Himachal Pradesh High Court
Yudh Chand Bains vs State Of Himachal Pradesh on 24 April, 2025
2025:HHC:11020 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr.MP(M) Nos. 103, 509, 579 & 611 of 2025 Reserved on: 1.4.2025 Date of Decision:24.04.2025
1. Cr.MP(M) No. 103 of 2025 Yudh Chand Bains ....Petitioner Versus State of Himachal Pradesh ....Respondent
2. Cr.MP(M) No. 509 of 2025 Satvir Minhas ....Petitioner Versus State of Himachal Pradesh ....Respondent
3. Cr.MP(M) No. 579 of 2025 Ashok Kumar Puri ....Petitioner Versus State of Himachal Pradesh ....Respondent 4. Cr.MP(M) No. 611 of 2025 Harish Chand ....Petitioner Versus State of Himachal Pradesh ....Respondent Coram Hon'ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting? No For the Petitioners : Mr. N.S. Chandel, Mr. Ankush Dass Sood, Senior Advocates with Mr. Vikrant Chandel, Advocate in Whether reporters of the local papers may be allowed to see the judgment? Yes 2 2025:HHC:11020 Cr.MP(M) Nos.103 & 611 of 2025 and Mr. Umesh Kanwar, Advocate, in Cr.MP(M) Nos. 509 & 579 of 2025.
For the Respondent(s) : Mr. Anup Rattan, Advocate General with Mr. Lokender Kutlehria, Additional Advocate General and Mr. Ajit Sharma, Deputy Advocate General.
SP Virender Kalia, Additional SP.
NarvirRathour, Inspector Naresh Kumar and Inspector Rajesh Pathania, SV & ABC (SIU), Una present in person with police record.
Rakesh Kainthla,Judge Since all the bail applications emanate out of a common F.I.R., hence the same are taken up together for disposal by way of a common judgment.
2. The petitioners have filed the present petitions for seeking pre-arrest bail. It has been asserted that the Police have registered an F.I.R. No. 2 of 2025, dated 8.01.2025, at Police Station State Vigilance and Anti-Corruption Bureau (SV & ACB), Una, H.P for the commission of offences punishable under Sections 420, 468, 471, and 120-B of the IPC and Section 13 (1)
(a)& (2) of Prevention of Corruption (PC) Act, 2018. The petitioners apprehend that the Police would arrest them in connection with the aforesaid FIR. The prosecution story is false 3 2025:HHC:11020 and the petitioners were falsely implicated in the case. They belong to respectable family and their reputation would be harmed by their arrest and detention in custody. They have roots in the society and there is no likelihood of their absconding. They would abide by all the terms and conditions, which the Court may impose. Hence the petitions.
3. The petitions are opposed by filing status reports asserting that a complaint was received from the Secretary (Cooperation) to the Government of Himachal Pradesh alongwith a report of the Managing Director of Kangra Central Cooperative Bank Ltd. (KCCB) regarding fraud in the bank accounts of M/s. Himalaya Snow Village and M/s. Hotel Lake Palace., properties of petitioner Yudh Chand Bains. Yudh Chand Bains has taken multiple loans from KCC Bank and the bank had advanced the loans in violation of its lending policies and the guidelines of Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (NABARD). Police conducted an inquiry and found that a utilization certificate dated 30.6.2019 was stated to have been issued by Future Craft Palampur to Himalaya Snow Village Proprietor Yudh Chand Bains, who submitted the certificate to the bank. However, Future Craft clarified that it is an 4 2025:HHC:11020 architectural firm that can only issue structural stability certificates and building drawings. Hence Utilization Certificate was found to be forged. The bank approved petitioner Yudh Chand Bains's loan requests unconditionally. His investment from personal resources was not verified. Family members who were already guarantors in another loan were again included as guarantors. No monitoring of fund utilization was conducted. The loans were granted despite several accounts being in default. Post-loan fund utilization monitoring was completely ignored. Reports by Chartered Accountant and Additional Registrar, Cooperative Societies declared the loan as fraudulent. Branch Manager of KCCB Bank Government College, Una also informed that a loan account was maintained in the Bank in the name of Hotel Himalaya Snow Village Manali. ₹16 crores were disbursed on 11.7.2019 and ₹4 