Full Judgment Text
2024 INSC 546
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NOS. 30593062 of 2024
(@ Special Leave Petition (Crl.) Nos. 80078010 of 2024)
Parvinder Singh Khurana … Appellant
versus
Directorate of Enforcement … Respondent
J U D G M E N T
ABHAY S. OKA, J.
Leave granted.
1.
ISSUE INVOLVED
2. The issue involved in these appeals concerns the power
of the High Court or Sessions Court to grant an interim order
of stay of operation of an order granting bail till the disposal
of the application for cancellation of bail under subSection
(2) of Section 439 of the Code of Criminal Procedure, 1973 (for
short, ‘the CrPC’). SubSection (3) of Section 483 of Bharatiya
Nagarik Suraksha Sanhita, 2023 (for short, ‘the BNSS’) is the
corresponding provision of subsection (2) of Section 439 of
Signature Not Verified
the CrPC. The same issue arises in other proceedings adopted
Digitally signed by
Anita Malhotra
Date: 2024.07.23
17:05:56 IST
Reason:
for challenging an order of grant of bail.
Crl Appeal @ SLP (Crl.) Nos. 80078010 of 2024 Page 1 of 16
FACTUAL ASPECTS
st
3. On 1 December 2020, the Central Bureau of
Investigation registered a crime against two companies and
two individuals for the offences punishable under Section
120B read with Sections 420,467,468 and 471 of the Indian
Penal Code and Section 13(2) read with Section 13(1)(d) of the
Prevention of Corruption Act, 1988. The subject matter of
offence, inter alia, was the loan account of Jay Polychem India
rd
Ltd. On 23 February 2021, the respondent Enforcement
Directorate registered an Enforcement Case Information
Report (ECIR) for an offence punishable under Section 4 of
the Prevention of Money Laundering Act (for short, ‘the
PMLA’). Eleven persons were shown as accused in ECIR.
th
However, the appellant was not shown as an accused. On 30
October 2021, the respondent filed a complaint before the
Special Court under Section 44(1)(b) of PMLA. Even in the
complaint, the appellant was not shown as an accused. From
st th
31 October 2020 to 20 January 2023, the respondent called
the appellant for investigation several times. Though the
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appellant cooperated, on 20 January 2023, the appellant
was arrested.
The first bail application made by the appellant was
4.
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rejected by the Special Court by the order dated 10 March
th
2023. On 17 March 2023, the respondent filed a
supplementary complaint under the PMLA in which the
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appellant was shown as an accused. On 29 April 2023, the
Crl Appeal @ SLP (Crl.) Nos. 80078010 of 2024 Page 2 of 16
appellant filed two separate applications seeking bail. In the
first application, a prayer was made to grant a default bail
under Section 167 (2) of the CrPC. The second application
was for a grant of regular bail under Section 439 of the CrPC.
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By the order dated 17 June 2023, though the Special Court
declined to grant bail under Section 167(2) of the CrPC,
granted regular bail after recording a finding that the
appellant satisfied the twin conditions for grant of bail
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incorporated in Section 45(1)(ii) of the PMLA. On 21 June
2023, the respondent applied under Section 439(2) of the
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CrPC before the High Court. On 23 June 2023, the learned
Single Judge of the Delhi High Court, sitting as a Vacation
Judge, directed that the case should be listed before him on
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26 June 2023 at 2.30 pm, and in the meanwhile, the order
granting bail will remain stayed. This is the first impugned
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order. The hearing could not be held on 26 June 2023. On
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28 June, 2023, the case was listed before another learned
Single Judge who continued the interim relief of stay.
Thereafter, the application was adjourned from time to time.
Once the application for cancellation of bail was fully argued
before a learned judge and, the order was reserved. However,
the Judge recused himself. Thereafter, there were two more
recusals .
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On 2 May 2024, the application for cancellation of bail
5.
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was adjourned to 9 July 2024. On 3 May 2024, the
appellant applied to vacate the stay order. The application
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was listed on 22 May 2024. The application for vacating
Crl Appeal @ SLP (Crl.) Nos. 80078010 of 2024 Page 3 of 16
stay could not be heard due to paucity of time. The learned
Single Judge passed an order directing that the main
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application shall be heard on 9 July 2024 which was the
date earlier fixed. The learned Judge, however, granted
liberty to apply for interim bail.
