Conduct‑Centric Bail Scrutiny and “Deemed Court Custody” on Appearance: Supreme Court’s Framework in M/s Netsity Systems Pvt. Ltd. v. State (NCT of Delhi), 2025 INSC 1181

Introduction

This Supreme Court judgment arises from twin criminal appeals filed by M/s Netsity Systems Pvt. Ltd., the complainant in Complaint Case No. 4142/2017, challenging a common High Court order which had refused to interfere with the grant of regular bail to two accused (a husband–wife duo) by the Additional Chief Metropolitan Magistrate (ACMM), Karkardooma. The prosecution alleges that the accused received Rs. 1.90 crores from the complainant on the promise to transfer land which was already mortgaged and later sold to a third party. After enjoying almost four years of interim protection in anticipatory bail proceedings—during which they undertook before the High Court to repay the complainant and participated in mediation—their anticipatory bail was ultimately rejected on 01.02.2023 with scathing observations about their conduct.

Despite this backdrop, the ACMM granted regular bail on 10.11.2023 principally because the charge-sheet had been filed and the Investigating Officer (IO) had opined that no further custodial interrogation was required. The Sessions Judge (16.08.2024) and then the High Court (18.11.2024) declined to interfere, treating the matter as a conventional cancellation-of-bail question. Netsity appealed to the Supreme Court, urging that the lower courts ignored decisive factors: the accused’s undertakings and conduct before the High Court, their non-disclosure of anticipatory bail rejection when seeking regular bail, and their antecedents including other similar cases.

At its core, the case confronts two systemic issues: whether filing of a charge-sheet and an IO’s stance on custodial interrogation can, by themselves, justify bail; and how courts must handle appeals against bail orders where the accused’s prior conduct—especially undertakings to superior courts—casts a long shadow. The Supreme Court’s decision re-centers the evaluation of bail on the totality of facts and the accused’s conduct, and clarifies critical procedural and administrative points that will influence bail jurisprudence and trial court practice.

Summary of the Judgment

• The Supreme Court quashed the ACMM’s bail order dated 10.11.2023, the Sessions Judge’s affirming order dated 16.08.2024, and the High Court’s impugned order dated 18.11.2024.
• Key reasons:
  • The ACMM granted bail on a “mechanical” premise that filing of the charge-sheet and the IO’s non-insistence on custody sufficed, while glossing over the accused’s conduct and undertakings before the High Court in the anticipatory bail round.
  • The ACMM failed to engage with the charge-sheet material despite acknowledging its relevance.
  • The Sessions Judge erred by evaluating post-bail conduct and by upholding the ACMM’s order without testing whether the order, on its own bearings, met the settled parameters (perversity/illegality/ignoring relevant factors).
  • The High Court wrongly treated the case as a routine cancellation of bail, overlooking the exceptional factual matrix and the accused’s prior conduct noted in its own earlier anticipatory bail rejection (01.02.2023).
• Doctrinal clarifications:
  • Bail decisions are intensely fact-specific; filing of a charge-sheet or the IO’s view on custody are not, per se, grounds to grant bail.
  • Principles enunciated for bail apply equally to anticipatory bail; the ACMM’s understanding that Sections 437 and 438 CrPC are decided on wholly different grounds was “ex-facie not totally correct.”
  • In an appeal against grant of bail, post-bail conduct is generally irrelevant; interference is justified for perversity, illegality, inconsistency with law, or ignoring relevant factors including gravity and impact.
  • “Deemed court custody” upon appearance: once the accused appear before court on their bail applications, they are in the court’s custody unless a specific interim/regular release order (or bond under Section 88 CrPC) is passed; allowing them to leave without such an order is irregular.
  • Bench/roster administration: only the Chief Justice has the prerogative to constitute benches; roster change is not a sound reason to refuse placing a matter before a prior judge. However, consistency across bail applications from the same FIR must be balanced with roster realities.
• Directions:
  • The accused must surrender before the ACMM within two weeks.
  • Judicial training: the ACMM (10.11.2023 order) and the Sessions Judge (16.08.2024 order) are directed to undergo at least seven days of special judicial training at the Delhi Judicial Academy, focusing on weighing superior court decisions and appropriate bail adjudication.
  • Police accountability: the Commissioner of Police, Delhi, must personally inquire into the conduct of the IOs and take appropriate action.
  • The ACMM is to conduct the trial expeditiously.
  • Request to modify observations in light of Satender Kumar Antil (2022) 10 SCC 51 was declined: the present judgment rests on its distinct factual and legal footing.

