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Bail: Allegations against respondent no.1 that he had huge amount of unaccounted money, that documents recovered from his premises contained instructions issued by him for transfer of various amounts to different persons from the bank accounts held by him outside India and the said monies were the proceeds of crime and by depositing the same in his bank accounts, respondent no.1 had attempted to project the same as untainted money – Further allegation that the said amount ran into billions of dollars; that respondent no.1 had obtained at least three passports in his name by submitting false documents, making false statements and by suppressing the fact that he already had a passport; that Income Tax Department had for the Assessment Years 2001-02 to 2007-08 assessed his total income as Rs.110,412,68,85303/- – Investigations also revealed that he sold a diamond from the collection of Nizam of Hyderabad and routed the proceeds through his account in Bank in Switzerland to a Bank in United Kingdom – High Court allowed bail application of respondent no.1 – On appeal, held: There was no attempt on part of respondent no.1 to disclose the source of the large sums of money handled by him – The allegations may not ultimately be established, but the burden of proof that the said monies were not the proceeds of crime and were not tainted shifted to respondent no.1 u/s.24 of PML Act – The amount lying in the Swiss bank was not explained by respondent no.1 – He was also not able to establish that the sum of Rs.110,412,68,85303/- were neither proceeds of crime nor tainted property – Manner in which he procured three different passports in his name after his original passport was directed to be deposited in court also lend support to apprehension that if released on bail, he may abscond – Bail granted to Respondent no.1 cancelled – Prevention of Money Laundering Act, 2002 – s.4 – FEMA – Code of Criminal Procedure, 1973 – s.439. Bail – Application for cancellation of bail, and appeal against order granting bail – Distinction between. State of U.P. v. Amarmani Tripathi (2005) 8 SCC 21: 2005 (3) Suppl. SCR 454 – relied on. Sanjay Dutt v. State through CBI, Bombay (II) (1994) 5 SCC 410: 1994 (3) Suppl. SCR 263; Uday Mohanlal Acharya v. State of Maharashtra (2001) 5 SCC 453: 2001 (2) SCR 878 – referred to. Case Law Reference: 1994 (3) Suppl. SCR 263 referred to Para 17 2001 (2) SCR 878 referred to Para 17 2005 (3) Suppl. SCR 454 relied on Para 27 CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 1883 of 2011. From the Judgment & Order dated 12.8.2011 of the High Court of Bombay i Criminal Bail Appliction No. 994 of 2011. A. Mariarputham, Rajiv Nanda, Revati Mohite, T.A. Khan, Anirudh Sharma, Anando Mukherjee, Harsh Parekh and B. Krishna Prasad for the Appellant. Ishwari Prasad A. Bagaria, Vijay Bhaskar Reddy, Santosh Paul, Uma Ishwari Bagaria, Arti Singh, Arvind Gupta, Mohita Bagati, Kamal Nijhawan and Asha Gopalan Nair for the Respondents.

REPORTABLE

English: The supreme court of india. Taken abo...

English: The supreme court of india. Taken about 170 m from the main building outside the perimeter wall (Photo credit: Wikipedia)

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.1883 OF 2011

(Arising out of SLP(Crl.) No.6114 OF 2011)

Union of India … Appellant

Vs.

Hassan Ali Khan & Anr. … Respondents

O R D E R

ALTAMAS KABIR, J.
1. Leave granted.

2. The Special Leave Petition out of which this

Appeal arises has been filed against the judgment
2
and final order dated 12th August, 2011, passed by

the Bombay High Court in Crl. Bail Application

No.994 of 2011, whereby the High Court granted bail

to the Respondent No.1, Hassan Ali Khan, in

connection with Special Case No.1 of 2011, wherein

the Respondent No.1 is the Accused No.1.

3. The allegation against the Respondent No.1 and

the other accused is that they have committed an

offence punishable under Section 4 of the

Prevention of Money Laundering Act, 2002,

hereinafter referred to as `the PML Act’. The said

case has been registered on the basis of a

complaint filed by the Deputy Director, Directorate

of Enforcement, Ministry of Finance, Department of

Revenue, Government of India, on 8th January, 2007,

on the basis of Enforcement Case Information Report

No.02/MZO/07 based on certain information and

documents received from the Income Tax Department.
3
On the said date, the Income Tax Department carried

out a search in the premises owned and/or possessed

by the Respondent No.1 and a sum of Rs.88,05,000/-

in cash was found in his residence at Peddar Road,

Mumbai, and was seized. A number of imported

watches and some jewellery were also found and

seized during the search.

