Facts of the Case

  • The respondent, along with a co-accused, was alleged to have created dummy firms to generate fake invoices.
  • These entities were used to pass on fraudulent Input Tax Credit without actual supply of goods.
  • Alleged fake transactions exceeded ₹200 crores, with tax evasion of approximately ₹27.54 crores.
  • The respondent was arrested on 31.07.2018.
  • Initial bail was granted on 20.08.2018 but later cancelled on 22.12.2018 by the Sessions Court.
  • The investigation was not completed within 60 days, and no complaint was filed.
  • The respondent applied for statutory bail under Section 167(2) CrPC, which was granted by the CMM.

Issues Involved

  1. Whether statutory bail under Section 167(2) CrPC can be granted after earlier bail cancellation.
  2. Whether failure to file a complaint within the statutory period entitles the accused to default bail irrespective of prior orders.

Petitioner’s Arguments

  • The Department argued that once bail had been cancelled by the Sessions Court, the respondent was not entitled to the benefit of statutory bail.
  • It was contended that granting bail again would defeat the earlier judicial order cancelling bail.

Respondent’s Arguments

  • The respondent relied on the statutory right under Section 167(2) CrPC.
  • It was submitted that since the investigation was incomplete and no complaint was filed within 60 days, the respondent was entitled to default bail.
  • The right under Section 167(2) is independent and cannot be curtailed by prior bail cancellation.

Court Findings / Order

  • The Delhi High Court held that the argument of the petitioner was without merit.
  • It was observed that Section 167(2) CrPC is a beneficial provision granting an indefeasible right to the accused upon failure of the investigating agency to complete investigation within the prescribed time.
  • The Court emphasized that this right has been recognized as a constitutional right.
  • Since no complaint had been filed even after expiry of 60 days, the respondent was entitled to statutory bail.
  • The petition was dismissed. 

Important Clarifications by the Court

  • Statutory bail under Section 167(2) CrPC is independent of prior bail orders.
  • Failure of the prosecution to file a complaint within the statutory period mandates grant of bail.
  • The Court criticized the Department for not filing a complaint even after several years.
  • Filing such petitions without progressing the case was termed an abuse of process of law.

Sections Involved

  • Section 167(2) Code of Criminal Procedure, 1973
  • Provisions relating to statutory/default bail

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/59530082024CRLMM28242019_185728.pdf 

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