Introduction

In Nirmal Kumar Sharma S/o Ram Swroop Sharma v. Union of India (Order dated 13-11-2025; Reportable), the Rajasthan High Court (Single Bench: Justice Anoop Kumar Dhand) confronted a recurring and increasingly consequential procedural question: can non-bailable arrest warrants (NBWs) issued after cognizance be converted into bailable warrants as a matter of right under Section 70(2) of the Code of Criminal Procedure, 1973 (CrPC), or its successor provision Section 72(2) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS)?

The petitioner faced a complaint for offences under Section 132(1)(b), (c) and (l) of the Central Goods and Services Tax Act, 2017 (CGST Act) read with Section 132(1)(i) of the Customs Act, 1962, alleging wrongful availment/passing of Input Tax Credit (ITC). After cognizance, the trial court issued NBWs to secure his appearance. The petitioner moved to convert those NBWs into bailable warrants, claiming readiness to cooperate and disputing the gravity (he asserted a tax dispute of Rs. 6 lakhs), while the prosecution alleged fake firms and fraudulent ITC to the tune of Rs. 10,65,23,833/-.

Beyond the individual facts, the High Court recognized a deeper conflict in its own precedents about the permissibility and parameters of converting NBWs, particularly in prosecutions for grave economic offences. Citing the doctrinal imperative of coordinate bench discipline and the existence of contradictory intra-High Court rulings, the Court referred the issue to a Larger Bench for authoritative resolution.

Summary of the Judgment

• The petitioner challenged the trial court’s order refusing to convert NBWs into bailable warrants under Section 70(2) CrPC.
• The Court underscored that allegations concern grave economic offences—fake/non-existent firms and alleged wrongful ITC of Rs. 10.65 crore—warranting a stricter bail approach.
• Converting NBWs into bailable warrants at this stage was characterized as seeking “anticipatory bail in the form of warrants,” which cannot be claimed as a matter of right.
• The Court noted conflicting coordinate-bench views:
  • Girdhar Gopal Bajoria v. Rajesh Kumar Sharma (2021) and Shyam Sunder Singhvi v. Union of India (2020): upheld issuance of NBWs and rejected conversion in economic offence contexts.
  • P.C. Purohit v. Union of India (2025): converted NBWs into bailable warrants under Section 72(2) BNSS.
• Invoking Supreme Court authority on coordinate bench discipline, the Court referred the following question to a Special/Larger Bench:

  Whether the arrest warrants issued against the accused committing economic offence or heinous offences like murder/rape/dowry death/dacoity etc. can be converted into bailable warrants as a matter of right of the accused by invoking the powers contained under Sections 70(2) Cr.P.C. and 72(2) BNSS as a matter of right?

• Accordingly, the matter was placed before the Hon’ble Chief Justice for constitution of an appropriate Larger Bench.

Analysis

1) Precedents cited and their influence

• Inder Mohan Goswami v. State of Uttaranchal, (2007) 12 SCC 1:

  A seminal authority on the graduated use of process—summons first, then bailable warrant, and only thereafter NBW in appropriate cases. The Court restated the balance between personal liberty and societal interest, emphasizing that NBWs should not be issued casually and must be based on proper scrutiny and application of mind. Here, the principle informs the caution expected at the cognizance stage but does not create an absolute bar on NBWs for serious offences.

• Nimmagadda Prasad v. CBI, (2013) 7 SCC 466:

  Lays down the parameters for bail—nature of accusation, evidence, severity of punishment, character of accused, possibility of securing presence, risk of tampering, and public interest. The Court relies on this to underscore that economic offences, given their deliberate design and public impact, justify a stricter approach; “no straightjacket formula.”

• Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439:

  Establishes that economic offences constitute a distinct class: they involve deep-rooted conspiracies and large-scale loss to public exchequer, and hence must be viewed seriously in bail decisions. The judgment uses this to rebuff the argument that a five-year maximum sentence or Magistrate-triable classification alone mandates leniency in process.