crores were disbursed on 27.7.2019. Petitioner Yudh Chand Bains transferred the amount to another account in the name of Himachal Home Furnishing and Hotel through RTGS. The money was disbursed to other accounts and further investigation is required. The Board of Directors relaxed the terms and conditions mentioned in the sanction letter. The first instalments of ₹16 crore and ₹4 crore were disbursed on 11.7.2019 5 2025:HHC:11020 and 22.7.2019 respectively. Project Monitoring and Loan Disbursement Committee (PMLDC) recommended reconsideration of the relaxations granted to the petitioner but the loan was disbursed despite this recommendation. The police registered the FIR after receipt of the preliminary inquiry report. It was found after the investigation that petitioner Yudh Chand Bains and his family members obtained the loan in the year 2017- 2018 from Shri Anand & Investment Company Pvt. Ltd. and Himachal Pradesh Cooperative Non-Agriculture Thrift & Credit Society Ltd. 35 cheques issued by the petitioner and his family members were dishonoured and the cases were pending before learned Judicial Magistrate First Class(JMFC) Solan. Chander Pal Aggarwal stated that an amount of ₹9.5 crore is to be recovered from the petitioner and his family members. Petitioner Yudh Chand Bains avoided appearance in the court of learned JMFC Solan. The petitioner violated the conditions imposed by this Court while granting interim bail.He is habitual of non-payment of bank loan account. He would commit economic crimes in case of release on bail.He failed to appear before the Investigating Officer despite directions.He would abscond in case of his release on bail. Therefore, it was prayed that his petition be dismissed.
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4. A similar status report was filed in the petition filed by Satvir Minhas. It was asserted that the police investigated Yudh Chand Bains, Satvir Mihnas General Manager KCCB, Ashok Puri, General Manager (Banking) KCCB, Vinay Kumar and Sher Singh Chauhan and found violation of lending norms. Vinay Kumar dissolved PMLDC on 23.9.2019. Satveer Minhas was present in various Board of Directors meetings. He had a significant role in facilitating the loan disbursement. He ignored deficiencies in the loan documentation. Hence, it was prayed that this petition be also dismissed.
5. In the status report filed in the application of Harish Chand, it was submitted that he is the son of Yudh Chand Bains and is a direct beneficiary of the embezzled loan amount. He is not cooperating with the investigation. He has received ₹38,07,623/- from the petitioner Yudh Chand Bains and misappropriated it. His custodial interrogation is necessary to recover the amount. Hence it was prayed that his bail petition be dismissed.
6. In a status report filed in the case of Ashok Kumar, it was asserted that a loan of ₹12 crore was sanctioned on 5.7.2016 7 2025:HHC:11020 by Karnail Singh Rana, Chairman, Lekh Raj Kanwar, Director, Parkash Chand Rana, Director and Smt. Rakhil Kahloon, Managing Director. A loan of ₹7.87 crore was sanctioned on 15.6.2017 by Karnail Singh Rana Chairman, Jaswant Rana, Director, Parkash Chand Rana, Director, Yog Raj Director and P.C Akela Managing Director. A loan of ₹39.68 crores was sanctioned on 20.9.2017 by Karnail Singh Rana, Chairman, Jaswant Rana Director Parkash Chand Rana Director, Yog Raj Director and PC Akela Managing Director. A term loan of ₹39.68 crore was sanctioned on 25.2.2019 by Rajeev Bhardwaj Chairman, Ranjeet Rana Director, Ramesh Kumar Director, Sher Singh Chauhan (Apex Bank Nominee) and Vinay Kumar Managing Director. Ashok Kumar Puri was the General Manager between 2016 to 2020. He committed serious financial irregularities and abused his official position while sanctioning the loan. He had actively participated in the Loan Committee meetings held on 20.5.2016 and 5.7.2016. He recommended the NABCONS appraisal report and ensured the loan's sanction despite the serious financial risks involved. He placed a loan proposal before the Loan Committee and attended several meetings of the Board of Directors. He 8 2025:HHC:11020 abused his official position. Hence it is prayed that the present petition be dismissed.
