Case Law Details
Sahil Jain Vs Superintendent (Anti Evasion) (Supreme Court of India)
The case involves judicial scrutiny of a bail condition requiring the furnishing of a ₹50 lakh bank guarantee in a prosecution relating to alleged wrongful Input Tax Credit of ₹64 crores. The matter was first considered by the Punjab and Haryana High Court and subsequently examined by the Supreme Court of India.
The appellant had initially been granted bail under Section 167(2) Cr.P.C. by order dated 11.01.2021. The bail order imposed several conditions, including furnishing a personal bond of ₹1 crore with two sureties of the same amount, along with an additional requirement to furnish a bank guarantee/FDR of ₹50 lakhs. Other conditions included appearance before the Court on each hearing, restrictions on leaving the country, surrender of passport, and prohibitions on influencing witnesses or committing similar offences.
Read HC Judgment in this case: P&H HC Upheld Bail Condition as Earlier Challenge Already Decided
The appellant challenged the bank guarantee condition before the High Court in 2021, but the challenge was dismissed on 03.03.2021. The High Court held that the condition was based on sound judicial principles and did not warrant interference. Following this, the appellant complied with the condition by arranging a surety who furnished the bank guarantee, and he was released on bail. The appellant continued to appear regularly before the trial Court and did not violate any bail conditions.
Subsequently, the surety withdrew the bank guarantee due to financial necessity. The Chief Judicial Magistrate permitted such withdrawal on 26.05.2025 and granted time to the appellant to furnish a fresh bank guarantee. The appellant, however, was unable to arrange a new surety for the same amount and approached the High Court again, seeking quashing of the bail condition under Section 484 Cr.P.C. read with Section 528 of BNSS.
Before the High Court, it was argued that the withdrawal of the surety and the appellant’s financial incapacity constituted a change in circumstances. It was contended that bail conditions are meant to ensure the presence of the accused and fairness of trial, and that the continued imposition of an onerous financial condition effectively amounted to denial of bail.
The High Court rejected these submissions. It held that the same condition had already been challenged and upheld earlier, and that the present petition amounted to re-agitation of an issue already decided. The Court did not accept the argument that withdrawal of the surety constituted a sufficient change in circumstances. It concluded that the grounds raised were already available earlier and had been considered and rejected. Accordingly, the petition was dismissed.
The matter was then carried to the Supreme Court. The appellant contended that he had already complied with the primary bail condition of furnishing a personal bond of ₹1 crore with two sureties, and that the additional requirement of a ₹50 lakh bank guarantee was excessive and contrary to the law laid down in Saravanan vs. State represented by the Inspector of Police.
The respondent argued that the condition was justified given the magnitude of alleged tax evasion involving fake invoices. It was also noted that the case pertained to the year 2020 and that charges had not yet been framed.
After considering the submissions and the applicable legal principles, the Supreme Court held that the condition requiring a ₹50 lakh bank guarantee could not be legally sustained. The Court observed that the appellant had already furnished a personal bond of ₹1 crore with two sureties of the same amount. In such circumstances, imposing an additional financial condition in the form of a bank guarantee was excessive.
The Supreme Court emphasized that bail conditions must be reasonable and cannot impose undue financial burden when adequate security has already been furnished. Accordingly, the Court set aside the High Court’s order and removed the condition requiring the bank guarantee. The appeal was allowed, and all pending applications were disposed of.
The combined reading of the High Court and Supreme Court decisions highlights a distinction between procedural finality and substantive legality. While the High Court declined to revisit the condition on the ground that it had already been upheld earlier, the Supreme Court examined the legality of the condition itself and found it to be unsustainable due to its excessive nature.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Leave granted.
2. The appellant is aggrieved against the order dated 29.08.2025 passed by the High Court whereby he has been directed to furnish bank guarantee of ₹ 50 lakhs as a condition of bail.
3. The appellant is an accused with the allegation by the GST Department of claiming wrongful Input Tax Credit to the tune of ₹64 crores. At the time of initial grant of bail to the appellant, a condition for furnishing personal bond of ₹ 1 crore with two sureties of like amount was imposed. In addition to that, the appellant was directed to furnish bank guarantee of ₹ 50 lakhs. The needful was done. Subsequently, the person who had given the bank guarantee of ₹ 50 lakhs has withdrawn the same.
4. The person who had given the bank guarantee was permitted to withdraw the same by the Chief Judicial Magistrate vide order dated 26.05.2025 and the appellant was given time to furnish fresh bank guarantee.
5. While recording the fact that the condition for furnishing bank guarantee was challenged by the appellant earlier before the High Court and the same was upheld vide order dated 03.03.2021 passed in CRM-M-4374/2021, the High Court dismissed the petition filed by the appellant to waive of that condition.
6. The argument raised by learned counsel for the appellant is that as per the condition imposed by the trial Court while granting bail, he has already furnished personal bond of ₹ 1 crore with two sureties of like amount. The condition of furnishing bank guarantee of ₹ 50 lakhs is onerous and contrary to the law laid down by this Court in Saravanan vs. State represented by the Inspector of Police1. Hence, the prayer is for setting aside of that condition.
7. On the other hand, learned counsel for the respondent submitted that the aforesaid condition was required to be imposed while granting bail to the appellant seeing huge amount of tax which the appellant had evaded by availing wrongful Input Tax Credit on the strength of fake invoices. The fact remains that the case pertains to the year 2020 and as admitted in Court, till date even the charges have not been framed.
8. After hearing learned counsel for the parties and considering the law laid down by this Court in Saravanan’s case (supra), in our opinion, furnishing bank guarantee of ₹ 50 lakhs as a condition for grant of bail, cannot be legally sustained, especially, considering the fact that the appellant was required to furnish personal bond of ₹1 crore with two sureties of like amount, which admittedly has already been furnished.
9. Considering the aforesaid fact, the impugned order passed by the High Court is set aside. The condition of furnishing bank guarantee of ₹ 50 lakhs as a condition for bail stands set aside.
10. The Appeal is allowed.
11. Pending application(s), if any, shall also stand disposed of.
Leave granted.
The Criminal Appeal is allowed in terms of the signed order.
Pending application(s), if any, shall also stand disposed of.
Note:
1 2020 INSC 600
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