Economic Offences and Anticipatory Bail: Supreme Court Addresses Disregard of Summons in SFIO vs. Aditya Sarda (2025)

Introduction

Date of the Judgment: April 09, 2025

Citation: 2025 INSC 477

Judges: Bela M. Trivedi, J., Prasanna B. Varale, J.

What happens when individuals accused of serious economic offenses deliberately avoid court summons and warrants? The Supreme Court of India recently tackled this critical question in a series of appeals stemming from a case involving the Serious Fraud Investigation Office (SFIO) and various accused individuals. The core issue revolves around the respondents’ alleged attempts to obstruct justice by repeatedly ignoring summons and warrants issued by the Special Court, thereby stalling criminal proceedings against them for serious economic offenses.

The Supreme Court, in this judgment, examined the circumstances under which anticipatory bail can be granted, especially in cases involving economic offenses. The bench comprised Justice Bela M. Trivedi and Justice Prasanna B. Varale, delivering a unanimous decision.

Case Background

The case originates from an investigation initiated by the Serious Fraud Investigation Office (SFIO) into the affairs of 125 companies of Adarsh Group, later expanded to include 20 other companies and two individuals. This investigation was prompted by concerns over the operations of Adarsh Credit Cooperative Society Limited (ACCSL), a multi-state cooperative society founded by Mukesh Modi.

ACCSL, managed and controlled by Mukesh Modi and his associates, accepted deposits from numerous members, primarily low to middle-income individuals. Allegations surfaced that Mukesh Modi, Rahul Modi, and others incorporated around 125 companies (Adarsh Group of Companies) and illicitly diverted funds from ACCSL to these entities. The SFIO investigation revealed that approximately Rs. 1700 crores were disbursed as illegal loans to 70 Adarsh Group companies, violating regulations that prohibit companies from being members of multi-state credit cooperative societies.

Further allegations indicated that the companies belonging to Adarsh Group and Ridhi Sidhi Group obtained illegal loans from ACCSL using forged financial documents. These funds, totaling Rs. 4120 crores as of March 31, 2018, were allegedly siphoned off by the directors of the Adarsh Group companies with the connivance of other accused parties.

Based on these findings, the SFIO filed a criminal complaint in the Special Court at Gurugram, implicating 181 accused individuals, including the respondents in these appeals, for offenses under the Companies Act (1956 and 2013), the Limited Liability Partnership Act, 2008, and the Indian Penal Code.

The Special Court took cognizance of the offenses on June 3, 2019, issuing bailable warrants to the accused, directing them to appear on July 30, 2019. However, due to alleged collusion with process servers and deliberate evasion by the accused, the warrants could not be executed. Consequently, the Special Court issued non-bailable warrants and initiated proclamation proceedings against several accused individuals.

Timeline

Course of Proceedings

The Special Court, after taking cognizance of the offenses, initially issued bailable warrants against the accused, including the respondents, directing them to appear on July 30, 2019. However, these warrants could not be executed due to the accused allegedly evading service and colluding with process servers.

Subsequently, the Special Court issued non-bailable warrants against the respondents from time to time, passing detailed orders. In some cases, the Special Court also initiated proclamation proceedings against the accused, as they continued to evade appearance.

Legal Framework

The judgment refers to several key legal provisions that form the basis of the case. These include:

• Section 212 of the Companies Act, 2013: This section deals with the investigation into the affairs of a company by the Serious Fraud Investigation Office (SFIO). It empowers the Central Government to assign investigations to the SFIO under specific circumstances.
  “212. Investigation into affairs of Company by Serious Fraud Investigation Office. — (1) Without prejudice to the provisions of section 210, where the Central Government is of the opinion, that it is necessary to investigate into the affairs of a company by the Serious Fraud Investigation Office…”
• Section 447 of the Companies Act, 2013: This section pertains to the punishment for fraud. It specifies the penalties for individuals found guilty of fraud involving a significant amount.
  “447. Punishment for fraud. — Without prejudice to any liability including repayment of any debt under this Actor any other law for the time being in force, any person who is found to be guilty of fraud…shall be punishable with imprisonment…”
• Section 82 of Cr.P.C., 1973: This section deals with the proclamation for a person absconding. It allows a court to issue a written proclamation requiring an individual to appear if the court believes that the person has absconded or is concealing themselves.
  “82. Proclamation for person absconding. — (1) If any Court has reason to believe (whether after taking evidence or not) that any person against whom a warrant has been issued by it has absconded or is concealing himself so that such warrant cannot be executed, such Court may publish a written proclamation requiring him to appear…”
• Section 204 of Cr.P.C., 1973: This section pertains to the issue of process. It outlines the procedure for a Magistrate to issue summons or warrants for the attendance of the accused.
  “204. Issue of process. — (1) If in the opinion of a Magistrate taking cognizance of an offence there is sufficient ground for proceeding, and the case appears to be— (a) a summons -case, he shall issue his summons for the attendance of the accused, or (b) a warrant -case, he may issue a warrant…”
• Section 438 of Cr.P.C., 1973: This section pertains to the direction for the grant of bail to a person apprehending arrest. It allows individuals to apply for anticipatory bail if they believe they may be arrested for a non-bailable offense.
  “438. Direction for grant of bail to person apprehending arrest. — (1) When any person has reason to believe that he may be arrested on an accusation of having committed a non -bailable offence, he may apply to the High Court or the Court of Session for a direction under this section…”

Arguments

Arguments by the SFIO:

• The SFIO contended that the respondents deliberately avoided the execution of non-bailable warrants, even after their anticipatory bail applications were rejected by the Special Court.
• The SFIO argued that the respondents’ act of filing anticipatory bail applications before the Special Court proved their awareness of the complaint proceedings.
• The SFIO emphasized the seriousness of the economic offenses, involving large-scale fraud and loss of public funds, which pose a threat to the financial health of the country.
• The SFIO relied on Section 212(6) of the Companies Act, 2013, which makes offenses under Section 447 cognizable and imposes stringent conditions for granting bail.

