Anticipatory bail refused where financial fraud allegations and criminal antecedents necessitate custodial interrogation.

The applicant sought anticipatory bail regarding Crime No. 32/2026 for offenses under Sections 420, 406, and 34 of the IPC.

The complainant, Director of Suryavanshi Traders, alleged that the applicant and co-accused induced him to pay ₹30,00,000/- for a liquor dealership franchise, which was later escalated to a state-wide partnership requiring a total investment of ₹75,00,000/-.

Despite payments made via RTGS and cash, the promised goods were never delivered.

The complainant further discovered that the applicant had allegedly defrauded another individual of ₹1,00,00,000/- in a similar manner.

The applicant contended the dispute was purely commercial/civil in nature, governed by an MOU with an arbitration clause, and that the complainant failed to fulfill contractual and excise obligations.

1. Whether the present dispute is purely civil/contractual in nature, warranting the grant of anticipatory bail.

2. Whether the applicant is entitled to the extraordinary relief of anticipatory bail under Section 438 Cr.P.C. (Section 482 BNSS) given his criminal antecedents and conduct during the investigation.

The Court considered Section 438 of the Cr.P.C. (corresponding to Section 482 of the BNSS) regarding the discretionary power to grant anticipatory bail.

It evaluated the principles of Sections 420 (cheating) and 406 (criminal breach of trust) of the IPC.

The applicant relied on the precedent of Naresh Kumar and Anr. v. State of Karnataka and Anr. and Anukul Singh v. State of U.P. and Anr., which establish that criminal proceedings should not be used to settle purely civil disputes.

The Court also weighed the necessity of custodial interrogation in financial frauds and the relevance of a candidate's criminal history and "absconding" status in bail adjudications.

The Court rejected the applicant’s contention that the matter was a simple breach of contract.

It observed that the inducement of large sums from multiple parties, combined with reports of similar fraudulent activities elsewhere, established a prima facie case of criminal intent from the inception.

The Court emphasized that the applicant has 12 criminal antecedents, indicating a persistent pattern of criminal activity.

Additionally, the applicant's status as "absconding" had hindered the investigation.

The Court reasoned that in cases of substantial financial fraud, custodial interrogation is essential to uncover the trail of the alleged proceeds of crime, and the presence of an arbitration clause does not automatically negate criminal liability for fraud.

The Court held that given the gravity of the offense, the applicant’s extensive criminal history (12 antecedents), and his conduct in evading the legal process, he was not entitled to extraordinary relief.

The plea that the matter was of "civil flavor" was found unsustainable in light of the evidence of criminal intent.