Settlement by co-accused or addition of victims cannot be sole grounds for cancelling regular bail.

The petitioner filed a petition to set aside a Sessions Court order dated 17.05.2024, which granted regular bail to respondent no. 2 (Deep Saxena)

The case arose from FIR No. 161/2022 involving allegations that partners of M/s Caprise Financial Services cheated approximately 41 investors of nearly Rs. 6 crores by promising high returns on share trading

While some co-accused were granted bail or had proceedings quashed after settling with victims, the petitioner argued that respondent no. 2—holding a 30% share in the firm—had not settled the matter and was similarly situated to another co-accused, Amit Arora, whose bail was rejected

Respondent no. 2 argued he had already repaid Rs. 70–75 lakhs and had cooperated with the investigation for four months in custody

Whether the impugned order granting regular bail to respondent no. 2 suffered from perversity, illegality, or arbitrariness warranting cancellation of bail by the High Court

The court relied on the Indian Penal Code, 1860, specifically Sections 406, 409, 420, and 120B regarding criminal breach of trust and cheating

the court applied established Supreme Court precedents clarifying that bail proceedings should not be converted into recovery proceedings and that the grant of bail cannot be made contingent solely upon the settlement of monetary disputes

It further applied the principle that the addition of new victims post-bail is not an automatic ground for cancellation

The court reasoned that the Sessions Court had exercised due discretion by considering that respondent no. 2 had already returned a significant portion of the funds (approx. Rs. 70–75 lakhs) to victims, a fact not disputed by the Investigating Officer

The court noted the Investigating Officer’s failure to freeze the alleged cheated amounts in respondent no. 2’s account, which undermined the prosecution's opposition to bail

The court further observed that while some co-accused settled to get relief, the lack of a total settlement by respondent no. 2 does not render a bail order "perverse" if other factors—such as completion of investigation, filing of the charge sheet, and lack of misuse of liberty—are present

The court held that there were no supervening circumstances or evidence of misuse of liberty (such as witness tampering or non-cooperation) to justify interfering with the discretionary order of the Sessions Court

The court reaffirmed that bail is not a tool for money recovery in criminal proceedings