{"id":352292,"date":"2025-07-03T17:00:10","date_gmt":"2025-07-03T11:30:10","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=352292"},"modified":"2025-07-03T17:33:03","modified_gmt":"2025-07-03T12:03:03","slug":"precedent-in-peril-a-critical-examination-of-scs-judgment-in-sfio-v-aditya-sarda-and-the-erosion-of-judicial-discipline","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/07\/03\/precedent-in-peril-a-critical-examination-of-scs-judgment-in-sfio-v-aditya-sarda-and-the-erosion-of-judicial-discipline\/","title":{"rendered":"Precedent in Peril: A Critical Examination of SC’s Judgment in SFIO v. Aditya Sarda and the Erosion of Judicial Discipline"},"content":{"rendered":"
\n

Introduction: The fragility of legal consistency<\/h2>\n

The Supreme Court of India, as the ultimate interpreter of the Constitution and the final arbiter of legal disputes, is entrusted with the solemn duty to uphold the rule of law through consistency in its judgments. This principle, enshrined in Article 141<\/a> of the Constitution<\/a>1<\/sup><\/a>, mandates that the law declared by the Court binds all courts, including its own coordinate Benches. Yet, recent decisions such as SFIO<\/span> v. Aditya Sarda<\/span>2<\/sup><\/a> and Ram Kishor Arora<\/span> v. Enforcement Directorate<\/span>3<\/sup><\/a> have exposed a troubling pattern of Benches of equal strength deviating from settled precedents without referral to larger Benches, undermining judicial discipline and creating jurisprudential chaos.<\/p>\n

The constitutional mandate and doctrine of precedent<\/h2>\n

Article 141<\/a> of the Constitution<\/a>4<\/sup><\/a> anchors the doctrine of stare decisis, ensuring that Supreme Court judgments act as binding precedents. When a coordinate Bench encounters a conflicting legal proposition, it has two options: follow the earlier decision or refer the question to a larger Bench for reconsideration. But no decision can be arrived at contrary to or inconsistent with the law laid down by the coordinate Bench. This principle, reiterated by the Constitutional Bench of the Supreme Court in State of Punjab<\/span> v. Devans Modern Breweries Ltd.<\/span>5<\/sup><\/a>, safeguards against judicial arbitrariness.<\/p>\n

Aditya Sarda case<\/p>\n

Factual backdrop<\/p>\n

Aditya Sarda case6<\/sup><\/a> arose from a prosecution complaint filed by the Serious Fraud Investigation Office (SFIO) under Section<\/span> 212(6)<\/a>7<\/sup><\/a> of the Companies Act, 2013<\/a>8<\/sup><\/a>, alleging financial fraud involving Rs 1700 crores. Pertinently, the accused persons, who were the parties before the Supreme Court, were not arrested during the course of investigation. The investigation of the SFIO culminated into a prosecution complaint\/charge-sheet, being filed around the time of June 2019, before the Special Court under the Companies Act, 2013<\/a>.<\/p>\n

During that time, there was a rampant practice across the country, where upon filing of prosecution complaints\/charge-sheets by prosecuting agencies such as Enforcement Directorate (ED), SFIO, etc. the accused persons were arrested or sent to custody, which forced them to apply for anticipatory bails upon filing of prosecution complaint\/charge-sheet, on account of such apprehensions.<\/p>\n

In the present case, when the prosecution complaint was filed by the SFIO, the Special Court took cognizance over prosecution complaint and directly issued warrants against the accused persons, instead of issuing summons first, to secure their presence. Due to the practice of arrest post-filing of prosecution complaint, the accused persons did not appear before the Special Court post-cognizance and at first attempted to secure anticipatory bail to ensure their liberties. The Special Court rejected applications for anticipatory bail. During the time, the applications for anticipatory bail were rejected, non-bailable warrants were in place against the accused persons. Continuing the apprehension of arrest, the accused persons approached the High Court seeking anticipatory bail, which was granted, considering the facts of the case.<\/p>\n

