Saurabh Agrawalv.State of Uttar Pradesh and Another

Legal Analysis: Saurabh Agrawal v. State of Uttar Pradesh and Another

Citation: 2026 INSC 548
Court: Supreme Court of India
Bench: A Division Bench comprising Justice Prashant Kumar Mishra and Justice N.V. Anjaria
Date of Decision: May 26, 2026
Nature of Judgment: Criminal Appeal under Article 136 of the Constitution of India against the order of the Allahabad High Court granting anticipatory bail.

Synopsis of the Judgment

The complainant (appellant) alleged a large‑scale financial fraud in relation to a residential property. Respondent No. 2 (Monika Dwivedi) and her son represented that they jointly owned the property, entered into an agreement to sell, received Rs. 3.55 crore out of the total consideration of Rs. 4.30 crore, but thereafter executed a sale deed in favour of a third party. The High Court granted anticipatory bail to Respondent No. 2, observing that the agreement was not registered, that only part payment was made, and that the complainant sought refund – thereby indicating a civil dispute. The Supreme Court set aside the anticipatory bail, holding that the High Court had relied on peripheral considerations while overlooking material factors such as the criminal antecedents of the accused, the magnitude of the economic offence, the fact that the property was alienated to a third party after receiving substantial consideration, and the requirements of custodial investigation. The Court reiterated that the existence of a civil remedy does not preclude criminal proceedings where the ingredients of a criminal offence are prima facie made out.

1. Basic Information of the Judgment

• Case Title: Saurabh Agrawal v. State of Uttar Pradesh and Another

• Citation: 2026 INSC 548

• Criminal Appeal No.: 2850 of 2026 (arising out of SLP (Crl.) No. 19112 of 2025)

• Bench: Division Bench (Justice Prashant Kumar Mishra and Justice N.V. Anjaria)

• Date of Decision: May 26, 2026

• Court: Supreme Court of India (Criminal Appellate Jurisdiction)

• Impugned Order: Order dated 06.10.2025 of the Allahabad High Court, Lucknow Bench, in Criminal Misc. Anticipatory Bail Application U/S 482 BNSS No. 812 of 2025.

2. Legal Framework

Major Laws and Provisions Involved

• Indian Penal Code, 1860 – Sections 406 (criminal breach of trust), 420 (cheating), 467 (forgery of valuable security), 468 (forgery for purpose of cheating), 471 (using forged document as genuine), 506 (criminal intimidation), 120B (criminal conspiracy), 34 (common intention).

• Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) – Section 482 (anticipatory bail) – corresponding to Section 438 of the Code of Criminal Procedure, 1973.

• Code of Criminal Procedure, 1973 – Principles governing grant of anticipatory bail: relevant factors include nature and gravity of the accusation, criminal antecedents, likelihood of fleeing justice, tampering with evidence, and the need for custodial interrogation.

Key Precedents Impliedly Applied

• Sushila Aggarwal v. State (NCT of Delhi) (2020) 5 SCC 1 – Guidelines for grant of anticipatory bail; the court must consider the nature of the offence, the role of the accused, and the possibility of the accused fleeing or tampering with evidence.

• State of Maharashtra v. Sagar Shantilal Soni (2022) (referred to in principle) – In economic offences involving substantial sums, custodial interrogation may be necessary to unearth the modus operandi and trace the flow of funds.

• Central Bureau of Investigation v. Santosh Karnani (2023) (implicit) – Anticipatory bail should not be granted as a matter of routine in serious economic offences.

3. Relevant Facts

• FIR No. 0002 of 2025 dated 03.01.2025 was registered at Police Station Mahanagar, Lucknow North under Sections 406, 420, 467, 468, 471, 506, 120B and 34 IPC.

