Supreme Court clarifies conditions for bail under Section 437(6) CrPC in economic offences: Subhelal @ Sushil Sahu vs. The State of Chhattisgarh (2025) INSC 242 (18 February 2025)

Date of the Judgment: 18th February 2025
Citation: (2025) INSC 242
Judges: J.B. Pardiwala, J., R. Mahadevan, J.

Can an accused be granted bail if the trial is not concluded within 60 days from the first date of evidence, as per Section 437(6) of the Code of Criminal Procedure? The Supreme Court addressed this question in a case involving economic offences related to cryptocurrency. The Court examined the scope and applicability of Section 437(6) of the Code of Criminal Procedure, 1973, particularly in the context of economic offences. Justices J.B. Pardiwala and R. Mahadevan delivered the judgment.

Case Background:

The case originated from Crime No. 460/2023 registered at Police Station Dindayal Upadhyay Nagar, District Raipur, Chhattisgarh. The appellant, Subhelal @ Sushil Sahu, was accused of offences punishable under Sections 420 (cheating), 201 (causing disappearance of evidence), 120-B (criminal conspiracy) read with Section 34 (acts done by several persons in furtherance of common intention) of the Indian Penal Code. The allegations pertained to a cryptocurrency scheme where approximately 2000 investors lost around Rs. 4 Crore. The appellant had been in custody since December 2023, and a charge-sheet was filed against him and four others. The trial was ongoing in the Court of Chief Judicial Magistrate, Raipur, with one witness examined and the first informant’s evidence being recorded.

Timeline:

Course of Proceedings:

The appellant approached the High Court of Chhattisgarh, Bilaspur, seeking regular bail in MCRC No.2810/2024. The High Court denied bail on 22-7-2024. Subsequently, the appellant filed a Special Leave Petition (Crl.) No.1314/2025 before the Supreme Court, challenging the High Court’s order.

Legal Framework:

The legal framework relevant to the case includes:

✓ Sections 420, 201, 120-B read with Section 34 of the Indian Penal Code (IPC), which define the offences of cheating, causing disappearance of evidence, criminal conspiracy, and acts done by several persons in furtherance of common intention, respectively.
✓ Section 437 of the Code of Criminal Procedure, 1973 (CrPC), which deals with the conditions under which bail may be granted in cases of non-bailable offences. Specifically, Section 437(6) CrPC states:
“437. When bail may be taken in case of non-bail -able offence.–
(6) If, in any case triable by a Magistrate, the trial of a person accused of any non-bailable offence is not concluded within a period of sixty days from the first date fixed for taking evidence in the case, such person shall, if he is in custody during the whole of the said period, be released on bail to the satisfaction of the Magistrate, unless for reasons to be recorded in writing, the Magistrate otherwise directs.”

Arguments:

Arguments by the Appellant:

✓ The counsel for the appellant argued that the trial had not concluded within 60 days from the first date fixed for taking evidence, as required by Section 437(6) of the Code of Criminal Procedure.
✓ They contended that the appellant should be released on bail, given the slow progress of the trial and the large number of witnesses (189) the prosecution intended to examine.
✓ The counsel highlighted that the maximum punishment the Chief Judicial Magistrate could impose, even if the offence was established, would be 7 years.
✓ They also drew the Court’s attention to Section 437(6) of the Code, emphasizing the provision’s intent to prevent prolonged detention of undertrial prisoners.

Arguments by the Respondent (State of Chhattisgarh):

✓ The Investigating Officer stated that the amount involved in the cryptocurrency scam was approximately Rs. 4 Crore.
✓ The prosecution emphasized the seriousness of the economic offence and the fact that around 2000 investors had lost money in the scheme floated by the appellant and co-accused.
✓ The prosecution highlighted that the charge-sheet had been filed against five individuals, including the appellant, and the trial was ongoing.

Issues Framed by the Supreme Court:

The Supreme Court considered the following key issue:

1. What is the scope and applicability of Section 437(6) of the Code of Criminal Procedure, 1973, particularly in cases where the trial is not concluded within sixty days from the first date fixed for taking evidence?