This resulted in a batch of appeals being filed by the SFIO before the Supreme Court. The respondent-accused persons contended that since the SFIO did not arrest them during the course of investigation, their application for anticipatory has been rightly allowed by the High Court. Furthermore, when they have cooperated during investigation and were not arrested during that time, issuance of warrants by the Special Court after filing of the prosecution complaint is wholly illegal and their liberties be protected in terms of the judgment of the Supreme Court in Tarsem Lal<\/span> v. Enforcement Directorate<\/span>9<\/sup><\/a>, where similar reliefs have been granted to accused persons apprehending arrest due to the said practice of arrest post-filing of prosecution complaint\/charge-sheet.<\/p>\n

However, the appeals filed by the SFIO were ultimately allowed by a Bench comprising Justices Bela M. Trivedi and Prasanna B. Varale. The orders granting anticipatory bail were set aside, and the accused were directed to surrender before the Special Court.<\/p>\n

Supreme Court’s reasoning<\/p>\n

While reversing the order of grant of anticipatory bail, the Supreme Court held that under Section 204<\/a> of the Criminal Procedure Code, 1973<\/a> (CrPC)10<\/sup><\/a> in a complaint case, which appears to be a warrant case, the Court taking cognizance of the offence, has the discretion to issue warrant or summons as it thinks fit, for causing the accused to be brought or to appear before it and there is no mandate on the Court to issue only summons first. The Court held that the choice of summons or warrants must be seriously based on gravity or seriousness of the offence and larger interest of public and State, etc.<\/p>\n

This finding of the Supreme Court unfortunately is in direct contrast with the recent judgment of the Supreme Court itself in Tarsem Lal case<\/span>11<\/sup><\/a> rendered by a Bench of Justices Abhay S. Oka and Ujjal Bhuyan, in similar circumstances, where due to the rampant practice of arrest post-filing of prosecution complaints, the accused was forced to file anticipatory bail. In that case too, an identical issue was addressed: Whether courts can issue warrants directly in cases where the accused were not arrested during the investigation?<\/p>\n

The said judgment is being rendered in a case arising from ED\/the Prevention of Money-Laundering Act, 2002<\/a> (PMLA)12<\/sup><\/a> investigation. It is worth mentioning that the provisions regarding arrest, bail, summoning, issuance of warrants, etc. in the PMLA cases are pari materia with those under the Companies Act, 2013<\/a>.<\/p>\n

Tarsem Lal: The binding precedent<\/h2>\n

In Tarsem Lal case<\/span>13<\/sup><\/a>, the Court held:<\/p>\n

(a<\/span>) Summons as the normal rule<\/span>: If the accused cooperated during the investigation (e.g. complied with summons under Section 50 of the PMLA14<\/sup><\/a>) the Court must issue summons first instead of directly issuing warrants to the accused.<\/p>\n

(b<\/span>) Graduated escalation<\/span>: Only if summons are disobeyed should the Court issue bailable warrants, followed by non-bailable warrants (NBWs).<\/p>\n

(c<\/span>) No automatic custody\/arrest<\/span>: When the accused has cooperated during investigation and no arrest was made during investigation, neither the prosecuting agency ED can arrest the accused post-filing of prosecution complaint, nor the courts can mechanically remand an accused who appears pursuant to summons; custody is permissible only if the prosecution demonstrates necessity.<\/p>\n

The Supreme Court underscored the glaring paradox driving the surge in anticipatory bail pleas post-filing of prosecution complaints: certain Special Courts, it observed, are arresting accused individuals after they dutifully comply with summons. This perverse practice \u2014<\/del>\u2014<\/ins> where the State refrains from arrest during investigation but springs custody traps once the accused appears in Court \u2014<\/del>\u2014<\/ins> forces citizens into a coercive cycle of bail litigation merely to shield themselves from arbitrary detention. The Supreme Court ultimately set aside the order of the High Court rejecting anticipatory bail to the accused and cancelled the warrants so issued.<\/p>\n