• Complainant’s case: Respondent No. 2 (Monika Dwivedi), her son Abhishek Dwivedi, and her daughter Abhilasha Dwivedi represented that they were joint owners of property C-24, E-Park, Mahanagar Extension, Lucknow. Acting on this representation, the complainant entered into an agreement to sell dated 08.01.2024 (notarised) for a total consideration of Rs. 4,30,00,000/-. He paid Rs. 3,55,00,000/- in instalments. It was represented that the sale deed would be executed upon the daughter’s return from abroad.

• Alleged fraud: Instead of executing the sale deed in favour of the complainant, Respondent No. 2 and her son executed a sale deed dated 24.06.2024 in favour of a third party (Pankaj Mohan Mishra). The daughter, in fact, had no ownership interest in the property.

• Prior proceedings:
  FIR No. 0333 of 2024 was initially registered on 17.12.2024 at Police Station Aliganj, then transferred and re‑registered as FIR No. 0002 of 2025.
  Respondent No. 2 and her son filed Criminal Misc. Writ Petition No. 1688 of 2025 seeking quashing of the FIR. The High Court referred the matter to mediation (which failed) and dismissed the writ petition on 08.05.2025, noting the criminal antecedents of the accused and the existence of a prima facie case of financial fraud.
  The Sessions Court rejected their anticipatory bail application on 18.06.2025, taking note of the seriousness of the allegations and criminal antecedents.
  The High Court (by the impugned order) granted anticipatory bail to Respondent No. 2 on 06.10.2025.

• Present appeal by the complainant seeking cancellation of anticipatory bail.

4. Issues

• Issue No. 1: Whether the High Court was justified in granting anticipatory bail to Respondent No. 2, considering the nature of the allegations (economic offence involving substantial sum, fraudulent inducement, and alienation of property to a third party after receiving consideration).

• Issue No. 2: Whether the High Court erred in relying on peripheral factors (agreement not registered, only part payment made, complainant seeking refund) while ignoring material considerations (criminal antecedents of the accused, the requirement of custodial investigation, and the fact that the accused were absconding).

• Issue No. 3: Whether the grant of anticipatory bail to Respondent No. 2 should be cancelled.

5. Ratio Decidendi

A. The High Court’s reasoning is based on peripheral considerations that do not bear a direct nexus to the parameters for grant of anticipatory bail (Paras 14-18).
The Court held that the following observations of the High Court were misplaced:
(i) That one of the alleged co‑owners (the daughter) was abroad at the time of execution of the agreement – this does not dilute the allegation of inducement; the gravamen is that the complainant was led to believe all parties would join.
(ii) That the agreement was notarised and not registered – the nature of the agreement does not determine criminality; the allegation is of fraudulent inducement, not merely breach of contract.
(iii) That only part payment was made and there was no averment of readiness to pay the balance – the material allegation is that a substantial amount was received and the property was thereafter alienated.
(iv) That the complainant sought refund, indicating a civil dispute – the existence of a civil remedy does not preclude criminal proceedings where ingredients of a criminal offence are prima facie made out.

B. The High Court completely omitted consideration of material factors (Paras 19-20).
The Court noted that the High Court, while dismissing the quashing writ petition on 08.05.2025, had recorded the existence of multiple criminal antecedents of a similar nature against the accused persons. The Sessions Court, while rejecting anticipatory bail on 18.06.2025, had also taken note of such antecedents. The impugned order of the High Court granting anticipatory bail was completely silent on this aspect. The omission to consider such relevant factors, especially in a case involving a substantial economic offence, rendered the order unsustainable.

C. The grant of anticipatory bail was not warranted in the facts of the case (Paras 20-21).
The Court held that the allegations pertain to an economic offence involving a substantial sum, coupled with deliberate conduct of inducing the complainant to part with a significant portion of the consideration and thereafter transferring the property to a third party. The material on record also indicated that the accused were not readily available during the investigation and coercive steps were required to secure their presence. Having regard to the nature of the allegations, the magnitude of the transaction, the antecedents of Respondent No. 2, and the requirements of a fair and effective investigation, the grant of anticipatory bail was not justified.

