Bail Conditions Strengthened in Financial Fraud Case: Supreme Court’s Decision

The Supreme Court of India, in its judgment dated August 28, 2018, ruled on an appeal concerning the bail granted to an accused in a financial fraud case. The case, Bharat Stars Services Pvt. Ltd. vs. Harsh Dev Thakur & Anr., revolved around allegations of embezzlement amounting to Rs. 2.78 Crores. The appellant challenged the bail granted by the High Court, arguing that the conditions imposed were insufficient given the scale of the fraud.

The judgment highlights how courts assess bail conditions in financial fraud cases, ensuring that accused individuals do not evade justice while protecting the interests of the victims.

Background of the Case

The appellant, Bharat Stars Services Pvt. Ltd., alleged that the first respondent, Harsh Dev Thakur, was involved in a significant financial fraud, embezzling Rs. 2.78 Crores. The prosecution further contended that funds were transferred to the respondent’s wife, her brother, and her father, who were also co-accused but remained absconding.

Initially, the High Court granted bail to the first respondent, subject to a deposit of Rs. 50 Lakhs and additional conditions. The appellant challenged this order before the Supreme Court, arguing that the bail conditions were inadequate given the extent of financial misappropriation.

Petitioner’s Arguments

The appellant’s counsel contended that:

• The case involved a large-scale embezzlement, and the accused should not be released on bail under lenient conditions.
• The accused’s family members were co-accused and were already absconding, raising concerns that the first respondent might also attempt to flee.
• The bail amount of Rs. 50 Lakhs was significantly lower than the alleged fraud amount of Rs. 2.78 Crores, making it an insufficient deterrent.

Respondent’s Arguments

The defense, represented by senior counsel, argued that:

• The accused had been in custody since November 10, 2017, and the investigation concerning him was complete.
• The accused’s assets had already been attached by the authorities, minimizing the risk of tampering with evidence.
• Since the case largely revolved around documentary evidence, there was no risk of influencing witnesses.
• The accused was willing to deposit his passport and comply with any additional conditions imposed by the Court.

Supreme Court’s Observations

After hearing both sides, the Supreme Court ruled that the conditions set by the High Court were insufficient given the severity of the allegations. The Court stated:

“The High Court has directed deposit of Rs.50 Lakhs on the premise that the financial fraud involved in the case is around Rs. 50 Lakhs. Now that it has come out that the fraud is more than Rs.2.75 Crores, we are of the view that some more stringent conditions should be imposed on the first respondent.”

The Court acknowledged that while the accused had been in custody for a significant period and the investigation was complete, stronger financial conditions were necessary to ensure compliance and prevent evasion.

Final Verdict

The Supreme Court modified the bail conditions as follows:

• The accused was required to furnish additional security of Rs. 75 Lakhs, bringing the total deposit amount to Rs. 1.25 Crores.
• The accused had to deposit his passport with the trial court to prevent him from fleeing the country.
• He was required to report to the jurisdictional police station once every week.

The Court also clarified that these conditions were in addition to those imposed by the High Court. Furthermore, the appellant was permitted to approach the trial court to request withdrawal of the deposited amount, subject to conditions imposed by the court.

Conclusion

The ruling in Bharat Stars Services Pvt. Ltd. vs. Harsh Dev Thakur & Anr. underscores the judiciary’s cautious approach in financial fraud cases. The Supreme Court’s decision to enhance the bail conditions ensures that the accused remains available for trial and that the victims’ financial interests are protected. This judgment serves as a precedent for how courts balance the rights of the accused with the need to prevent economic offenders from evading justice.

Petitioner Name: Bharat Stars Services Pvt. Ltd..
Respondent Name: Harsh Dev Thakur & Anr..
Judgment By: Justice Kurian Joseph, Justice Sanjay Kishan Kaul.
Place Of Incident: India.
Judgment Date: 28-08-2018.

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