Paragraph numbers below are the court’s original numbering, recovered from the source text.
10. When a person is arrested, the rights guaranteed by Article 21 of the Constitution of India get substantially curtailed. The law permits arrests of the accused as provided in the CrPC or the BNSS. The effect of the grant of bail under the provisions of Sections 437 and 439 of the CrPC (Sections 480 and 483 of the BNSS) is that the liberty of the undertrial accused is restored pending the trial, subject to the accused complying with the conditions of bail. When the High Court or Sessions Court stays such an order, it amounts to taking away the liberty granted under the order of bail. When an application for cancellation of bail is filed, the High Court or Sessions Court should be very slow in granting drastic interim relief of stay of the order 986 granting bail. The reason is when a Court competent to grant bail finds the accused entitled to be enlarged on bail unless the said order is set aside on the limited grounds of cancellation available under sub-section (2) of Section 439 of CrPC or any other proceedings, the accused who has been granted bail cannot be normally deprived of his right to liberty guaranteed under Article 21 of the Constitution. Even if the order granting bail is not stayed, the accused can always be taken into custody if the bail is finally cancelled.
11. While issuing notice on an application for cancellation of bail, without passing a drastic order of stay, if the facts so warrant, the High Court can, by way of an interim order, impose additional bail conditions on the accused, which will ensure that the accused does not flee. However, an order granting a stay to the operation of the order granting bail during the pendency of the application for cancellation of bail should be passed in very rare cases. The reason is that when an undertrial is ordered to be released on bail, his liberty is restored, which cannot be easily taken away for the asking. The undertrial is not a convict. An interim relief can be granted in the aid of the final relief, which could be finally granted in proceedings. After cancellation of bail, the accused has to be taken into custody. Hence, it cannot be said that if the stay is not granted, the final order of cancellation of bail, if passed, cannot be implemented. If the accused is released on bail before the application for stay is heard, the application/proceedings filed for cancellation of bail do not become infructuous. The interim relief of the stay of the order granting bail is not necessarily in the aid of final relief.
12. The Court dealing with the application for cancellation of bail can always ensure that notice is served on the accused as soon as possible and that the application is heard expeditiously. An order granting bail can be stayed by the Court only in exceptional cases when a very strong prima facie case of the existence of the grounds for cancellation of bail is made out. The prima facie case must be of a very high standard. By way of illustration, we can point out a case where the bail is granted by a very cryptic order without recording any reasons or application of mind. One more illustration can be of a case where material is available on record to prove serious misuse of the liberty made by the accused by tampering with the evidence, such as threatening the prosecution witnesses. If the High Court or [2024] 7 S.C.R. Parvinder Singh Khurana v. Directorate of Enforcement Sessions Court concludes that an exceptional case is made out for the grant of stay, the Court must record brief reasons and set out the grounds for coming to such a conclusion.
13. An ex-parte stay of the order granting bail, as a standard rule, should not be granted. The power to grant an ex-parte interim stay of an order granting bail has to be exercised in very rare and exceptional cases where the situation demands the passing of such an order. While considering the prayer for granting an ex-parte stay, the concerned Court must apply its mind and decide whether the case is very exceptional, warranting the exercise of drastic power to grant an ex-parte stay of the order granting bail. Liberty granted to an accused under the order granting bail cannot be lightly and causally interfered with by mechanically granting an ex-parte order of stay of the bail order. Moreover, the Court must record specific reasons why it concluded that it was a very rare and exceptional case where a very drastic order of ex-parte interim stay was warranted. Moreover, since the issue involved is of the accused’s right to liberty guaranteed by Article 21 of the Constitution, if an ex-parte stay is granted, by issuing a short notice to the accused, the Court must immediately hear him on the continuation of the stay. ON FACTS OF THE CASE
14. Now, we come to the facts of the case. The order dated 23rd June 2023 records the presence of the advocate representing the accused. Therefore, the High Court ought to have heard the Advocate before granting the stay. But that was not done. Thus, it was an ex-parte order of stay. The failure to hear the advocate for the accused and the failure to record reasons vitiates the order of stay. The application for cancellation of bail was placed before the High Court on 23rd June 2023. The order dated 23rd June 2023 indicates that without even applying mind to the merits of the prayer for a grant of stay, the ex- parte stay was granted, and the application was ordered to be listed at 2.30 pm on 26th June 2023. However, the case was not heard on that day. After 23rd June 2023, the case appeared on 28th June before another Single Judge. He directed that the case be listed before the roster bench on 3rd July 2023. The order of stay was extended. On 3rd July 2023, the case was adjourned to 14th July 2023. On 14th July 2023, 7th August 2023, and 17th August 2023, arguments were heard on the application for cancellation of bail. For one reason or 988 another, further arguments could not be heard on 28th August 2023, 5th September 2023, 4th October 2023, 16th October 2023, 19th October 2023, and 3rd November 2023. Meanwhile, interim relief of stay of the order granting bail was continued from time to time.