Detailed Analysis

1) Precedents Cited and Their Influence

• High Court’s anticipatory bail order (01.02.2023) rejecting bail: The Supreme Court relied on the High Court’s own earlier observations that the accused had effectively “taken the court and complainant for a ride” by giving undertakings to repay during years of interim protection and then resiling. This prior conduct was a central factor that lower courts ignored when granting and upholding regular bail.
• Sanjay Chandra v. CBI, (2012) 1 SCC 40: While underscoring that bail is not punitive and the charge-sheet was filed, the Court stressed that grant/denial of bail is governed by case-specific facts. The ACMM’s approach—reducing the analysis to charge-sheet filing and absence of custodial need—contradicted the nuanced fact-centric standard affirmed in Sanjay Chandra.
• Rahul Gupta v. State of Rajasthan, (2023) 7 SCC 781: Held that, post charge-sheet, the court must consider investigation material to assess bail. The Supreme Court found that neither the ACMM nor the Sessions Judge meaningfully engaged with the charge-sheet, despite recognizing its relevance.
• Appeals against grant of bail vs cancellation:
  • Ashok Dhankad v. State of NCT of Delhi, 2025 SCC OnLine SC 1690: Distills principles for appellate interference with bail orders—focus on perversity, illegality, inconsistency with law, or ignoring relevant factors; avoid adjudicating merits; and do not rely on post-bail conduct when hearing an appeal against grant.
  • State of Karnataka v. Sri Darshan, 2025 SCC OnLine SC 1702: Reiterates that delay in furnishing grounds of arrest, filing of charge-sheet, or long witness lists are not independent justifications for bail; courts should not appraise evidence or deliver merits findings at the bail stage.
• Principles common to bail and anticipatory bail:
  • Satender Kumar Antil v. CBI, 2023 SCC OnLine SC 452 (three-judge bench): What the Court has said about bail applies equally to anticipatory bail; “anticipatory bail after all is one of the species of a bail.” The ACMM’s conclusion that Sections 437 and 438 CrPC rest on different grounds was therefore untenable to the extent of suggesting a rigid dichotomy.
  • State of Haryana v. Dharamraj, (2023) 17 SCC 510: Anticipatory bail—like bail—is discretionary and fact-sensitive; earlier case law (including Dolat Ram and X v. State Of Telangana) shows cancellation of anticipatory bail where warranted.
• Other recent case law guiding interference with bail orders: AJWAR v. WASEEM, (2024) 10 SCC 768; Manik Madhukar Sarve v. Vitthal Damuji Meher, (2024) 10 SCC 753; Shabeen Ahmad v. State of U.P., (2025) 4 SCC 172; State of Rajasthan v. Indraj Singh, 2025 SCC OnLine SC 518; Victim ‘X’ v. State of Bihar, 2025 SCC OnLine SC 1490; AJWAR v. WASEEM, 2025 SCC OnLine SC 1742; State of A.P. v. N. Sanjay, 2025 SCC OnLine SC 1747. These decisions collectively reinforce the court’s power—and duty—to set aside bail orders that are perverse, illegal, or ignore material factors such as gravity, impact, antecedents, and accused conduct.
• Regular bail after anticipatory bail rejection:
  • Court on its Own Motion v. State, 2018 SCC OnLine Del 12306 (DB): While rejection of anticipatory bail is not, by itself, determinative of regular bail, the factors underlying such rejection that remain relevant post charge-sheet should inform the Section 437 analysis. The Supreme Court held the ACMM and Sessions Judge failed this test by not grappling with conduct and investigation material.
  • Siddharth v. State of U.P., (2022) 1 SCC 676: Cited for context as having noted the Delhi DB view; reinforces caution against mechanical approaches.
• Roster and bench assignment: In a subsequent order (07.02.2025) in W.P.(Crl.) 55/2025, the Supreme Court clarified that while consistency is desirable (placing bail applications arising from the same FIR before one judge), roster change realities mean such directions cannot be universal. Crucially, only the Chief Justice can constitute benches; referring a matter based on how a judge is currently sitting (e.g., in a division bench) is inappropriate. The High Court’s refusal to place the case before the earlier single judge because his roster had changed was thus “misplaced.”

