THE STATE THROUGH CENTRAL BUREAU OF INVESTIGATION versus T. GANGI REDDY @ YERRA GANGI REDDY on 16 January 2023

[2023] 1 S.C.R. 741

THE STATE THROUGH CENTRAL BUREAU OFINVESTIGATION

v.

T. GANGI REDDY @ YERRA GANGI REDDY

(Criminal Appeal No. 37 of 2023)

JANUARY 16, 2023

[M. R. SHAH AND C.T. RAVIKUMAR, JJ.]

Code of Criminal Procedure, 1973 : s. 167(2) – Default bail– Cancellation of, on merits – On facts, accused-respondent arrestedin connection with the murder of a former MLA, released on defaultbail u/s 167(2) – CBI concluded the investigation, filed chargesheetand then filed for cancellation of bail of the respondent – However,the High Court rejected the said petition on the ground that defaultbail granted u/s. 167(2) cannot be cancelled on merits – On appeal,held: Order of release on bail under proviso to s. 167(2) cannot becalled as an order on merits – Purpose of proviso to s.167(2) is topress expeditious investigation within the prescribed time limit –Accused is released on bail under proviso to s.167(2) on the failureof the prosecuting agency –Mere filing of the chargesheetsubsequent to a person is released on default bail u/s. 167(2) cannotbe a ground to cancel the bail of a person, who is released ondefault bail – No absolute bar that once a person is released ondefault bail u/s.167(2), his bail cannot be cancelled on merits – Onfiling of the chargesheet on conclusion of the investigation, if astrong case is made out and on merits, it is found that he hascommitted a non-bailable offence/crime, on the special reasons/grounds and considering ss. 437(5) and 439(2), over and aboveother grounds on which the bail to a person, who is released onbail can be cancelled on merits – Therefore, the courts are notprecluded from considering the application for cancellation of thebail on merits –Order of the High Court set aside – ss. 174, 437(5),439(2) – Penal Code, 1860 – ss. 120-B, 201, 302, 506.

Allowing the appeal, the Court

HELD: 1.1 When an accused is released on default bailunder proviso to sub- section (2) of Section 167 Cr.P.C., he isreleased on furnishing the bail bond by him on the failure of the

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Ainvestigating agency to complete the investigation and file thechargesheet within the stipulated time mentioned therein. Theproviso to sub-section (2) of Section 167 fixes the outer limitwithin which the investigation must be completed and if the sameis not completed within the period prescribed therein, the accusedhas a right to be released on bail if he is prepared to and doesBfurnish bail. Considering proviso to Section 167(2) Cr.P.C., itcannot be disputed that a person released on bail (default bail) isdeemed to be released under provisions of Chapter XXXIII ofthe Cr.P.C., which includes Section 437 and 439 also. The objectand purpose of proviso to Section 167(2) Cr.P.C. is to impressCupon the need for expeditious investigation within the prescribedtime limit and to prevent laxity in that behalf. The object is toinculcate a sense of its urgency and on default the Magistrateshall release the accused if he is ready and does furnish bail.Thus, it cannot be said that order of release on bail under provisoto Section 167(2) Cr.P.C. is an order on merits. An accused isDreleased on bail under proviso to Section 167(2) Cr.P.C. on thefailure of the prosecuting agency. Therefore, the deeming fictionunder Section 167(2) Cr.P.C. cannot be interpreted to the lengthof converting the order of bail not on merits as if passed on merits. [Para 8.1][750-H; 751-A-E]

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1.2. When special reasons/grounds are being made out fromthe chargesheet and the chargesheet reveals the commission ofa non- bailable crime, the bail in favour of a person, who hasbeen released on default bail under Section 167(2) Cr.P.C. canbe cancelled considering Section 437(5) and Section 439(2)FCr.P.C. The law, which emerges is that mere filing of thechargesheet subsequent to a person is released on default bailunder Section 167(2) Cr.P.C. cannot be a ground to cancel thebail of a person, who is released on default bail. However, onfiling of the chargesheet on conclusion of the investigation, if astrong case is made out and on merits, it is found that he hasGcommitted a non-bailable offence/crime, on the special reasons/grounds and considering Section 437(5) and Section 439(2)Cr.P.C, over and above other grounds on which the bail to aperson, who is released on bail can be cancelled on merits.Therefore, there is no absolute bar as held by the High Court inH

the impugned judgment and order that once a person is releasedon default bail under Section 167(2) Cr.P.C., his bail cannot becancelled on merits and his bail can be cancelled on other generalgrounds like tampering with the evidence/witnesses; notcooperating with the investigating agency and/or not cooperatingwith the concerned trial court etc. [Para 9.7, 10, 11][761-F; 762-G-H; 763-A-B]

1.3 The impugned judgment and order passed by the HighCourt dismissing the application for cancellation of the bail filedby the C.B.I. under Section 439(2) Cr.P.C. is quashed and setaside. [Para 13][763-H; 764-A]

1.4 As the High Court has not at all considered on meritsthe application for cancellation of the bail, the matter is to beremitted to the High Court for considering the said applicationafresh in accordance with law and on merits and in light of theobservations made. As pursuant to the earlier judgment and orderpassed by this Court dated 29.11.2022 in Writ Petition (Criminal)No. 169 of 2022, the trial of the F.I.R. in the present case hasbeen ordered to be transferred to the C.B.I. Special Court,Hyderabad, the proceedings of the cancellation of the bailapplication, which was earlier filed before the High Court ofAndhra Pradesh are ordered to be transferred to the High Courtof Telangana at Hyderabad and now the High Court of Telanganato consider, decide and dispose of the application for cancellationof the bail on merits and in light of the observations made. [Para14][764-D-F]

Aslam Babalal Desai Vs. State of Maharashtra (1992)4 SCC 272 : [1992] 1 Suppl. SCR 545; Abdul BasitAlias Raju and Ors. Vs. Mohd. Abdul Kadir Chaudharyand Anr (2014) 10 SCC 754 : [2014] 10 SCR 571;Raghubir Singh and Ors. Vs. State of Bihar (1986) 4SCC 481 : [1986] 3 SCR 802 – relied on.

