complete the investigation, can be cancelled, but
not, only on the ground that after the release, the chargesheet has been
submitted against such accused for an offence. Thereafter, it is further
observed that for cancelling the bail, the well-settled principles in respect
of cancellation of bail have to be made out as observed by this Court in
the case of Aslam Babalal Desai (supra). Therefore, as such the
observations made by this Court in the case of Mohamed Iqbal Madar
Sheikh and Ors. (supra) even supports the case on behalf of the C.B.I.
25
that the order granting bail shall be deemed to be under Section 437(1)
or (2) or Section 439(1) of the Cr.P.C. and that order can be cancelled
when a case for cancellation is made out under Section 437(5) or 439(2)
Cr.P.C.
9.7 Thus, when special reasons/grounds are being made out from the
chargesheet and the chargesheet reveals the commission of a nonbailable crime, the bail in favour of a person, who has been released on
default bail under Section 167(2) Cr.P.C. can be cancelled considering
Section 437(5) and Section 439(2) Cr.P.C.
9.8 What can be said to be special grounds for cancellation of the bail,
over and above the well-known grounds for cancellation of the bail
granted under Section 167(2) Cr.P.C. has been considered by this Court
in the case of Raghubir Singh and Ors. Vs. State of Bihar, (1986) 4
SCC 481. In paragraph 22, it is observed and held as under:-
“22. ……………………..Where bail has been granted
under the proviso to Section 167(2) for the default of the
prosecution in not completing the investigation in 60 days,
after the defect is cured by the filing of a charge-sheet, the
prosecution may seek to have the bail cancelled on the
ground that there are reasonable grounds to believe that
the accused has committed a non-bailable offence and that
it is necessary to arrest him and commit him to custody. In
the last mentioned case, one would expect very strong
grounds indeed.”

26
9.9 The decision of Raghubir Singh and Ors. (supra) has been
followed by this Court in Rajnikant Jivanlal and Anr. Vs. Intelligence
Officer, NCB, New Delhi, (1989) 3 SCC 532, wherein in paragraphs 13
and 14, it is observed and held as under:-
“13. An order for release on bail under proviso (a) to
Section 167(2) may appropriately be termed as an orderon-default. Indeed, it is a release on bail on the default of
the prosecution in filing charge-sheet within the prescribed
period. The right to bail under Section 167(2) proviso (a)
thereto is absolute. It is a legislative command and not
court's discretion. If the investigating agency fails to file
charge-sheet before the expiry of 90/60 days, as the case
may be, the accused in custody should be released on
bail. But at that stage, merits of the case are not to be
examined. Not at all. In fact, the Magistrate has no power
to remand a person beyond the stipulated period of 90/60
days. He must pass an order of bail and communicate the
same to the accused to furnish the requisite bail bonds.
14. The accused cannot, therefore, claim any special
right to remain on bail. If the investigation reveals that the
accused has committed a serious offence and chargesheet is filed, the bail granted under proviso (a) to Section
167(2) could be cancelled.”
(emphasis supplied)
10. From the above, the law, which emerges is that mere filing of the
chargesheet subsequent to a person is released on default bail under
Section 167(2) Cr.P.C. cannot be a ground to cancel the bail of a
person, who is released on default bail. However, on filing of the
chargesheet on conclusion of the investigation, if a strong case is made
out and on merits, it is found that he has committed a non-bailable
27
offence/crime, on the special reasons/grounds and considering Section
437(5) and Section 439(2) Cr.P.C, over and above other grounds on
which the bail to a person, who is released on bail can be cancelled on
merits.
11. Therefore, there is no absolute bar as observed and held by the
High Court in the impugned judgment and order that once a person is
released on default bail under Section 167(2) Cr.P.C., his bail cannot be
cancelled on merits and his bail can be cancelled on other general
grounds like tampering with the evidence/witnesses; not cooperating
with the investigating agency and/or not cooperating with the concerned
Trial Court etc.
12. As such, we are in complete agreement with the view taken by this
Court in the aforesaid decisions. The submission on behalf of the
respondent – original Accused No. 1 and the view taken by the High
Court in the impugned judgment and order that once an accused is
released on default bail under Section 167(2) Cr.P.C., his bail cannot be
cancelled on merits is accepted, in that case, it will be giving a premium
to the lethargic and/or negligence, may be in a given case of deliberate
attempt on the part of the investigating agency not to file the
chargesheet within the prescribed time period. In a given case, even if
the accused has committed a very serious offence, may be under the
NDPS or even committed murder(s), still however, he manages through
28
a convenient investigating officer and he manages not to file the
chargesheet within the prescribed time limit mentioned under Section
167(2) Cr.P.C. and got released on default bail, it may lead to giving a
premium to illegality and/or dishonesty. As observed hereinabove, such
release of the accused on default bail is not on merits at all, and is on
the eventuality occurring in proviso to sub-section (2) of Section 167.
However, subsequently on curing the defects and filing the chargesheet,
though a strong case is made out that an accused has committed the
very serious offence and non-bailable crime, the Court cannot cancel the
bail and commit the person into custody and not to consider the gravity
of the offence committed by the accused, the Courts will be loathe for
such an interpretation, as that would frustrate the justice. The Courts
have the power to cancel the bail and to examine the merits of the case
in a case where the accused is released on default bail and released not
on merits earlier. Such an interpretation would be in furtherance to the
administration of justice.
13. In view of the above and for the reasons stated above, the
impugned judgment and order passed by the High Court dismissing the
application for cancellation of the bail filed by the C.B.I. under Section
439(2) Cr.P.C. deserves to be quashed and set aside and is accordingly
quashed and set aside.
29
The issue involved in the present appeal is answered in the
affirmative and it is observed and held that in a case where an accused
is released on default bail under Section 167(2) Cr.P.C., and thereafter
on filing of the chargesheet, a strong case is made out and on special
reasons being made out from the chargesheet that the accused has
committed a non-bailable crime and considering the grounds set out in
Sections 437(5) and Section 439(2), his bail can be cancelled on merits
and the Courts are not precluded from considering the application for
cancelation of the bail on merits. However, mere filing of the
chargesheet is not enough, but as observed and held hereinabove, on
the basis of the chargesheet, a strong case is to be made out that the
accused has committed non-bailable crime and he deserves to be in
custody.
14. As the High Court has not at all considered on merits the
application for cancellation of the bail, the matter is to be remitted to the
High Court for considering the said application afresh in accordance with
law and on merits and in light of the observations made hereinabove. As
pursuant to the earlier judgment and order passed by this Court dated
29.11.2022 in Writ Petition (Criminal) No. 169 of 2022, the trial of the
F.I.R. in the present case has been ordered to be transferred to the
C.B.I. Special Court, Hyderabad, the proceedings of the cancellation of
the bail application, which was earlier filed before the High Court of
30
Andhra Pradesh at Amravati are ordered to be transferred to the High
Court of Telangana at Hyderabad and now the High Court of Telangana
to consider, decide and dispose of the application for cancellation of the
bail on merits and in light of the observations made hereinabove.
Present appeal is allowed accordingly to the aforesaid extent.
………………………………….J.
 [M.R. SHAH]
NEW DELHI; ………………………………….J.
JANUARY 16, 2023. [C.T. RAVIKUMAR]
31

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