6. New Legal Principles Established / Reiterated

• First, the existence of a civil remedy does not bar criminal proceedings where the ingredients of a criminal offence are prima facie made out. The fact that the complainant seeks refund or that the dispute has civil overtones does not automatically make the case fit for anticipatory bail or quashing.

• Second, in economic offences involving substantial sums and allegations of fraudulent inducement followed by alienation of property to a third party, the court must weigh the need for custodial investigation. Anticipatory bail should not be granted as a matter of routine merely because the agreement is not registered or because only part payment has been made.

• Third, when a coordinate Bench of the High Court has earlier taken note of the criminal antecedents of the accused while dismissing a quashing petition, a subsequent Bench granting anticipatory bail must at least address those antecedents. Silence on such material factors vitiates the order.

7. Court’s Examination and Analysis of Concepts

The Court began by noting that the impugned order of the High Court proceeded on certain considerations that were not directly relevant to the grant of anticipatory bail. It examined each of the High Court’s observations:

• On the daughter being abroad: The Court held that the allegation was that the complainant was induced to believe that all co‑owners would execute the sale deed. Whether the daughter actually executed the agreement is a matter of evidence; at the stage of anticipatory bail, the focus is on the prima facie deception.

• On the agreement not being registered: The Court observed that the absence of registration does not neutralise the criminality alleged. The agreement was notarised and acknowledged receipt of substantial consideration. The subsequent conduct (alienation to a third party) is the crux of the fraud.

• On only part payment being made: The Court held that the receipt of Rs. 3.55 crore out of Rs. 4.30 crore is a substantial amount. The allegation is not merely of breach of contract but of deliberate deception followed by alienation of the property.

• On the complainant seeking refund: The Court reiterated the settled principle that the pendency of a civil remedy does not bar criminal prosecution. The fact that the complainant may have sought restitution does not efface the allegations of cheating or criminal breach of trust.

The Court then highlighted the glaring omission in the impugned order: the High Court had earlier, while dismissing the quashing writ petition, recorded the criminal antecedents of the accused. The Sessions Court had also taken note of those antecedents. Yet the High Court, while granting anticipatory bail, did not even mention this factor. The Court held that this non‑consideration of relevant material rendered the order perverse.

Finally, the Court held that the nature of the offence (economic fraud), the amount involved, the conduct of the accused (absconding, requiring coercive steps), and the criminal antecedents all pointed against the grant of anticipatory bail. The appeal was allowed, and the anticipatory bail was cancelled.

8. Critical Analysis

Strengths: The judgment correctly identifies the error in the High Court’s approach: granting anticipatory bail based on peripheral factors while ignoring criminal antecedents and the need for custodial investigation. It reaffirms that the existence of a civil dispute does not immunise an accused from criminal prosecution where the ingredients of cheating or fraud are made out. The judgment also underscores that a subsequent bench of the High Court cannot ignore material findings recorded by a coordinate bench in earlier proceedings (e.g., the dismissal of the quashing writ petition). This promotes consistency and prevents forum shopping.

Potential concerns: The judgment does not explicitly discuss the standard of proof for cancellation of anticipatory bail. It sets aside the bail on the ground that the High Court’s order was unsustainable – which is the correct approach. However, it could have clarified that the power to cancel anticipatory bail is exercised when the order granting bail is perverse or based on irrelevant considerations, not merely because the appellate court would have taken a different view. The judgment implicitly follows that principle.

Practical impact: This judgment will be cited by complainants in economic offence cases to argue that anticipatory bail should not be granted lightly, especially when the accused has criminal antecedents and the investigation requires custodial interrogation. It will also be used by prosecutors to oppose anticipatory bail in cheque dishonour and property fraud cases where the dispute has civil overtones but also discloses criminal elements. High Courts will now be expected to explicitly address material factors (antecedents, need for custodial interrogation) in their bail orders, and failure to do so may lead to cancellation.

9. Final Outcome

• The appeal was allowed.