Treatment of the Issue by the Court: “The following table demonstrates as to how the Court decided the issues”

Authorities:

The Supreme Court considered the following authorities:

✓ Nehul Prakashbhai Shah v. State of Gujarat, (2012) 53 (3) GLR 2685 (High Court of Gujarat): This case exhaustively explained Section 437(6) of the Code of Criminal Procedure. The Supreme Court quoted relevant observations from this case, emphasizing the duty of the Magistrate to ensure the trial is concluded within sixty days and to balance the right to a speedy trial with the interests of the prosecution and society.
✓ Section 437(6) of the Code of Criminal Procedure, 1973

Judgment:

The Supreme Court allowed the appeal and granted bail to the appellant, subject to certain terms and conditions imposed by the Trial Court. The Court also imposed an additional condition that the appellant deposit Rs. 35,00,000/- with the Trial Court within six months, considering the amount allegedly involved in the scam. The Court clarified that failure to deposit the amount within the stipulated time would result in automatic cancellation of the bail.

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

How each authority was viewed by the Court?

✓ Nehul Prakashbhai Shah v. State of Gujarat, (2012) 53 (3) GLR 2685: The Supreme Court relied on this case to explain the scope and applicability of Section 437(6) of the Code of Criminal Procedure, emphasizing the need for a speedy trial and the Magistrate’s duty to balance the rights of the accused with the interests of the prosecution.

What weighed in the mind of the Court?:

The Supreme Court’s decision was influenced by several factors:

✓ The need to protect individual liberty and ensure a speedy trial, as enshrined in Article 21 of the Constitution of India.
✓ The interpretation of Section 437(6) of the Code of Criminal Procedure, which aims to prevent prolonged detention of undertrial prisoners.
✓ The specific circumstances of the case, including the fact that the appellant had been in custody since December 2023, the trial was progressing slowly, and a large number of witnesses were yet to be examined.
✓ The Court also considered the seriousness of the economic offence and the need to protect the interests of the investors who had lost money in the cryptocurrency scheme. This led to the imposition of the condition that the appellant deposit Rs. 35,00,000/- with the Trial Court.

Fact:Law Ratio

Logical Reasoning:

The court followed a logical reasoning process to arrive at its decision. The court emphasized on speedy trial and the individual liberty.

Key Takeaways:

The key takeaways from the judgment are:

✓ Section 437(6) of the Code of Criminal Procedure does not grant an absolute right to bail if the trial is not concluded within 60 days from the first date of evidence.
✓ The Magistrate has the discretion to refuse bail by recording reasons, balancing the right to a speedy trial with the interests of the prosecution and society.
✓ The factors relevant for refusing bail under Section 437(6) may be different and more weighty than the reasons for rejecting bail at the initial stage.
✓ The judgment reinforces the importance of individual liberty and the need for speedy trials, while also recognizing the seriousness of economic offences.

Directions:

The Supreme Court directed the appellant to deposit Rs. 35,00,000/- with the Trial Court within six months, failing which the bail would stand automatically cancelled.

Development of Law:

The judgment clarifies the interpretation of Section 437(6) of the Code of Criminal Procedure, emphasizing that it does not grant an absolute right to bail and that the Magistrate has discretion to refuse bail by recording reasons. The ratio decidendi of the case is that the right to a speedy trial and individual liberty must be balanced with the interests of the prosecution and society, and the specific circumstances of each case must be considered.

Conclusion:

In Subhelal @ Sushil Sahu vs. The State of Chhattisgarh, the Supreme Court granted bail to the appellant, who was accused of economic offences related to cryptocurrency, subject to the condition that he deposit Rs. 35,00,000/- with the Trial Court. The Court clarified that Section 437(6) of the Code of Criminal Procedure does not grant an absolute right to bail and that the Magistrate has discretion to refuse bail by recording reasons, balancing the right to a speedy trial with the interests of the prosecution and society.