Mohamed Iqbal Madar Sheikh and Ors. Vs. State ofMaharashtra (1996) 1 SCC 722 : [1996] 1 SCR 183,Rajnikant Jivanlal and Anr. Vs. Intelligence Officer,NCB, New Delhi, (1989) 3 SCC 532 : [1989] 3 SCR377, Rakesh Kumar Paul v. State of Assam, (2017) 15SCC 67 : [2017] 8 SCR 785 – referred to.

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Case Law Reference

CRIMINAL APPELLATE JURISDICTION : Criminal AppealCNo.37 of 2023.

From the Judgment and Order dated 16.03.2022 of the High Courtof Andhra Pradesh at Amaravati in Criminal Petition No.788 of 2022.

K.M. Nataraj, ASG, Ms. Jyoti Zongluju, Sharath Nambiar, VinayakSharma, Praneet Pranav, T.S. Sabarish, Nakul Chengappa K. K., ArvindDKumar Sharma, Advs. for the Appellant.

B. Adinarayana Rao, Siddhartha Dave, Sr. Advs., SumanthNookala, Ms. Jesal Wahi, Ms. Vidhi Thaker, Advs. for the Respondent.

The Judgment of the Court was delivered by EM. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 16.03.2022 passed by the High Court of Andhra Pradeshat Amravati in Criminal Petition No. 788 of 2022 by which the HighCourt has dismissed the said petition preferred by the appellant – CentralFBureau of Investigation (C.B.I.) filed under Section 439(2) of the Codeof Criminal Procedure (Cr.P.C.), to cancel the bail that was granted tothe respondent herein – original Accused No. 1 and wherein the HighCourt has held that once the respondent No. 1 – Accused No. 1 wasreleased on default bail under Section 167(2) Cr.P.C., thereafter it is notpermissible to consider the case for cancellation of bail on merits, theGInvestigating Agency – C.B.I. has preferred the present appeal.

2. While considering the issue involved in the present appeal,namely, whether in a case where the accused is released on default bailthereafter, cancellation of the bail application can be considered on merits,the chronological dates and events are required to be referred to, whichHare as under:- 2.1 The deceased Shri Y.S. Vivekananda Reddy, a former M.L.A.;former Member of Lok Sabha; former Member of A.P. LegislativeCouncil; and holding other posts was found dead in his house on15.03.2019. Initially a case under Section 174 Cr.P.C. was registered bythe local police, i.e., Police Station, Pulivendula in Crime No.84 of 2019.Subsequently, a case under Section 302 read with Section 120-B of theIndian Penal Code (I.P.C.) was registered. Special Investigation Team(S.I.T.) was constituted by the State. The S.I.T. took over theinvestigation. During the course of investigation, the concerned StatePolice Agency arrested the respondent herein – original Accused No. 1(A-1) on 28.03.2019 and he was remanded to judicial custody. Thestatutory period of 90 days lapsed on 26.06.2019. On the very next dayof lapsing of 90 days, respondent herein – original Accused No. 1 filed abail application for default bail under Section 167(2) of the Cr.P.C. Therespondent herein was allowed the default bail by the learned JMFC,Pulivendula on 27.06.2019. The respondent herein – original accusedNo. 1 was released on bail as per the said order.

2.2 That subsequently and pursuant to the order passed by theHigh Court dated 11.03.2020 passed in Writ Petition No. 3144 of 2019and Writ Petition No. 1639 of 2020, investigation in the above crime wasentrusted to the appellant – C.B.I. The C.B.I. then took up theinvestigation in the said case. The C.B.I. filed the F.I.R. No. RC-04(S)/2020/SC-II/ND on 09.07.2020. The investigation revealed that aconspiracy was hatched up by A-1 to A-4 along with some other personsto kill the deceased and there were some influenced persons behind thesaid conspiracy.

2.3 The C.B.I. filed the initial / first chargesheet on 26.10.2021and named A1 to A4. That thereafter the CBI filed an application beforethe Special Court under Section 439(2) Cr.P.C. for cancelation of thebail granted to the respondents, which came to be dismissed by the learnedTrial Court vide order dated 30.11.2021.

2.4 That thereafter the C.B.I. filed a supplementary chargesheetagainst the accused D. Siva Shankar Reddy (A-5) under Sections 201and 120-B read with 302 & 201 I.P.C. and also against the respondentherein – original Accused No. 1 under Sections 201, 506 and 120-B readwith 201 I.P.C. That thereafter the C.B.I. conducted the furtherinvestigation and continued the investigation and recorded the statementof approver A-4. That thereafter the C.B.I. filed the Criminal Petition AB

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ANo. 788 of 2022 before the High Court under Section 439(2) Cr.P.C. forcancellation of bail granted to the respondent herein – Accused No. 1.

2.5 By the impugned judgment and order, the High Court hasrejected the said petition mainly on the ground that once the respondentNo. 1 – original Accused No. 1 was released on default bail under SectionB167(2) Cr.P.C., thereafter, the bail cannot be cancelled on merits.

2.6 Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court refusing to cancel the bail underSection 439(2) Cr.P.C., the C.B.I. has preferred the present appeal.

3. At this stage, it is required to be noted that in the meantime, theCdaughter and wife of the deceased filed a writ petition under Article 32of the Constitution of India before this Court seeking transfer of the trialarising out of the present F.I.R. from C.B.I. Special Court, Kadapa,Andhra Pradesh to C.B.I. Special Court, Hyderabad or C.B.I. SpecialCourt, New Delhi and also to direct the C.B.I. for duly completing theDinvestigation in the aforesaid F.I.R. in the time bound manner. By adetailed judgment and order dated 29.11.2022, this Court has allowedthe said writ petition on the allegations of tampering with the evidenceand the witnesses and even pressurizing the C.B.I. Officers by filingfalse complaints against them.

E4. Therefore, the short question which is posed for theconsideration of this Court is:- Whether after an accused is released on default bail underSection 167(2) Cr.P.C., under which circumstances, his bail canbe cancelled and whether bail can be cancelled on merits havingfound committed non-bailable crime on conclusion of theFinvestigation and filing the chargesheet?

5. Shri K.M. Nataraj, learned ASG appearing on behalf of theC.B.I. has vehemently submitted that as such release of an accused ondefault bail under Section 167(2) Cr.P.C., cannot be said to be releasingthe accused on merits. It is submitted that an accused is released onGdefault bail under Section 167(2) Cr.P.C. on failure of the investigatingagency to conclude the investigation within the time stipulated under theCr.P.C. It is submitted that therefore, on filing of the chargesheet andcuring the defects, it is always open for the Court to consider theapplication for cancellation of bail on merits on that basis and to considerHthe seriousness of the offence.

