REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1716  OF 2008 (Arising out of SLP (Crl.) No. 4379 of 2008)

Parvinderjit Singh and Anr.   ....Appellants

Versus

State (U.T. Chandigarh) and Anr. ....Respondents

(With Criminal Appeal No.1717  of 2008 @SLP(Crl.) no.4609 of 2008)

J U D G M E N T

Dr. ARIJIT PASAYAT, J.

1. Leave granted.

2. Challenge in these appeals is to the order of learned Single Judge of

the  Punjab  and  Haryana  High  Court.  Though  the  appellants  had  filed

application under Section 482 of the Code of Criminal Procedure, 1973 (in

short the ‘Code’) praying for quashing the proceedings in FIR No.73 dated

15.4.2008 registered in respect of offences punishable under Sections 406,

420 and 120B of the Indian Penal Code, 1860 (in short the ‘IPC’) in Police

Station,  Sector  3,  Chandigarh,  in  essence  the  prayer  was  for  grant  of

protection under Section 438 of the Code.  

3. Background facts, highlighted by the appellants, are as follows:

Citibank and Citigroup Wealth  Advisors  (in short  ‘CWA’) are two

separate  legal  entities.  Citibank  carries  on  banking  activities  and  is

incorporated under the Banking Regulations Act, 1956 and is guided by the

directions and guidelines of the Reserve Bank of India;  whereas CWA is a

wealth advisory body incorporated under the Companies Act, 1956 and is

regulated by the directions and guidelines as set out by SEBI and the Stock

Exchanges.  

Appellants’ (who are employees of Citi Bank) prayer for anticipatory

bail  are  based  on  the  premises  that  the  allegations  in  the  complaint  are

purely of civil nature since arbitration proceedings have been initiated at the

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behest of both the complainant and CWA much prior to the institution of the

criminal case.   

The prayer was opposed by the State and the complainant. The High

Court noted that the allegation in the FIR was to the following effect:

“A perusal of the FIR shows that an amount of Rs.1.10 crores has been fraudulently withdrawn from the saving account  of  the  complainant  and  shares  worth  Rs.1.60 crores  have  been  fraudulently  withdrawn/embezzled from  his  demat  account  maintained  in  the  City  Bank with whom the petitioners were employed at the relevant time.  The  act  of  embezzlement  is  attributed  to  the petitioners and two other persons, who are employees of City Group Wealth Advisors India Private Limited. On these  allegations,  a  case  under  sections  406/420  and 120B of the Indian Penal Code in Police Station, Sector 3, Chandigarh was registered against the petitioners. “  

The High Court noted that this was not a case where any protection in

terms of Section 438 of Code was to be extended.  

4. In support of the appeals, learned counsel for the appellants submitted

that the FIR was nothing but a sheer abuse of the process of the law. The

entire  case  hinges  on  documentary  evidence  which  cannot  be  tampered

since the records are duly co-related with NSE/BSE and CWA and there

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cannot be apprehension of either the appellants tampering with the evidence

or absconding since they are responsible officers and are willing to assist

the  investigation.  It  is  further  submitted  that  the  complaint  made by the

complainant is not bona fide and has been filed with ulterior motive.

5. Learned counsel for the State on the other hand submitted that in spite

of the directions of this Court the appellants are not cooperating with the

investigation. This statement is strongly denied by learned counsel for the

appellants.  They  have  submitted  that  they  have  on  more  than  twenty

occasions  appeared  before  the  investigating  officer.  Strangely,  the

investigating officer is asking for certain documents which have either no

relevance and, therefore, the investigating officer  is not acting fairly.

6. The facility which Section 438 of the Code gives is generally referred

to  as  ‘anticipatory  bail’.  This  expression  which  was  used  by  the  Law

Commission  in  its  41st Report  is  neither  used  in  the  section  nor  in  its

marginal note.  But the expression ‘anticipatory bail’ is a convenient mode

of indication that  it  is possible to apply for bail  in anticipation of arrest.

Any  order  of  bail  can  be  effective  only  from the  time  of  arrest  of  the

accused.   Wharton’s  Law Lexicon  explains  ‘bail’  as  ‘to  set  at  liberty  a

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person arrested or imprisoned, on security being taken for his appearance.’

