Supreme Court Cancels Anticipatory Bail in Adarsh Group Fraud Case

The Supreme Court of India, in the case of Serious Fraud Investigation Office Vs Aditya Sarda, heared a batch of sixteen appeals presented by the Serious Fraud Investigation Office (SFIO) against the High Court orders of granting anticipatory bail to different accused persons.

The accused persons were named in a criminal complaint made by the SFIO to the Special Judge, Gurugram, in view of serious economic offenses which had been allegedly perpetrated involving the Adarsh Group of Companies.

The background of the case was an investigation ordered by the Ministry of Corporate Affairs (MCA) into the affairs of several companies of the Adarsh Group after the company was accused of making fake transactions and illegal loans to the tune of thousands of crores by the Adarsh Credit Cooperative Society Limited (ACCSL) to its controlled groups and to other groups. After completing its inquiry, the SFIO lodged a criminal complaint against 181 accused, including the respondents in these appeals, for offences under the Indian Penal Code and the Companies Act.

The Special Court has taken cognizance of the offences and issued bailable warrants, allegedly not executed inasmuch as the respondents abstained from appearing before the issuing authorities, prompting the issuance of non-bailable warrants and start of proclamation procedures against some of them. Further, the High Court granted the respondents anticipatory bail, forcing the SFIO to prefer these appeals before the Supreme Court now.

The Supreme Court, allowing most of the appeals, set aside the orders of the High Court granting anticipatory bail to the majority of the respondents. The Court observed that the respondents had brazenly attempted to stall the criminal proceedings by not respecting summons and warrants, thereby obstructing the administration of justice. It was noted that despite the rejection of their anticipatory bail applications by the Special Court in 2019-2022, the respondents avoided execution of non-bailable warrants and were aware of the complaint proceedings, as evidenced by their prior bail applications.

The Court emphasized that economic offences constitute a class apart and need to be visited with a different approach in matters of bail, considering their deep-rooted conspiracies and impact on the nation's economy.

The Supreme Court highlighted the mandatory nature of the twin conditions for bail under Section 212(6) of the Companies Act for offences under Section 447 (fraud), which the High Court seemingly disregarded. Furthermore, the Apex Court reiterated that anticipatory bail is an extraordinary remedy to be exercised sparingly, particularly in serious economic offences, and should not be granted to those evading the law.

The Apex Court further clarified the discretion of the Special Court under Section 204 CrPC to issue warrants, including non-bailable warrants, if it believes the accused will not voluntarily appear.

Coram: Justice Bela M. Trivedi & Justice Prasanna B. V
Date of Judgment: 09-04-2025