This article has been written by Adv. Nikita Pandit pursuing the Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting from LawSikho. This article has been edited by Zigishu Singh (Associate, Lawsikho), and Ruchika Mohapatra (Associate, Lawsikho). 

Introduction

The main objective of this article is to understand the concept of bail and to understand how it was interpreted in the case of Yes Bank fraud by the Court of Law. Bail is when an accused is released temporarily from the jail while the trial is ongoing before the court and sometimes also consists of the conditions that the accused has to follow during the period of the release. Sometimes he is also asked to pay a certain amount against the release. Cambridge dictionary explains Bail as an amount that the accused has to pay to the court for releasing him till the trial and the payment is for ensuring that he will return for the trial.

Bail as per Criminal Procedure Code, 1973

The Code of Criminal Procedure (CrPC) doesn’t define Bail, but defines ‘Bailable Offence’. As per Section 2 (a) of the Code, Bailable Offence is the one which is shown as ‘Bailable’ in the First Schedule of the Code or by any other law in force and all those which do not come under this schedule are Non-Bailable. Offence means breaching the law or any act which is against the law of the land. It is something that affects the morale of the society. Section 2 (n) of the Code explains offence as any act or omitting to do any act which is punishable by the law. 

Section 436 of the Code explains when the Bail should be given to the accused in a bailable offence. When the person committing a bailable offence is arrested or detained by without a warrant by the police officer who is in charge of that police station or if such person is brought in the court or appears there during the custody or proceeding, such person should be given the bail if he is ready and prepared to fulfil the conditions of the bail. If that police officer or Court feels it fit, they may allow the accused to give a bond i.e an agreement or a promise without any surety by another person giving guarantee of the good behavior of the accused that he will pay the amount if there is bad behaviour of the accused while he is left from the jail.

If such a person does not comply with the conditions of such a bond, then the court can refuse the bail on the next hearing, putting the accused behind the bars. In case of bailable offences, bail is the right of the accused and not the discretion of the court. It cannot be denied to the accused. In such cases the police and the courts are bound to release the accused. In R. C. Cooper v. Union of India, the Supreme Court of India adjudged that when a person is detained under the law of the land, he is not deprived of the freedoms granted by Article 19 (1) of the Constitution of India. This article and Article 21 giving the right of life and liberty walk hand in hand and cannot be separated from each other.

Bail in non-bailable cases

Section 437 of the Code explains when the bail can be given in the non-bailable cases. Non-bailable offences are all those offences which are not included in the First Schedule of the Code as given in Section 2 (a) of the Code. If a person accused of such offence is arrested without a warrant or appears before the High Court or Sessions Court, he can be released on Bail. The exception is if there is a reasonable ground to believe that the accused is guilty of an offence which can be punishable by death or life imprisonment.. If such accused is a woman or below 16 years of age or sick or infirm, the court can grant bail if the court feels that it is just and fair.

It is also provided that where the offence committed by the accused or a suspect is punishable for seven years or more under Chapters 6, 16 and 17 of IPC, abetment and conspiracy, if that accused or suspect is released on bail, the court can put a condition of appearance, to ensure that there is no commission of any offence during that time or any other condition as required in interest of justice.

After the trial but before the judgement, in case of non-bailable offences, the court can grant bail without sureties.

Warrant

Warrant, as per Cambridge dictionary means an official document which is signed by the judge or any authorized person which gives permission to the police for searching the home of a person, arresting a person or doing any such act as per the procedure of the law. CrPC explains the Warrant Case in Section 2(x) of the Code which means the offences where the punishment is death penalty, life imprisonment or imprisonment for more than 2 years. So the expression ‘without a warrant’ means the cases where no warrant is needed for the police to arrest a person, which as per Section 2 (c) of the Code is called a cognizable offence. The non-cognizable offence as per Section 2 (l) means the police cannot arrest a person without the warrant i.e. the official permission of the judge.

Cancellation of bail

The court which gives the bail under the Section 437 can also cancel the same and get that person arrested again and commit him to custody. Section 439 gives the powers to the High Court and Sessions Court to Cancel the Bail if it is given unreasonably, without applying the mind, is in violation of law and the freedom is misused after the bail is given. So  when there is a chance that the person may tamper with the evidence, interfere in investigation, misuse the liberty, escape from the country, go underground or run away from the sureties, the bail can be cancelled.