5.1 It is vehemently submitted that Section 167(2) Cr.P.C. fixesthe outer limit within which the investigation has to be completed and ifthe same is not completed within the period prescribed, the accused hasa right to be released on bail, if he is prepared to and does furnish bail. Itis submitted that as per clause (a)(ii) of sub-section (2) of Section 167,he is deemed to be released under the provisions of Chapter XXXIII ofthe Cr.P.C. It is submitted that Chapter XXXIII of the Cr.P.C. includesSections 437 and 439 whereunder the Court is empowered to cancel thebail granted to an accused in terms of Section 437(5) and Section 439(2).It is submitted that therefore, though the bail is granted under proviso tosub-section (2) of Section 167 Cr.P.C., by virtue of deeming fiction, thesame can be cancelled by the Court in terms of Section 437(5) andSection 439(2) Cr.P.C.

5.2 It is submitted that the purpose of the proviso to Section 167(2)is to impress upon the need for expeditious investigation within theprescribed time limit and to prevent laxity in that behalf. The object is toinculcate a sense of its urgency and on default the Magistrate shall releasethe accused if he is ready and does furnish bail. It is submitted thattherefore, an order for release on bail under proviso to Section 167(2)Cr.P.C. is not an order on merits but an order on default of the prosecutingagency. It is submitted that the deeming fiction under the proviso toSection 167(2) cannot be interpreted to go to the length of converting anorder of bail not on merit as if passed on merit. It is submitted thattherefore, such an order could be nullified for special reasons after thedefect/default has been cured, i.e., after filing of the chargesheet. It issubmitted that therefore, since the bail was granted due to default of theinvestigating agency and without the Court adverting to the merits of thecase, the merits brought about in the chargesheet and attendingcircumstance would be relevant.

5.3 It is further submitted that in the present case the bail wasgranted to the respondent herein under proviso to Section 167(2) on thedefault of the State Police in completing the investigation within theprescribed limit and the lackadaisical approach of the State Police wasalso the reason for transfer of the investigation to the appellant – C.B.I.

5.4 Shri K.M. Nataraj, learned ASG appearing on behalf of theappellant – C.B.I. has vehemently relied upon the Three Judge Benchdecision of this Court in the case of Aslam Babalal Desai Vs. State ofMaharashtra, (1992) 4 SCC 272 in support of his submission that as ABCDE

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Aobserved and held by this Court on the special grounds being made outthat the accused has committed very serious offences; committed non-bailable crimes and he deserves to be in custody, even in a case wherethe accused is released on default bail under Section 167(2) Cr.P.C., hisbail can be cancelled. Heavy reliance is placed on the observations madeby Justice A.M. Ahmadi (as he then was) in paragraph 14. He has alsoBtaken us to the observations made by Justice M.M. Punchhi (as he thenwas) in paragraphs 23 and 28 (though dissenting view but concurringwith the observations with respect to Section 167(2) Cr.P.C.). He hasalso taken us to the observations made by the then Justice K. Ramaswamy(concurring view made in paragraphs 39 and 40). Relying upon the aboveCobservations made in the aforesaid paragraphs by the respective Hon’bleJudges, it is submitted that as observed and held by this Court, grant ofdefault bail under the proviso to sub-section (2) of Section 167 Cr.P.C. isdeemed to be released in terms of Chapter XXXIII of the Cr.P.C. and,therefore, the default bail, once granted, can be cancelled by the Court for the reasons germane to the cancellation of bail under Section 437(5)Dor Section 439(2) of the Cr.P.C.

5.5 Relying upon the above decision and the observations madetherein, it is submitted that since the bail was granted due to default ofthe investigating agency and without the Court adverting to the merits ofthe case, the merits brought about in the chargesheet and attendingEcircumstance would be relevant.

5.6 Shri K.M. Nataraj, learned ASG has further submitted that inthe present case, even the case is made out under Section 439(2) Cr.P.C.to cancel the bail in view of the changed circumstances and theobservations made by this Court in the subsequent order passed in theFWrit Petition (Criminal) No. 169 of 2022) by which this Court transferredthe trial from the C.B.I. Special Court, Kadapa, Andhra Pradesh to theC.B.I. Special Court, Hyderabad. It is submitted that this Hon’ble Courthas transferred the trial on the ground that the witnesses are beingthreatened and/or influenced and there is no possibility of having fairGtrial if the same is conducted in the State of Andhra Pradesh. However,as the High Court has not at all considered anything on merits, we do notpropose to go into the said aspect at this stage and opine anything on theaforesaid.

5.7 Shri Nataraj, learned ASG has also heavily relied upon theHsubsequent decision of this Court in the case of Abdul Basit Alias Raju and Ors. Vs. Mohd. Abdul Kadir Chaudhary and Anr., (2014)10 SCC 754 (paragraphs 13 and 14) in support of his submission thatthe bail granted under Section 167(2) Cr.P.C. can be cancelled on anapplication by the prosecuting agency.

5.8 Making above submissions, it is prayed to allow the presentappeal and cancel the bail granted in favour of the respondent herein –original Accused No. 1 on merits considering the chargesheet andconsidering the seriousness of the offences alleged to have beencommitted by the accused and considering the gravity of the offences.

5.9 Learned ASG appearing on behalf of the C.B.I. has also triedto submit on merits as well as on the post-bail conduct of the respondentherein – Accused No. 1. However, as the High Court has not at allconsidered the aforesaid aspects, we do not propose to enter into themerits and/or post-bail conduct of the respondent /accused at this stage.

6. Present appeal is vehemently opposed by Shri B. AdinarayanaRao, learned Senior Advocate appearing on behalf of the respondent.

6.1 It is vehemently submitted by the learned senior counselappearing on behalf of the respondent – original Accused No. 1 that asper the settled position of law, mere subsequent filing of the chargesheetcannot be a ground to cancel the bail granted to the respondent underSection 167(2) Cr.P.C. It is submitted that therefore in the present case,the High Court has rightly refused to cancel the default bail/bail onsubsequent filing of the chargesheet by the C.B.I. It is further submittedthat as such in the present case the respondent – original Accused No.1 was chargesheeted by the State Police Agency / S.I.T. much prior tothe C.B.I. was entrusted with the investigation.

