Company Law | Physical Presence Mandatory For Furnishing Bonds, Accused Can’t Be Taken Into Custody Immediately: Punjab and Haryana High Court

The Serious Fraud Investigation Office has secured partial relief before the Punjab and Haryana High Court in a ruling clarifying the procedure for furnishing bonds under Section 91 of the Bharatiya Nagarik Suraksha Sanhita, 2023 in complaint cases where the accused were never arrested during investigation. The bench of Justice Surya Partap Singh held that bonds under Section 91 BNSS cannot be furnished in the absence of the accused, but simultaneously protected the petitioners from immediate custody by directing the trial court to grant them time to pursue legal remedies if their bonds are not accepted. The petition was filed by Balraj and another accused challenging the order dated 17 May 2025 of the Special Judge designated under the Companies Act, Gurugram. The petitioners had sought quashing of the trial court order refusing to permit furnishing of bonds in their absence. The case arises from a large-scale investigation conducted by the SFIO into the affairs of 88 companies belonging to the SRS Group. According to the complaint, investigations revealed that several companies allegedly obtained loans amounting to nearly ₹528 crore from public sector banks and financial institutions by presenting false financial statements, inflated sales and purchase figures, and misleading debtor details. The total outstanding bank exposure relating to nine SRS Group companies allegedly reached ₹1,596.94 crore. The petitioners were among 81 accused summoned by the Special Court in proceedings initiated under various provisions of the Companies Act, including Section 448 dealing with false statements. The SFIO alleged that the accused were involved in deceptive accounting practices, non-disclosure of material facts, and falsification of financial transactions. Buy Now: 50+ PMLA JUDGEMENTS : CASE LAWS Before the High Court, the petitioners argued that they had never been arrested during investigation and were therefore entitled to the benefit of the Supreme Court ruling in Tarsem Lal v. Directorate of Enforcement. Relying on that judgment, they had moved an application under Section 91 BNSS before the trial court seeking permission to furnish bonds without physical appearance. However, the trial court rejected the plea on the ground that the accused themselves were not present in court when the application was moved. The petitioners contended that since the investigating agency had not considered it necessary to arrest them during investigation, the insistence on their physical presence for furnishing bonds was contrary to the law laid down by the Supreme Court in Tarsem Lal. They further expressed apprehension that if they physically appeared before the trial court and their bonds were rejected, they could immediately be taken into custody. Opposing the plea, the SFIO argued that the petitioners had deliberately avoided appearance before the trial court despite being aware of the proceedings. The prosecution submitted that the accused had adopted dilatory tactics from the very beginning and had not cooperated with the judicial process. It was further argued that Section 91 BNSS specifically contemplates execution of personal bonds, which necessarily requires physical presence of the accused before the court. The High Court extensively examined the Supreme Court judgment in Tarsem Lal, which dealt with complaint proceedings under the Prevention of Money Laundering Act, 2002. The Court noted that the principles laid down therein were equally applicable to prosecutions under Section 448 of the Companies Act because of the similarity in statutory framework. The Court reproduced the principles summarized by the Supreme Court, including that where the accused was never arrested during investigation, summons rather than warrants should ordinarily be issued; appearance pursuant to summons does not amount to custody; and bonds under Section 88 CrPC (now Section 91 BNSS) may be taken without treating the accused as arrested. However, while interpreting Section 91 BNSS, the High Court held that the statutory language clearly requires the accused to be “present in such Court” before bonds can be executed. The Court observed that the trial court committed no illegality in refusing to accept bonds in the absence of the petitioners. At the same time, the High Court acknowledged the genuine apprehension of the petitioners regarding possible custody upon appearance before the trial court. Taking note of prevailing practices at the district court level, the Court evolved what it termed a “via media” approach to balance the rights of the accused with procedural requirements. Accordingly, the High Court directed the petitioners to appear before the trial court on the next date of hearing and move appropriate applications for recall of warrants and permission to furnish bonds under Section 91 BNSS in light of the Tarsem Lal judgment. Importantly, the Court directed that if the trial court refuses to accept the bonds or finds defects in them, the petitioners should not be taken into custody immediately. Instead, the trial court must grant them at least two weeks’ time to avail appropriate legal remedies without issuing fresh warrants. The High Court ultimately set aside the impugned order of the trial court qua the present petitioners and partly allowed the petition while directing the trial court to adhere to the principles laid down by the Supreme Court in Tarsem Lal. Case Details Case Title: Balraj And Anr. Versus Serious Fraud Investigation Office Citation: JURISHOUR-1176-HC-2026(P&H) Case No.: CRM-M-37640-2025 Date: 06.05.2026 Counsel For Petitioner: Kunal Dawar, Sr. Advocate Counsel For Respondent: J.S. Lalli, Deputy Solicitor General of India Click Here To Read Order Read More: Economic Offences Require Strict Approach: Chhattisgarh High Court Denies Bail In ₹540 Crore Coal Levy Extortion Case

Company Law | Physical Presence Mandatory For Furnishing Bonds, Accused Can’t Be Taken Into Custody Immediately: Punjab and Haryana High Court

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