A) ABSTRACT / HEADNOTE

The Supreme Court of India ruled on the procedural safeguards and standards for granting interim orders of stay on bail in exceptional cases. The case centered on whether the High Court could stay an order granting bail without sufficiently considering the merits or recording reasons for its decision. It addressed the principles under Section 439(2) of the Code of Criminal Procedure, 1973 (CrPC) and its equivalent Section 483(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), emphasizing that the cancellation of bail must only occur in rare circumstances demonstrating misuse of liberty or other significant grounds. The judgment clarified the limits of judicial discretion and stressed the protection of liberty under Article 21 of the Constitution.

Keywords: Bail, Interim Stay, Cancellation of Bail, Exceptional Cases, Judicial Discretion.

B) CASE DETAILS

i) Judgment Cause Title: Parvinder Singh Khurana v. Directorate of Enforcement

ii) Case Number: Criminal Appeal Nos. 3059-3062 of 2024

iii) Judgment Date: 23rd July 2024

iv) Court: Supreme Court of India

v) Quorum: Hon’ble Justice Abhay S. Oka and Justice Augustine George Masih

vi) Author: Justice Abhay S. Oka

vii) Citation: [2024] 7 S.C.R. 979

viii) Legal Provisions Involved:

• Section 439(2), Criminal Procedure Code, 1973
• Section 483(3), Bharatiya Nagarik Suraksha Sanhita, 2023
• Section 45(1)(ii), Prevention of Money Laundering Act, 2002 (PMLA)
• Article 21, Constitution of India

ix) Judgments Overruled: None explicitly overruled, but prior orders of stay by the Delhi High Court were set aside.

x) Case is Related to Law Subjects:
Criminal Procedure, Bail Jurisprudence, Prevention of Money Laundering, Constitutional Law.

C) INTRODUCTION AND BACKGROUND OF JUDGMENT

This case emerged from conflicting orders on bail granted to the appellant, Parvinder Singh Khurana, in proceedings initiated by the Enforcement Directorate (ED) under the PMLA. The appellant, initially excluded from the accused list, faced arrest after supplementary allegations were filed. The controversy arose when the High Court of Delhi stayed an order granting bail ex-parte and without recorded reasons. This judgment explored the interplay between judicial discretion and procedural fairness in bail matters.

D) FACTS OF THE CASE

The ED initiated proceedings against companies and individuals for fraud and money laundering. The appellant was initially not named in the ECIR or the initial complaint but was later accused in a supplementary complaint. Despite his cooperation during the investigation, he was arrested in January 2023.

His first bail application was denied. Subsequently, he applied for default bail under Section 167(2) of the CrPC and regular bail under Section 439 CrPC, which the Special Court granted in June 2023. The ED challenged this bail order in the High Court, which stayed the bail ex-parte, leading to prolonged litigation over the continuation of the stay without a substantive hearing.

E) LEGAL ISSUES RAISED

1. Whether the High Court could stay an order granting bail without considering the merits and recording reasons.
2. Under what circumstances an interim stay of bail is justified under Section 439(2) CrPC or Section 483(3) BNSS.

F) PETITIONER/APPELLANT’S ARGUMENTS

1. The appellant emphasized that the ex-parte stay of bail violated his Article 21 rights, as the order deprived him of liberty without due process.
2. He argued that the High Court failed to provide reasons or consider the merits, rendering the stay order procedurally and substantively unsound.
3. The prolonged non-hearing and repeated recusals further prejudiced his rights, creating undue delays in relief.

G) RESPONDENT’S ARGUMENTS

1. The ED contended that the appellant was improperly granted bail by the Special Court, alleging procedural lapses and no change in circumstances.
2. They relied on precedents like Puran v. Rambilas (2001) and Gulabrao Baburao Deokar v. State of Maharashtra (2013) to argue for the permissibility of interim stays in cases of unjustified bail orders.
3. They highlighted the gravity of the allegations under the PMLA to justify the stay of bail.

H) RELATED LEGAL PROVISIONS

1. Section 439(2), CrPC: Provides courts with the power to cancel bail in exceptional cases.
2. Section 483(3), BNSS: Equivalent to Section 439(2), CrPC, in the Bharatiya Nagarik Suraksha Sanhita.
3. Article 21, Constitution of India: Protects life and personal liberty, forming the basis for challenging arbitrary deprivation of bail.
4. Section 45(1)(ii), PMLA: Imposes twin conditions for bail in money laundering cases.

I) JUDGMENT

a. Ratio Decidendi

1. An interim stay of bail must be exercised sparingly and only in exceptional cases, supported by a strong prima facie case.
2. Ex-parte interim stays should generally not be granted, and courts must record specific reasons for such orders.
3. The failure to hear the accused before granting a stay violates fundamental liberties under Article 21.

b. Obiter Dicta

1. Judicial delay in hearing bail matters can amount to a denial of justice.
2. Liberty granted through bail should not be curtailed through mechanical or unexplained interim orders.

c. Guidelines

• Interim stays on bail should only be granted with:
  1. Strong prima facie evidence for bail cancellation.
  2. Detailed reasoning recorded in the order.
  3. Immediate opportunity for the accused to contest the stay.

J) CONCLUSION & COMMENTS

This case reinforces procedural fairness in bail jurisprudence, safeguarding individual liberty against arbitrary judicial actions. It underscores the need for prompt hearings and detailed reasoning in bail matters to balance state interests with constitutional rights.

K) REFERENCES

1. Gulabrao Baburao Deokar v. State of Maharashtra, (2013) 16 SCC 190.
2. Narendra Kumar Amin v. CBI, (2015) 3 SCC 417.
3. Puran v. Rambilas, (2001) 6 SCC 338.
4. Code of Criminal Procedure, 1973.
5. Bharatiya Nagarik Suraksha Sanhita, 2023.
6. Prevention of Money Laundering Act, 2002.
7. Constitution of India.