6.2 It is submitted that even thereafter and after the C.B.I. tookover the investigation and filed the chargesheet, the C.B.I. then filed theapplication before the learned Trial Court for cancellation of the bailunder Section 439(2), which came to be dismissed by the Trial Court. Itis submitted that therefore, mere subsequent filing of the chargesheetcannot be a ground to cancel the bail granted in favour of the respondent– original Accused No. 1, once he was released on default bail on non-conclusion of the investigation and non-filing of the chargesheet withinthe stipulated time.

6.3 It is submitted that as per the catena of decisions of this Courtas such to release the accused on bail on non-filing of the chargesheet A

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Awithin the stipulated time as mentioned under Section 167(2) Cr.P.C. isan indefeasible right accrued in favour of the accused. It is submittedthat once in exercise of such right available when the accused is releasedon bail under Section 167(2) Cr.P.C., the same cannot be taken awayand/or cancelled on subsequent filing of the chargesheet. Learned seniorcounsel appearing on behalf of the respondent – original Accused No. 1Bhas heavily relied upon the decision of this Court in the case of MohamedIqbal Madar Sheikh and Ors. Vs. State of Maharashtra, (1996) 1SCC 722 (paragraph 10).

6.4 Making above submissions and relying upon the decisions inthe case of Mohamed Iqbal Madar Sheikh and Ors. (supra), it isCprayed to dismiss the present appeal.

7. Shri Siddhartha Dave, learned Senior Advocate appearing onbehalf of the proposed impleader –daughter of the deceased hassupported Shri Nataraj, learned ASG and has submitted that looking tothe seriousness of the charges alleged against the respondent herein –Doriginal Accused No. 1 and that looking to the gravity of the offence andin view of the post-bail conduct of the accused after he was released onbail, considered by this Court while deciding Writ Petition (Criminal) No.169 of 2022, it is prayed to cancel the bail granted in favour of therespondent herein – original Accused No. 1. He has also relied upon theEdecision of this Court in the case of Rakesh Kumar Paul Vs. State ofAssam, (2017) 15 SCC 67 (paragraphs 15 and 49) by submitting thatas observed by this Court in the said decision, in case the accused isreleased on default bail, it does not prohibit or otherwise prevent thearrest or re-arrest of the accused on cogent grounds in respect of thesubject charge and upon arrest or re-arrest, the accused is entitled toFpetition for grant of regular bail which application should be consideredon its own merit.

8. Having heard the learned counsel appearing for the respectiveparties, the short question, which is posed for the consideration of thisCourt is whether the bail granted under the proviso to sub-section (2) ofGSection 167 Cr.P.C. for failure to complete the investigation within theperiod prescribed therein can be cancelled after the presentation of achargesheet and if the said question is answered in affirmative, then, onwhat grounds and circumstances, the bail can be cancelled?

8.1 At the outset, it is required to be noted and it cannot be disputedHthat when an accused is released on default bail under proviso to sub-

section (2) of Section 167 Cr.P.C., he is released on furnishing the bailbond by him on the failure of the investigating agency to complete theinvestigation and file the chargesheet within the stipulated time mentionedtherein. The proviso to sub-section (2) of Section 167 fixes the outerlimit within which the investigation must be completed and if the same isnot completed within the period prescribed therein, the accused has aright to be released on bail if he is prepared to and does furnish bail.Considering proviso to Section 167(2) Cr.P.C., it cannot be disputed thata person released on bail (default bail) is deemed to be released underprovisions of Chapter XXXIII of the Cr.P.C., which includes Section437 and 439 also. The object and purpose of proviso to Section 167(2)Cr.P.C. is to impress upon the need for expeditious investigation withinthe prescribed time limit and to prevent laxity in that behalf. The objectis to inculcate a sense of its urgency and on default the Magistrate shallrelease the accused if he is ready and does furnish bail. Thus, it cannotbe said that order of release on bail under proviso to Section 167(2)Cr.P.C. is an order on merits. An accused is released on bail underproviso to Section 167(2) Cr.P.C. on the failure of the prosecuting agency.Therefore, the deeming fiction under Section 167(2) Cr.P.C. cannot beinterpreted to the length of converting the order of bail not on merits asif passed on merits. Keeping in view the above, the issue involved in thepresent appeal is required to be considered.

9. While considering the issue involved, some observations madeby this Court in the case of Aslam Babalal Desai (supra) and AbdulBasit Alias Raju and Ors. (supra) are required to be referred to.Speaking for the Bench, Justice A.M. Ahmadi (as he then was) hasobserved in paragraphs 14 and 15 as under:- “14. We sum up as under:

The provisions of the Code, in particular Sections 57 and167, manifest the legislative anxiety that once a persons’s libertyhas been interfered with by the police arresting him without acourt’s order or a warrant, the investigation must be carried outwith utmost urgency and completed within the maximum periodallowed by the proviso (a) to Section 167(2) of the Code. It mustbe realised that the said proviso was introduced in the Code byway of enlargement of time for which the arrested accused couldbe kept in custody. Therefore, the prosecuting agency must realisethat if it fails to show a sense of urgency in the investigation of the AB

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case and omits or defaults to file a charge-sheet within the timeprescribed, the accused would be entitled to be released on bailand the order passed to that effect under Section 167(2) would bean order under Section 437(1) or (2) or Section 439(1) of theCode. Since Section 167 does not empower cancellation of thebail, the power to cancel the bail can only be traced to Section437(5) or Section 439(2) of the Code. The bail can then becancelled on considerations which are valid for cancellation ofbail granted under Section 437(1) or (2) or Section 439(1) of theCode. The fact that the bail was earlier rejected or that it wassecured by the thrust of proviso (a) to Section 167(2) of the Codethen recedes in the background. Once the accused has beenreleased on bail his liberty cannot be interfered with lightly i.e. onthe ground that the prosecution has subsequently submitted acharge-sheet. Such a view would introduce a sense of complacencyin the investigating agency and would destroy the very purpose ofinstilling a sense of urgency expected by Sections 57 and 167(2)of the Code. We are, therefore, of the view that once an accusedis released on bail under Section 167(2) he cannot be taken backin custody merely on the filing of a charge- sheet but there mustexist special reasons for so doing besides the fact that the charge-sheet reveals the commission of a non-bailable crime. The ratioof Rajnikant case [(1989) 3 SCC 532] to the extent it isinconsistent herewith does not, with respect, state the law correctly.