Yes Bank case

Facts of the case

This was the case of Rana Kapoor vs Directorate Of Enforcement, CRIMINAL BAIL APPLICATION NO (ST). 4999 OF 2020 and Dheeraj Wadhawan vs Central Bureau Of Investigation, CRIMINAL BAIL APPLICATION [STAMP] NO. 1924 OF 2020. An Enforcement Case Information Report (ECIR)  was registered with the Directorate of Enforcement (ED), Mumbai under Section 3 and 4 of the Prevention of Money Laundering Act, 2002. The offence of money laundering is committed under this section when a person indulges in the activities associated with the proceeds or money obtained from criminal activities and shows as if the money is not tainted, whether directly or indirectly or if it is even associated with such acts. The penalty under this Act for such money laundering is imprisonment from 3 to 7 years and fine up to Rs. 5 Lakh and in case of offences associated with arms and ammunition as given under Paragraph 2 of Part A of the schedule, it may extend to 10 years. Under the offence, the supplicant, Rana Kapoor was arrested. CBI also registered an FIR for cheating and criminal conspiracy under Indian Penal Code and for Corruption under Prevention of Corruption Act.

ED case

The contentions were made based on Section 45 of the Prevention of Money Laundering act (PMLA Act). As per the Section, if the person is accused of the offence having penalty of more than 3 years of imprisonment, no matter what is given in CrPC, he cannot be released on bail. The only exception here is if the prosecution is given a chance to oppose the application of release and in case of such opposition, and the court genuinely feels that the accused is not guilty or cannot possibly commit such offence. Also, if such a person is below 16 years of age or is a woman or is sick or infirm, the Special Court can direct to release on bail. It was alleged by Kapoor’s lawyer that since there was no offence made under PMLA, the offence did not come under the Act.

The Bombay High Court held that the witnesses and the evidence certainly shows that Kapoor was indeed engaged in the crime. There appeared to be a scam in YES Bank and DHFL. Kapil Wadhwan and Dheeraj Wadhwan through YES Bank and DHFL were the perpetrators. Kapoor had used his position as Managing Director / CEO of YES Bank to give unlawful financial benefits to DHFL by YES Bank and ultimately get benefits for himself and his family through the companies they owned. It was held that there was a conspiracy between Kapoor and the Wadhwans through DHFL and YES Bank. It was held that this offence was a serious one and there was a huge amount of evidence to prove it as it had caused huge loss to the public fund as the money which the YES Bank had was public money. YES Bank had given the loan in spite of it suffering losses and the witnesses clearly showed how the offence was committed. The bail was rejected for the seriousness the offence carried

The grounds of bail considered were;

·       Accusations;

·       Severity of penalty;

·       Apprehension of witness getting tampered with;

·       Loss caused to the public.

The Bombay HC considered the magnitude of the crime committed by Kapoors and Wadhwans, it rejected the Bail to Kapoors.

Default Bail Case – CBI

It was alleged by Wadhwans that the Police Officer’s Report under Section 173 of the Code was not submitted even 90 days after the first remand was over, before the special judge but was only given in registry as per the procedure given in Section 167 of the Code and that they had a right to get default bail. It was also alleged that the case was transferred to Chief Metropolitan Magistrate as the sanction of Government was not acquired before filing a case under Prevention of Corruption Act It was rejected by the Magistrate’s Court.

Satya Narain Musadi And Ors. v. State Of Bihar, AIR 1980 SC 506 gives the requirements of the Police Report under Section 173.  If the details are complete, the police report is considered to be complete. It should show the magistrate that the investigation is done of a cognizable offence and sufficient evidence is obtained and the information is sent to the court. It is an opinion of the Investigating Officer. If it contains all the documents and statements of witnesses it is considered as complete. Details of the offence must also be given. This is enough and nothing more is required.

In this case it was held that the police report was complete and is irrelevant that it was filed in Registry and that the Code does not mention whether it is to be filed in Registry or Magistrate. As it was filed in the Registry, the investigation was over. It was held that as the Report was filed on the 60^th Day and it was before the present Bail application, the Default Bail was rejected.

Conclusion

The Supreme Court has rightfully explained in Gautam Kundu v. Manoj Kumar Assistant Director, CRIMINAL APPEAL NO. 1706  OF  2015 that, when it relates to the case of Money Laundering, is a serious threat to the economy and interest of the nation. Personal motive and purposeful benefit made out of such offences cannot be brushed aside, so refusing bail in such cases is not wrong. In this case, whether in the case of ED or CBI, the gravity of offence was severe and the evidence and witnesses clearly showed that the proceeds of crime and tainted money was made by the Applicants. This was gravely dangerous to the utilization of public money by the Bank in any circumstances. In the case of CBI, the Court rightfully explained the complications in interpretation of the Police Report and that the procedures of CrPC cannot be misused by anyone for wrongful defenses. It is also to be noted that PMLA is a special statute and it overrides the provisions of CrPC. In both the cases the bail and the default bail were denied to the Applicants with correct interpretation of laws and with the help of the preceding case laws.

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