To curb the risk of trampling the constitutional promise of liberty under Article 2115<\/sup><\/a>, Tarsem Lal case<\/span>16<\/sup><\/a> Bench placed the abovementioned procedural safeguards. The Court premised its reasoning on two critical foundations:<\/p>\n

(a<\/span>) Satender Kumar Antil<\/span> v. CBI<\/span>17<\/sup><\/a>, which held that if the accused was not arrested during investigation, there is no requirement of arrest post charge-sheet.<\/p>\n

(b<\/span>) Inder Mohan Goswami<\/span> v. State of Uttaranchal<\/span>18<\/sup><\/a>, which cautioned against \u201cindiscriminate\u201d issuance of NBWs.<\/p>\n

Interestingly, in Tarsem Lal case<\/span>19<\/sup><\/a>, the Court has held that if the accused was not arrested till the filing of the complaint and has not cooperated with the investigation by defying summons, the Special Court may still issue a bailable warrant at the first instance while issuing the process. Therefore, the route of issuing warrants instead of summons is not foreclosed upon filing of prosecution complaint. The Court only held that the conduct of the accused during investigation is to be scrutinised, and if the accused person is not arrested during investigation, then there is no purpose in issuing warrants and only summons is to be issued upon taking cognizance, thereby protecting the accused from any arbitrary actions post-filing of prosecution complaints\/charge-sheets.<\/p>\n

Critique of Aditya Sarda: Jurisprudential inconsistency and procedural overreach<\/h2>\n

The Supreme Court in Aditya Sarda case<\/span>20<\/sup><\/a> disregarded the binding precedent of Tarsem Lal case<\/span>21<\/sup><\/a> \u2014 which addressed identical circumstances and legal issues (anticipatory bail post-prosecution complaint when accused cooperated during investigation) \u2014 without distinguishing its reasoning or referring the matter to a larger Bench, violating precedent rules under Article 14122<\/sup><\/a>.<\/p>\n

In Tarsem Lal case<\/span>23<\/sup><\/a>, the Court emphasised that when an accused has cooperated during the investigation and was not arrested at that stage, summons \u2014 not warrants \u2014 is to be issued upon filing of the prosecution complaint. However, Aditya Sarda case<\/span>24<\/sup><\/a> disregarded the accused’s conduct during the investigation entirely, instead mandating the courts to seriously consider the \u201cgravity of the offence\u201d and vague \u201cpublic interest\u201d before making the choice of summons or warrants. This is a clear deviation from Tarsem Lal case<\/span>25<\/sup><\/a>, which a coordinate Bench could not have done.<\/p>\n

Moreover, the judgment conflated the distinct legal issues of anticipatory bail (which concerns pre-arrest protection) with the accused’s non-appearance post-issuance of warrants, which is a procedural consequence of the Special Court’s own refusal to grant relief. The mechanical rejection of anticipatory bail and issuance of warrants triggered a self-defeating cycle: fearing post charge-sheet arrest, the accused did not appear, leading to their declaration as proclaimed offenders under Section 82 CrPC26<\/sup><\/a>. The Supreme Court later cited this status to deny bail, ignoring that the accused’s absence arose from genuine apprehension of arrest (due to the Special Court’s unwarranted warrants and bail denial), not evasion.<\/p>\n

Anticipatory bail ought to have been granted initially by the Special Court, given the accused’s cooperation during investigation and non-arrest. Pertinently, when the anticipatory bail application was denied by the Special Court, non-bailable warrants were already issued against the accused. The apprehension of arrest which stemmed from the practice of post charge-sheet arrest was aggravated by the denial of anticipatory bail. The judgment in Asha Dubey<\/span> v. State of M.P.<\/span>27<\/sup><\/a> rightly clarifies that even proclaimed offenders can seek bail if the circumstances of their declaration justify it. However, Aditya Sarda case<\/span>28<\/sup><\/a> ignored this nuance, effectively punishing the accused for a situation created by the Court’s deviation from precedent.<\/p>\n