15. Even where two views are possible, this being a matterbelonging to the field of criminal justice involving the liberty of anindividual, the provision must be construed strictly in favour ofindividual liberty since even the law expects early completion ofthe investigation. The delay in completion of the investigation canbe on pain of the accused being released on bail. The prosecutioncannot be allowed to trifle with individual liberty if it does not takeits task seriously and does not complete it within the time allowedby law. It would also result in avoidable difficulty to the accused ifthe latter is asked to secure a surety and a few days later beplaced behind the bars at the sweet will of the prosecution onproduction of a charge-sheet. We are, therefore, of the view thatunless there are strong grounds for cancellation of the bail, thebail once granted cannot be cancelled on mere production of thecharge- sheet. The view we are taking is consistent with this Court’s view in the case of Bashir [(1977) 4 SCC 410] andRaghubir [(1986) 4 SCC 481] but if any ambiguity has arisen onaccount of certain observations in Rajnikant case [(1989) 3 SCC532] our endeavour is to clear the same and set the controversyat rest.”

9.1 Justice K. Ramaswamy (as he then was) in his concurringjudgment has observed in paragraphs 39 and 40 as under:-

“39. Undoubtedly, by operation of the proviso to Section167(2) of the Code, the accused is entitled to bail due to defaultby the investigating officer in completing the investigation andlaying the charge-sheet within the prescribed period of 90/60 daysand not on merits. The fiction of law under the proviso applyingthe provisions in Chapter XXXIII is to serve the purpose of law,namely not only the release of the accused on taking the requisitebond and conditions to be incorporated therein as envisaged in thesaid Chapter, but also the power of the court to cancel the bailand to take the accused into detention for the grounds mentionedunder the relevant provisions in Sections 437(5) and 439(2) of theCode. The Legislature is aware of the pre-existing practice of notfiling the charge-sheet within 15 days as envisaged under sub-section (2) of Section 167 of the old Code and the consequencesas well. The doubtful procedure of seeking further detention onsecuring order of remand under Section 344 of the old Code andSection 309 of the present Code was to be put to an end to, whilepreserving the power to the court to cancel the bail, if circumstanceswarrant to take the accused into custody. At the earliest this Courtin Matabar Parida case [(1975) 2 SCC 220] also took note ofthe fact that even under Section 167(2) proviso, it might not bepossible to complete the investigation into grave crimes within theouter limit of the time set out in the proviso. In the light of thestatutory animation to have the accused released from detentionon expiry of 90/60 days if the accused shall be prepared to anddoes furnish bail, the consequences are inevitable and the releaseis a statutory paradise to the criminals not by judicial fiat butlegislative mandate.

40. The purpose of interpretation is to sustain the law. Thecourt must interpret the words or the language in the statute topromote public good and misuse of power is interdicted. Criminal A

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Alaw primarily concerns social protection and prescribes rules ofbehaviour to be observed by all. Law punishes for deviance,transgression, violation or omission. Liberty of the individual andsecurity and order in the society or public order are delicate andyet paramount considerations. Undue emphasis on either wouldimpede harmony and hamper public good as well as disturb socialBweal and peace. To keep the weal balanced, must be the primeduty of the Judiciary. The purpose of the proviso to Section 167(2)read with Chapter XXXIII of the Code is to impress upon theneed for expeditious completion of the investigation by the policeofficer within the prescribed limitation and to prevent laxity in thatCbehalf. On its default the Magistrate shall release the accused onbail if the accused is ready and does furnish the bail. At the sametime during investigation or trial the power of the court to havethe bail cancelled and have the accused taken into custody arepreserved. But as interpreted by this Court on the happening ofthe catalyst act i.e. expiry of 90/60 days the hammer of releaseDon default would fall. Later filing of the charge-sheet (challan) isnot by itself relevant to have the bail cancelled on committing theaccused for trial or taking cognizance of the offence. Asemphasised by this Court in Bashir [(1977) 4 SCC 410] andRaghubir [(1986) 4 SCC 481] cases, on curing the defect byEfiling the charge-sheet (challan) if the prosecution seeks to havethe bail cancelled on the ground that there are reasonable groundsto believe that the accused has committed a non-bailable offenceand that it is necessary to arrest and commit him into custody,prima facie at that stage, strong grounds indeed are necessary.For cancellation of the bail after filing of the charge-sheet theFfactum of dismissal of the bail on the earlier occasion is notrelevant. But during investigation some strong prima facie evidenceand gravity and magnitude of the crime or the manner in whichthe crime was committed and other attending circumstances maybe relevant as prima facie grounds to have a fresh look to cancelGthe bail. The grounds for cancellation of the bail in Chapter XXXIIIare, dehors the merits in the matter, namely, necessity due to theconduct of the accused and abuse of liberty i.e. obstruction of thesmooth investigation or suborning witnesses or attempting to tamperthe evidence, threatening the witnesses with dire consequencesor making or attempting to remove himself beyond the reach of B

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THE STATE THROUGH CENTRAL BUREAU OF INVESTIGATION V. T.GANGI REDDY @ YERRA GANGI REDDY [M. R. SHAH, J.]

the court to hamper the smooth trial, etc. are independent of themerits in the matter. Cancellation of the bail would be necessitatedby the conduct of the accused himself after the release. I agreewith brother Punchhi, J. that it might be possible to abuse theproviso by deliberate delay in completing the investigation tofacilitate the release of the accused on bail. I also agree thatmerits brought out in the charge-sheet and attending circumstancesare relevant, as the bail was granted due to default of theinvestigating officer without court’s adverting to the merits butstrong grounds are necessary to cancel the bail. To that extentbrother Ahmadi, J. also laid emphasis, namely, strong grounds areto be made out in the charge-sheet. With respect I agree withbrother Ahmadi’s emphasis that filing the charge-sheet (challan)itself is not sufficient. However, I lay emphasis that the High Courtor the Court of Sessions should consider the merits of the case.With respect, K.J. Shetty, J., laid emphasis on the subsequentfiling of the charge-sheet and the power for cancellation underSections 437 and 439 of the Code. Unfortunately, the ratio inParida [(1975) 2 SCC 220] and Bashir [(1977) 4 SCC 410] caseswas not brought to the notice of the learned Judge, which wasdirectly on the point and for the reasons stated I find it difficult toagree with the learned Judge in that respect. I am in full agreementwith the view expressed by brother Ahmadi, J. and the orderproposed by him.”