7. I have heard Mr. N.S. Chandel, learned Senior Advocate, Mr Ankush Dass Sood, learned Senior Advocate assisted by Mr Vikrant, learned counsel for the petitioners-Yudh Chand Bains and Harish Chand, Mr Umesh Kanwar, learned counsel, for the petitioners-Satvir Minhas and Ashok Kumar Puri and Mr Anup Rattan, learned Advocate General with Mr Lokender Kutlehria, learned Additional Advocate General and Mr Ajit Sharma, learned Deputy Advocate General, for the respondent(s)- State.
8. Mr N.S. Chandel, learned Senior Counsel for the petitioner-Yudh Chand Bains submitted that a perusal of FIR does not show the commission of any offence rather it discloses a loan disbursement based on the mortgage of the property. The loan was secured and the remedy of the bank is to file a Civil Suit instead of resorting to criminal proceedings. The document stated to be forged was not instrumental in sanctioning the loan. There was no wrongful gain or wrongful loss and even if there was forgery, no cognizable offence was committed. The police are 9 2025:HHC:11020 bent upon arresting the petitioner to tarnish his reputation due to political reasons. This is apparent from the fact that the police have not arrested or sought the arrest of the members of the Board of Directors, who were responsible for disbursing the so- called fraudulent loan. Therefore, he prayed that the present petition be allowed and the petitioner be released on bail.
9. Mr Umesh Kanwar, learned counsel for the petitioner,Ashok Kumar, submitted that he was the Chairman of PMLDC and had flagged the concerns regarding the disbursal of the loan. Still, the loan was disbursed by the Board of Directors. Instead of making the members of the Board of Directors accused, the police are seeking to arrest the petitioner. He was not responsible for sanctioning or disbursal of the loan. Hence, he prayed that the present petition be dismissed. 10 Mr Anup Rattan, learned Advocate General submitted that a financial fraud had occurred in which the loan was disbursed to petitioner Yudh Chand Bains in violation of the lending norms and the guidelines of NABARD and RBI. Petitioner Yudh Chand Bains had intentionally attempted to secure a loan amount of ₹120.35 crore from KCCB under false pretences, 10 2025:HHC:11020 misrepresentation and non-disclosure of the material. The petitioner defrauded the Kangra Central Co-operative Bank and misused the public fund. He siphoned off Rs. 38.66 crore. He used a false utilization certificate, which was relied upon by the Board of Directors. He committed a criminal breach of trust by diverting the sanctioned amount. He misused the interim bail granted to him. He held two press conferences and attempted to stage a media trial. He had not returned the loan taken from other persons. Proceedings under Section 138 of the NI Act are pending against him. He purchased the land in question in the year 2017 for Rs.10.50 crore out of which Rs.7.87 crore was financed by KCCB. The realizable value as per the report of Avesh Prasher is ₹21.39 crore and the realizable value as per Pankaj Kumar is Rs.22.52 crore. The empanelled advocate also stated that the value of the mortgaged land is less than the loan amount. The plea taken by the petitioner regarding adequate security is not correct. The utilization of₹4.5 crore for constructing the boundary wall is under investigation and a forged certificate was used to establish the expenditure for the construction of the retaining wall. The Vigilance Department had earlier filed the complaint against K.C Bhardwaj and accused Vinay Kumar 11 2025:HHC:11020 because the matter was being investigated by the Registrar of Co- operative Societies. The role of the petitioner was not discussed by the Registrar Co-operative Society. He relied upon the judgments of State of Gujarat Vs Mohanlal Jitamalji Poorwal (1987) 2 SCC 364, Y.S. Jagan Mohan Reddy Vs CBI (2013) 7 SCC 439, P. Chidambaram Vs Directorate of Enforcement (2019), Vijay Kumar Juneja Vs State of H.P (2024) HHC 11122, and Manik Madhukar Sarve and ors. Vs Vitthal Damuji Mehar and ors. 2024 STPL 9210 SC in support of his submission.
