The Punjab and Haryana High Court has reaffirmed that the resolution of a financial dispute through voluntary settlement significantly undermines the justification for custodial interrogation, even in cases involving serious non-bailable offences. This ruling clarifies the judicial approach to anticipatory bail when the core grievance underlying the FIR has been extinguished.
Background & Facts
The Dispute
The petitioner, Ravneet Singh Sandhu, was named in FIR No. 0142 dated 04.09.2024 under Sections 409, 420, and 120-B of the IPC for alleged criminal breach of trust and cheating involving Rs. 15 lakhs. The complainant alleged that the petitioner, while employed at a firm, misrepresented ownership of property and induced payment through a forged rent deed. The property in question was registered in the name of one Harinder Singh, and the bank account linked to the transaction was under Jatin Hans - neither of whom had been arrested.
Procedural History
- 04.09.2024: FIR registered at Police Station, South Sector-34, Chandigarh
- 03.07.2025: Investigating Officer’s reply disclosed that key persons linked to the transaction remained unarrested
- 09.09.2025: Court granted interim protection from arrest pending further hearing
- 09.03.2026: Final hearing conducted after settlement was disclosed
Relief Sought
The petitioner sought anticipatory bail under Section 482(2) of the BNSS, 2023, arguing that he was a low-level employee with no managerial control, had no active role in the alleged fraud, and was ready to fully cooperate with the investigation. He further sought protection from custodial interrogation in light of the pending settlement.
The Legal Issue
The central question was whether amicable settlement of a financial dispute, coupled with full cooperation and repayment, negates the necessity for custodial interrogation in cases under Sections 409 and 420 IPC, thereby warranting the grant of anticipatory bail.
Arguments Presented
For the Petitioner
Counsel argued that the petitioner was merely an employee with no authority over financial decisions or property documentation. He emphasized that the entire disputed amount of Rs. 6 lakhs had been repaid to the complainant, resulting in a complete resolution of the civil dispute. Reliance was placed on Arnesh Kumar v. State of Bihar to argue that arrest is not automatic, and on Gurbaksh Singh Sibbia v. State of Punjab to assert that anticipatory bail should be granted where the accused is willing to cooperate and the investigation can proceed without detention.
For the Respondent/State
The Additional Public Prosecutor initially expressed ignorance regarding the settlement. However, after the complainant’s counsel confirmed the payment, the State did not oppose the grant of anticipatory bail. The State’s position shifted to non-resistance, acknowledging the absence of any compelling reason to detain the petitioner.
The Court's Analysis
The Court examined the nature of the allegations and the factual posture of the case. It noted that the complainant had received the entire settled amount of Rs. 6 lakhs and had formally endorsed the petitioner’s statement regarding the resolution. The Court observed that the investigation had already identified other individuals - Jatin Hans and Harinder Singh - who were more directly implicated, yet remained unarrested. This raised serious questions about selective prosecution.
"This Court does not find any substantial reason to keep the present petition pending or to subject the petitioner for custodial interrogation."
The Court emphasized that custodial interrogation is not a default remedy but must be justified by necessity - such as risk of evidence tampering, flight, or repeated offences. Here, the petitioner had no prior criminal record, was willing to appear before the investigating agency, and had already remedied the financial harm. The Court further held that the principle of proportionality under Article 21 mandates that the least restrictive measure be adopted. The petitioner’s cooperation and settlement rendered detention disproportionate.
The Court also clarified that Section 482(2) of the BNSS, 2023 (replacing Section 438(2) CrPC) permits conditions such as surrender of passport and prior permission for travel, which were duly imposed.
The Verdict
The petitioner won. The Court granted anticipatory bail, holding that the amicable settlement of a financial dispute, coupled with full cooperation and repayment, eliminates the necessity for custodial interrogation. The petitioner was directed to join the investigation within two weeks and comply with specified conditions under Section 482(2) of the BNSS, 2023.
What This Means For Similar Cases
Settlement Renders Custody Disproportionate
- Practitioners must now argue that repayment of the disputed amount and formal withdrawal of complaint are decisive factors in opposing arrest
- Courts are likely to view custodial interrogation as excessive where the civil wrong has been fully remedied
- This applies even to non-bailable offences under Sections 409 and 420 IPC if the accused is not a key orchestrator
Cooperation Over Confinement
- Willingness to cooperate with investigation must be documented in writing and presented as evidence
- Surrender of passport and undertaking not to leave the country are now standard conditions - failure to comply may result in cancellation of bail
- Anticipatory bail applications should include affidavits confirming settlement and payment receipts
Selective Prosecution Raises Doubts
- Courts will scrutinize why other implicated persons remain unarrested
- Petitioners can invoke this judgment to challenge discriminatory investigation practices
- Failure to investigate all equally may be raised as a ground for quashing the FIR under Section 482 CrPC