4. The search also revealed that the Respondent

No.1 had purchased an expensive car, worth about

Rs.60 lakhs, from one Anil Shankar of Bangalore

through one Sheshadari and that he had paid till

then a sum of Rs.46 lakhs towards purchase of the

said car. It also appears that the documents which

were recovered by the Income Tax Department

contained several transfer instructions said to

have been issued by the Respondent No.1 for

transfer of various amounts to different persons

from the bank accounts held by him outside India.
4
The said amounts forming the subject matter of the

instructions issued by the Respondent No.1 ran into

billions of dollars. The Income Tax Department

assessed the total income of the Respondent No.1

for the Assessment Years 2001-02, 2006-07 and

2007-08 as Rs.110,412,68,85,303/-. Furthermore,

during the investigation, the Directorate of

Enforcement also obtained a document said to have

been signed by the Respondent No.1 on 29th June,

2003, which was notarized by one Mr. Nicolas Ronald

Rathbone Smith, Notary Public of London, on 30th

June, 2003.

5. Further, an investigation was conducted under

the Foreign Exchange Management Act, 1999,

hereafter referred to as `FEMA’. Show-cause notices

were issued to the Respondent No.1 for alleged

violation of Sections 3A and 4 of FEMA for dealing

in and acquiring and holding foreign exchange to
5
the extent of US$ 80,004,53,000, equivalent to

Rs.36,000 crores approximately in Indian currency,

in his account with the Union Bank of Switzerland,

AG, Zurich, Switzerland.

6. Inquiries also revealed that Shri Hassan Ali

Khan had obtained at least three Passports in his

name by submitting false documents, making false

statements and by suppressing the fact that he

already had a Passport. In addition to the above,

it was also indicated that investigations had

revealed that he had sold a diamond from the

collection of the Nizam of Hyderabad and had routed

the sale proceeds through his account in Sarasin

Bank in Basel, Switzerland, to the Barclays Bank in

the United Kingdom.

7. Based on the aforesaid material, the

Directorate of Enforcement, Mumbai Zonal Office,

arrested the Respondent No.1 on 7th March, 2011,
6
and, thereafter, he was produced before the Special

Judge, PMLA, Mumbai, on 8th March, 2011, and was

remanded in custody. Subsequently, by an order

dated 11th March, 2011, the Special Judge, PMLA,

rejected the prayer made on behalf of the

Directorate of Enforcement for remand of the

Respondent No.1 to its custody and released him on

bail. However, since a Public Interest Litigation

was pending in this Court in which the Directorate

of Enforcement was required to file a status report

in respect of the investigations carried out in

connection with the case, the fact that the

Respondent No.1 had been released on bail was

brought to the notice of this Court and this Court

stayed the operation of the bail order and

authorized the detention of the Respondent No.1 in

custody, initially for a period of four days. The

Union of India thereupon filed Special Leave

Petition (Crl.) No.2455 of 2011 and upon observing
7
that the material made available on record prima

facie discloses the commission of an offence by the

Respondent No.1 punishable under the provisions of

the PML Act, this Court vide order dated 29th March,

2011, disposed of the appeal as well as the Special

Leave Petition and set aside the order dated 11th

March, 2011, of the Special Judge, PMLA, Mumbai,

and directed that the Respondent No.1 be taken into

custody. Thereafter, the Respondent No.1 was

remanded into custody from time to time and the

complaint came to be filed on 6th May, 2011. A

further prayer for bail was thereafter made on

behalf of the Respondent No.1 on 1st July, 2011, but

the same was dismissed by the Special Judge, PMLA,

Mumbai, on the same day.

8. The said order of the Special Judge, PMLA,

Mumbai, rejecting the Respondent No.1’s prayer for

bail was challenged before the Bombay High Court in
8
Bail Application No.994 dated 2nd July, 2011. After

a contested hearing, the Bombay High Court by its

order dated 12th August, 2011, granted bail to the

Respondent No.1 and the said order is the subject

matter of the present proceedings before this Court.