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6. Aggrieved by the first order granting stay passed on 23
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June 2023 and the second order dated 22 May 2024
granting liberty to the appellant to apply for interim bail,
these appeals have been preferred. This Court, by the order
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dated 7 June 2024, stayed the order of stay dated 23 June
2023 and clarified that the appellant would be entitled to
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benefit of the order dated 17 June 2023 passed by the
Special Court granting bail. Accordingly, the appellant has
been enlarged on bail.
SUBMISSIONS
7. The learned counsel appearing for the appellant has
taken us through various orders of the High Court. He
pointed out that the application for cancellation of bail was
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listed on 24 to 25 dates from 23 June 2023 to July 2024.
One learned Single Judge, after reserving the judgment,
recused himself. After that, two other learned Single Judges
recused themselves. His submission is that the order
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granting bail was casually stayed by the High Court on 23
June 2023 without examining the merits of the case and
without recording any reasons. He submitted that if the
benefit of the order granting bail is allowed to be taken away
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by such a cryptic order of interim stay passed without
application of mind, it will violate the liberty guaranteed to
the appellant under Article 21 of the Constitution of India.
8. Learned counsel appearing for the respondent has
produced a compilation of documents. He stated that in
several cases, even this Court had stayed the order granting
bail while issuing notice on prayer for cancellation of bail
without recording any reasons. Relying upon two decisions of
this Court in the case of
Gulabrao Baburao Deokar v. State
1 2
and , he
of Maharashtra Narendra Kumar Amin v. CBI
submitted that the power to cancel the bail is not confined to
the ground of breach of terms and conditions on which bail
was granted. If the order granting bail is unjustified, illegal or
perverse, an order of cancellation of bail can be passed. He
also relied on this Court's decision in the case of Puran v.
3
Rambilas . He submitted that when there is a power to set
aside or cancel the order granting bail, there always exists a
power to stay the order pending final adjudication of the
prayer for cancellation of bail. He pointed out that the same
learned Special Judge had rejected the regular bail
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application made by the appellant by the order dated 10
th
March 2023, and only after three months, on 17 June 2023,
the same learned Judge granted bail though there was no
change in circumstances. He submitted that in view of this
1 (2013) 16 SCC 190
2 (2015) 3 SCC 417
3 (2001) 6 SCC 338
Crl Appeal @ SLP (Crl.) Nos. 80078010 of 2024 Page 5 of 16
position, the High Court was justified in granting the interim
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stay on 23 June 2023.
CONSIDERATION OF SUBMISSIONS
GROUNDS FOR CANCELLATION OF BAIL
9. Regarding the grounds available for cancellation of bail
under Section 439(2), we can conveniently refer to a decision
1
of this Court in the case of . In
Gulabrao Baburao Deokar
paragraph 27 of the said decision, it was held thus:
“27. Thus, it could certainly be said that the
order passed by the Sessions Judge was an
order passed in breach of the mandatory
requirement of the proviso to Section 439(1)
CrPC. It is also an order ignoring the
material on record, and therefore without
any justification and perverse.
As held by
this Court in Puran v. Rambilas [(2001) 6
SCC 338: 2001 SCC (Cri) 1124], the High
Court does have the power under Section
439(2) CrPC to set aside an unjustified,
illegal or perverse order granting bail.
This is an independent ground for
cancellation as against ground of the
accused misconducting himself.”
(emphasis added)
3
As held in the case of Puran v. Rambilas , apart from the
ground that the accused has committed breaches of terms
and conditions on which bail is granted, if he has otherwise
misconducted himself, the High Court or Sessions Court can
exercise power under Section 439(2) of CrPC to cancel the
bail. Bail can be cancelled if the bail order is wholly
Crl Appeal @ SLP (Crl.) Nos. 80078010 of 2024 Page 6 of 16
unjustified, patently illegal, or perverse. Once it is held that
there is a power vesting in the High Court or Sessions Court
to cancel bail by exercising power under Section 439(2) of
CrPC, it follows that the power to stay an order granting bail
is implicit in the Court dealing with the applications. The
question is about the contours of the exercise of power to
grant a stay.
