Courts cannot insist on bank guarantees while granting bail: Karnataka High Court

Bengaluru: Trial courts cannot insist on bank guarantees from the accused while granting bail, the Karnataka High Court said in a recent judgement.

Justice M Nagaprasanna stated this while allowing a petition filed by Bengaluru-based Vaibhavraj Utsav.

The petitioner had challenged the May 17, 2024, order passed by a sessions court in Bengaluru. A crime was registered against the petitioner for offences under IPC sections 406, 465, 471 and 379 for alleged misappropriation of funds to the tune of Rs 1,08,50,000 to a certain Vimukthi Trust. After the charge sheet was filed, the petitioner filed an application seeking regular bail.

The bail was granted to the petitioner on March 14, 2023. Besides the other conditions, the sessions court asked him to execute a personal bond for Rs 50 lakh with one surety for the like sum. The court also directed him to furnish a bank guarantee to the trust to the tune of Rs 1 crore within three months after his release from prison.

On an application filed by him seeking modification of the order, the court directed him to furnish a bank guarantee of Rs 50 lakh. Challenging this order, the petitioner contended that insistence of bank guarantee is illegal.

Justice Nagaprasanna cited the Apex Court judgement in the Karandeep Singh case and said that the top court clearly held that direction to furnish a bank guarantee as a condition precedent for release on bail or continuance of bail is, on the face of it, illegal.

"Therefore, the fly in the ointment is the direction to furnish a bank guarantee. The Apex Court has held it to be illegal in the afore-quoted judgments. The said finding would become applicable to the facts of the case at hand and the condition of furnishing of bank guarantee is on the face of it illegal,” Justice Nagaprasanna said.

The court further said, “This court is coming across a plethora of cases where the concerned courts, while granting bail, are imposing a condition that the accused should furnish a bank guarantee of any quantum. This is on the face of it illegal. Such orders being passed have generated a lot of litigation. Therefore, I deem it appropriate to observe that the concerned court shall not insist on furnishing a bank guarantee for release of the accused on grant of bail. Except this, the concerned court would be free to impose any other legally tenable conditions.”