15. The order of the High Court passed on 10th November 2023 records that the arguments were heard and judgment was reserved. After that, on 22nd December 2023, the application was listed for directions when the learned Judge, who had heard the arguments, passed an order directing that the application be listed before another Judge. From 8th January 2024 to 5th March 2024, the application was repeatedly adjourned without any hearing. On 5th March 2024, the case was again re-notified for 11th March 2024. On 11th March 2024, the learned Single Judge before whom the case was placed on eight earlier dates recused himself. On 12th March 2024, the case was shifted to another Single Judge who again passed an order of recusal. Incidentally, the same learned Judge had passed the ex-parte stay order on 23rd June 2023. After that, the case was adjourned on 18th March, 10th April and 2nd May 2024. On 2nd May 2024, the case was again adjourned to 9th July 2024. This compelled the appellant to apply to vacate the interim stay. The application for vacating stay was listed on 22nd May 2024, which was not heard due to paucity of time, and even the said application was adjourned to 9th July 2024, which was a date already fixed. The said order dated 22nd May 2024 does not make a happy reading. The order reads thus: "1. The matter could not be heard due to paucity of time. 2. List the matter on 09.07.2024 at 12:30 PM. 3. In case of any urgency in the matter or on any ground for which the petitioner wants to seek interim bail, it will be well within his right to do so and the same will be decided on merits as per law. 4. Interim order(s), if any, to continue, till the next date of hearing. 5. Copy of this order be given dasti under the signature Court Master. 6. The order be uploaded on the website forthwith.” The application moved before the Court was for vacating the stay. [2024] 7 S.C.R. Parvinder Singh Khurana v. Directorate of Enforcement It is very difficult to understand the propriety of granting liberty to the appellant to apply for interim bail without even touching the application for vacating interim relief. The High Court ignored the extreme urgency of hearing the application for vacating the stay. The Court ignored that the drastic order of stay of bail order had continued for 11 months which was passed without considering the merits. The appellant got no solace by the direction of the High Court that a copy of the said order be given dasti and that the same shall be uploaded forthwith.
16. In this case, it is so apparent from the first impugned order dated 23rd June 2023 that the order granting bail was mechanically stayed without considering merits. The application was kept on 26th June 2023 at 2.30 pm. The High Court ought to have heard the parties on the prayer for interim relief on 26th June 2023 if the main application for cancellation of bail could not be heard. From 23rd June 2023 till the end of June 2024, the application for cancellation of bail was listed on 28 different dates. As noted earlier, there were three recusals. One recusal was made more than one month after the judgment was reserved. The result of all this is that the ex-parte order of stay granted on 23rd June 2023, without considering the merits of the case, continued to operate for one year. Thus, the order of stay granted without hearing the accused continued to operate for more than one year without hearing the accused on merits. Whether such an approach violated the fundamental right to liberty of the appellant is a serious question we must ask ourselves. Except for stating that this is a sorry state of affairs, we cannot say anything further as we must show restraint. Ultimately, in vacation, this Court granted a stay on 7th June 2024 to the order of stay, paving the way for the appellant’s release on bail in terms of the order dated 17th June 2023, passed one year ago.
17. There may be good reasons for three learned Judges to have recused themselves. But surely, the ex-parte order staying the order of bail passed without considering merits cannot continue to operate for one year without the appellant getting a hearing on the issue of continuation of the interim order. All Courts have to be sensitive about the most important fundamental right conferred under our Constitution, which is the right to liberty under Article 21.
18. The first application for regular bail filed by the appellant was rejected by the Special Court by the order dated 10th March 2023. At that 990 time, further investigation was in progress following filing the first complaint on 30th October 2021. The appellant was not named as an accused in the FIR of the predicate offence, ECIR, or in the first complaint under the PMLA. Within seven days after the first bail application was rejected, a second complaint was filed in which the appellant was shown as an accused for the first time. In view of the filing of the complaint, it was open for the appellant to file a second bail application based on a change in circumstances brought about by the supplementary complaint. The change was that the investigation against the appellant was completed.
19. We have carefully perused the order dated 17th June 2023 granting regular bail. After a detailed discussion, it records a finding that the appellant has made out a case in terms of Section 45(1)(ii) of the PMLA on the power to grant bail. We have perused the application made by the respondent before the High Court for cancellation of bail. We find no allegation of the misuse of liberty granted under the bail order in the said application. All the grounds are on merits. The order dated 17th June 2023 granting bail is a detailed order running into more than 50 pages, which considers the material on record from both complaints under the PMLA. After having perused the said order, we find that the case was not the one that could have been termed a rare and exceptional case where an order granting bail ought to be stayed.
20. Our conclusions are as under: a. In an application made under Section 439(2) of the CrPC or Section 483(3) of the BNSS or other proceedings filed seeking cancellation of bail, the power to grant an interim stay of operation of order to bail can be exercised only in exceptional cases when a very strong prima facie case of the existence of the grounds for cancellation of bail is made out. While granting a stay of an order of grant of bail, the Court must record brief reasons for coming to a conclusion that the case was an exceptional one and a strong prima facie case is made out; b. As a normal rule, the ex-parte stay of the bail order should not be granted. The said power can be exercised only in rare and very exceptional cases where the situation demands the passing of such drastic order. Where such a drastic ex-parte order of stay is passed, it is the duty of the Court to immediately hear [2024] 7 S.C.R. Parvinder Singh Khurana v. Directorate of Enforcement the accused on the prayer for continuation of the interim relief. When the Court exercises the power of granting ex-parte ad interim stay of an order granting bail, the Court is duty bound to record reasons why it came to the conclusion that it was a very rare and exceptional case where a drastic order of ex-parte interim stay was warranted.
21. Therefore, the appeals must succeed. We set aside the impugned orders by which the High Court granted the stay of the order granting bail. We make it clear that pending the hearing of application for cancellation of bail, the order dated 17th June, 2023 passed by the Special Court will continue to operate. We make it clear that all the contentions on the merits of the application for cancellation of bail are expressly left open to be decided by the High Court. The findings recorded in the judgment are only for considering the legality and validity of the order of stay on the order granting bail.
22. The appeals are, accordingly, allowed on the above terms. Result of the case: Appeals allowed. †Headnotes prepared by: Ankit Gyan