9. Learned Additional Solicitor General, Mr. Haren

P. Raval, appearing for the Union of India,

submitted that the High Court failed to appreciate

the astronomical amounts of foreign exchange dealt

with by the Respondent No.1, for which there was no

accounting and in respect whereof the Income Tax

Department had for the Assessment years 2001-02 to

2007-08 assessed the total income as

Rs.110,412,68,85,303/-. The learned ASG also

submitted that transfer of the huge sums from one

bank to another was one of the methods adopted by

persons involved in money-laundering to cover the

trail of the monies which were the proceeds of
9
crime. The learned ASG contended that the large sums

of unaccounted money, with which the Respondent No.1

had been dealing, attracted the attention of the

Revenue Department and on investigation conducted

under the Foreign Exchange Management Act, 1959,

(FEMA), show cause notices were issued to the

Respondent No.1 for alleged violation of Sections 3A

and 4 thereof for acquiring and holding foreign

exchange and dealing with the same to the extent of

US$ 80,004,53,000, equivalent to Rs.36,000/- crores,

approximately, in Indian currency, in his account

with the Union Bank of Switzerland, AG, Zurich,

Switzerland.

10. Mr. Raval submitted that the Respondent No.1,

Shri Hassan Ali Khan, used the different passports

which he had acquired by submitting false documents,

to open bank accounts in foreign countries to engage

in the laundering of tainted money which brought
10
such transactions squarely within the scope and

ambit of Section 3 of the PML Act, 2002. Mr. Raval

submitted that Section 3 of the aforesaid Act by

itself was an offence since it provides that any

person directly or indirectly attempting to indulge

in or knowingly assisting or knowingly being a party

or actually involved in any process or activity

connected with the proceeds of crime and projecting

it as untainted property, would be guilty of the

offence of money-laundering. The learned ASG

submitted that the key expressions used in Section 3

are “proceeds of crime” and “projecting it as an

untainted property”. In other words, in order to

prove an offence of money-laundering, it has to be

established that the monies involved are the

proceeds of crime and having full knowledge of the

same, the person concerned projects it as untainted

property. The process undertaken in doing so,

amounts to be offence of money-laundering.
11

11. In this connection, the learned ASG referred to

Section 2(u) of the PML Act, which describes

“proceeds of crime” to mean any property derived or

obtained, directly or indirectly by any person as a

result of criminal activity relating to a scheduled

offence or the value of any such property. He,

thereafter, referred to the definition of “scheduled

offence” in Section 2(y) of the above Act to mean

(i) the offences specified under Part A of the

Schedule; or (ii) the offences specified under Part

B of the Schedule if the total value involved in

such offences amounted to Rs.30 lakhs or more.

12. The learned ASG submitted that the enormous

sums of money held by Shri Hassan Ali Khan in

foreign accounts in Switzerland, United Kingdom and

Indonesia and the transactions in respect thereof,

prima facie indicated the involvement of the

Respondent No.1 in dealing with proceeds of crime
12
and projecting the same as untainted property, which

was sufficient to attract the provisions of Section

3 of the PML Act, 2002. The learned ASG submitted

that under Section 24 of the aforesaid Act, when a

person is accused of having committed an offence

under Section 3, the burden of proving that the

monies involved were neither proceeds of crime nor

untainted property, is on the accused. It was urged

that once a definite allegation had been made

against Shri Hassan Ali Khan on the basis of

documents seized, that the monies in his various

accounts were the proceeds of crime, the burden of

proving that the money involved was neither the

proceeds of crime nor untainted, shifted to him and

it was upto him to prove the contrary. The learned

ASG submitted that Shri Hassan Ali Khan had failed

to discharge the said burden and hence the large

sums of money in the several accounts of the

Respondent No.1 would have to be treated as tainted
13
property, until proved otherwise. The learned ASG

submitted that the Respondent No.1 had himself made

certain statements which were recorded under Section

50 of the PML Act, parts whereof were not hit by the

provisions of Section 27 of the Indian Evidence Act.

13. The learned ASG also referred to the provisions

of Section 45 of the aforesaid Act which make

offences under the said Act cognizable and non-

bailable and also provides that notwithstanding the

provisions of the Code of Criminal Procedure, no

person accused of an offence punishable for a term

of imprisonment of more than three years under Part

A of the Schedule to the Act, is to be released on

bail or on his own bond, unless the Public

Prosecutor has been given an opportunity to oppose

the application for such release and where the

Public Prosecutor opposes the application, the

Court is satisfied that there are reasonable
14
grounds for believing that the accused is not

guilty of such offence and that he is not likely to

commit any offence while on bail. The learned ASG

submitted that an exception had been made for

persons under the age of 16 years or a woman or a

person who is sick or infirm.

