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Introduction
In Serious Fraud Investigation Office v. Aditya Sarda[i], the Hon’ble Supreme Court of India was approached by the Serious Fraud Investigation Office (‘SFIO’) challenging the orders passed by the High Court granting anticipatory bail to accused persons who had been declared absconders and proclaimed offenders under s. 82 of the Code of Criminal Procedure, 1973 (‘CrPC’). The case stemmed from an investigation into the affairs of 145 companies linked to the Adarsh Group, which revealed that public funds were illegally diverted by disbursing loans to promoter-linked entities through the use of fictitious documentation and falsified financial statements. Despite the issuance of bailable and non-bailable warrants (‘BW, NBW’) by the Special Court, many accused evaded service, leading to proclamation proceedings. The Supreme Court set aside the High Court’s decision to grant anticipatory bail, holding that individuals who deliberately evade the judicial process and are declared proclaimed offenders are not entitled to the discretionary relief of anticipatory bail, particularly in cases involving serious economic offences.
Brief Facts
The case involved a batch of 16 connected appeals arising from proceedings before the Special Judge in Gurugram. The SFIO, a statutory body under s. 211 of the Companies Act, 2013 (‘CA13’), was directed by the Ministry of Corporate Affairs (‘MCA’) on 20.06.2018 to investigate the affairs of 125 companies of the Adarsh Group and later, on 25.02.2019, an additional 20 companies and two individuals.
The central entity under scrutiny was Adarsh Credit Cooperative Society Limited (‘ACCSL’), a multi-state cooperative society founded by Shri Mukesh Modi and allegedly run by him, his family, and associates. ACCSL had an extensive network with over 800 branches, 20 lakh members, 3.7 lakh advisors, and Rs. 9,253 crore in outstanding deposits as of 31.05.2018.
The SFIO alleged that Rs. 1,700 crores were illegally loaned by ACCSL to 70 companies of the Adarsh Group and others, in contravention of the principle that companies cannot be members of a multi-state cooperative society. The total outstanding illegal loans stood at Rs. 4,120 crore as of 31.03.2018. Funds were allegedly siphoned off based on forged loan documents, with the accused directors misrepresenting the funds in balance sheets.
Upon completion of the investigation, the SFIO submitted its report and filed a criminal complaint before the Special Court, Gurugram, under the provisions of CA13, the Companies Act, 1956, the Limited Liability Partnership Act, 2008, and the CrPC, naming 181 accused persons. The Special Court took cognizance and issued BWs, which were later replaced by NBWs as several accused allegedly evaded service. Proclamation proceedings under s. 82 of the CrPC were also initiated against several accused who persistently avoided summons/warrants.
Despite multiple NBWs and the rejection of anticipatory bail applications by the Special Court, the High Court granted bail to several accused in March and April 2023, which became the subject of challenge before the Hon’ble Supreme Court in the present appeals.
Held
The Supreme Court set aside the orders passed by the High Court granting anticipatory bail to the accused. It directed them to surrender themselves before the Special Court within one week in all connected cases, except in the cases where the Special Court itself had granted bail to the accused persons. The Court found a consistent pattern of evasion by the accused in avoiding the execution of warrants and thereby obstructing the administration of justice.
The Court addressed the legality of the proclamation proceedings under s. 82 of the CrPC and held that the accused had wilfully evaded the judicial process despite being aware of the proceedings against them, as was evident from their applications seeking anticipatory bail. Their claim of unawareness was found to be contradictory and without merit. The Court upheld the legality of the proclamation orders, finding that the Special Court had followed due process, including the issuance of BWs and NBWs before initiating proclamation. Relying on Inder Mohan Goswami v. State of Uttaranchal[ii], the Court reaffirmed that NBWs and proclamation are justified where the accused deliberately avoid the legal process.
The Court emphasised that the offences under s. 447 of CA13 are serious and cognizable, attracting the bar on bail under s. 212(6) of CA13, which imposes twin conditions for the grant of bail. It reiterated that economic offences involving financial fraud constitute a distinct category of crimes justifying a stricter approach to bail, given their serious impact on public interest. Reference was made to P. Chidambaram v. ED[iii] and Y.S. Jagan Mohan Reddy v. CBI[iv] to stress the need for higher scrutiny in such cases.
Thus, the Court held that the High Court erred in granting anticipatory bail to persons who had persistently defied the judicial process and had been declared proclaimed offenders. It was found that the accused had not cooperated with the investigation or court proceedings and had allegedly taken active steps to frustrate the service of legal process. The Court reiterated that anticipatory bail is not a matter of right and is to be granted sparingly, especially in cases involving serious economic offences and wilful disobedience of court processes.
Our Analysis
The Supreme Court’s ruling in this case affirms a stringent approach toward economic offences, especially where the accused have been declared proclaimed offenders under s. 82 of the CrPC. The judgment reinforces the position that anticipatory bail is not a shield for those who wilfully evade legal proceedings. This aligns with prior rulings of the Supreme Court, such as Lavesh v. State NCT of Delhi[v]* *and State of Madhya Pradesh v. Pradeep Sharma[vi], which collectively establish that absconders or proclaimed offenders are not entitled to anticipatory bail.
While statutes like s. 438 of the CrPC, now corresponding to s. 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (‘BNSS’), confers discretion upon courts to grant anticipatory bail; it is equally important that the exercise of such discretion is guided by clearly articulated principles. By laying down markers, as the Court has done in this ruling, the Supreme Court ensures that discretion is exercised within the defined bounds of law and reasoning, while also providing necessary clarity to accused persons. Clear judicial standards enable accused individuals to understand the consequences of their conduct, shape their defence strategies appropriately, and engage with the judicial process in good faith rather than through evasion.
The judgment in this case sets a clear precedent that individuals who consciously avoid the judicial process cannot seek refuge under s. 438 CrPC/s. 482 BNSS, especially in grave economic offences with far-reaching impact on the public interest.
End Notes
[i] 2025 SCC OnLine SC 764.
[ii] (2007) 12 SCC 1.
[iii] (2019) 9 SCC 24.
[iv] (2013) 7 SCC 439.
[v] (2012) 8 SCC 730.
[vi] (2014) 2 SCC 171.
Authored by Nitish Solanki, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinions.