POWER TO GRANT INTERIM STAY OF ORDER GRANTING
BAIL
When a person is arrested, the rights guaranteed by
10.
Article 21 of the Constitution of India get substantially
curtailed. The law permits arrests of the accused as provided
in the CrPC or the BNSS. The effect of the grant of bail
under the provisions of Sections 437 and 439 of the CrPC
(Sections 480 and 483 of the BNSS) is that the liberty of the
undertrial accused is restored pending the trial, subject to the
accused complying with the conditions of bail. When the
High Court or Sessions Court stays such an order, it amounts
to taking away the liberty granted under the order of bail.
When an application for cancellation of bail is filed, the High
Court or Sessions Court should be very slow in granting
drastic interim relief of stay of the order granting bail. The
reason is when a Court competent to grant bail finds the
accused entitled to be enlarged on bail unless the said order
is set aside on the limited grounds of cancellation available
under subsection (2) of Section 439 of CrPC or any other
proceedings, the accused who has been granted bail cannot
Crl Appeal @ SLP (Crl.) Nos. 80078010 of 2024 Page 7 of 16
be normally deprived of his right to liberty guaranteed under
Article 21 of the Constitution. Even if the order granting bail
is not stayed, the accused can always be taken into custody if
the bail is finally cancelled.
While issuing notice on an application for cancellation of
11.
bail, without passing a drastic order of stay, if the facts so
warrant, the High Court can, by way of an interim order,
impose additional bail conditions on the accused, which will
ensure that the accused does not flee. However, an order
granting a stay to the operation of the order granting bail
during the pendency of the application for cancellation of bail
should be passed in very rare cases. The reason is that when
an undertrial is ordered to be released on bail, his liberty is
restored, which cannot be easily taken away for the asking.
The undertrial is not a convict. An interim relief can be
granted in the aid of the final relief, which could be finally
granted in proceedings. After cancellation of bail, the accused
has to be taken into custody. Hence, it cannot be said that if
the stay is not granted, the final order of cancellation of bail,
if passed, cannot be implemented. If the accused is released
on bail before the application for stay is heard, the
application/proceedings filed for cancellation of bail do not
become infructuous. The interim relief of the stay of the order
granting bail is not necessarily in the aid of final relief.
The Court dealing with the application for cancellation
12.
of bail can always ensure that notice is served on the accused
Crl Appeal @ SLP (Crl.) Nos. 80078010 of 2024 Page 8 of 16
as soon as possible and that the application is heard
expeditiously. An order granting bail can be stayed by the
Court only in exceptional cases when a very strong prima
facie case of the existence of the grounds for cancellation of
bail is made out. The prima facie case must be of a very high
standard. By way of illustration, we can point out a case
where the bail is granted by a very cryptic order without
recording any reasons or application of mind. One more
illustration can be of a case where material is available on
record to prove serious misuse of the liberty made by the
accused by tampering with the evidence, such as threatening
the prosecution witnesses. If the High Court or Sessions
Court concludes that an exceptional case is made out for the
grant of stay, the Court must record brief reasons and set out
the grounds for coming to such a conclusion.
An stay of the order granting bail, as a
13. exparte
standard rule, should not be granted. The power to grant an
interim stay of an order granting bail has to be
exparte
exercised in very rare and exceptional cases where the
situation demands the passing of such an order. While
considering the prayer for granting an exparte stay, the
concerned Court must apply its mind and decide whether the
case is very exceptional, warranting the exercise of drastic
power to grant an exparte stay of the order granting bail.
Liberty granted to an accused under the order granting bail
cannot be lightly and causally interfered with by mechanically
granting an exparte order of stay of the bail order. Moreover,
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the Court must record specific reasons why it concluded that
it was a very rare and exceptional case where a very drastic
order of exparte interim stay was warranted. Moreover, since
the issue involved is of the accused's right to liberty
guaranteed by Article 21 of the Constitution, if an exparte
stay is granted, by issuing a short notice to the accused, the
Court must immediately hear him on the continuation of the
stay.
