The Madhya Pradesh High Court at Gwalior has granted bail in a serious cyber fraud case under the Bharatiya Nyaya Sanhita and Information Technology Act, conditioning release on the mandatory deposit of illicit proceeds and execution of a personal bond. This order clarifies the court’s discretion to impose financial conditions under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, reinforcing that bail is not an absolute right even in non-bailable offences when custody has exceeded reasonable limits and no further investigation is pending.
Background & Facts
The Dispute
The applicant, Yogesh Kushwah, was arrested in connection with Crime No. 119/2026 registered at Police Station Karera, District Shivpuri, Madhya Pradesh. The case involves allegations of online money fraud, wherein the applicant is accused of being part of a network engaged in illegal financial transactions through digital means. The offences invoked are Section 318(4), 319(2), and 316(2) of the Bharatiya Nyaya Sanhita (BNS), and Sections 66-C and 66-D of the Information Technology Act, 2000, which pertain to identity theft, cheating by impersonation, and unauthorized access to computer resources.
Key Facts
- The applicant was arrested on 17.02.2026 and has been in judicial custody since then
- The charge-sheet has been filed and the investigation is complete
- The prosecution alleges that the applicant received illicit funds amounting to Rs. 61,500/- into his bank account as part of the fraudulent scheme
- No direct evidence linking the applicant to the commission of the offence has been presented by the prosecution at this stage
- The applicant is a permanent resident of Shivpuri, Madhya Pradesh
- No prior criminal record is mentioned in the order
Procedural History
- 17.02.2026: Arrest of applicant in Crime No. 119/2026
- Before 04.05.2026: Completion of investigation and filing of charge-sheet
- 04.05.2026: First bail application filed under Section 483 of BNSS before the High Court at Gwalior
- 04.05.2026: Hearing conducted before Justice Rajesh Kumar Gupta
- 04.05.2026: Order passed granting bail subject to conditions
Relief Sought
The applicant sought bail on the grounds that:
- He has been in custody for over 45 days
- The investigation is complete and no further custodial interrogation is required
- The trial is likely to be protracted
- He is a local resident with no risk of absconding or tampering with evidence
- He undertakes to deposit the sum of Rs. 61,500/- received in his account, as a condition for bail
The Parties' Positions
For the Applicant
The applicant’s counsel, Shri Faisal Ali Shah, argued that:
- The applicant has been falsely implicated
- There is no direct evidence connecting him to the commission of the offence
- The investigation is closed and custodial interrogation is no longer necessary
- The applicant is a permanent resident of Shivpuri with strong local ties
- He is willing to deposit the entire amount of Rs. 61,500/- received in his account as a condition for bail
- He undertakes to execute a personal bond of Rs. 50,000/- with one solvent surety
For the Respondent/State
The Public Prosecutor, Shri Dinesh Savita, opposed the bail application on the grounds that:
- The offences are serious and involve organized cyber fraud
- The amount involved, though not massive, is part of a larger fraudulent scheme
- Cyber fraud cases often involve cross-border elements and risk of evidence tampering
- Granting bail without stringent conditions may undermine the integrity of the trial
The Legal Issue
The central question was whether a court may grant bail in a non-bailable cyber fraud case under Section 483 of the Bharatiya Nyaya Sanhita, subject to the condition that the accused deposits the proceeds of the alleged crime and furnishes a personal bond with surety, even without a final determination of guilt.
Arguments Presented
For the Applicant
The applicant’s counsel relied on the principle that bail is the rule and jail is the exception, as affirmed in State of Rajasthan v. Balchand and Sanjay Chandra v. CBI. He emphasized that the investigation was complete, custody had exceeded a reasonable period, and there was no indication of flight risk or tampering. He further submitted that depositing the illicit amount was a voluntary act of good faith and should be viewed as a mitigating factor.
For the Respondent/State
The State contended that offences under Sections 318(4), 319(2), 316(2) of BNS and Sections 66-C and 66-D of the IT Act are grave, involving financial deception and impersonation, and often linked to organized crime networks. The State argued that bail should not be granted merely because the investigation is closed, especially where the accused stands accused of receiving proceeds of crime.
The Court's Analysis
The Court acknowledged the seriousness of the offences but noted that the investigation had concluded and no further custodial interrogation was required. It observed that the applicant had been in custody since 17.02.2026, a period exceeding six weeks, and that the trial would likely extend over months or years. The Court emphasized that the applicant was a permanent resident of Shivpuri with no history of flight or interference.
"Considering the facts and circumstances of the case, the nature of the allegations, and the period of custody and on the condition that the applicant deposits the entire amount received in his favour, thereafter, he shall be released on bail..."
The Court held that imposing a financial condition tied to the proceeds of the alleged offence was a reasonable and proportionate safeguard. It distinguished this from punitive measures, framing the deposit as a mechanism to ensure accountability and deter further misuse of funds. The Court also noted that the applicant’s willingness to deposit the amount and furnish a personal bond with surety demonstrated cooperation and reduced the risk of non-appearance.
The Court rejected the State’s argument that the seriousness of the offence alone warranted denial of bail, holding that such an approach would render Section 483 of BNSS otiose. The Court reaffirmed that bail conditions may be tailored to the facts of the case, including financial deposits, provided they are not punitive and serve the interests of justice.
The Verdict
The applicant succeeded. The High Court granted bail subject to two conditions: (1) deposit of Rs. 61,500/- (Rupees Sixty One Thousand and Five Hundred Only) before the learned Trial Court within 15 days of receipt of the certified copy of this order; and (2) execution of a personal bond of Rs. 50,000/- (Rupees Fifty Thousand Only) with one local solvent surety of the like amount, to the satisfaction of the Trial Court. The bail order is subject to six binding conditions, including cooperation with the trial, no contact with witnesses, no commission of further offences, no unnecessary adjournments, and no travel abroad without permission. Failure to comply with any condition shall result in automatic cancellation of bail.
What This Means For Similar Cases
Financial Conditions Are Permissible in Non-Bailable Cyber Cases
- Practitioners may now argue for bail in cyber fraud cases under BNS and IT Act by proposing deposit of illicit proceeds as a condition
- Courts may treat such deposits as a form of interim restitution, not punishment
- This creates a new pathway for bail in cases where the accused holds proceeds of crime but lacks flight risk
Custody Duration Triggers Bail Consideration Even Without Trial Delays
- The Court’s reliance on the 45-day custody period signals that prolonged detention without trial, even in serious cases, warrants bail review
- The completion of investigation is now a decisive factor in bail applications under Section 483 BNSS
- This aligns with the spirit of Arnesh Kumar v. State of Bihar - custody must be justified, not automatic
Surety and Bond Requirements Must Be Reasonable and Local
- The Court accepted a local solvent surety, reinforcing that sureties need not be from outside the jurisdiction
- Personal bond of Rs. 50,000/- with a surety of equal amount is now a benchmark for similar cases
- Practitioners should propose sureties who are residents of the same district to enhance credibility
Automatic Cancellation Clause Is Legally Valid
- The clause for automatic cancellation upon commission of a new offence is enforceable and does not require judicial intervention
- This reduces burden on courts and ensures compliance
- Similar clauses may be sought in other bail orders involving financial crimes
No Opinion on Merits Preserves Fair Trial
- The Court explicitly stated it was not expressing any opinion on the merits of the case
- This protects the presumption of innocence and avoids prejudicing the trial
- Practitioners should cite this approach when opposing premature media or judicial commentary on pending cases
