Court holds that neither grant nor cancellation of bail can be based solely on monetary compromise or promise to repay; matter sent back for fresh decision on merits.
The Delhi High Court has quashed both the grant and cancellation of bail granted to Gurmeet Singh @ Harpreet Singh in a bank fraud case, holding that criminal courts cannot use bail as a tool to enforce a financial settlement or recovery of dues.
Justice Sanjeev Narula was hearing a petition challenging the order of the Sessions Court, which had first granted bail to the accused in November 2022 on the basis of a settlement with Punjab National Bank, and later cancelled the bail in October 2023 after the accused allegedly failed to honour the repayment terms.
The case arose out of a cash-credit facility of Rs. 50 lakh sanctioned in 2016 to M/s Dashmesh Enterprises. The prosecution alleged that the loan was obtained through forged documents and a false guarantee allegedly executed in the name of a deceased person. The accused was arrested in August 2022 and later released on bail after paying Rs. 45 lakh to the bank and undertaking to repay the remaining amount within six months.
However, when no further payment was made, the bank sought cancellation of bail. The Sessions Court accepted the request, treating compliance with the settlement as a condition of bail.
Setting aside that approach, the High Court said that bail under the Criminal Procedure Code must be decided strictly on settled legal principles such as the nature of the allegations, evidence, custody requirement, possibility of absconding, and likelihood of tampering with evidence. It cannot be granted merely because an accused offers to repay money, nor can it be cancelled only because a repayment promise is breached.
The Court relied on Supreme Court rulings including Biman Chatterjee, Dilip Singh, Bimla Tiwari, Ramesh Kumar, Kundan Singh, Gajanan Dattatray Gore and Rakesh Jain, reiterating that criminal proceedings are not meant to recover disputed dues and that courts should not act as recovery agents.
The High Court found that the original bail order did not assess the usual bail factors and instead relied substantially on the settlement and part-payment. Likewise, the cancellation order was held unsustainable because there was no finding that the accused had absconded, tampered with evidence, influenced witnesses, or otherwise misused liberty.
The Court therefore set aside both orders and restored the bail application to the Sessions Court for fresh consideration on merits. It directed that the settlement, the Rs. 45 lakh payment, and the alleged breach of settlement terms shall not by themselves determine the bail question.
The Court also said it would continue interim protection for the accused until the Sessions Court decides the matter afresh, and asked that the bail application be decided preferably within four weeks. While declining to order immediate refund of the Rs. 45 lakh paid to the bank, the Court left it open to the accused to seek such relief before the Sessions Court during fresh bail consideration.
Bottom Line :
Bail cannot be granted or cancelled solely on the basis of a monetary settlement or undertaking to repay the complainant; bail must be considered strictly on merits under the settled principles governing regular bail.
Statutory provision(s): Section 482 CrPC, Section 439 CrPC, Sections 406, 419, 420, 468, 471, 120-B IPC
Gurmeet Singh @ Harpreet Singh v. State of NCT of Delhi, (Delhi) : Law Finder Doc id # 2985254