ON FACTS OF THE CASE
Now, we come to the facts of the case. The order dated
14.
rd
23 June 2023 records the presence of the advocate
representing the accused. Therefore, the High Court ought to
have heard the Advocate before granting the stay. But that
was not done. Thus, it was an exparte order of stay. The
failure to hear the advocate for the accused and the failure to
record reasons vitiates the order of stay. The application for
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cancellation of bail was placed before the High Court on 23
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June 2023. The order dated 23 June 2023 indicates that
without even applying mind to the merits of the prayer for a
grant of stay, the exparte stay was granted, and the
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application was ordered to be listed at 2.30 pm on 26 June
2023. However, the case was not heard on that day. After
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23 June 2023, the case appeared on 28 June before
another Single Judge. He directed that the case be listed
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before the roster bench on 3 July 2023. The order of stay
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was extended. On 3 July 2023, the case was adjourned to
th th th th
14 July 2023. On 14 July 2023, 7 August 2023, and 17
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August 2023, arguments were heard on the application for
cancellation of bail. For one reason or another, further
arguments could not be heard on 28th August 2023, 5th
September 2023, 4th October 2023, 16th October 2023, 19th
October 2023, and 3rd November 2023. Meanwhile, interim
relief of stay of the order granting bail was continued from
time to time.
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The order of the High Court passed on 10 November
15.
2023 records that the arguments were heard and judgment
nd
was reserved. After that, on 22 December 2023, the
application was listed for directions when the learned Judge,
who had heard the arguments, passed an order directing that
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the application be listed before another Judge. From 8
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January 2024 to 5 March 2024, the application was
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repeatedly adjourned without any hearing. On 5 March
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2024, the case was again renotified for 11 March 2024. On
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11 March 2024, the learned Single Judge before whom the
case was placed on eight earlier dates recused himself. On
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12 March 2024, the case was shifted to another Single
Judge who again passed an order of recusal. Incidentally, the
same learned Judge had passed the stay order on
exparte
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23 June 2023. After that, the case was adjourned on 18th
nd
March, 10th April and 2nd May 2024. On 2 May 2024, the
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case was again adjourned to 9 July 2024. This compelled
the appellant to apply to vacate the interim stay. The
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application for vacating stay was listed on 22 May 2024,
which was not heard due to paucity of time, and even the said
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application was adjourned to 9th July 2024, which was a date
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already fixed. The said order dated 22 May 2024 does not
make a happy reading. The order reads thus:
“1. The matter could not be heard due to
paucity of time.
2. List the matter on 09.07.2024 at 12:30
PM.
3. In case of any urgency in the matter or
on any ground for which the petitioner
wants to seek interim bail, it will be well
within his right to do so and the same will
be decided on merits as per law.
4. Interim order(s), if any, to continue, till
the next date of hearing.
5. Copy of this order be given dasti under
the signature Court Master.
6. The order be uploaded on the website
forthwith.”
The application moved before the Court was for vacating the
stay. It is very difficult to understand the propriety of granting
liberty to the appellant to apply for interim bail without even
touching the application for vacating interim relief. The High
Court ignored the extreme urgency of hearing the application
for vacating the stay. The Court ignored that the drastic order
of stay of bail order had continued for 11 months which was
passed without considering the merits. The appellant got no
solace by the direction of the High Court that a copy of the
said order be given dasti and that the same shall be uploaded
forthwith.
Crl Appeal @ SLP (Crl.) Nos. 80078010 of 2024 Page 12 of 16
In this case, it is so apparent from the first impugned
16.
rd
order dated 23 June 2023 that the order granting bail was
mechanically stayed without considering merits. The
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application was kept on 26 June 2023 at 2.30 pm. The High
Court ought to have heard the parties on the prayer for
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interim relief on 26 June 2023 if the main application for
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cancellation of bail could not be heard. From 23 June 2023
till the end of June 2024, the application for cancellation of
bail was listed on 28 different dates. As noted earlier, there
were three recusals. One recusal was made more than one
month after the judgment was reserved. The result of all this
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is that the exparte order of stay granted on 23 June 2023,
without considering the merits of the case, continued to
operate for one year. Thus, the order of stay granted without
hearing the accused continued to operate for more than one
year without hearing the accused on merits. Whether such an
approach violated the fundamental right to liberty of the
appellant is a serious question we must ask ourselves.
