The Punjab and Haryana High Court has refused anticipatory bail to a person accused of operating an illegal gutka manufacturing unit and removing machinery and other goods after they had been seized by officials of the Directorate General of GST Intelligence (DGGI).
The bench of Justice Manisha Batra observed that custodial interrogation was necessary to ascertain how the alleged offence was committed and the circumstances in which the seized machinery and goods disappeared from the searched premises.
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The High Court held that denying the investigating agency an opportunity to conduct custodial interrogation at the nascent stage of the case could leave significant gaps and loopholes in the investigation.
The FIR arose from a complaint submitted by an Intelligence Officer of the DGGI’s Gurugram office.
The DGGI officials conducted a search on June 17, 2025, at premises situated in Janti village, Kundli. During the operation, the officials allegedly discovered that a gutka manufacturing unit was being operated illegally from the premises.
The authorities claimed that their preliminary inquiry revealed that the unit was being operated by the petitioner along with co-accused Sunil Gupta. Following the search, the premises were sealed.
The petitioner was subsequently contacted by telephone and asked to appear before DGGI officials. However, according to the allegations, he did not appear and switched off his mobile phone.
On June 20, 2025, a team of DGGI officials returned to the premises to take custody of the articles seized during the search. The officials allegedly found that both the seized goods and the machinery used to manufacture gutka were missing.
A complaint was consequently submitted seeking criminal action on the allegation that the petitioner had removed the seized articles from the premises.
After registration of the FIR, the investigating agency arrested a co-accused who was stated to be the caretaker of the manufacturing unit.
The co-accused allegedly made a disclosure statement on May 22, 2026, claiming that the petitioner had been operating the gutka manufacturing machinery at the premises.
Apprehending arrest, the petitioner approached the Sessions Court for anticipatory bail. His application was dismissed by the Sessions Judge, Sonipat, on August 5, 2026, following which he moved the High Court.
The petitioner argued that he had been falsely implicated solely on the basis of the disclosure statement of a co-accused, which could not be treated as legally admissible evidence against him.
It was submitted that the petitioner had no connection with the searched premises and was neither its owner nor tenant. Since the premises were allegedly neither accessible to him nor under his control, he could not have removed the machinery or other seized articles, the counsel contended.
The petitioner further claimed that he had been named on the basis of unverified hearsay information. It was alleged that the co-accused who implicated him had criminal antecedents and had acted in collusion with certain other persons.
His counsel assured the Court that the petitioner was willing to join the investigation. It was argued that custodial interrogation was unnecessary because no recovery was required to be made from him.
The Haryana government submitted the co-accused’s disclosure statement and the panchnama prepared during the DGGI search.
The State argued that information about the petitioner’s alleged involvement had emerged during the raid itself. His role was not disclosed for the first time only in the co-accused’s subsequent statement, it contended.
The prosecution maintained that custodial interrogation was essential for a proper and effective investigation into the removal of the seized machinery and goods. It argued that no exceptional circumstances existed to justify granting anticipatory bail.
After considering the rival submissions, the High Court noted that the petitioner was accused of using machinery at the searched premises for manufacturing gutka.
The machinery and other goods found during the GST Department’s search were seized, but they were missing when officials subsequently returned to the premises.
At the present stage, the Court held, the allegations prima facie indicated the petitioner’s involvement in the offences under investigation.
The Court observed that investigators were required to determine the manner in which the alleged offence was committed and establish how the seized goods and machinery were removed from the premises. Custodial interrogation of the petitioner was therefore necessary for conducting a thorough investigation.
Since the investigation was still at an early stage, granting protection against arrest could adversely affect its progress and leave material questions unanswered, the Court added.
The High Court reiterated that arrest forms part of the investigative procedure and serves purposes beyond merely ensuring the accused’s presence.
It observed that the power to grant anticipatory bail is extraordinary and must be exercised sparingly in exceptional circumstances. While deciding such an application, the Court must consider the nature and gravity of the accusation, the possibility of the applicant fleeing from justice and other relevant circumstances.
An anticipatory bail order, the Court said, interferes to some extent with the investigation of an offence. Courts must therefore ensure that such protection does not create an inroad into the ordinary legal procedure governing criminal cases.
The Court further observed that custodial interrogation is qualitatively more oriented towards eliciting information than questioning a suspect protected by a favourable anticipatory bail order.
Finding no exceptional circumstances warranting the exercise of its extraordinary jurisdiction, the High Court dismissed the anticipatory bail petition.
The Court clarified that its observations were confined to deciding the bail application and should not be treated as an expression of opinion on the merits of the prosecution case or influence the trial.
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