Thus bail is basically release from restraint, more particularly the custody of

Police. The distinction between an ordinary order of bail and an order under

Section 438 of the Code is that whereas the former is granted after arrest,

and therefore means release from custody of the Police, the latter is granted

in anticipation  of  arrest  and is  therefore  effective at  the very moment of

arrest.(See: Gur Baksh Singh v. State of Punjab 1980(2) SCC 565). Section

46(1) of the Code, which deals with how arrests are to be made, provides

that in making an arrest the Police officer or other person making the same

“shall actually touch or confine the body of the person to be arrested, unless

there be a submission to the custody by word or action”.  The order under

Section 438 of the Code is intended to confer conditional immunity from the

touch as envisaged by Section 46(1) of the Code or any confinement.  The

apex Court in  Balachand Jain  v.  State of Madhya Pradesh  (AIR 1977 SC

366)  has  described  the  expression  ‘anticipatory bail’  as  misnomer.   It  is

well-known  that  bail  is  ordinary  manifestation  of  arrest,  that  the  Court

thinks first to make an order is that in the event of arrest a person shall be

released on bail. Manifestly there is no question of release on bail unless the

accused is arrested, and therefore, it is only on an arrest being effected the

order  becomes  operative.  The  power  exercisable  under  Section  438  is

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somewhat  extraordinary  in  character  and  it  is  only  in  exceptional  cases

where it appears that the person may be falsely implicated or where there

are reasonable grounds for holding that a person accused of an offence is

not  likely  to  otherwise  misuse  his  liberty  then  power  is  to  be  exercised

under Section 438.  The power being of important nature it is entrusted only

to the higher echelons of judicial forums, i.e. the Court  of Session or the

High Court. It is the power exercisable in case of an anticipated accusation

of  non-bailable  offence.   The  object  which  is  sought  to  be  achieved  by

Section 438 of the Code is that the moment a person is arrested, if he has

already obtained an order from the Court of Session or High Court, he shall

be released immediately on bail without being sent to jail.

7. Sections 438 and 439 operate in different fields.  Section 439 of the

Code reads as follows:

“439. (1) A High Court or Court of Session may direct -

(a) that any person accused of an offence and in custody be released on bail, and if the offence is of the nature specified in sub-section (3) of Section 437, may impose any  condition  which  it  considers  necessary  for  the purposes mentioned in that sub-section;  

(b) that any condition imposed by the Magistrate when releasing any person on bail be set aside or modified.”  

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(underlined for emphasis)

8. It is clear from a bare reading of the provisions that for making an

application  in  terms  of  Section  439  of  the  Code  a  person  has  to  be  in

custody. Section 438 of the Code deals with “Direction for grant of bail to

person apprehending arrest”.  

9. In Salauddin Abdulsamad Shaikh v. State of Maharashtra (AIR 1996

SC 1042) it was observed as follows:                  

“Anticipatory bail is granted in anticipation of arrest in non-bailable  cases,  but  that  does  not  mean  that  the regular court, which is to try the offender, is sought to be bypassed and that is the reason why the High Court very rightly fixed the outer date for the continuance of the  bail  and  on  the  date  of  its  expiry  directed  the petitioner to move the regular court for bail. That is the correct procedure to follow because it must be realised that when the Court  of Sessions or the High Court is granting anticipatory bail, it is granted at a stage when the investigation is incomplete and, therefore, it is not informed  about  the  nature  of  evidence  against  the alleged  offender.  It  is,  therefore,  necessary  that  such anticipatory bail orders should be of a limited duration only  and  ordinarily  on  the  expiry  of  that  duration  or extended  duration  the  court  granting  anticipatory bail should  leave  it  to  the  regular  court  to  deal  with  the matter  on an appreciation of evidence placed before it after the investigation has made progress or the charge- sheet is submitted”.  

