Why Parvinder Singh Khurana v ED is an Important Judgment for Bail Jurisprudence

The Supreme Court said that an interim order staying bail should be passed in rare and exceptional cases.

In the recent case, Parvinder Singh Khurana v Directorate of Enforcement (2024 INSC 546), the Supreme Court affirmed the Special Court’s order granting bail to the accused in a money laundering case.

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“If courts ‘cave in’ when great rights are gouged within the sound-proof, sight-proof precincts of prison houses, where, often, dissenters and minorities are caged, Bastilles will be re-enacted. When law ends tyranny begins; and history whispers, iron has never been the answer to the rights of man. Therefore we affirm that imprisonment does not spell farewell to fundamental rights although, by a realistic re-appraisal, courts will refuse to recognise the full panoply of Part III enjoyed by a free citizen.” 

- Justice Krishna Iyer, Former Judge, Supreme Court of India, in Charles Sobraj v Supdt., Central Jail, (1978) 4 SCC 104, Para 4. 

In a recent case, Parvinder Singh Khurana v Directorate of Enforcement, the Supreme Court affirmed the Special Court’s order granting bail to the accused in a money laundering case. The Divisional Bench consisting of Justice Abhay S Oka and Justice Augustine George Masih set aside the impugned order of Delhi High Court which had stayed the order of the Special Court. The SC judgment is authored by Justice Oka. 

If an application for cancelling the bail under Section 439(2) is pending before the court, then whether the High Court or Sessions Court can grant an interim order of stay was the moot question before the Supreme Court.  In this case, the Supreme Court had to examine the extent of the power of the High Court or Sessions Court to grant an interim order of stay of an order that had granted bail. Repeated adjournments in the case highlight the endemic problem within the Indian Judiciary. Section 439(2) of the CrPC, 1973 states that “A High Court or Court of Session may direct that any person who has been released on bail under this chapter be arrested and commit him to custody”. This means that the High Court or Sessions Court have the power to cancel bail.

Facts of the Case

In this case,  Parvinder Singh Khurana was not named an accused initially and he was called for questioning many times by the ED. He was arrested on 20 January 2023. After this, he applied for bail in the Special Court and it was rejected. The Enforcement Directorate (ED) submitted a supplementary complaint on 17 March 2023 in which the name of the accused was there, post which, the accused person again filed for bail as there was a change in circumstances.

The Special Court, in a detailed order, gave bail to the accused as it fulfilled the twin test of bail under Section 45(1)(ii) of the PMLA.

The order of the Special Court was challenged in the Delhi High Court. On 23 June 2023, the High Court didn’t hear the accused lawyer and passed an ex-parte order of the stay of operation of the Special Court order which had granted bail. The court further directed that the case be listed before him on 26 June 2023. A hearing was not held on that day.

After this, the matter was placed before another learned Single Judge and the judgment was reserved after hearing arguments. Interestingly, the judge, after one month of reserving judgment, took recusal from the case. Following him, the two other judges recused themselves. Meanwhile, the Supreme Court, by the order dated 7 June 2024, stayed the order of the Delhi High Court dated 23 June 2023. 

Observations of the Court

The Supreme Court lamented about the sorry state of affairs and said that an interim order staying bail should be passed in rare and exceptional cases, and the court must record the reasons. The court noted that the application for cancellation of bail was listed on 28 different dates between 23 June 2023 and June 2024. The court questioned whether such an approach violated the fundamental right to liberty of the appellant. The Supreme Court held: 

“In an application made under Section 439(2) of the CrPC or Section 483(3) of the BNSS or other proceedings filed seeking cancellation of bail, the power to grant an interim stay of operation of order to bail can be exercised only in exceptional cases when a very strong prima facie case of the existence of the grounds for cancellation of bail is made out. While granting a stay of an order of grant of bail, the court must record brief reasons for coming to a conclusion that the case was an exceptional one and a strong prima facie case is made out.” 

The court said that an ex-parte interim stay of an order of bail needs to be exercised only in rare and exceptional circumstances.

“The power to grant an ex-parte interim stay of an order granting bail has to be exercised in very rare and exceptional cases where the situation demands the passing of such an order.  While considering   the  prayer  for  granting   an ex-parte stay, the concerned court must apply its mind and decide whether the case is very exceptional, warranting the exercise of drastic power to grant an ex-parte stay of the order granting bail.”  

Supreme Court in Parvinder Singh Khurana v Directorate of Enforcement

The Supreme Court imposes stringent criteria that must be met before an interim order of stay of bail is granted. This approach of the court highlights the court’s focus on the individual liberty of a person under Article 21 of the Constitution. The Supreme Court’s order should not be limited to an interim stay of bail.

