Rajasthan HC Cancels Default Bail Granted on Incomplete Charge Sheet in Adarsh Credit Cooperative Society Fraud Case

Justice Ashok Kumar Jain held that a trial court cannot treat a filed charge sheet as incomplete to grant default bail without examining whether the documents suffice to proceed.

The High Court of Judicature for Rajasthan, Bench at Jaipur, has cancelled the default bail granted to Rajeev Kumar Rana, a 52-year-old resident of Dehradun, in connection with FIR No. 24/2018 registered at Police Station SOG, Jaipur — popularly known as the Adarsh Credit Cooperative Society case. Justice Ashok Kumar Jain, sitting singly, allowed the State of Rajasthan's bail cancellation application under Section 439(2) of the Code of Criminal Procedure, finding that the Additional Sessions Judge had committed a serious error by treating a filed charge sheet as incomplete without any examination of whether the documents were sufficient to proceed. The judgment, pronounced on 22 May 2026, sets aside the bail order dated 23 November 2022 and directs Rana to surrender before the trial court within four weeks.

The Adarsh Credit Cooperative Society Case and Rana's Arrest

FIR No. 24/2018 at PS SOG, Jaipur, centres on allegations that Mukesh Modi and his associates distributed loans of approximately ₹9,238 crores to 125 shell companies. The SOG filed its first charge sheet against 15 persons, including Rohit Modi, Rahul Modi, and Kamlesh Choudhary, on 22 July 2019.

Rajeev Kumar Rana was arrested on 13 April 2022. The SOG filed a third charge sheet on 8 July 2022 but simultaneously kept the investigation pending under Section 173(8) of CrPC on four specific points. Rana then filed an application for default bail under Section 167(2) of CrPC, which the Additional Sessions Judge No. 6, Jaipur Metropolitan-II, allowed on 23 November 2022.

The trial court's reasoning, as reproduced in the High Court judgment, was that because the charge sheet itself noted that investigation on four counts remained pending, the charge sheet could not be treated as complete, and therefore the right to default bail had accrued.

The State of Rajasthan challenged that order through S.B. Criminal Bail Cancellation Application No. 28/2023. Arguments concluded and judgment was reserved on 7 May 2026.

What the Parties Argued

The Public Prosecutor, Mr. Vijay Singh Yadav, submitted that a charge sheet had in fact been filed on 8 July 2022 and there was no basis to invoke the default bail clause under Section 167(2) of CrPC. He pointed out that the trial court itself had recorded in paragraph six of its order that charge sheet 11B/19 dated 8 July 2022 was filed, yet went on to treat it as incomplete. The PP argued that the Additional Sessions Judge's reasoning was contrary to settled law.

Counsel for Rana, Mr. Aditya Vikram Singh, appearing through video conferencing, raised several objections. He argued that the bail had been granted in 2022 and the cancellation application was being heard in 2026 — a delay of four years that amounted to an abuse of process. He relied on Guria, Swayam Sevi Sansthan v. State of Uttar Pradesh and Others : (2009) 15 SCC 75 for the proposition that a bail granted in 2022 could not be cancelled in 2026.

He further relied on Fakhrey Alam v. State of Uttar Pradesh : (2021) 20 SCC 636 and Kamlesh Chaudhary v. State of Haryana (Criminal Appeal No. 15/2021) to argue that where a charge sheet is not complete in all respects and investigation remains pending against the same accused, a default bail can be granted and the accused cannot be re-arrested merely because a subsequent charge sheet is filed.

Counsel also pointed out that in related proceedings arising from the same facts — a complaint filed by the Serious Fraud Investigation Office — the Supreme Court had granted Rana bail on 10 April 2026 in SLP (Crl.) No. 2931/2026, observing that his period of incarceration exceeded 3.5 years and that properties worth more than ₹93 crores had already been attached. He urged that the conditions fixed in that order should apply mutatis mutandis to the present SOG case.

He also relied on Dolat Ram and Others v. State of Haryana : (1995) 1 SCC 349 to argue that no supervening circumstance existed to justify cancellation, and on Pradip N. Sharma v. State of Gujarat : 2025 SCC OnLine SC 457 to contend that Rana's custody was not required.

The Legal Framework: When Does the Right to Default Bail Arise and Survive?

Section 167(2) of CrPC provides that if investigation is not completed within 90 days (for offences punishable with death, life imprisonment, or imprisonment of not less than ten years) or 60 days (for other offences), the accused is entitled to be released on bail. The right is often called a “default bail” or statutory bail.