Except for stating that this is a sorry state of affairs, we
cannot say anything further as we must show restraint.
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Ultimately, in vacation, this Court granted a stay on 7 June
2024 to the order of stay, paving the way for the appellant's
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release on bail in terms of the order dated 17 June 2023,
passed one year ago.
17. There may be good reasons for three learned Judges to
have recused themselves. But surely, the exparte order
staying the order of bail passed without considering merits
Crl Appeal @ SLP (Crl.) Nos. 80078010 of 2024 Page 13 of 16
cannot continue to operate for one year without the appellant
getting a hearing on the issue of continuation of the interim
order. All Courts have to be sensitive about the most
important fundamental right conferred under our
Constitution, which is the right to liberty under Article 21.
18. The first application for regular bail filed by the
appellant was rejected by the Special Court by the order dated
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10 March 2023. At that time, further investigation was in
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progress following filing the first complaint on 30 October
2021. The appellant was not named as an accused in the FIR
of the predicate offence, ECIR, or in the first complaint under
the PMLA. Within seven days after the first bail application
was rejected, a second complaint was filed in which the
appellant was shown as an accused for the first time. In view
of the filing of the complaint, it was open for the appellant to
file a second bail application based on a change in
circumstances brought about by the supplementary
complaint. The change was that the investigation against the
appellant was completed.
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19. We have carefully perused the order dated 17 June
2023 granting regular bail. After a detailed discussion, it
records a finding that the appellant has made out a case in
terms of Section 45(1)(ii) of the PMLA on the power to grant
bail. We have perused the application made by the
respondent before the High Court for cancellation of bail. We
find no allegation of the misuse of liberty granted under the
Crl Appeal @ SLP (Crl.) Nos. 80078010 of 2024 Page 14 of 16
bail order in the said application. All the grounds are on
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merits. The order dated 17 June 2023 granting bail is a
detailed order running into more than 50 pages, which
considers the material on record from both complaints under
the PMLA. After having perused the said order, we find that
the case was not the one that could have been termed a rare
and exceptional case where an order granting bail ought to be
stayed.
20. Our conclusions are as under:
a. In an application made under Section 439(2) of the
CrPC or Section 483(3) of the BNSS or other proceedings
filed seeking cancellation of bail, the power to grant an
interim stay of operation of order to bail can be
exercised only in exceptional cases when a very strong
prima facie case of the existence of the grounds for
cancellation of bail is made out. While granting a stay of
an order of grant of bail, the Court must record brief
reasons for coming to a conclusion that the case was an
exceptional one and a strong prima facie case is made
out;
b. As a normal rule, the exparte stay of the bail order
should not be granted. The said power can be exercised
only in rare and very exceptional cases where the
situation demands the passing of such drastic order.
Where such a drastic exparte order of stay is passed, it
is the duty of the Court to immediately hear the accused
Crl Appeal @ SLP (Crl.) Nos. 80078010 of 2024 Page 15 of 16
on the prayer for continuation of the interim relief.
When the Court exercises the power of granting exparte
ad interim stay of an order granting bail, the Court is
duty bound to record reasons why it came to the
conclusion that it was a very rare and exceptional case
where a drastic order of exparte interim stay was
warranted.
21. Therefore, the appeals must succeed. We set aside the
impugned orders by which the High Court granted the stay of
the order granting bail. We make it clear that pending the
hearing of application for cancellation of bail, the order dated
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17 June, 2023 passed by the Special Court will continue to
operate. We make it clear that all the contentions on the
merits of the application for cancellation of bail are expressly
left open to be decided by the High Court. The findings
recorded in the judgment are only for considering the legality
and validity of the order of stay on the order granting bail.
22. The appeals are, accordingly, allowed on the above
terms.
……………………………..J.
(Abhay S. Oka)
……………………………..J.
(Augustine George Masih)
New Delhi;
July 23, 2024.
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