9.2 In a concurring judgment, Justice K. Ramaswamy (as he thenwas) has concurred with some of the observations made by JusticeM.M. Punchhi (as he then was) made in a dissenting judgment that itmight be possible to abuse the proviso to Section 167(2) Cr.P.C. bydeliberate delay in completing the investigation to facilitate the releaseof the accused on bail. However, thereafter has agreed with the viewthat the merits brought out in the chargesheet and attending circumstancesare relevant, as the bail was granted due to default of the investigatingofficer without Court’s adverting to the merits but strong grounds arenecessary to cancel the bail and mere filing of the chargesheet itself isnot sufficient.

9.3 Justice M.M. Punchhi (as he then was) in his dissentingjudgment has observed in paragraphs 23, 25, 26, 27 and 28 as under:- AB

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“23. The mere circumstance that Section 167(2) ordainsthat every person released on bail under this sub- section shall bedeemed to be so released under the provisions of Chapter XXXIIIfor the purposes of that Chapter does not ipso facto mean that thebail order assumes the content and character of bail orders onmerit, of the kind conceived of in sub-sections (1) and (2) of Section437 or sub-section (1) of Section 439 of the Code. The deemingrequirement of Section 167(2) puts the release on bail of suchperson as if under the provisions of Chapter XXXIII but only forthe purposes of that Chapter. In other words, it means that by thisfiction the provision is to be read as a part of Chapter XXXIII sothat it invites the purposes of that chapter such as filling of bonds,provision of sureties etc., as also permitting cancellation of bail. Itis on the thrust of such inclusion that cancellation under Section437(5) can be attempted as if fictionally the bail order had beenpassed under sub-sections (1) and (2) of Section 437 but not onconsiderations as if the bail order was on merit. Fiction of thiskind cannot be permitted to go to the length of converting an orderof bail not on merit as if passed on merit.

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25. The emphasised words are reflective of the view thatthe Court could at that stage after the challan is filed be of theopinion that there appear sufficient grounds for entertaining theview that the accused had committed a non-bailable offence andthat it was necessary that he should be arrested and committed tocustody. Besides the afore-mentioned ground for cancellation, aground singularly sufficient and special to an order-on-default,the Court may also arrest and commit to custody such person onother grounds judicially noted and others relevant; such astampering of evidence etc. The later hinted grounds are thosegrounds which normally weigh with a Court while cancelling amerited bail under Section 437(5) when the bail in strictu sensuhas been granted on merit under sub- sections (1) and (2) of Section437. But a deemed bail under Chapter XXXIII, under the thrustof Section 167(2), as is discernible, appears to me on a differentfooting, permitting cancellation of bail not only on the well-knowngrounds for cancellation of bail but also on the special singularground on the Court’s entertaining the view that there are sufficient grounds that the accused had committed a non-bailable offenceand that it was necessary that he should be arrested and committedto custody. The seeming diversity in Bashir case [(1977) 4 SCC410] crops up only if it is understood that it takes a bail orderunder Section 167(2), as if an order on merit under sub-sections(1) and (2) of Section 437. But if the fiction, as it appears to me,extends to the extent of the bail order being treated as if passedunder Chapter XXXIII and that too under sub- sections (1) and(2) of Section 437 read with the provisions of Section 167(2) aspart and parcel of that chapter so that the bail order remains anorder passed on default and not on merit, the tangency disappears.And even if this aspect is ignored, Bashir case [(1977) 4 SCC410] goes on to add a singular and special ground for cancellationof bail granted under Section 167(2) over and above the otherwell-known grounds for cancellation of bail granted under sub-sections (1) and (2) of Section 437 of the Code. The provisionemployable in that event again is Section 437(5) of the Code,notwithstanding the text of the provision, for besides that there isno other provision with the Court.

26. The existence of such special ground for cancellationof bail, over and above the well-known grounds for cancellationof bail, granted under Section 167(2) of the Code was re-affirmedand repeated in a decision of this Court by a two-member Benchin Raghubir Singh v. State of Bihar [(1986) 4 SCC 481] at page826 by stating as follows: (SCC p. 502, para 22)

“Where bail has been granted under the proviso to Section167(2) for the default of the prosecution in not completingthe investigation in 60 days, after the defect is cured by thefiling of a charge-sheet, the prosecution may seek to havethe bail cancelled on the ground that there are reasonablegrounds to believe that the accused has committed a non-bailable offence and that it is necessary to arrest him andcommit him to custody. In the last mentioned case, one wouldexpect very strong grounds indeed.”

The strong grounds referred in the context obviously aregrounds on merits of the case, which are reflective from the formalaccusation put in the challan which the accused has to face at thetrial.

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27. Raghubir Singh case [(1986) 4 SCC 481] was followedby a decision of a vacation Judge of this Court in RajnikantJivanlal Patel v. Intelligence Officer, NCB, New Delhi [(1989)3 SCC 532]. It was observed at page 536 as follows: (SCC p.536, paras 13 and 14)

“An order for release on bail under proviso (a) to Section167(2) may appropriately be termed as an order-on-default. Indeed, it is a release on bail on the default of theprosecution in filing charge-sheet within the prescribedperiod. The right to bail under Section 167(2) proviso (a)thereto is absolute. It is a legislative command and not court’sdiscretion. If the investigating agency fails to file charge-sheet before the expiry of 90/60 days, as the case may be,the accused in custody should be released on bail. But atthat stage, merits of the case are not to be examined.Not at all. In fact, the Magistrate has no power to remanda person beyond the stipulated period of 90/60 days. Hemust pass an order of bail and communicate the same tothe accused to furnish the requisite bail bonds.

The accused cannot, therefore, claim any special rightto remain on bail. If the investigation reveals that theaccused has committed a serious offence and charge-sheet is filed, the bail granted under proviso (a) toSection 167(2) could be cancelled.”