14. Referring to Part A of the Schedule to the PML

Act, the learned ASG submitted that the same had

been divided into paragraphs 1 and 2. While

paragraph 1 deals with offences under the Indian

Penal Code under Sections 121 and 121-A thereof,

paragraph 2 deals with offences under the Narcotic

Drugs & Psychotropic Substances Act, 1985. The

learned ASG submitted that, on the other hand, Para

B is divided into five paragraphs. Paragraph 1

deals with offences under the Indian Penal Code,

while paragraph 2 deals with offences under the

Arms Act, 1959. Paragraph 3 deals with offences
15
under the Wild Life (Protection) Act, 1972,

paragraph 4 deals with offences under the Immoral

Traffic (Prevention) Act, 1956, and paragraph 5

deals with offences under the Prevention of

Corruption Act, 1988. The learned ASG submitted

that the facts of the case attracted the provisions

of paragraph 1 of Part A of the Schedule, since the

money acquired by Shri Hassan Ali Khan, besides

being the proceeds of crime, is also connected with

transactions involving the international arms

dealer, Adnan Khashoggi. The learned ASG submitted

that the same became evident from the notarized

document which had been obtained by the Directorate

of Enforcement during the course of investigation

which had been signed by the Respondent No.1 on 29th

June, 2003, at London and notarized by Mr. Nicolas

Ronald Rathbone Smith, Notary Public of London,

England, on 30th June, 2003. It was also submitted

that the said document certified the genuineness of
16
the signature of the Respondent No.1 and also

mentioned his Indian Passport No. Z-1069986. The

learned ASG further contended that the said

notarized document also referred to Dr. Peter

Wielly, who was a link between Mr. Adnan Khashoggi,

and one Mr. Retro Hartmann on whose introduction

the Respondent No.1 opened an account at UBS,

Singapore, and was also linked with Mr. Kashinath

Tapuriah. The learned ASG submitted that there

were other materials to show the involvement of Dr.

Wielly in the various transactions of the

Respondent No.1, Hassan Ali Khan.

15. Further submissions on behalf of the Appellant

were advanced by Mr. A. Mariarputham, learned

Senior Advocate, who referred to the purported

theft of the jewellery of the Nizam of Hyderabad

and the sale of the same by the Respondent No.1, on
17
account whereof US$ 700,000 had been deposited by

the Respondent No.1 in the Barclays Bank in London.

16. Mr. Mariarpurtham then submitted that although

the High Court had relied on the provisions of

Section 167(2) Cr.P.C. in granting bail to the

Respondent No.1, the said provisions were not

attracted to the facts of this case since charge

sheet had already been filed within the statutory

period and the High Court could not, therefore,

have granted statutory bail to the Respondent No.1

on the ground that it had been submitted on behalf

of the Appellant that it would still take some time

for the Appellant to commence the trial. Mr.

Mariarputham submitted that while the Respondent

No.1 had been arrested on 7th March, 2011 and had

been produced before the Special Judge and remanded

to custody on 8th March, 2011, the charge sheet had

been filed on 6th May, 2011 within the prescribed
18
period of 60 days. It was submitted that the High

Court had wrongly interpreted the provisions of

Section 167(2) Cr.P.C. in granting bail to the

Respondent No.1.

17. In support of his submissions, the learned

counsel referred to the Constitution Bench decision

of this Court in Sanjay Dutt Vs. State through CBI,

Bombay (II) [(1994) 5 SCC 410], wherein it was held

that the indefeasible right of an accused to be

released on bail by virtue of Section 20(4)(bb) of

the Terrorist and Disruptive Activities

(Prevention) Act, 1987, was enforceable only prior

to the filing of the challan and it did not survive

or remain enforceable on the challan being filed,

if not already availed of. Their Lordships held

further that if the right to grant of statutory

bail had not been enforced till the filing of the

challan, then there was no question of its
19
enforcement thereafter, since it stood extinguished

the moment the challan was filed because Section

167(2) Cr.P.C. ceased to have any application.

Reference was also made to the decision of a Three

Judge Bench of this Court in Uday Mohanlal Acharya

Vs. State of Maharashtra [(2001) 5 SCC 453],

wherein the scope of Section 167(2) Cr.P.C. and the

proviso thereto fell for consideration and it was

the majority view that an accused had an

indefeasible right to be released on bail when

investigation is not completed within the specified

period and that for availing of such right the

accused was only required to file an application

before the Magistrate seeking release on bail

alleging that no challan had been filed within the

period prescribed and if he was prepared to offer

bail on being directed by the Magistrate, the

Magistrate was under an obligation to dispose of

the said application and even if in the meantime a
20
charge-sheet had been filed, the right to statutory

bail would not be affected. It was, however,

clarified that if despite the direction to furnish

bail, the accused failed to do so, his right to be

released on bail would stand extinguished.