11 I have given considerable thought to the submissions made at the bar and have gone through the records carefully.
12. It was laid down by the Hon'ble Supreme Court in P. Chidambaram v. Directorate of Enforcement, (2019) 9 SCC 24: (2019) 3 SCC (Cri) 509: 2019 SCC OnLine SC 1143 that the power of pre- arrest bail is extraordinary and should be exercised sparingly. It was observed:
"69. Ordinarily, arrest is a part of the procedure of the investigation to secure not only the presence of the accused but also several other purposes. Power under Section 438 Cr.P.C. is an extraordinary power, and the same has to be exercised sparingly. The privilege of pre- arrest bail should be granted only in exceptional cases. The judicial discretion conferred upon the court has to be properly exercised after application of mind as to the 12 2025:HHC:11020 nature and gravity of the accusation; the possibility of the applicant fleeing justice and other factors are considered to decide whether it is a fit case for the grant of anticipatory bail. Grant of anticipatory bail to some extent interferes in the sphere of investigation of an offence, and hence, the court must be circumspect while exercising such power for the grant of anticipatory bail. Anticipatory bail is not to be granted as a matter of rule, and it has to be granted only when the court is convinced that exceptional circumstances exist to resort to that extraordinary remedy."
13. It was held in P Chidambaram (supra) that economic offences are to be treated differently from other offences. It was observed:
Economic offences
78. Power under Section 438 CrPC being an extraordinary remedy, has to be exercised sparingly; more so, in cases of economic offences. Economic offences stand as a different class as they affect the economic fabric of society.
In Directorate of Enforcement v. Ashok Kumar Jain [Directorate of Enforcement v. Ashok Kumar Jain, (1998) 2 SCC 105: 1998 SCC (Cri) 510], it was held that in economic offences, the accused is not entitled to anticipatory bail. xxxxxx
80. Observing that economic offence is committed with deliberate design with an eye on personal profit regardless of the consequence to the community, in State of Gujarat v. Mohanlal Jitamalji Porwal [State of Gujarat v. Mohanlal Jitamalji Porwal, (1987) 2 SCC 364: 1987 SCC (Cri) 364], it was held as under: (SCC p. 371, para 5) "5. ... The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of the moment, upon passions 13 2025:HHC:11020 being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit, regardless of the consequences to the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even-handed manner without fear of criticism from the quarters which view white-collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest."
81. Observing that economic offences constitute a class apart and need to be visited with a different approach in the matter of bail, in Y.S. Jagan Mohan Reddy v. CBI [Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439: (2013) 3 SCC (Cri) 552], the Supreme Court held as under: (SCC p. 449, paras 34-35) "34. Economic offences constitute a class apart and need to be viewed with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing a serious threat to the financial health of the country.
35. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations." (emphasis supplied)
82. Referring to DukhishyamBenupani v. Arun Kumar Bajoria [DukhishyamBenupani v. Arun Kumar Bajoria, 14 2025:HHC:11020 (1998) 1 SCC 52: 1998 SCC (Cri) 261], in Directorate of Enforcement v. Bher Chand Tikaji Bora [Directorate of Enforcement v. Bher Chand Tikaji Bora, (1999) 5 SCC 720:
1999 SCC (Cri) 1045], while hearing an appeal by the Enforcement Directorate against the order [BherchandTikaji Bora v. State of Maharashtra, Criminal Application No. 2140 of 1998, decided on 21-7-1998 (Bom)] of the Single Judge of the Bombay High Court granting anticipatory bail to the respondent thereon, the Supreme Court set aside the order of the Single Judge granting anticipatory bail.
