Custodial Interrogation Not Mandatory In Machinery Purchase Dispute: Gujarat HC

The Gujarat High Court has reinforced the sanctity of personal liberty in commercial disputes, granting anticipatory bail to company directors accused of siphoning bank funds intended for machinery procurement. Highlighting that custodial interrogation is not a prerequisite for investigation in matters lacking criminal antecedents, the Court emphasized a balanced approach between state interests and individual freedom.

A Single Judge Bench of Justice Sanjeev J. Thaker heard the application filed by the directors of Airline Pro Textile Machinery Pvt. Ltd., who were facing charges for alleged financial irregularities. The Court was tasked with determining whether pre-arrest bail should be granted in a case involving a complex transaction with a Chinese firm and a subsequent dispute over bank-disbursed funds.

Key Takeaways

Pre-Arrest Bail Rationale

Reiterated that the gravity of accusations must be balanced against the necessity of custodial interrogation and the risk of the accused fleeing from justice.

Commercial Nature of Dispute

Recognized that disputes arising from business transactions, such as machinery procurement, may not always warrant immediate arrest if the accused is cooperative.

Judicial Discretion Framework

Confirmed that courts must exercise discretion cautiously, focusing on antecedents and the potential for the accused to be humiliated through arrest.

Court Observations on Anticipatory Bail Principles

The Court, while examining the merits, noted that the applicants had no prior criminal history and had demonstrated a willingness to cooperate with the investigative process. The Bench relied on established principles that caution against elaborate examination of evidence at the bail stage, focusing instead on the prima facie necessity of detention.

The Court, in its reasoning, observed: "Having heard the learned advocates appearing for the parties and perusing the papers available on record, it is incumbent upon the Court to exercise its discretion judiciously, cautiously and strictly in compliance with the basic principles laid down in plethora of decisions of the Apex Court on the point. It is well settled that, among other circumstances, the factors to be borne in mind while considering an application for bail are:

(i) the nature and gravity of the accusation;

(ii) the antecedents of the applicant including the fact as to whether he has previously undergone imprisonment on conviction by a Court in respect of any cognizable offence;

(iii) the possibility of the applicant to flee from justice; and

(iv) where the accusation has been made with the object of injuring or humiliating the applicant by having him so arrested."

The Court has following directions:

"(a) shall cooperate with the investigation and make available for interrogation whenever required;

(b) shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the fact of the case so as to dissuade him from disclosing such facts to the court or to any police officer;

(c) shall not obstruct or hamper the police investigation and not to play mischief with the evidence collected or yet to be collected by the police;

(d) shall remain present at the concerned Police Station on 14.09.2026 between 11.00 a.m. and 2.00 p.m.;

(e) shall at the time of execution of bond, furnish the address to the investigating officer and the court concerned and shall not change residence till the final disposal of the case till further orders;

(f) shall not leave India without the permission of the Court and if having passport shall deposit the same before the trial Court within a week;

(g) It is open to the police or the investigating agency to move the learned trial Court for a direction under Section 483(2) of the BNSS to arrest the accused, in the event of violation of any term, such as absconding, non-cooperating during investigation, evasion, intimidation or inducement to witnesses with a view to influence outcome of the investigation or trial, etc."

Ratio

The Court held that where the accused are willing to cooperate, have no prior criminal record, and the dispute is prima facie linked to commercial transactions where significant portions of the funds have already been accounted for, the protection of personal liberty under the Bharatiya Nagarik Suraksha Sanhita, 2023 outweighs the need for custodial interrogation.

Background

The case arose from an FIR registered at Ankleshwar City B Division Police Station for alleged offences under Sections 314, 318(3), and 3(5) of the Bhartiya Nyaya Sanhita. The prosecution alleged that the applicants, acting as directors of Airline Pro Textile Machinery Pvt. Ltd., siphoned Rs. 1.94 crores disbursed by a complainant bank for purchasing machinery for 'Priyan Creation'.

The applicants contended that they had already invested Rs. 54 lacs into a Chinese company for the machinery and had returned the balance amount of Rs. 1.94 crore. They argued that the dispute was civil/commercial in nature. In granting bail, the Court applied the principles laid down by the Supreme Court in Siddharam Satlingappa Mhetre v. State of Maharashtra and Others ( "(2011) 1 SCC 6941": 2010 CaseBase(SC) 1528), which reiterated the Constitution Bench rulings in Shri Gurubaksh Singh Sibbia & Others and Sushila Aggarwal v. State (NCT of Delhi) ( "(2020) 5 SCC 1": 2020 CaseBase(SC) 1053). The Court concluded that the applicants were not a flight risk and their custodial presence was not mandatory for the ongoing investigation.

Case Details:
Case No.: R/CRIMINAL MISC.APPLICATION NO. 20621 of 2026
Neutral Citation: 2026:GUJHC:56320
Case Title: DEEPAK KUMAR SUSHIL KUMAR SHUKLA & ANR. Versus STATE OF GUJARAT
Appearances:
For the Petitioner(s): MR PRAVIN GONDALIYA
For the Respondent(s): MR RONAK RAVAL, APP

Source: 2026 CaseBase(GUJ) 20422