The Punjab & Haryana High Court, in its impugned order29<\/sup><\/a>, had correctly granted anticipatory bail by relying on Satender Kumar Antil case<\/span>30<\/sup><\/a>, noting the accused’s cooperation during investigation and the absence of any need for custodial interrogation. The judgment of the High Court31<\/sup><\/a> is completely aligned with Tarsem Lal case<\/span>32<\/sup><\/a>.<\/p>\n

The Supreme Court’s revocation of anticipatory bail \u2014 despite the absence of any proven misuse of liberty and without addressing the factual merits of the accused’s cooperation during investigation \u2014 forced them into the stringent draconian regime of regular bail under Section 212(6)33<\/sup><\/a>, where they must rebut a presumption of guilt \u2014 a standard nearly impossible to meet in practice.<\/p>\n

In conclusion, Aditya Sarda case<\/span>34<\/sup><\/a> reasoning is legally untenable. The Supreme Court must have taken cognizance of the practice of arrest post-filing of prosecution complaint\/charge-sheet as considered by the Court in Tarsem Lal case<\/span>35<\/sup><\/a>. There is no justifiable basis to deviate from the settled binding precedent. Resultantly, considering the facts and law governing the case, it can be concluded that the judgment of Aditya Sarda case<\/span>36<\/sup><\/a> is in complete violation of Article 141<\/a> of the Constitution<\/a> as inter alia, it deviates from the judgments of Satender Kumar Antil case<\/span>37<\/sup><\/a> and Tarsem Lal case<\/span>38<\/sup><\/a>.<\/p>\n

The rise and fall of Pankaj Bansal v. Union of India<\/h2>\n

Aditya Sarda case<\/span>39<\/sup><\/a> is not the first case where the judgment of a coordinate Bench has been diluted by the ruling of a subsequent Bench. Recently, in Pankaj Bansal<\/span> case<\/span>40<\/sup><\/a>, a Bench of Justices A.S. Bopanna and Sanjay Kumar delivered a landmark ruling to protect arrestees\u2019 rights under Article 22(1)<\/a> of the Constitution<\/a>41<\/sup><\/a>. The Court held that the ED must furnish written grounds of arrest to the accused to enable effective legal recourse and in absence of such written communication, the arrest under Section 1942<\/sup><\/a>, remand and custody would be rendered unconstitutional. Pankaj Bansal case<\/span>43<\/sup><\/a> ruling was premised on the reasoning that an arrested person, in a state of shock, cannot meaningfully retain orally communicated grounds and written communication would curb any arbitrariness on part of the ED.<\/p>\n

The importance of Pankaj Bansal case<\/span>44<\/sup><\/a> is evident from the fact that the said judgment has been followed in several other cases by different Benches: Prabir Purkayastha<\/span> v. State (NCT of Delhi)<\/span>45<\/sup><\/a>, which extended similar safeguards to the Unlawful Activities (Prevention) Act, 1967<\/a>46<\/sup><\/a> (UAPA) arrests; Vihaan Kumar<\/span> v. State of Haryana<\/span>47<\/sup><\/a> which held that the grounds of arrest must be clearly and effectively communicated to the accused in a language they understand, and if the accused alleges non-compliance, the burden lies on the investigating agency to prove adherence to Article 22(1)<\/a> of the Constitution<\/a>48<\/sup><\/a>.<\/p>\n

Unfortunately, in Ram Kishor Arora case<\/span>49<\/sup><\/a>, a coordinate Bench of Justices Bela M. Trivedi and Satish Chandra Sharma of the Supreme Court deviated from Pankaj Bansal case<\/span>50<\/sup><\/a> by holding that written grounds requirement applies only to arrests made after pronouncement of judgment in Pankaj Bansal case<\/span>51<\/sup><\/a> and any oral intimation suffices and any written copy is unnecessary.<\/p>\n

