Salil Mahajan v. Avinash Kumar & Anr.

The Supreme Court of India has held that an order granting anticipatory bail is liable to be set aside where the court granting relief fails to consider relevant investigative material, including the necessity of custodial interrogation and the conduct of the accused. The Court emphasised that anticipatory bail, being an extraordinary remedy, cannot be granted in a mechanical manner without proper application of mind to the gravity of the allegations and the stage of investigation.

Allowing an appeal against the grant of anticipatory bail, the Court clarified the distinction between an appeal challenging the legality of a bail order and an application seeking cancellation of bail, reiterating that appellate courts may interfere where the order granting bail suffers from perversity, illegality, or non-consideration of material facts.

Case Background

The case arose from an FIR lodged by the complainant alleging misappropriation of more than ₹3 crores from accounts of Amandeep Healthcare Private Limited. The accused was employed as a Senior Accountant at Amandeep Hospital and was entrusted with transferring funds between various units of the organisation with authorisation from the management.

During an internal review, discrepancies were discovered in the accounts of Amandeep Nursing College. Upon being called for an explanation, the accused allegedly stopped reporting for work. Subsequent investigation revealed that substantial amounts had been transferred from the accounts of the hospital and its units to accounts held by the accused and his family members.

What The Lower Authorities Held

The accused initially sought anticipatory bail before the Sessions Court, which rejected the application after considering the allegations and the status of investigation. Thereafter, the accused approached the High Court of Punjab and Haryana under its inherent jurisdiction.

The High Court granted anticipatory bail, observing that custodial interrogation was not justified at that stage and noting that a portion of the allegedly misappropriated amount had been returned. The High Court also relied on the accused’s willingness to disclose assets and bank details as a ground for granting relief.

The Court’s Reasoning

The Supreme Court began its analysis by reiterating settled principles governing appeals against grant of bail. It noted that while such appeals are not to be treated as applications for cancellation of bail, appellate courts are empowered to examine whether the bail order reflects due application of mind and consideration of relevant factors.

The Court relied on recent precedent to restate that appellate interference is justified where the order granting bail suffers from perversity, illegality, inconsistency with established legal principles, or failure to consider material aspects such as gravity of offence and societal impact.

Applying these principles, the Court found that the High Court had failed to engage with the status report submitted by the investigating agency. The report categorically stated that the accused had allegedly embezzled a large sum, was absconding, and that custodial interrogation was essential not only for recovery of funds but also for identifying other persons involved.

The Supreme Court observed that although the High Court had reproduced the contents of the status report, it did not address them in its reasoning. No explanation was provided as to why the accused’s alleged conduct of remaining at large or the expressed need for custodial interrogation could be disregarded.

The Court further held that the grant of anticipatory bail appeared to be mechanical, with no meaningful assessment of the seriousness of the allegations or the conduct attributed to the accused. Such an approach, the Court held, is impermissible in cases involving serious economic offences.

Statutory Interpretation

The Supreme Court examined the exercise of inherent jurisdiction by the High Court in granting anticipatory bail under the Bharatiya Nagarik Suraksha Sanhita, 2023. The Court reiterated that anticipatory bail is an extraordinary relief and must be granted only after careful consideration of the facts, nature of allegations, and requirements of investigation.

The Court clarified that completion of investigation or filing of a charge sheet does not automatically render custodial interrogation unnecessary. What is material is whether relevant facts were considered at the time the bail order was passed. Non-consideration of essential investigative requirements vitiates the order granting bail.

Constitutional / Policy Context

The Supreme Court situated its analysis within the broader policy framework governing the grant of bail in serious criminal matters. While personal liberty remains a fundamental value, the Court reiterated that anticipatory bail is an extraordinary remedy intended to protect individuals from arbitrary arrest, not to shield those against whom credible allegations and material evidence exist at a crucial stage of investigation.

The Court emphasised that economic offences involving large-scale financial irregularities have a significant societal impact and often require thorough investigation to trace funds and identify additional participants. Courts must therefore balance individual liberty with the collective interest of effective investigation and administration of justice.

Distinction Between Appeal Against Bail and Cancellation of Bail

A key clarification in the judgment concerns the distinction between an appeal challenging the grant of bail and an application seeking cancellation of bail. The Supreme Court reiterated that these remedies operate on different legal parameters.

While cancellation of bail ordinarily requires supervening circumstances such as misuse of liberty, an appeal against a bail order permits scrutiny of the legality and correctness of the order at the time it was passed. If the bail order suffers from perversity, ignores relevant material, or reflects non-application of mind, appellate interference is warranted even in the absence of subsequent misconduct by the accused.

Custodial Interrogation and Investigative Necessity

The Supreme Court underscored that the necessity of custodial interrogation is a relevant and weighty consideration while deciding applications for anticipatory bail. The investigating agency had specifically asserted that custodial interrogation of the accused was required to recover misappropriated funds and to ascertain the involvement of other individuals.

The Court held that the High Court erred in brushing aside this requirement without recording any cogent reasons. Merely observing that custodial interrogation was not justified, without addressing the material placed by the prosecution, amounted to an abdication of judicial duty.

The judgment clarifies that voluntary cooperation or partial return of funds does not, by itself, negate the need for custodial interrogation when the investigation is at a nascent stage and the alleged offence involves complex financial transactions.

Why This Judgment Matters

This decision reinforces the principle that anticipatory bail must not be granted as a matter of course, particularly in cases involving serious economic offences. It serves as a caution against mechanical orders that fail to engage with the prosecution’s case or the requirements of investigation.

The judgment provides guidance to High Courts on the proper exercise of jurisdiction while granting anticipatory bail, emphasising that reasons must be recorded with reference to relevant material. It also clarifies the scope of appellate review, ensuring that legally unsustainable bail orders can be corrected at the appellate stage.

Final Outcome

The Supreme Court allowed the appeal and set aside the order of the High Court granting anticipatory bail to the accused. The matter was remitted to the competent court for fresh consideration in accordance with law.

The Court clarified that the investigating agency was at liberty to proceed in accordance with law, including seeking custodial interrogation of the accused, subject to judicial oversight.

Case Details

• Case Title: Salil Mahajan v. Avinash Kumar & Anr.
• Citation: 2025 INSC 1396
• Court: Supreme Court of India
• Date of Judgment: 8 December 2025