### Relaxation of Bail Condition Restricting Property Alienation to Prevent Loss via Bank Auction and Secure Potential Restitution

The petitioner was granted bail on August 5, 2022, in a criminal case involving alleged fraud of Rs. 1,91,50,000/-.

As a condition for bail, the Court restrained him from alienating his property (Plots No. 32 and 33, Adarsh Mechanic Nagar, Indore) without the Court’s leave, regardless of any ongoing civil proceedings.

The petitioner sought modification of this condition to sell the property at market value (estimated at ~Rs. 6 Crores) to settle bank dues under the SARFAESI Act and deposit the alleged defalcation amount in the Trial Court.

The application was opposed by various objectors claiming larger outstanding liabilities (collectively exceeding Rs. 4.8 Crores) and alleging prior encumbrances/agreements on the property.

1. Whether the restrictive condition against the alienation of property imposed in a bail order should be relaxed to prevent the devaluation of assets through public auction.

2. Whether the court should adjudicate upon the quantum of disputed civil liabilities while deciding on the modification of bail conditions.

The court primarily exercised its inherent powers under Section 528 of the Bharatiya Nagrik Suraksha Sanhita (BNSS), 2023 (formerly Section 482 of the Cr.P.C.) to modify bail conditions.

The court applied the principle that conditions imposed in bail orders intended to secure the interests of the complainant should not be used to cause unnecessary financial loss (such as selling property at "throwaway prices" in an auction) if the market value of the assets exceeds the alleged liability.

The court further maintained the distinction between a criminal proceeding and a recovery suit, noting that disputed civil claims are for appropriate forums to decide.

The Court observed that the original restrictive condition was intended to prevent the petitioner from siphoning off assets that could potentially compensate the victims.

It noted that the petitioner is currently facing recovery proceedings by banks, where property is often sold below market value in public auctions.

The Court found that if the property is valued at approximately Rs. 6 Crores—which significantly exceeds the amount cited in the FIR—selling it at market price serves the interests of all parties, including potential claimants.

The Court dismissed the objectors’ contentions regarding higher liabilities on the grounds that these claims are disputed and no civil suits for recovery or specific performance had been filed by several objectors despite existing contracts from 2020.

It held that the petitioner is permitted to sell the property at the best market price, subject to obtaining necessary permissions from the relevant banks, authorities, or Civil Courts where proceedings are pending.

The petitioner remains bound by his undertaking to deposit the defalcation amount in the Trial Court.

The Court clarified it made no observations on the merits of the objectors' claims, leaving them free to pursue legal remedies in appropriate forums.