Default Bail Depends on Proper Section 409 Scrutiny

The Bombay High Court examined a challenge to the rejection of default bail under Section 167(2) CrPC in a prosecution arising out of alleged diversion of trust property sale proceeds. Justice N. J. Jamadar dismissed the writ petition, holding that the facts prima facie attracted Section 409 IPC and, therefore, the longer statutory period applied.

The petitioner was the Secretary of Shejar Chhaya Trust, a public charitable trust formed to provide shelter and education to orphan children. The prosecution case was that he obtained sanction for sale of trust land on the basis of false statements and false documents, secured an advance consideration of Rs. 1.20 crore, and instead of depositing it in the trust account, opened a new bank account by allegedly forging the signatures of the chief trustees and other trustees. The amount was then transferred to another trust controlled by the petitioner.

The petitioner sought default bail on the footing that the offences initially mentioned did not carry punishment beyond seven years, so the 60-day period had expired without a charge-sheet. The Magistrate rejected the plea, relying on the addition of Section 409 IPC, which carries punishment of imprisonment for life or imprisonment up to ten years.

Before the High Court, the petitioner argued that the Magistrate had acted mechanically and should have independently examined whether Section 409 was actually attracted, rather than relying only on the FIR and remand report. The Court accepted the legal proposition that a Magistrate cannot deny statutory bail merely because a section is cited in the FIR or remand papers. The applicability of the charged provision must be examined.

On the facts, however, the Court found that the allegation was not a mere civil dispute or routine sale transaction. The petitioner, acting as Secretary and in the capacity of an agent of the trust, was alleged to have received trust sale proceeds and diverted them for personal use and to another trust. The Court held that the payment was by way of entrustment and that the alleged conduct, at least prima facie, fell within the tentacles of Section 409 IPC.

The Court also held that once Section 409 was prima facie in play, the case fell under the proviso to Section 167(2) requiring a 90-day period, not 60 days. The petitioner’s claim to an indefeasible right to default bail at 60 days therefore failed.

The writ petition was dismissed, while the Court clarified that its observations were confined to the question of statutory bail and would not affect the merits of the criminal case.

Practical takeaway: in default bail matters, the Magistrate must examine the real applicability of the charged section, but where Section 409 IPC is prima facie made out, the 90-day period governs.