14. This position was reiterated in Srikant Upadhyay v.
State of Bihar, 2024 SCC OnLine SC 282, wherein it was held:
"25. We have already held that the power to grant anticipatory bail is extraordinary. Though in many cases it was held that bail is said to be a rule, it cannot, by any stretch of the imagination, be said that anticipatory bail is the rule. It cannot be the rule, and the question of its grant should be left to the cautious and judicious discretion of the Court, depending on the facts and circumstances of each case. While called upon to exercise the said power, the Court concerned has to be very cautious as the grant of interim protection or protection to the accused in serious cases may lead to a miscarriage of justice and may hamper the investigation to a great extent as it may sometimes lead to tampering or distraction of the evidence. We shall not be understood to have held that the Court shall not pass interim protection pending consideration of such application as the Section is destined to safeguard the freedom of an individual against unwarranted arrest, and we say that such orders shall be passed in eminently fit cases."
15. It was held in Pratibha Manchanda v. State of Haryana, (2023) 8 SCC 181: 2023 SCC OnLine SC 785 that the Courts should 15 2025:HHC:11020 balance individual rights, public interest and fair investigation while considering an application for pre-arrest bail. It was observed:
"21. The relief of anticipatory bail is aimed at safeguarding individual rights. While it serves as a crucial tool to prevent the misuse of the power of arrest and protects innocent individuals from harassment, it also presents challenges in maintaining a delicate balance between individual rights and the interests of justice. The tightrope we must walk lies in striking a balance between safeguarding individual rights and protecting public interest. While the right to liberty and presumption of innocence are vital, the court must also consider the gravity of the offence, the impact on society, and the need for a fair and free investigation. The court's discretion in weighing these interests in the facts and circumstances of each case becomes crucial to ensure a just outcome."
16 It was specifically asserted in the status report filed in the case of Ashok Kumar that various members of the Board of Directors had sanctioned the loan in favour of petitioner Yudh Chand Bains on different dates. The police registered the FIR on 8.1.2025 and the status report is silent that any member of the Board of Directors was interrogated for disbursing the loan contrary to the norms, lending practices and guidelines laid down by RBI and NABARD. It was vehemently contended by Mr Anup Rattan learned Advocate General that two members of the Board of Directors were ill but he has not explained as to why the other 16 2025:HHC:11020 members were not interrogated or arrested if there was a violation of norms and the petitioner Yudh Chand Bains was guilty of so- called large scale financial fraud. The petitioner is only a beneficiary of the fraud and not the perpetrator of the fraud. It is difficult to see how Yudh Chand Bains and his son can be held guilty of financial fraud for getting the loan sanctioned contrary to the norms when the sanctioning persons are not being sought to be prosecuted. Hence, the submission of the learned Advocate General that this case involves financial fraud of an unprecedented level cannot be accepted. Had it been so, the persons sanctioning the loan and disbursing the loan would have been behind bars or before the Court seeking their pre-arrest bail. The fact that the police have not interrogated or arrested any member of the Board of Directors clearly shows that there is something more than what meets the eye and the police are only bent upon arresting the petitioner Yudh Chand Bains and his son. It was laid down by the Hon'ble Supreme Court in Gurbaksh Singh Sibbia v. State of Punjab, (1980) 2 SCC 565: 1980 SCC (Cri) 465: 1980 SCC OnLine SC 125 that the power to grant pre-arrest bail is conferred to prevent exposure of adversary to the social ridicule. It was observed at page 575:
17 2025:HHC:11020 "8. No one can accuse the police of possessing a healing touch nor indeed does anyone have misgivings in regard to constraints consequent upon confinement in police custody. But, society has come to accept and acquiesce in all that follows upon a police arrest with a certain amount of sang-froid, insofar as the ordinary rut of criminal investigation is concerned. It is the normal day-to-day business of the police to investigate charges brought before them and, broadly and generally, they have nothing to gain, not favours at any rate, by subjecting ordinary criminals to needless harassment. But the crimes, the criminals and even the complainants can occasionally possess extraordinary features. When the even flow of life becomes turbid, the police can be called upon to inquire into charges arising out of political antagonism. The powerful processes of criminal law can then be perverted for achieving extraneous ends. Attendant upon such investigations, when the police are not free agents within their sphere of duty, is a great amount of inconvenience, harassment and humiliation. That can even take the form of the parading of a respectable person in handcuffs, apparently on way to a Court of justice. The foul deed is done when an adversary is exposed to social ridicule and obloquy, no matter when and whether a conviction is secured or is at all possible. It is in order to meet such situations, though not limited to these contingencies, that the power to grant anticipatory bail was introduced into the Code of 1973." (Emphasis supplied)
17. Therefore, the petitioners are entitled to a pre-arrest bail as per the judgment of the Hon'ble Supreme Court of India.
18. It was asserted that PMLDC had flagged concerns regarding the disbursal of the loan. Strangely Ashok Kumar Chairman of the PMLDC is arrayed as an accused, instead of the persons who had disbursed the loan despite the concerns raised by 18 2025:HHC:11020 PMLDC headed by him. It was submitted that Ashok Kumar and Harish Chand were instrumental in getting the documents prepared and placing the documents before the Board of Directors, therefore they are guilty. It is not explained how the persons presenting the documents before the Board of Directors are guilty, but the members of the Board of Directors who actually sanctioned the loan are not guilty.This conduct casts serious doubt regarding the whole of the prosecution's case.
19. It has been alleged that the petitioner Yudh Chand Bains was unduly benefitted and the offences punishable under the PC Act were committed. It is difficult to see how an offence under the PC Act can be committed without impleading the public servants who had abused their position to benefit the petitioner Yudh Chand Bains.
20. It was asserted that the petitioner Yudh Chand Bains produced a Utilization Certificate stated to have been issued by a Future Craft which led the Bank to sanction the loan. The Utilization certificate is dated 30.6.2019. The status report in the case of Ashok Kumar shows the dates of disbursal of the loans as 5.7.2016, 15.6.2017, 20.9.2017 and 25.2.2019. Hence, all the loans were disbursed before the issuance of the utilization certificates 19 2025:HHC:11020 and even if a forged document was produced by the petitioner, it is not shown how wrongful loss or wrongful gain was made to anyone.
21. In the written arguments, different dates of disbursal were mentioned on the opening page. It is difficult to see how written arguments can contain something contrary to the status reports filed by the State. Written arguments are arguments and not facts divorced from the record. Copies of disbursal letters were not placed on record to show that the loans were disbursed based on the utilization certificate submitted by the petitioner. Thus, no advantage can be derived from the fact that a forged document was produced.
22. It was submitted that the economic offences are to be viewed differently from the normal offences. There is no quarrel with the proposition of law that the cases involving economic fraud are to be viewed seriously and a person involved in the economic fraud is not entitled to the concession of pre-arrest bail. However, before applying this principle, it has to be established that economic fraud was committed.In the present case, the investigation conducted so far does not show any economic offence. At the cost of repetition, the Board of Directors, who are 20 2025:HHC:11020 responsible for this economic fraud are still at large and no steps are being taken to apprehend any of them. Hence the plea that there is economic fraud is not acceptable.
