The Madhya Pradesh High Court has established that the voluntary deposit of alleged proceeds from a fraud offense can serve as a sufficient condition for granting bail, even before trial on merits. This ruling provides a pragmatic pathway for accused persons in non-violent economic offenses to secure liberty without prejudicing the complainant’s interest.
Background & Facts
The Dispute
The applicant, Ajij Kaskar, is accused in Crime No. 829/2023 registered at Police Station Khategaon, Dewas, for offenses under Sections 420 and 34 of the Indian Penal Code. The complainant, described as a person of limited means, alleged that the applicant, along with others, defrauded him of Rs. 11,50,000. Of this amount, Rs. 50,000 was credited directly into the applicant’s bank account, which the prosecution treats as proceeds of the alleged fraud.
Procedural History
- 10 December 2025: Applicant arrested and lodged in judicial custody
- January 2026: First bail application filed under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 (replacing Section 439 CrPC)
- 27 January 2026: Hearing before Justice Subodh Abhyankar at Indore High Court
Relief Sought
The applicant sought regular bail on the grounds that his prolonged incarceration was unjustified given the non-violent nature of the offense, the likelihood of a prolonged trial, and his willingness to deposit the Rs. 50,000 credited to his account.
The Legal Issue
The central question was whether a court may grant bail under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 by conditioning release on the deposit of alleged proceeds of fraud, without adjudicating the merits of the case or requiring a full trial.
Arguments Presented
For the Appellant
Counsel for the applicant argued that the applicant had no prior criminal record, was not a flight risk, and had demonstrated willingness to return the disputed sum. He relied on the principle that bail is the rule and jail the exception, citing Arnesh Kumar v. State of Bihar. He emphasized that depositing the amount would protect the complainant’s interest and align with the rehabilitative intent of the new BNSS framework.
For the Respondent
The State opposed bail, contending that the offense under Section 420 IPC is serious, non-bailable, and involves substantial financial loss. It argued that allowing bail on deposit might undermine the deterrent effect of the law and could be misused by accused persons to evade accountability.
The Court's Analysis
The Court declined to evaluate the truth of the allegations, stating that bail proceedings are not trials. It emphasized that the purpose of bail is to ensure the accused’s presence during trial, not to punish pre-conviction. The Court noted that the complainant is a poor individual and that the Rs. 50,000 credited to the applicant’s account represents a tangible, identifiable portion of the alleged loss.
"In order to save his interest also, this Court is inclined to allow the present application, as the applicant is ready to deposit the amount of Rs.50,000/-..."
The Court held that conditioning bail on deposit of the specific sum linked to the offense is a reasonable, proportionate, and non-punitive measure. It distinguished this from mere surety bonds by tying the deposit directly to restitution of harm. The Court further directed that the deposit be made in a fixed deposit account, with the receipt endorsed by the trial court and held subject to the final outcome, ensuring the complainant’s claim remains protected.
The Court also affirmed that the applicant must comply with Section 437(3) CrPC conditions, including not tampering with evidence or intimidating witnesses.
The Verdict
The applicant won. The Court held that bail may be granted in non-violent fraud cases under Section 483 BNSS by conditioning release on the deposit of alleged proceeds, provided the deposit is tied to identifiable financial harm and held subject to trial outcome. The applicant was released upon deposit of Rs. 50,000 and furnishing a bond with surety.
What This Means For Similar Cases
Deposit of Proceeds Can Be a Bail Condition
- Practitioners may now argue for bail in Section 420 IPC cases by proposing deposit of identifiable proceeds as a substitute for monetary surety
- Courts may treat such deposits as a form of interim restitution, reducing the risk of complainant hardship
- This approach is especially viable where the accused has no prior record and the offense lacks violence
BNSS Expands Judicial Flexibility in Bail
- Section 483 BNSS replaces CrPC Section 439 but retains judicial discretion; this judgment confirms that courts may innovate conditions beyond traditional surety
- The Court’s reference to "saving the complainant’s interest" signals a shift toward restorative justice in economic offenses
- Lawyers should draft bail applications with specific, quantifiable deposit proposals tied to the alleged crime
Procedural Safeguards Are Mandatory
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All deposits must be made in a fixed deposit account with bank certification
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The trial court must endorse the deposit receipt with explicit language linking it to bail conditions
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Failure to comply with Section 437(3) CrPC conditions may lead to cancellation of bail
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The deposit amount must be directly traceable to the offense
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The accused must not be allowed to withdraw or encash the deposit during trial
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The court must record reasons for accepting deposit as a condition, not merely as a formality