18. It was, therefore, submitted that the Bombay

High Court had granted bail to the Respondent No.1

on an incorrect interpretation of the law and the

said order granting bail was, therefore, liable to

be set aside.

19. Appearing for the Respondent No.1, Hassan Ali

Khan, learned counsel, Shri Ishwari Prasad A.

Bagaria, firstly contended that an offence which

did not form part of the scheduled offences

referred to in Section 45 of the PML Act would not

attract the provisions of Section 3 of the said

Act. It was submitted that whatever be the amounts

involved and even if the same had been unlawfully
21
procured, the same might attract the provisions of

the Income Tax Act or FEMA, but that would not

satisfy the two ingredients of Section 3 which

entails that not only should the money in question

be the proceeds of crime, but the same had also to

be projected as untainted property. Mr. Bagaria

submitted that in the instant case all that has

been disclosed against the Respondent No.1 is that

he dealt with large sums of money, even in foreign

exchange and operated bank accounts from different

countries, which in itself would not indicate that

the monies in question were the proceeds of crime.

Mr. Bagaria also submitted that at no stage has it

been shown that the said amounts lying in the

accounts of the Respondent No.1 in Switzerland, the

United Kingdom and Indonesia had been projected as

untainted money. Furthermore, as far as the

allegation regarding the theft of the Nizam’s

jewellery is concerned, except for mere
22
allegations, there was no material in support of

such submission in the face of the case made out by

the Respondent No.1 that he had brokered the sale

of some portions of the jewellery for which he had

received a commission of US$30,000 which he had

spent in Dubai.

20. Mr. Bagaria submitted that in the complaint,

reference had been made in paragraph 13 thereof to

“scheduled offences” which have been set out in

sub-paragraphs 13.1 to 13.5. Mr. Bagaria pointed

out that the offences indicated related to alleged

offences under the provisions of the Indian Penal

Code, the Passport Act, 1967 and the Antiquities

and Art Treasures Act, 1972, which do not come

either under Part A or Part B of the Schedule to

the PML Act, 2002, except for the offences under

the Indian Penal Code, the sections whereof, which

have been included in paragraph 1 of Part B, are
23
not attracted to the facts of this case. Mr.

Bagaria submitted that as a result, none of the

offences mentioned as scheduled offences in the

charge-sheet were covered by the Schedule to the

PML Act, 2002, and could at best be treated as

offences under the Indian Penal Code, the Passport

Act and the Antiquities and Art Treasures Act,

1972. On the question of the alleged absconsion of

the Respondent No.1, Mr. Bagaria submitted that the

said Respondent had not gone to Singapore on his

own volition, but had there been taken by one

Amalendu Kumar Pandey and Shri Tapuriah. Shri

Pandey was subsequently made a witness and Shri

Tapuriah was made a co-accused with the Respondent

No.1.

21. Mr. Bagaria also contended that once bail had

been granted, even if the special leave petition is

maintainable, the power to cancel grant of such
24
bail lies with the High Court or the Court of

Sessions under Section 439(2) Cr.P.C. and,

consequently, all the principles laid down by this

Court relating to cancellation of bail, would have

to be considered before the order granting bail

could be cancelled. Mr. Bagaria submitted that

even though the offences were alleged to have been

committed by the Respondent No.1 as far back as in

the year 2007, till he was arrested on 7th May,

2011, there had been no allegation that he had in

any manner interfered with the investigation or

tampered with any of the witnesses. Mr. Bagaria

submitted that even the apprehension expressed on

behalf of the appellant that there was a

possibility of the Respondent No.1 absconding to a

foreign country on being released on bail, was

without any basis, since such attempts, if at all

made, could be secured by taking recourse to

various measures. Mr. Bagaria submitted that such
25
a submission could not be the reason for cancelling

the bail which had already been granted to the

Respondent No.1.