Arguments by the Respondents:

• The respondents claimed that they were not aware of the proceedings initiated against them.
• The respondents argued that the Special Court should have issued summons instead of warrants, as they were not arrested during the investigation.
• The respondents’ counsels cited the decision in Tarsem Lal vs. Directorate of Enforcement to support their argument that summons should be issued first.

Issues Framed by the Supreme Court

The Supreme Court addressed the following key issues:

1. Whether the High Court was justified in granting anticipatory bail to the respondents, despite the issuance of non-bailable warrants and initiation of proclamation proceedings against them.
2. Whether the mandatory conditions under Section 212(6) of the Companies Act, 2013, were duly considered by the High Court while granting anticipatory bail.
3. Whether the Special Court, while taking cognizance of the alleged offenses, should have issued summons instead of warrants to the respondents.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

Judgment

The Supreme Court allowed the appeals, setting aside the High Court’s orders granting anticipatory bail to the concerned accused. The Court directed the respondents-accused to surrender themselves before the Special Court within one week. The Court clarified that it had not expressed any opinion on the merits of the case and that the bail applications, as and when filed, would be decided by the Special Court in accordance with the law.

The Court dismissed the Appeals arising out of SLP (Crl.) No.13973/2023 (Akshat Singh) & SLP (Crl.) No.13974/2023 (Naveen Kumar) and SLP (Crl.) No .15326/2023 (Mahesh Dutt Sharma).

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The authorities were used by the court for its reasoning for resolving the issue.

• Inder Mohan Goswami and Another vs. State of Uttaranchal and Others [(2007) 12 SCC 1]: The Court relied on this authority to reiterate the principles governing the issuance of non-bailable warrants.
• P. Chidambaram vs. Directorate of Enforcement [(2019) 9 SCC 24]: This case was cited to emphasize that anticipatory bail should be granted sparingly, especially in economic offenses.
• Y.S. Jagan Mohan Reddy vs. Central Bureau of Investigation [(2013) 7 SCC 439]: The Court referred to this case to highlight the seriousness of economic offenses and their impact on the country’s economy.
• Nimmagadda Prasad vs. Central Bureau of Investigation [(2013) 7 SCC 466]: This authority was used to underscore the alarming rise in white-collar crimes and their repercussions.
• Srikant Upadhyay and Others vs. State of Bihar and Another [(2024) SCC OnLine SC 282]: This case was cited to reiterate that the power to grant anticipatory bail is an extraordinary power to be exercised in exceptional cases.
• Prem Shankar Prasad vs. State of Bihar and Another [(2022) 14 SCC 516]: The Court relied on this authority to disapprove of the High Court granting anticipatory bail when proceedings under Section 82/83 CrPC were initiated.
• Vijay Madanlal Choudhary and Others vs. Union of India and Others [(2023) 12 SCC 1]: The Court relied on this authority to reiterate that the restrictive conditions of bail are mandatory in nature.
• Union of India through Assistant Director vs. Kanhaiya Prasad [2025 SCC Online SC 306]: The Court relied on this authority to observe that cryptic orders granting bail without adverting to the facts or the consideration of such restrictive conditions with regard to the bail are perverse and liable to be set aside.
• State of U.P. vs. Poosu [(1976) 3 SCC 1]: The Court relied on this authority to hold that whether the attendance of the accused can be best secured by issuing a bailable warrant or non -bailable warrant, would be a matter, which entirely rests at the discretion of the concerned Court.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The deliberate evasion of legal proceedings by the respondents.
• The seriousness of the economic offenses and their impact on the country’s economy.
• The mandatory conditions under Section 212(6) of the Companies Act, 2013, which were not duly considered by the High Court.

Fact:Law

Key Takeaways

• Anticipatory bail should not be granted routinely, especially in serious economic offenses.
• Courts must consider the mandatory conditions under Section 212(6) of the Companies Act, 2013, while granting bail for offenses under Section 447.
• Deliberate evasion of legal proceedings can be a ground for rejecting anticipatory bail.

Directions

The Supreme Court directed the respondents-accused to surrender themselves before the Special Court within one week from the date of the judgment.

Development of Law

The ratio decidendi of the case is that anticipatory bail should not be granted routinely in economic offenses, especially when the accused deliberately evade legal proceedings and the mandatory conditions under Section 212(6) of the Companies Act, 2013, are not duly considered.

Conclusion

The Supreme Court’s judgment in SFIO vs. Aditya Sarda underscores the importance of adhering to legal processes and the seriousness with which economic offenses are viewed. The Court’s decision reinforces the principle that anticipatory bail is not a matter of right and should be granted sparingly, especially when accused individuals attempt to obstruct justice.