2) The Court’s Legal Reasoning

• Conduct matters—especially vis-à-vis undertakings to superior courts: The accused obtained long protection by holding out an undertaking to pay and participating in mediation, then resiled after charge-sheet and sought anticipatory bail on the ground that custody was not required. The High Court had already censured this conduct. The ACMM could not wipe the slate clean and grant regular bail by focusing only on the charge-sheet filing and the IO’s stance; it had to assess the totality of circumstances, including this conduct, antecedents, and the material collected.
• No “automatic” bail on charge-sheet filing or IO’s custodial view: Echoing Sri Darshan and Sanjay Chandra, the Court reaffirmed that filing of a charge-sheet or the IO saying “no custodial interrogation needed” does not automatically warrant bail. The bail court must still weigh the gravity, role attribution, antecedents, likelihood of absconding or tampering, and crucially, the investigation material in the charge-sheet.
• Anticipatory bail and regular bail share core principles: By drawing on Satender Kumar Antil (2023 SCC OnLine SC 452), the Court corrected the ACMM’s premise that Sections 437 and 438 operate on distinct planes. While procedural posture differs, the principles guiding judicial discretion—especially the centrality of facts, conduct, and material—apply across both contexts.
• Appellate interference vs cancellation: Applying Ashok Dhankad, the Supreme Court emphasized that an appeal against grant of bail is not a cancellation application and should be tested for perversity, illegality, inconsistency with law, or failure to consider relevant factors. The Sessions Judge’s reliance on the accused not violating bail conditions post-grant inverted the proper inquiry; what mattered was whether the original grant was defensible when made.
• Charge-sheet material must be meaningfully assessed: Despite noting that the “role of both the accused persons … has been clearly delineated in the charge-sheet,” the ACMM did not identify or evaluate any concrete aspects of that material before granting bail, undermining the order’s legality under Rahul Gupta.
• “Deemed court custody” and Section 88 CrPC: Once the accused appeared before the ACMM to seek bail, they stood in the court’s custody unless specifically released—either through interim/regular bail or by taking a bond under Section 88. The record showed neither, yet the accused were permitted to depart until bail was eventually granted on 10.11.2023. The Supreme Court flagged this as a procedural irregularity to be avoided.
• Roster and transfer: The High Court’s refusal to send the matter to the earlier single judge because his roster had changed and he was sitting in a Division Bench was criticized. The power to constitute benches rests with the Chief Justice; any reference must be processed through the Chief Justice, and consistency in bail rulings from the same FIR should be pursued within roster constraints.

3) Impact and Prospective Influence

• For trial courts:
  • Filing of a charge-sheet and the IO’s view on custody are not, by themselves, determinative; courts must engage with the charge-sheet material and the accused’s conduct—especially undertakings to superior courts—before granting bail.
  • Record clear, reasoned findings showing application of mind to gravity, role, antecedents, risk factors, and investigation material; avoid “mechanical” orders.
  • If the accused appear for bail, pass a clear interim or final order of release, or take recourse to Section 88; do not permit exit without a formal order.
• For appellate courts:
  • When hearing appeals against grant of bail, test the order for perversity/illegality/ignoring of relevant factors; refrain from evaluating post-bail conduct or conducting merits analysis.
  • Where trial courts fail to examine charge-sheet material or accused conduct, appellate intervention is justified even absent “classic” cancellation grounds.
• For police and prosecution:
  • IO recommendations are not dispositive; they must be responsible, consistent, and defensible. The Court’s directive for a personal inquiry by the Commissioner of Police signals heightened accountability.
  • Prosecution should proactively place antecedents and overlapping cases before the bail court; the Supreme Court noted the “conceded factum” of other similar pending cases.
• For court administration:
  • The unusual direction for mandatory judicial training underscores the Court’s expectation that trial and sessions courts will internalize pro-liberty principles without overlooking controlling facts, superior court orders, and charge-sheet material.
  • Roster and referral practices must respect the Chief Justice’s prerogative; consistency aims should be balanced with roster realities, in line with the Court’s clarificatory guidance.
• Substantive criminal law and economic offences:
  • In complex economic offences with repeat patterns, “gaming” the system by using mediation and undertakings to secure long interim protection and then disavowing responsibility will count sharply against bail at later stages.
  • Victims of economic fraud gain reassurance that courts will not allow undertakings to be used as a shield to delay accountability and then claim bail on technicalities.