(emphasis supplied)

28. On analysis of the case law above discussed I haverather come to the conclusion that a compulsive bail order madeby a court under Section 167(2) of the Code being one not onmerit, when required to be cancelled after the filing of the challan,would not involve any review of a decision made on merit. Suchbail is cancellable if the court has reason to entertain the beliefthat the accused has committed a non-bailable offence and that itis necessary to arrest him and commit him to custody. Theoccasion to grant or refuse bail on merit becomes available to thecourt after the filing of the challan because earlier thereto meritof bail could not figure at the time of the grant of compulsive bail.The goal of the court in any event is to strike a judicial balance depending on the exigencies of the situation keeping in viewamongst others the claims of personal liberty and the larger interestsof the State. It cannot be overlooked that a bail order under Section167(2) of the Code could even be managed through a convenientinvestigating officer, however heinous be the crime. The courtwould have to grant bail under the mandate of law, debarred as itis to see to the merits of the case at that stage. To say thatthenceforth the court is for ever shut to see to the merits of thecase, though it otherwise has power to cancel bail, is to deprive itof its elementary function to administer justice and weigh the claimson merit inter se. I would rather loathe for such an interpretationas that would frustrate justice, and would on the other hand let thecourt have the power to cancel bail, for once examining the meritsof the case in such a situation.”

Therefore, as such, even Justice Punchhi, had concurred with theother Hon’ble Judges taking the view that every person released on bailunder sub-section (2) of Section 167 Cr.P.C. shall be deemed to be soreleased under the provisions of Chapter XXXIII for the purposes ofthat Chapter and does not ipso facto mean that the bail order assumesthe content and character of bail orders on merit, of the kind conceivedof in sub-sections (1) and (2) of Section 437 or sub-section (1) of Section439 of Cr.P.C.

9.4Thus, as per the law laid down by this Court in the case ofAslam Babalal Desai (supra), (i) release of accused ondefault bail under Section 167(2) Cr.P.C. is not on merits,but on the failure of the investigating agency in completingthe investigation and filing the chargesheet within thestipulated time prescribed therein;

(ii) That every person released on bail under Section 167 (2)Cr.P.C. shall be deemed to be so released under theprovisions of Chapter XXXIII Cr.P.C., which includesSections 437(5) and 439(2);

(iii) That the bail in favour of a person, who is released on defaultbail under Section 167(2) Cr.P.C. cannot be cancelled onmere filing of the chargesheet, but can be cancelled onmaking out a special and strong ground that commission ofnon-bailable crime is disclosed from the chargesheet.

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A9.5 In the case of Abdul Basit Alias Raju and Ors. (supra)after considering the decision of this Court in the case of Aslam BabalalDesai (supra), it is observed and held in paragraphs 13 and 14 as under:- “13. It is trite that Section 167(2) creates a deeming fictionwhereby the release of a person is equated to his release underChapter XXXIII of the Code. However, an order for release onbail under proviso (a) to Section 167(2) is not an order on meritsbut an order-on-default of the prosecuting agency. Such an ordercould be nullified for special reasons after the defect/default hasbeen cured. The accused cannot, therefore, claim any specialright to remain on bail. If the investigation reveals that the accusedhas committed a serious offence and charge-sheet is filed, thebail granted under proviso (a) to Section 167(2) could be cancelledon an application by the prosecuting agency.

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14. Under Chapter XXXIII, Section 439(1) empowers theHigh Court as well as the Court of Session to direct any accusedDperson to be released on bail. Section 439(2) empowers the HighCourt to direct any person who has been released on bail underChapter XXXIII of the Code be arrested and committed to custodyi.e. the power to cancel the bail granted to an accused person.Generally the grounds for cancellation of bail, broadly, are, (i) theEaccused misuses his liberty by indulging in similar criminal activity,(ii) interferes with the course of investigation, (iii) attempts totamper with evidence or witnesses, (iv) threatens witnesses orindulges in similar activities which would hamper smoothinvestigation, (v) there is likelihood of his fleeing to another country,(vi) attempts to make himself scarce by going underground orFbecoming unavailable to the investigating agency, (vii) attemptsto place himself beyond the reach of his surety, etc. These groundsare illustrative and not exhaustive. Where bail has been grantedunder the proviso to Section 167(2) for the default of the prosecutionin not completing the investigation in sixty days after the defect isGcured by the filing of a charge-sheet, the prosecution may seek tohave the bail cancelled on the ground that there are reasonablegrounds to believe that the accused has committed a non- bailableoffence and that it is necessary to arrest him and commit him tocustody. However, in the last mentioned case, one would expectvery strong grounds indeed. (Raghubir Singh v. State of BiharH[(1986) 4 SCC 481.)”

9.6 Now, so far as the reliance placed upon the decision of thisCourt in the case of Mohamed Iqbal Madar Sheikh and Ors. (supra)relied upon by the learned senior counsel appearing on behalf of therespondent – original Accused No. 1 is concerned, at the outset, it isrequired to be noted that in the said decision, this Court has not taken acontrary view than the view taken in the case of Aslam Babalal Desai(supra). In the case of Mohamed Iqbal Madar Sheikh and Ors.(supra), it was a case of refusing to release the accused on default bail.While releasing the accused on default bail, thereafter, this Court observedthat if the accused is released on bail because of the default in completionof the investigation, then, no sooner the chargesheet is filed, the ordergranting bail to such accused cannot be cancelled. However, thereafter,it is observed in paragraph 10 that the bail of such accused who hasbeen released, because of the default on the part of the investigatingofficer to complete the investigation, can be cancelled, but not, only onthe ground that after the release, the chargesheet has been submittedagainst such accused for an offence. Thereafter, it is further observedthat for cancelling the bail, the well-settled principles in respect ofcancellation of bail have to be made out as observed by this Court in thecase of Aslam Babalal Desai (supra). Therefore, as such theobservations made by this Court in the case of Mohamed Iqbal MadarSheikh and Ors. (supra) even supports the case on behalf of the C.B.I.that the order granting bail shall be deemed to be under Section 437(1)or (2) or Section 439(1) of the Cr.P.C. and that order can be cancelledwhen a case for cancellation is made out under Section 437(5) or 439(2)Cr.P.C.

9.7 Thus, when special reasons/grounds are being made out fromthe chargesheet and the chargesheet reveals the commission of a non-bailable crime, the bail in favour of a person, who has been released ondefault bail under Section 167(2) Cr.P.C. can be cancelled consideringSection 437(5) and Section 439(2) Cr.P.C.