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(Emphasis supplied)

10. In  K.L. Verma v.  State and Anr. (1996 (7) SCALE 20) this Court

observed as follows:

“This  Court  further  observed  that  anticipatory bail is granted in anticipation of arrest in non-bailable cases,  but  that  does  not  mean  that  the  regular  court, which is to try the offender, is sought to be bypassed. It was,  therefore,  pointed  out  that  it  was  necessary  that such  anticipatory  bail  orders  should  be  of  a  limited duration  only  and  ordinarily  on  the  expiry  of  that duration  or  extended  duration  the  court  granting anticipatory bail should leave it to the regular court to deal  with  the  matter  on  an  appreciation  of  evidence placed  before  it  after  the  investigation  has  made progress or the charge-sheet is submitted. By this, what the  Court  desired  to  convey  was  that  an  order  of anticipatory bail does not enure till the end of trial but it must be of limited duration as the regular court cannot be bypassed. The limited duration must be determined having regard to the facts of the case and the need to give  the  accused  sufficient  time  to  move  the  regular court  for  bail  and to  give  the  regular  court  sufficient time to determine the bail application.  In other words, till  the bail  application is disposed of one way or the other  the  court  may  allow  the  accused  to  remain  on anticipatory bail. To put it differently, anticipatory bail may be granted for a duration which may extend to the date on which the bail application is disposed of or even a few days thereafter to enable the accused persons to move the higher court, if they so desire.”

(Emphasis supplied)

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11. In Nirmal Jeet Kaur v. State of M.P. and Another (2004 (7) SCC 558)

and Sunita Devi v. State of Bihar and Anr. Criminal Appeal arising out of

SLP (Crl.) No. 4601 of 2003 disposed of on 6.12.2004 certain grey areas in

the case of K.L. Verma’s case (supra) were noticed. The same related to the

observation “or even a few days thereafter to enable the accused persons to

move the Higher Court, if they so desire”. It was held that the requirement

of Section 439 of  the  Code is  not  wiped out  by the above observations.

Section 439 comes into operation only when a person is “in custody”.  In

K.L. Verma’s case (supra) reference was made to Salauddin’s case (supra).

In the said case there was no such indication as given in K.L. Verma’s case

(supra),  that a few days can be granted to the accused to move the higher

Court if they so desire.   The statutory requirement of Section 439 of the

Code cannot be said to have been rendered totally inoperative by the said

observation.         

12. In  view of  the  clear  language  of  Section  439  and  in  view of  the

decision  of  this  Court  in  Niranjan Singh and Anr. v.  Prabhakar Rajaram

Kharote and Ors. (AIR 1980 SC 785), there cannot be any doubt that unless

a person is in custody, an application for bail under Section 439 of the Code

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would not be maintainable. The question when a person can be said to be in

custody  within  the  meaning  of  Section  439  of  the  Code  came  up  for

consideration before this Court in the aforesaid decision.

13. After analyzing the crucial question is when a person is in custody,

within the meaning of Section 439 of the Code, it was held in Nirmal Jeet

Kaur’s case  (supra)  and  Sunita  Devi’s case  (supra)  that  for  making  an

application  under  Section  439  the  fundamental  requirement  is  that  the

accused should be in custody. As observed in  Salauddin’s case (supra) the

protection in terms of Section 438 is for a limited duration during which the

regular Court has to be moved for bail.  Obviously, such bail is bail in terms

of  Section  439  of  the  Code,  mandating  the  applicant  to  be  in  custody.

Otherwise, the distinction between orders under Sections 438 and 439 shall

be rendered meaningless and redundant.

14. If the protective umbrella of Section 438 is  extended beyond what

was  laid  down  in  Salauddin’s case  (supra)  the  result  would  be  clear

bypassing of what is mandated in Section 439 regarding custody.  In other

words,  till  the  applicant  avails  remedies  upto  higher  Courts,  the

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requirements of Section 439 become dead letter. No part of a statute can be

rendered redundant in that manner.               