22. Mr. Bagaria submitted that in the absence of

any provisions in the PML Act that the provision

thereof would have retrospective effect, the

provisions of the PML Act could not also be made

applicable to the Respondent No.1. Mr. Bagaria

submitted that once it is accepted that the PML

Act, 2002, would not apply to the Respondent No.1,

the provisions of Section 45 thereof would also not

apply to the Respondent’s case and his further

detention would be unlawful. Mr. Bagaria concluded

on the note that, in any event, the PML Act had

been introduced in the Lok Sabha on 4th August,

1998, and all the offences alleged to have been

committed by the Respondent No.1, were long prior

to the said date.
26
23. Having carefully considered the submissions

made on behalf of the respective parties and the

enormous amounts of money which the Respondent No.1

had been handling through his various bank accounts

and the contents of the note signed by the

Respondent No.1 and notarized in London, this case

has to be treated a little differently from other

cases of similar nature. It is true that at present

there is only a nebulous link between the huge sums

of money handled by the Respondent No.1 and any

arms deal or intended arms deals, there is no

attempt on the part of the Respondent No.1 to

disclose the source of the large sums of money

handled by him. There is no denying the fact that

allegations have been made that the said monies

were the proceeds of crime and by depositing the

same in his bank accounts, the Respondent No.1 had

attempted to project the same as untainted money.

The said allegations may not ultimately be
27
established, but having been made, the burden of

proof that the said monies were not the proceeds of

crime and were not, therefore, tainted shifted to

the Respondent No.1 under Section 24 of the PML

Act, 2002. For the sake of reference, Section 24

is extracted hereinbelow :-

“24. Burden of proof. – When a person is

accused of having committed the offence

under Section 3, the burden of proving

that proceeds of crime are in tainted

property shall be on the accused.”

24. The High Court having proceeded on the basis

that the attempt made by the prosecution to link up

the acquisition by the Respondent No.1 of different

Passports with the operation of the foreign bank

accounts by the said Respondent, was not

believable, failed to focus on the other parts of

the prosecution case. It is true that having a

foreign bank account and also having sizeable

amounts of money deposited therein does not ipso
28
facto indicate the commission of an offence under

the PML Act, 2002. However, when there are other

surrounding circumstances which reveal that there

were doubts about the origin of the accounts and

the monies deposited therein, the same principles

would not apply. The deposit of US$ 700,000 in the

Barclays Bank account of the Respondent No.1 has

not been denied. On the other hand, the allegation

is that the said amount was the proceeds of the

sale of diamond jewellery which is alleged to have

been stolen from the collection of the Nizam of

Hyderabad. In fact, on behalf of the Respondent

No.1 it has been submitted that in respect of the

said deal, the Respondent No.1 had received by way

of commission a sum of US$ 30,000 which he had

spent in Dubai.

25. Although, at this stage, we are also not

prepared to accept the convoluted link attempted to
29
be established by the learned ASG with the opening

and operation of the bank accounts of the

Respondent No.1 in the Union Bank of Switzerland,

AG, Zurich, Switzerland, the amounts in the said

bank account have not been sought to be explained

by the Respondent No.1. We cannot also ignore the

fact that the total income of the Respondent No.1

for the assessment years 2001-02 to 2007-08 has

been assessed at Rs.110,412,68,85,303/- by the

Income Tax Department and in terms of Section 24 of

the PML Act, the Respondent No.1 had not been able

to establish that the same were neither the

proceeds of crime nor untainted property. In

addition to the above is the other factor involving

the notarized document in which the name of Adnan

Khashoggi figures.

26. Lastly, the manner in which the Respondent No.1

had procured three different passports in his name,
30
after his original passport was directed to be

deposited, lends support to the apprehension that,

if released on bail, the Respondent No.1 may

abscond.

27. As far as Mr. Bagaria’s submissions regarding

Section 439(2) Cr.P.C. are concerned, we cannot

ignore the distinction between an application for

cancellation of bail and an appeal preferred

against an order granting bail. The two stand on

different footings. While the ground for

cancellation of bail would relate to post-bail

incidents, indicating misuse of the said privilege,

an appeal against an order granting bail would

question the very legality of the order passed.

This difference was explained by this Court in

State of U.P. Vs. Amarmani Tripathi [(2005) 8 SCC

21].
31
28. Taking a different view of the circumstances

which are peculiar to this case and in the light of

what has been indicated hereinabove, we are of the

view that the order of the High Court needs to be

interfered with. We, accordingly, allow the appeal

and set aside the judgment and order of the High

Court impugned in this appeal and cancel the bail

granted to the Respondent No.1.

………………………………………………………J.

(ALTAMAS KABIR)

………………………………………………………J.

(SURINDER SINGH NIJJAR)

NEW DELHI

DATED: 30.09.2011

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