The court’s observation regarding multiple adjournments and its order leading to the protection of individual liberty of an under-trial prisoner needs to be a stepping stone for legal reform in courts. Similarly, the Supreme Court needs to take Suo moto action in cases where bail applications have been pending for many years.

Undertrial Prisoner’s Right to Liberty 

The court observed that if the stay of the order of bail is given by the High Court or Sessions Court then it takes away the liberty which was granted to the accused under bail and the High Court or Sessions Court “should  be   very  slow  in  granting drastic interim relief of stay of the order granting bail.” The court further held, “An ex-parte stay  of  the  order granting  bail, as  a standard rule, should not be granted.”

The court observed, “Liberty granted to an accused under the order granting bail cannot be lightly and causally interfered with by mechanically granting an ex-parte order of stay of the bail order.” The court’s ruling assumes significance as it protected the under-trial prisoner’s right to liberty.  

The Supreme Court in P Ramachandra Rao v State of Karnataka, (2002) 4 SCC 578 observed that the words life and liberty should not be read narrowly and the words need to be interpreted to give a wide meaning and the court observed that “The mental agony, expense and strain which a person proceeded against in criminal law has to undergo and which, coupled with delay, may result in impairing the capability or ability of the accused to defend himself have persuaded the constitutional courts of the country in holding the right to speedy trial a manifestation of fair, just and reasonable procedure enshrined in Article 21.” 

In India, many under-trial prisoners spend many years in jail owing to delays in judicial proceedings and a lack of quality legal representation. The above Khurana case shows how repeated adjournments and recusals by judges kept the accused in jail for a year and how the fundamental right to liberty of the accused was violated as the stay was ordered without application of mind by the Delhi High Court. The court in Khurana’s case has said that all courts have to be sensitive about the right to liberty under Article 21 as it is the most important fundamental right.   

On Liberty 

One of the cardinal principles of criminal law is that one is convicted for an offence when it is proved beyond reasonable doubt that the person had done the crime. In this regard, William Blackstone, an English jurist has said “The law holds that it is better that ten guilty persons escape, than that one innocent suffer”. If such importance is given to the liberty of a person, then we need to question delays in disposing of bail applications. If there are repeated adjournments and recusals by judges then it is nothing but ‘tyranny of the legal process.’ According to a news report, 5000 under-trial prisoners are unable to furnish surety or bail bonds due to poverty.

Why should an undertrial prisoner suffer?

The right to speedy trial comes under the right to life. Multiple judgments of the Supreme Court have stated that a person had a right to speedy trial under Article 21 of the Constitution, but courts have been reluctant to agree on a defined time limit. In the case of P Ramachandra Rao v State of Karnataka, (2002) 4 SCC 578, a seven-judge Bench of the Supreme Court set aside smaller bench judgments which had prescribed a time limit as it violated Constitutional Bench Judgment in AR Antulay v RS Nayak case.

In the above case of Ramchandra Rao, the court reiterated the principles in Abdul Rehman Antulay v RS Nayak, (1992) 1 SCC 225 case that the court has the discretion to quash the proceedings if the case remains pending for such length of time that that delay becomes oppressive and unwarranted. In the above Antuly’s case, the court said that an outer time limit cannot be fixed. If a time limit is imposed on speedy trials, then it might have practical difficulties for the courts but a time limit of at least some period should be fixed. The absence of a time limit in concluding the proceedings is like telling the driver of a vehicle to drive reasonably without prescribing a speed limit. 

Recently, the Supreme Court dismissed an appeal by the ED against the Jharkhand High Court’s order to grant bail to CM Hemant Soren. This approach of the court in protecting the liberty of the accused is commendable but whether the same treatment will be meted out to ordinary litigants is a question that remains. In Khurana’s case, the accused have good legal representation but the grim reality is that marginalised sections of society do not have money and legal representation to fight their cases till the Supreme Court.

The case of Khurana should be a wake-up call for the High Courts and lower courts to prioritise the liberty of an under-trial prisoner. Lower courts are the first point of contact for the citizens and judges need to protect fundamental rights of under-trial prisoners. The repeated adjournments showcase the harsh reality of the way courts function and highlight the need to initiate reforms in the court.

[The author is a final-year law student at Aligarh Muslim University with an interest in constitutional law and minority rights. He acknowledges comments given by Senior Counsel BT Venkatesh (Founder Reachlaw and former State Public Prosecutor, Karnataka) during the preparation of the article.  This is an opinion piece and the views expressed are the author's own. The Quint neither endorses nor is responsible for them.]