Economic Crimes and Anticipatory Bail:No Mercy to offender

In a decisive intervention that underscores judicial intolerance for obstruction of justice in economic offences, the Supreme Court of India delivered a powerful verdict in SFIO v. Aditya Sarda & Ors. (2025 INSC 477), reversing a series of High Court orders that had granted anticipatory bail to several accused in one of the country’s largest corporate fraud cases.

The ruling not only restores the authority of special courts handling white-collar crime but also draws a red line around abuse of the anticipatory bail mechanism by absconding individuals who manipulate the system to delay prosecution and evade accountability.

What's The Matter?

The case arises from a large-scale financial scandal involving Adarsh Credit Cooperative Society Limited (ACCSL), a multi-state cooperative society with over 20 lakh depositors. Following a direction from the Ministry of Corporate Affairs, the Serious Fraud Investigation Office (SFIO) launched an investigation under Section 212 of the Companies Act, 2013, uncovering a massive ₹4,100 crore fraud.

Funds deposited by unsuspecting individuals were diverted through 125 shell companies linked to members of the Modi family and their associates, who allegedly fabricated balance sheets, forged documentation, and disguised fraudulent diversions as loans and advances to related parties.

A criminal complaint was filed before the Special Court in Gurugram in May 2019, implicating 181 individuals under various provisions of the Companies Act and Indian Penal Code. Cognizance was taken, and bailable warrants were issued, which were later escalated to non-bailable warrants as the accused failed to appear.

Despite being aware of the proceedings and even filing bail applications, several accused evaded service of summons and remained underground. Some had already been declared absconders under Section 82 CrPC, yet High Courts between March and April 2023 extended anticipatory bail to them, citing procedural infirmities and absence of custodial interrogation needs.

In unequivocal terms, the Supreme Court held this approach untenable. It declared that anticipatory bail cannot be claimed as a matter of right by individuals who have evaded the court process, concealed their location, and made no effort to submit to jurisdiction.

The Court observed that such conduct constitutes a breach of the essential precondition for considering anticipatory bail namely, cooperation with the investigation and willingness to submit to legal scrutiny.

Those who defy legal process cannot simultaneously seek its protection.

Importantly, the judgment reiterates the constitutional and statutory contours of anticipatory bail, clarifying that it is an extraordinary remedy not a blanket shield for fugitives. Drawing from precedents including P. Chidambaram v. Directorate of Enforcement and Y.S. Jagan Mohan Reddy v. CBI, the Court emphasized that economic offences stand on a distinct footing and must be approached with heightened caution.

Anticipatory bail in such cases requires satisfaction of dual conditions under Section 212(6) of the Companies Act: prima facie innocence and assurance of non-repetition of offence—neither of which was established in the present case.

The Court condemned the abuse of anticipatory bail to stall proceedings, stating that it would send the wrong signal if those who default on appearance are rewarded with pre-arrest protection. It further clarified that anticipatory bail is not to be granted in derogation of other judicial orders, such as non-bailable warrants and proclamations under Section 82 CrPC.

Rather, it must be a carefully considered remedy, granted only when the accused has demonstrated a genuine fear of unjust arrest and a willingness to participate in the legal process in good faith.

The ruling therefore affirms a core judicial principle: that liberty under Article 21, while sacred, cannot be wielded as a tool to subvert the legal system. Anticipatory bail, when misused by absconders and those facing serious charges of public fraud, does not preserve liberty—it erodes justice. By refusing to condone such misuse, the Supreme Court has not only protected the integrity of investigative mechanisms but also ensured that economic crimes are treated with the seriousness they warrant.

This verdict is not merely about the fate of individual accused; it has broader implications for the enforcement of corporate accountability. It reassures investors, protects the interests of millions of small depositors, and sends a clear message to judicial forums across the country: economic offences cannot be trivialized, and procedural fairness cannot be weaponized by the very individuals who shun it.