• The impugned order dated 06.10.2025 of the Allahabad High Court granting anticipatory bail to Respondent No. 2 (Monika Dwivedi) was set aside.

• The anticipatory bail granted to Respondent No. 2 stands cancelled.

• Observations in the judgment are confined to the adjudication of the present appeal and shall not influence the trial on merits.

10. Practical Application

First, a complainant in a property fraud case can rely on this judgment to argue that even if the agreement to sell is not registered, or if only part payment has been made, the court cannot grant anticipatory bail if there is prima facie evidence of fraudulent inducement followed by alienation of the property to a third party.

Second, a prosecutor opposing anticipatory bail must place on record the criminal antecedents of the accused and any observations made by the court in earlier proceedings (such as dismissal of a quashing petition). The High Court is bound to consider these factors; failure to do so vitiates the order.

Third, an accused seeking anticipatory bail in an economic offence must address the issue of criminal antecedents and the need for custodial investigation. Mere denial of the allegations or reliance on the civil nature of the dispute will not suffice if the material shows deception and fraudulent conduct.

11. Court Lines

Line 1 (Civil remedy not a bar – Para 18):
“It is well settled that the existence of a civil remedy does not preclude criminal proceedings where the ingredients of a criminal offence are prima facie made out. The mere fact that the complainant seeks restitution of the amount paid does not efface the allegations of cheating or fraud.”

Line 2 (Peripheral considerations – Para 15-16):
“The nature or form of the agreement does not, by itself, determine the existence or otherwise of a criminal offence. The allegation is not merely of breach of contract, but of fraudulent inducement and subsequent conduct inconsistent with the representations made. The absence of registration does not, therefore, neutralize the criminality alleged.”

Line 3 (Omission of material factors – Para 19):
“What is conspicuously absent in the impugned order is any consideration of material and relevant factors which ought to have guided the exercise of discretion of granting anticipatory bail to Respondent No. 2. … The omission to consider such relevant factors, particularly in a case involving an economic offence of this magnitude, vitiates the exercise of discretion.”

Line 4 (Need for custodial investigation – Para 20):
“Having regard to the nature of the allegations, the magnitude of the transaction, the antecedents attributed to Respondent No. 2, and the requirements of a fair and effective investigation, we are of the considered view that the grant of anticipatory bail to Respondent No. 2 at this stage is not warranted.”

12. Legal Strategy Insight

For the complainant (victim of property fraud):

• When opposing anticipatory bail, file a detailed counter‑affidavit annexing all orders passed in earlier proceedings (e.g., dismissal of quashing writ petition, rejection of anticipatory bail by Sessions Court). Highlight that the High Court has already taken note of criminal antecedents.

• Argue that the investigation is at a nascent stage and custodial interrogation is necessary to trace the flow of funds, recover the sale proceeds, and unearth the full conspiracy. Cite the fact that the accused were absconding and coercive steps were required.

• Emphasise that the mere existence of a civil suit or the fact that the complainant sought refund does not convert a criminal offence into a civil dispute.

For the accused (seeking anticipatory bail in an economic offence):

• If there are criminal antecedents, you must address them honestly. Argue that the antecedents are old or unrelated, or that the accused has not misused any earlier bail.

• If the agreement is not registered, argue that the transaction itself may be unenforceable, and the real dispute is civil. However, note that this judgment holds that such arguments are peripheral.

• If part payment was made, argue that the transaction was not completed, and the accused had a right to sell to a third party (if no concluded contract). But be prepared to face the allegation of fraudulent inducement.

For a lawyer challenging an anticipatory bail order:

• File an appeal (SLP) under Article 136. In the petition, highlight the High Court’s failure to consider criminal antecedents and the need for custodial investigation. Quote paragraph 19 of this judgment.

• Annex the earlier orders (dismissal of quashing petition, rejection of bail by Sessions Court) to show that the High Court’s order is inconsistent with its own earlier findings.

• Do not merely argue that the High Court took a “different view”; argue that the view is perverse and based on irrelevant considerations.