23. It is undisputed that the Bank had issued a possession notice under the SARFAESI Act and the petitioner had obtained a stay order from the Debt Recovery Tribunal, Chandigarh, where the proceedings are pending. Therefore, it is not a case where the bank is not taking any steps to recover the money as per law. There is a force in the submission of Mr N.S. Chandel, learned Senior Counsel for the petitioner that it is a case of disbursal of a loan and failure to return it for which the appropriate remedy is the Civil Courts and recourse cannot be had to the Criminal Courts to recover the money taken as a loan. The matter would have been different had the involvement of the Board of Directors been established and sufficient material was brought on record to show that the Board of Directors had misused their position to benefit the petitioner Yudh Chand Bains, contrary to the instructions/guidelines issued by the competent authorities.In the absence of any action against the Board of Directors, the submission that the present case is a case of abuse of the position 21 2025:HHC:11020 by the public servants to benefit the individual cannot be accepted.
24. The police are also seeking to arrest petitioner Harish Chand because money was transferred to his account by petitioner Yudh Chand Bains. He is simply a beneficiary of the transfer made by petitioner Yudh Chand Bains and it is not shown as to what crime has been committed by him by receiving the money. Section 411 of IPC punishes a receiver of the stolen property but in the absence of any allegation of criminal breach of trust, his case is not covered under this provision.
25 It was submitted that money is to be recovered and for this purpose, the custodial interrogation is required. The submission is only stated to be rejected. It was laid down by the Hon'ble Supreme Court in Ramesh Kumar vs. State NCT of Delhi (2023) 7 SCC 461 that the bail proceedings cannot be turned into recovery proceedings. It was observed:-
23. In Dilip Singh v. State of M.P. [Dilip Singh v. State of M.P., (2021) 2 SCC 779: (2021) 2 SCC (Cri) 106], this Court sounded a note of caution in the following words : (SCC p.
780, paras 3-4) "3. By imposing the condition of deposit of Rs 41 lakhs, the High Court has, in an application for pre- arrest bail under Section 438 of the Criminal 22 2025:HHC:11020 Procedure Code, virtually issued directions in the nature of recovery in a civil suit.
4. It is well settled by a plethora of decisions of this Court that criminal proceedings are not for the realisation of disputed dues. It is open to a court to grant or refuse the prayer for anticipatory bail, depending on the facts and circumstances of the particular case. The factors to be taken into consideration, while considering an application for bail are the nature of the accusation and the severity of the punishment in the case of conviction and the nature of the materials relied upon by the prosecution; reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant or the witnesses; the reasonable possibility of securing the presence of the accused at the time of trial or the likelihood of his abscondence; character, behaviour and standing of the accused; and the circumstances which are peculiar or the accused and larger interest of the public or the State and similar other considerations. A criminal court, exercising jurisdiction to grant bail/anticipatory bail, is not expected to act as a recovery agent to realise the dues of the complainant, and that too, without any trial."
24. Yet again in Bimla Tiwari v. State of Bihar [Bimla Tiwari v. State of Bihar, (2023) 11 SCC 607: 2023 SCC OnLine SC 51], this is what the Court said : (SCC paras 9-11) "9. We have indicated on more than one occasion that the process of criminal law, particularly in matters of grant of bail, is not akin to money recovery proceedings but what has been noticed in the present case carries the peculiarities of its own.
10. We would reiterate that the process of criminal law cannot be utilised for arm-twisting and money recovery, particularly while opposing the prayer for bail. The question as to whether pre-arrest bail, or 23 2025:HHC:11020 for that matter regular bail, in a given case is to be granted or not is required to be examined and the discretion is required to be exercised by the Court with reference to the material on record and the parameters governing bail considerations. Putting it in other words, in a given case, the concession of pre-arrest bail or regular bail could be declined even if the accused has made payment of the money involved or offers to make any payment; conversely, in a given case, the concession of pre-arrest bail or regular bail could be granted irrespective of any payment or any offer of payment.
11. We would further emphasise that, ordinarily, there is no justification in adopting such a course that for the purpose of being given the concession of pre-arrest bail, the person apprehending arrest ought to make payment. Recovery of money is essentially within the realm of civil proceedings."