9.8 What can be said to be special grounds for cancellation of thebail, over and above the well-known grounds for cancellation of the bailgranted under Section 167(2) Cr.P.C. has been considered by this Courtin the case of Raghubir Singh and Ors. Vs. State of Bihar, (1986) 4SCC 481. In paragraph 22, it is observed and held as under:- “22. ……………………..Where bail has been grantedunder the proviso to Section 167(2) for the default of the prosecution A

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Ain not completing the investigation in 60 days, after the defect iscured by the filing of a charge-sheet, the prosecution may seek tohave the bail cancelled on the ground that there are reasonablegrounds to believe that the accused has committed a non-bailableoffence and that it is necessary to arrest him and commit him tocustody. In the last mentioned case, one would expect very strongBgrounds indeed.”

9.9 The decision of Raghubir Singh and Ors. (supra) has beenfollowed by this Court in Rajnikant Jivanlal and Anr. Vs. IntelligenceOfficer, NCB, New Delhi, (1989) 3 SCC 532, wherein in paragraphs13 and 14, it is observed and held as under:-C

“13. An order for release on bail under proviso (a) to Section167(2) may appropriately be termed as an order- on-default.Indeed, it is a release on bail on the default of the prosecution infiling charge-sheet within the prescribed period. The right to bailunder Section 167(2) proviso (a) thereto is absolute. It is aDlegislative command and not court’s discretion. If the investigatingagency fails to file charge-sheet before the expiry of 90/60 days,as the case may be, the accused in custody should be released onbail. But at that stage, merits of the case are not to be examined.Not at all. In fact, the Magistrate has no power to remand a personEbeyond the stipulated period of 90/60 days. He must pass an orderof bail and communicate the same to the accused to furnish therequisite bail bonds.

14. The accused cannot, therefore, claim any special right toremain on bail. If the investigation reveals that the accusedFhas committed a serious offence and charge- sheet is filed,the bail granted under proviso (a) to Section 167(2) could becancelled.”

(emphasis supplied)

10. From the above, the law, which emerges is that mere filing ofGthe chargesheet subsequent to a person is released on default bail underSection 167(2) Cr.P.C. cannot be a ground to cancel the bail of a person,who is released on default bail. However, on filing of the chargesheet onconclusion of the investigation, if a strong case is made out and on merits,it is found that he has committed a non-bailable offence/crime, on thespecial reasons/grounds and considering Section 437(5) and SectionH

439(2) Cr.P.C, over and above other grounds on which the bail to aperson, who is released on bail can be cancelled on merits.

11. Therefore, there is no absolute bar as observed and held bythe High Court in the impugned judgment and order that once a person isreleased on default bail under Section 167(2) Cr.P.C., his bail cannot becancelled on merits and his bail can be cancelled on other general groundslike tampering with the evidence/witnesses; not cooperating with theinvestigating agency and/or not cooperating with the concerned TrialCourt etc.

12. As such, we are in complete agreement with the view takenby this Court in the aforesaid decisions. The submission on behalf of therespondent – original Accused No. 1 and the view taken by the HighCourt in the impugned judgment and order that once an accused is releasedon default bail under Section 167(2) Cr.P.C., his bail cannot be cancelledon merits is accepted, in that case, it will be giving a premium to thelethargic and/or negligence, may be in a given case of deliberate attempton the part of the investigating agency not to file the chargesheet withinthe prescribed time period. In a given case, even if the accused hascommitted a very serious offence, may be under the NDPS or evencommitted murder(s), still however, he manages through a convenientinvestigating officer and he manages not to file the chargesheet withinthe prescribed time limit mentioned under Section 167(2) Cr.P.C. andgot released on default bail, it may lead to giving a premium to illegalityand/or dishonesty. As observed hereinabove, such release of the accusedon default bail is not on merits at all, and is on the eventuality occurringin proviso to sub-section (2) of Section 167. However, subsequently oncuring the defects and filing the chargesheet, though a strong case ismade out that an accused has committed the very serious offence andnon-bailable crime, the Court cannot cancel the bail and commit theperson into custody and not to consider the gravity of the offencecommitted by the accused, the Courts will be loathe for such aninterpretation, as that would frustrate the justice. The Courts have thepower to cancel the bail and to examine the merits of the case in a casewhere the accused is released on default bail and released not on meritsearlier. Such an interpretation would be in furtherance to the administrationof justice.

13. In view of the above and for the reasons stated above, theimpugned judgment and order passed by the High Court dismissing the AB

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Aapplication for cancellation of the bail filed by the C.B.I. under Section439(2) Cr.P.C. deserves to be quashed and set aside and is accordinglyquashed and set aside.The issue involved in the present appeal is answered in theaffirmative and it is observed and held that in a case where an accusedBis released on default bail under Section 167(2) Cr.P.C., and thereafteron filing of the chargesheet, a strong case is made out and on specialreasons being made out from the chargesheet that the accused hascommitted a non-bailable crime and considering the grounds set out inSections 437(5) and Section 439(2), his bail can be cancelled on meritsand the Courts are not precluded from considering the application forCcancelation of the bail on merits. However, mere filing of the chargesheetis not enough, but as observed and held hereinabove, on the basis of thechargesheet, a strong case is to be made out that the accused hascommitted non-bailable crime and he deserves to be in custody.

14. As the High Court has not at all considered on merits theDapplication for cancellation of the bail, the matter is to be remitted to theHigh Court for considering the said application afresh in accordancewith law and on merits and in light of the observations made hereinabove.As pursuant to the earlier judgment and order passed by this Court dated29.11.2022 in Writ Petition (Criminal) No. 169 of 2022, the trial of theF.I.R. in the present case has been ordered to be transferred to theEC.B.I. Special Court, Hyderabad, the proceedings of the cancellation ofthe bail application, which was earlier filed before the High Court ofAndhra Pradesh at Amravati are ordered to be transferred to the HighCourt of Telangana at Hyderabad and now the High Court of Telanganato consider, decide and dispose of the application for cancellation of theFbail on merits and in light of the observations made hereinabove.

Present appeal is allowed accordingly to the aforesaid extent.

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Nidhi Jain

(Assisted by : Abhishek Pratap Singh, LCRA)

Appeal allowed.

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