Can Anticipatory Bail Be Cancelled For Breach Of Settlement?

In a significant judgment that strikes at the heart of "litigation opportunism," the Punjab and Haryana High Court has sent a stern message to litigants who use the promise of a settlement as a "strategic artifice" to secure freedom. The Court recently recalled an anticipatory bail order granted in 2022, observing that an accused cannot secure liberty on the strength of a compromise and later back out of their solemn undertakings.

Justice Sumeet Goel, while dealing with a recall application, coined the term "shopping for liberty," warning that such conduct undermines the majesty of the law and reduces the judicial machinery to a state of "suspended animation."

The case, titled Surinder Pal Singh v. State of Punjab and another, originated from an FIR registered under Section 420 (Cheating) of the Indian Penal Code (IPC). The complainant alleged that the accused, a Director of JMS Investment Private Ltd, had induced them to purchase a flat in a project named ‘JMS Homes’ in Ludhiana.

According to the complaint:

1. An agreement to sell was executed in February 2013 for a total consideration of ₹36 lakhs.
2. The complainant paid over ₹37 lakhs (including extra charges) through cash and cheques.
3. Despite a promise to deliver possession within eight months, the accused failed to hand over the flat or refund the money for nearly a decade.

When the accused’s initial anticipatory bail plea was dismissed by the Sessions Court, they approached the High Court. During the High Court proceedings, both parties were referred to mediation to explore an amicable solution.

On November 25, 2021, a settlement agreement was reached. Relying solely on this compromise—where the accused promised to fulfill certain obligations—the High Court granted anticipatory bail on January 17, 2022. The court specifically directed that the parties must strictly adhere to the settlement terms.

However, once the threat of arrest was removed, the accused allegedly failed to honor the commitments made during mediation. This prompted the complainant to move back to the High Court, seeking a "recall" of the bail order.

Justice Sumeet Goel did not mince words while describing the accused’s conduct. The Court noted a "distressing trend" where petitioners use the prospect of a settlement as a deceptive tool to get discretionary relief (bail), only to repudiate those commitments once they are free.

The Court observed:

"This maneuver of securing freedom through the pretense of restitution is a flagrant manipulation of the Court’s leniency. It is a stratagem that must be met with stern condemnation and shall have no sanctuary within the equitable jurisdiction of this Court."

The Court further noted that to allow such a breach to be treated as a simple "civil dispute" would be to allow the judicial machinery to be weaponized for private gain. By securing liberty through a Court-sanctioned compromise, the accused converts a contractual obligation into a solemn assurance to the Court.

The accused argued that under the Code of Criminal Procedure (CrPC), there is no specific provision to "recall" a bail order and that the complainant should instead seek civil remedies for a breach of contract.

Rejecting this argument, the High Court clarified:

1. Judicial Undertaking: Once a settlement is presented to the Court to obtain an order, it ceases to be a private contract and becomes a judicial undertaking.
2. Abuse of Process: If an order is obtained by making a promise that the party never intended to keep, it amounts to a "fraud on the court."
3. Nature of the Original Order: The 2022 bail order was not passed on the "merits" of the case (i.e., whether the accused was innocent or guilty) but was entirely "predicated" on the compromise. Since the foundation (the compromise) was breached, the structure (the bail) must fall.

The Court also took note of the 2025 Supreme Court decision in Gajanan Dattatray Gore v. State of Maharashtra, which cautioned against granting bail solely on the basis of settlements in criminal cases. Justice Goel clarified that while the Supreme Court has discouraged the practice moving forward, it does not dilute the High Court’s power to cancel or recall bail if conditions of a previous order are willfully violated.

Finding that the accused had treated the judicial process with "contumely" (insulting disregard), the High Court:

1. Recalled and set aside the anticipatory bail order dated 17.01.2022.
2. Dismissed the main anticipatory bail petition.
3. Ordered the accused to surrender within 15 days, though they were given the liberty to apply for regular bail thereafter.
4. Imposed exemplary costs of ₹25,000, payable to the Punjab State Legal Services Authority.

This ruling serves as a vital precedent for victims of financial fraud. Often, in cases of property disputes or cheating, accused persons use mediation as a "delay tactic." By labeling this "Shopping for Liberty," the Punjab and Haryana High Court has ensured that the "Shield of Bail" cannot be used as a "Sword of Deception." It reinforces the principle that judicial leniency is reserved for those who come to court with clean hands and a genuine intent to follow the law.