25. Law regarding the exercise of discretion while granting a prayer for bail under Section 438CrPC having been authoritatively laid down by this Court, we cannot but disapprove the imposition of a condition of the nature under challenge. Assuming that there is substance in the allegation of the complainants that the appellant (either in connivance with the builder or even in the absence of any such connivance) has cheated the complainants, the investigation is yet to result in a chargesheet being filed under Section 173(2)CrPC, not to speak of the alleged offence being proved before the competent trial court in accordance with the settled procedures and the applicable laws. Sub-section (2) of Section 438CrPC does empower the High Court or the Court of Session to impose such conditions while making a direction under sub-section (1) as it may think fit in the light of the facts of the particular case and such direction may include the conditions as in clauses (i) to (iv) thereof. However, a reading of the precedents laid down by this Court referred to above makes the position of law clear that the conditions to be 24 2025:HHC:11020 imposed must not be onerous or unreasonable or excessive. In the context of the grant of bail, all such conditions that would facilitate the appearance of the accused before the investigating officer/court, unhindered completion of investigation/trial and safety of the community assume relevance. However, the inclusion of a condition for payment of money by the applicant for bail tends to create an impression that bail could be secured by depositing money alleged to have been cheated. That is really not the purpose and intent of the provisions for the grant of bail.
26. In the present case, the proceedings under SARFAESI Act are pending and if the recovery is to be effected, it has to be as per law and not by resorting to the threat of arrest. Hence the submission that the petitioner is to be arrested to recover the money will not help the prosecution.
27. It was submitted that there is a violation of bail conditions. The status report mentions that petitioner Yudh Chand Bains reported at the Police Station SV & ACB Una at 10.45 a.m. when he was directed to report at 11.30 a.m. He left after some minutes and held up the press conference. He failed to abide by the conditions to report at the police station at 11.30 a.m. Reporting earlier than the stipulated time cannot be a violation of the terms of the bail and the bail cannot be cancelled because the petitioner had reported earlier.
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28. It was also submitted that the petitioner failed to join the investigation from 13th to 17th January 2025 by taking a plea that he was summoned by the ED office on 18.1.2025 and he joined the investigation on 18.1.2025. If the petitioner was summoned by ED, it is difficult to see how he could have joined the investigation before the police. Hence, it cannot be said to be a violation of the bail condition.
29. It was submitted that the petitioner has conducted a press conference. It is difficult to see how that can amount to the violation of the conditions imposed by the Court. The Constitution guarantees freedom of speech to every person and this freedom is not taken away merely because a criminal case is pending against him.
30. It was submitted that the petitioner has not returned the loan of other persons. However, that is hardly any reason to commit the petitioner to prison when the present case is related to the disbursal of a loan by KCCB.
31. No other point was urged.
32. In view of the above, the present petitions are allowed and the interim orders passed by the Court are made absolute.
26 2025:HHC:11020
33. However, it is specifically made clear that in case of violation of the conditions imposed by the Court while granting the interim bail, the police will be at liberty to file an appropriate application for cancellation of bail.
34. The observations made hereinbefore shall remain confined to the disposal of the present petition and will have no bearing whatsoever on the merits of the case.
(Rakesh Kainthla) Judge 24th April, 2025 (mamta) Digitally signed by MAMTA RAO DN: C=IN, O=HIGH COURT OF HIMACHAL MAMTA PRADESH, OU=HIGH COURT OF HIMACHAL PRADESH SHIMLA, Phone=36bb51250baa5a51385bbc5a5b425314fa e384931dc610a63165c9febd25094e, PostalCode=171001, S=Himachal Pradesh, SERIALNUMBER=2987d79d0aae1f98d0fd5663fb RAO 63f715a53ab1add092fa3617b76bdc094f63d9, CN=MAMTA RAO Reason: I am the author of this document Location:
Date: 2025-04-25 13:17:10