This raises a pertinent question: If non-compliance with Article 22(1)52<\/sup><\/a> violates fundamental rights, how it can be only \u201cprospectively\u201d enforced? This deviation renders pre-Pankaj Bansal arrests immune from scrutiny, undermining constitutional accountability.<\/p>\n

The broader implications: Chaos in the lower judiciary<\/h2>\n

When coordinate Benches of the Supreme Court deviate from precedents, the repercussions cascade through the judicial hierarchy:<\/p>\n

(a<\/span>) Lower courts\u2019 quandary<\/span>: Trial courts face conflicting directives. For instance, should a PMLA Court follow Tarsem Lal case<\/span>53<\/sup><\/a> (summons first) or Aditya Sarda case<\/span>54<\/sup><\/a> (discretionary warrants)? Should the courts analyse the seriousness of the offence or the cooperation and non-arrest during the investigation?<\/p>\n

(b<\/span>) Litigant uncertainty<\/span>: Accused persons are subjected to inconsistent standards, eroding trust in judicial fairness.<\/p>\n

(c<\/span>) Institutional inconsistency<\/span>: While the Supreme Court often chastises subordinate courts for ignoring precedents, departures from precedent at its own level may suggest an uneven application of the same standard.<\/p>\n

Conclusion: Restoring the sanctity of precedent<\/h2>\n

The Supreme Court, as the guardian of justice, carries the vital responsibility of upholding procedural safeguards that protect individuals from arbitrary action. However, the judgments in Aditya Sarda case<\/span>55<\/sup><\/a> and Ram Kishor Arora case<\/span>56<\/sup><\/a> reflects a concerning shift where progressive rulings of the Supreme Court are undermined by the Supreme Court itself.<\/p>\n

The time has come to confront an urgent question: Will the Supreme Court institutionalise mechanisms under Article 145(1)57<\/sup><\/a> to decisively resolve the issue of conflicting judgments between its Benches or the law will remain a prisoner of inconsistency? Without swift referrals to larger Benches, conflicting rulings will continue to breed chaos, leaving subordinate courts adrift in a sea of judicial ambiguity.<\/p>\n

Certainty of the law is the foundation of justice.58<\/sup><\/a> If rulings of the Supreme Court oscillate unpredictably, can its legitimacy endure? When the scales of justice sway with the winds of contradiction, who bears the cost of this erosion? The Court must answer, not with rhetoric, but with action: Will it restore the sanctity of precedent, or let the edifice of justice crumble under the weight of its own contradictions?<\/p>\n<\/div>\n

\n

*Advocate, Supreme Court of India. Author can be reached at: advocate.arpitgoel@gmail.com.<\/span><\/strong><\/p>\n