15. Section 438 is  a procedural  provision which is  concerned with the

personal liberty of an individual who is entitled to plead, innocence, since

he is not on the date of application for exercise of power under Section 438

of the Code convicted for the offence in respect of which he seeks bail. The

applicant must show that he has ‘reason to believe’ that he may be arrested

in a non-bailable offence.  Use of the expression’reason to believe’ that he

may be arrested in a non-bailable offence.  Use of the expression ‘reason to

believe’  shows  that  the  applicant  may  be  arrested  must  be  founded  on

reasonable grounds.  Mere “fear” is not ‘belief’ for which reason it is not

enough  for  the  applicant  to  show  that  h  has  some  sort  of  vague

apprehension that some one is going to make an accusation against him in

pursuance of which he may be arrested.  Grounds on which the belief on the

applicant is based that he may be arrested in non-bailable offence must be

capable of being examined.  If an application is made to the High Court or

the Court of Session, it is for the Court concerned to decide whether a case

has been made out of for granting the relief sought.  The provisions cannot

be  invoked  after  arrest  of  the  accused.   A  blanket  order  should  not  be

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generally  passed.   It  flows from the very language of  the  section  which

requires the applicant to show that he has reason to believe that he may be

arrested.  A belief can be said to be founded on reasonable grounds only if

there is something tangible to go by on the basis of which it can be said that

the applicant’s apprehension that he may be arrested is genuine.  Normally a

direction should not issue to the effect that the applicant shall be released on

bail “whenever arrested for whichever offence whatsoever”.  Such ‘blanket

order’ should not be passed as it would serve as a blanket to cover or protect

any and every kind of allegedly unlawful activity.  An order under Section

438 is a device to secure the individual’s liberty’ it is neither a passport to

the  commission  of  crimes  nor  a  shield  against  any  and  all  kinds  of

accusations likely or unlikely.   

16. The next question is whether a Court can pass an interim order not to

arrest the applicant, where an application under Section 438 of the Code is

pending disposal.   

17. Ordinarily, arrest is a part of the process of investigation intended to

secure several purposes.  The accused may have to be questioned in detail

regarding various facets of motive, preparation, commission and aftermath

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of the crime and the connection of other persons, if any, in the crime.  There

may  be  circumstances  in  which  the  accused  may  provide  information

leading to  discovery of  material  facts.  It  may be necessary to  curtail  his

freedom in order to enable the investigation to proceed without hindrance

and to protect witnesses and persons connected with the victim of the crime,

to prevent his dis-appearance to maintain law and order in the locality.  For

these or other reasons, arrest may become inevitable part of the process of

investigation.  The legality of the proposed arrest cannot be gone into in an

application under Section 438 of the Code.  The role of the investigator is

well-defined and the jurisdictional scope of interference by the Court in the

process of investigation is limited.  The Court ordinarily will not interfere

with  the  investigation  of  a  crime  or  with  the  arrest  of  accused  in  a

cognizable offence.    An interim order restraining arrest, if passed while

dealing with an application under Section 438 of the Code will amount to

interference in the investigation, which cannot, at any rate, be done under

Section  438  of  the  Code.  The  above  position  was  highlighted  in  Adri

Dharan Das v. State of West Bengal (2005 (4) SCC 303).  

18. We find that in the instant case this Court had in fact by order dated

30.5.2008 directed that the appellants  shall  not  be arrested subject to the

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condition that they will joint investigation. Strictly speaking the order does

not fit in with the parameters indicated in Adri Dharan Das’s case (supra).

Be that as it may, the order is in operation and we do not think it appropriate

in the present case to make any variation.  

19. We dispose of the appeals with the following directions:  

(1) The investigation shall be completed within two months unless

there is some practical difficulty in completing the same within that

period.  

(2) The appellants shall, as and when required by the investigating

agency, appear before the investigating officer and shall cooperate in

the investigation.  

(3) If any document is asked for the same shall be supplied unless

the appellants are not in possession of the documents.

(4) In case the investigating officer feels that the non-production of

documents as called for has any relevance, that can certainly be taken

note of while submitting the final form or the charge sheet as the case

may be.  Needless  to  say  that  this  order  shall  be  operative  till  the

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charge sheet or the final form as the case may be is filed before the

concerned court.  

20. The appeals are disposed of.  

……..…….............................J. (Dr. ARIJIT PASAYAT)

……..…….............................J. (C.K. THAKKER)

New Delhi, November 3, 2008

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