Complex Concepts Simplified

• Regular bail (Section 437 CrPC): Granted after arrest or appearance before a Magistrate; court considers gravity, role, risk of absconding/tampering, antecedents, and investigation material in the charge-sheet.
• Anticipatory bail (Section 438 CrPC): Pre-arrest protection against arrest in anticipation of being accused; though procedural posture differs, the Supreme Court emphasizes that core bail principles apply to both.
• Charge-sheet: The final police report (Section 173 CrPC) listing evidence and witnesses. Its contents must be meaningfully weighed before granting bail.
• Custodial interrogation: Police questioning while the accused is in custody. Even if not needed, it does not automatically entitle the accused to bail; the court still assesses overall factors.
• Undertaking to court: A solemn promise to the court (e.g., to repay money). Misusing undertakings to gain protection and then reneging will weigh heavily against the accused in bail decisions.
• Interim protection: Temporary protection from arrest during pendency of anticipatory bail; not to be leveraged indefinitely to the complainant’s detriment.
• Appeal against grant of bail vs cancellation of bail: An appeal challenges the legality/perversity of the grant at the time it was made; cancellation focuses on supervening circumstances (e.g., violation of conditions). Post-bail conduct is generally irrelevant in an appeal against grant.
• Section 88 CrPC bond: Allows a court to take a bond from a person present in court whose presence is required; used to regularize presence/release. If no bond or interim/regular bail order is passed, allowing the accused to leave is irregular.
• “Deemed court custody”: Once the accused submit to the court’s jurisdiction by appearing on a bail application, they are considered in the court’s custody unless formally released by an order or bond.
• Chief Justice’s bench-making power: Only the Chief Justice of a High Court allocates rosters and constitutes benches; individual judges should not predicate referrals on how another judge is presently sitting (single/division bench).

Practical Checklists Emerging from the Judgment

For Trial/Session Courts Deciding Bail

• Have you:
  • Identified the accused’s role and assessed investigation material in the charge-sheet?
  • Considered accused conduct—especially undertakings to superior courts and any pattern of similar cases?
  • Applied standard bail factors: gravity, impact on victims, antecedents, risk of absconding/tampering?
  • Avoided treating the filing of the charge-sheet or the IO’s no-custody stance as decisive?
  • Recorded clear reasons reflecting application of mind?
  • On appearance, issued a clear interim/regular release order or taken a bond under Section 88 before permitting the accused to leave?

For Appellate Courts Reviewing Bail Grants

• Focus on:
  • Perversity, illegality, inconsistency with law, or failure to consider relevant factors including gravity and impact.
  • Refrain from merits evaluation or factoring post-bail conduct in appeals against grant.
  • Where trial court reasoning is “mechanical,” intervention is warranted; remand is optional—quashal may be appropriate in exceptional matrices.

Conclusion

M/s Netsity Systems Pvt. Ltd. v. State (NCT of Delhi), 2025 INSC 1181, reorients bail adjudication back to fundamentals: a rigorous, conduct-sensitive, material-based scrutiny tailored to the case’s specific facts. The Supreme Court condemns “mechanical” grants of bail premised on the filing of a charge-sheet or an IO’s custodial stance, particularly where the accused have previously secured interim protection through undertakings they do not honor. It clarifies that anticipatory and regular bail share core principles; that appellate scrutiny of bail grants targets perversity and ignored factors rather than post-bail conduct; and that procedural propriety—such as not allowing an accused to leave court without a formal release order or bond—is indispensable.

Equally significant are the systemic nudges: mandatory judicial training for the concerned officers, a personal inquiry by the Commissioner of Police into IO conduct, and a reminder that bench composition lies within the Chief Justice’s domain. For future cases, the judgment supplies a practical framework: examine conduct and charge-sheet material, articulate reasons anchored in relevant factors, and uphold procedural integrity. In economic offence prosecutions and beyond, this decision will likely deter abuse of interim protections and ensure that bail orders meaningfully reflect the realities of the case, not just the formal stage of investigation.