1.<\/a> Constitution of India, Art. 141.<\/a><\/p>\n

2.<\/a> 2025 SCC OnLine SC 764.<\/a><\/p>\n

3.<\/a> (2024) 7 SCC 599.<\/a><\/p>\n

4.<\/a> Constitution of India, Art. 141.<\/a><\/p>\n

5.<\/a> (2004) 11 SCC 26.<\/a><\/p>\n

6.<\/a> 2025 SCC OnLine SC 764.<\/a><\/p>\n

7.<\/a> Companies Act, 2013, S. 212(6).<\/a><\/p>\n

8.<\/a> Companies Act, 2013<\/a>.<\/p>\n

9.<\/a> (2024) 7 SCC 61.<\/a><\/p>\n

10.<\/a> Criminal Procedure Code, 1973, S. 204.<\/a><\/p>\n

11.<\/a> (2024) 7 SCC 61.<\/a><\/p>\n

12.<\/a> Prevention of Money-Laundering Act, 2002<\/a>.<\/p>\n

13.<\/a> (2024) 7 SCC 61.<\/a><\/p>\n

14.<\/a> Prevention of Money-Laundering Act, 2002, S. 50.<\/a><\/p>\n

15.<\/a> Constitution of India, Art. 21.<\/a><\/p>\n

16.<\/a> (2024) 7 SCC 61.<\/a><\/p>\n

17.<\/a> (2022) 10 SCC 51.<\/a><\/p>\n

18.<\/a> (2007) 12 SCC 1.<\/a><\/p>\n

19.<\/a> (2024) 7 SCC 61.<\/a><\/p>\n

20.<\/a> 2025 SCC OnLine SC 764.<\/a><\/p>\n

21.<\/a> (2024) 7 SCC 61.<\/a><\/p>\n

22.<\/a> Constitution of India, Art. 141.<\/a><\/p>\n

23.<\/a> (2024) 7 SCC 61.<\/a><\/p>\n

24.<\/a> 2025 SCC OnLine SC 764.<\/a><\/p>\n

25.<\/a> (2024) 7 SCC 61.<\/a><\/p>\n

26.<\/a> Criminal Procedure Code, 1973, S. 82.<\/a><\/p>\n

27.<\/a> 2024 SCC OnLine MP 2711<\/a>.<\/p>\n

28.<\/a> 2025 SCC OnLine SC 764.<\/a><\/p>\n

29.<\/a> Aditya Sarda<\/span> v. SFIO<\/span>, 2023 SCC OnLine P&H 7252.<\/a><\/p>\n

30.<\/a> (2022) 10 SCC 51.<\/a><\/p>\n

31.<\/a> Aditya Sarda<\/span> v. SFIO<\/span>, 2023 SCC OnLine P&H 7252.<\/a><\/p>\n

32.<\/a> (2024) 7 SCC 61.<\/a><\/p>\n

33.<\/a> Companies Act, 2013, S. 212(6).<\/a><\/p>\n

34.<\/a> 2025 SCC OnLine SC 764.<\/a><\/p>\n

35.<\/a> (2024) 7 SCC 61.<\/a><\/p>\n

36.<\/a> 2025 SCC OnLine SC 764.<\/a><\/p>\n

37.<\/a> (2022) 10 SCC 51.<\/a><\/p>\n

38.<\/a> (2024) 7 SCC 61.<\/a><\/p>\n

39.<\/a> 2025 SCC OnLine SC 764.<\/a><\/p>\n

40.<\/a> (2024) 7 SCC 576.<\/a><\/p>\n

41.<\/a> Constitution of India, Art. 22(1).<\/a><\/p>\n

42.<\/a> Prevention of Money-Laundering Act, 2002, S. 19.<\/a><\/p>\n

43.<\/a> (2024) 7 SCC 576.<\/a><\/p>\n

44.<\/a> (2024) 7 SCC 576.<\/a><\/p>\n

45.<\/a> (2024) 8 SCC 254.<\/a><\/p>\n

46.<\/a> Unlawful Activities (Prevention) Act, 1967.<\/a><\/p>\n

47.<\/a> 2025 SCC OnLine SC 269.<\/a><\/p>\n

48.<\/a> Constitution of India, Art. 22(1).<\/a><\/p>\n

49.<\/a> (2024) 7 SCC 599.<\/a><\/p>\n

50.<\/a> (2024) 7 SCC 576.<\/a><\/p>\n

51.<\/a> (2024) 7 SCC 576.<\/a><\/p>\n

52.<\/a> Constitution of India, Art. 22(1).<\/a><\/p>\n

53.<\/a> (2024) 7 SCC 61.<\/a><\/p>\n

54.<\/a> 2025 SCC OnLine SC 764.<\/a><\/p>\n

55.<\/a> 2025 SCC OnLine SC 764.<\/a><\/p>\n

56.<\/a> (2024) 7 SCC 599.<\/a><\/p>\n

57.<\/a> Constitution of India, Art. 145(1).<\/a><\/p>\n

58.<\/a> Bengal Immunity Co. Ltd.<\/span> v. State of Bihar<\/span>, 1955 SCC OnLine SC 2.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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