Justice Jain surveyed the settled position across several Supreme Court decisions. In Sanjay Dutt v. State : (1994) 5 SCC 410, the Supreme Court held that the indefeasible right to default bail is enforceable only prior to the filing of the challan and does not survive once the challan is filed, if not already availed of. The same principle was affirmed in Uday Mohanlal Acharya v. State of Maharashtra : (2001) 5 SCC 453, which also held that filing an incomplete charge sheet will not defeat the right if it had already accrued — but equally, that the right is extinguished the moment a charge sheet is filed.

In CBI v. Kapil Wadhawan and Another : (2024) 3 SCC 734, the Supreme Court held that mere pendency of further investigation under Section 173(8) of CrPC does not impugn a charge sheet filed under Section 173(2), and does not entitle an accused to claim default bail on the ground that the charge sheet was incomplete. The court observed that once a charge sheet is filed and the court takes cognizance of the offence, the pendency of further investigation regarding other accused or documents not yet available does not vitiate the charge sheet.

Justice Jain also referred to Narendra Kumar Amin v. CBI and Others : JT 2015(2) SC 233, where bail was refused even though the charge sheet had been filed without compliance with sub-sections (2) and (5) of Section 173 of CrPC.

On the question of cancellation, the court relied on Venkatesan Balasubramaniyan v. Intelligence Officer, DRI Bangalore : 2020 INSC 652, where a three-judge bench of the Supreme Court held that a default bail granted illegally or erroneously under Section 167(2) of CrPC can be cancelled under Section 439(2) of CrPC. The court in that case had relied on Pandit Dnyanu Khot v. State of Maharashtra and Others : (2008) 17 SCC 745, which had upheld a Sessions Court order cancelling a default bail on the ground that it was granted before the 90-day period had actually expired.

Justice Jain also addressed the argument based on the Supreme Court's bail order in the SFIO proceedings. He noted that the Supreme Court had granted Rana bail in that matter under Section 479 of the Bharatiya Nagarik Suraksha Sanhita, which provides for release on bail where detention has exceeded the maximum period and trial has not concluded. That provision, the court held, operates on entirely different grounds from the default bail provision under Section 167(2) of CrPC, and the two cannot be conflated.

The court similarly distinguished the judgments on regular bail and anticipatory bail cited by Rana's counsel — including Dolat Ram, Guria, Pradip N. Sharma, and Arvind Kejriwal v. CBI : 2024 SCC OnLine SC 2550 — on the ground that the supervening-circumstances standard for cancellation of regular bail does not apply when the question is whether a default bail was granted erroneously in the first place.

How the Bench Reasoned on the Trial Court's Error

Justice Jain found that the trial court had committed a serious error at the threshold. The Additional Sessions Judge had itself recorded in paragraph six of its order that charge sheet 11B/19 dated 8 July 2022 had been filed. Yet it went on to treat the charge sheet as incomplete solely because the SOG had noted in the charge sheet that investigation on four points remained pending under Section 173(8) of CrPC.

The High Court found that the trial court had not identified what those four points were, had not examined whether the documents submitted were sufficient for the court to take cognizance, and had not considered whether the filing of the charge sheet was a genuine attempt to frustrate the accused's right to seek bail under Section 167(2) of CrPC. The court observed that the trial court had “judged the charge sheet without examination.”

The court also referred to its own earlier decision in S.B. Criminal Misc. Bail Application No. 7864/2024 filed by Rahul Modi and others in the same FIR No. 24/2018, where a bail application under Section 167(2) of CrPC had been dismissed by the Additional Sessions Judge on 10 May 2024. In that matter, the High Court had considered the legal position in detail, including the requirements laid down in Dablu Kujur and CBI v. Kapil Wadhawan, and had held that mere pendency of further investigation does not entitle an accused to default bail once a charge sheet is filed.

Justice Jain also noted the broader context: the case involves alleged financial fraud in which money of ordinary depositors is at stake, investigation in such matters is inherently complex, and a holistic approach is required when balancing the accused's rights under Article 21 of the Constitution against the nature of the offence.

On the delay argument, the court did not accept that a four-year gap between the grant of bail and the hearing of the cancellation application was itself a bar. The court's analysis focused on whether the original bail order was legally sustainable, not on the passage of time.

Outcome

Justice Ashok Kumar Jain allowed S.B. Criminal Bail Cancellation Application No. 28/2023 filed by the State of Rajasthan. The bail order dated 23 November 2022 passed by the Additional Sessions Judge No. 6, Jaipur Metropolitan-II, is set aside and revoked. The default bail under Section 167(2) of CrPC granted to Rajeev Kumar Rana is cancelled, and his application under Section 167(2) of CrPC is dismissed.

Rana has been granted four weeks to surrender before the trial court. The trial court is directed to take him into custody upon surrender. He is at liberty to file a regular bail application under Section 483 of the Bharatiya Nagarik Suraksha Sanhita. The court has directed the office to send a copy of the order to the trial court through the District Judge.