• Rohit Tandon v. Directorate of Enforcement, (2018) 11 SCC 46:

  Reiterates the aggravated societal harm of white-collar crimes—breach of trust, deliberate calculation—and cautions against treating them leniently merely because they are non-violent. This fortifies the Court’s rationale against mechanically softening coercive process in such cases.

• State Of Gujarat v. Mohanlal Jitamalji Porwal, (1987) 2 SCC 364:

  A classic statement that economic offences are executed with “cool calculation and deliberate design” and corrode public trust; courts must deal with them firmly. The judgment invokes this to justify the trial court’s choice of NBW given the alleged scale and design of the fraud.

• Shyam Sunder Singhvi v. Union of India (Raj HC, 24.01.2020), SLP (Crl.) No. 792/2020 dismissed on 10.02.2020:

  A coordinate bench decision upholding firm handling of economic offences and reproducing Inder Mohan Goswami’s calibrated warrant doctrine. The SLP dismissal underscores that the approach is not prima facie discordant with Supreme Court jurisprudence.

• Girdhar Gopal Bajoria v. Rajesh Kumar Sharma (Raj HC, 23.09.2021):

  In PMLA prosecutions, the coordinate bench sustained NBWs, stressing gravity, Section 45 PMLA stringency, and Supreme Court guidance on economic offences. The present Court views this as the earlier and prevailing line, and notes it was not brought to the notice of the bench in P.C. Purohit.

• P.C. Purohit v. Union of India (Raj HC, 31.01.2025):

  On similar facts, the coordinate bench converted NBWs into bailable warrants under Section 72(2) BNSS. The present Court observes that P.C. Purohit did not consider Bajoria and reaches a different conclusion—producing a conflict necessitating a reference.

• Union of India v. S.K. Kapoor, (2011) 4 SCC 589; S. Kasi v. State, 2021 (12) SCC 1; Central Board Of Dawoodi Bohra Community v. State of Maharashtra, (2005) 2 SCC 673; Sundaradas Kanyalal Bhathija v. Collector, Thane, AIR 1990 SC 261; Ayyaswami Gounder v. Munuswamy Gounder, AIR 1984 SC 1789:

  Together, these establish bench-strength discipline: a coordinate bench cannot take a contrary view to an earlier bench of equal strength; if a different view is contemplated, the matter must be referred to a larger bench. This doctrinal backdrop is the fulcrum for the present reference.

2) The Court’s legal reasoning

• NBW-to-bailable conversion is not a right and resembles “anticipatory bail by warrant”:

  The Court expressly characterizes the plea to convert NBWs into bailable warrants after cognizance, without surrender or bail, as a functional substitute for anticipatory bail. Such a device cannot be claimed as of right under Section 70(2) CrPC or Section 72(2) BNSS, which confer discretionary power on the court to cancel or recall process, not to guarantee a pre-arrest shield.

• Gravity of economic offences and individualized bail/process assessment:

  Invoking a long line of Supreme Court authorities, the Court reiterates that economic offences warrant a distinct, stricter approach. The mere fact that the offence is Magistrate-triable or carries a five-year maximum does not compel leniency at the process stage. Each case demands assessment of the nature of accusation, evidence, risk of evasion or tampering, and public interest.

• Caution from Inder Mohan Goswami is not an absolute bar:

  While the Court endorses the graduated approach to process (summons → bailable warrant → NBW), it clarifies that in grave cases—where the accused may evade, evidence may be endangered, or societal interest is acutely engaged—NBWs may be justified even at the cognizance stage, provided reasons are recorded.

• Coordinate bench conflict mandates a Larger Bench reference:

  Observing a material conflict between Bajoria/Shyam Sunder Singhvi and P.C. Purohit, and guided by Supreme Court precedents on judicial discipline, the Court declines to choose between them and instead refers the legal question for authoritative settlement by a Special/Larger Bench. This protects doctrinal coherence and avoids per incuriam outcomes.

3) Likely impact and forward-looking implications

• State-wide procedural clarity on warrants:

  The forthcoming Larger Bench ruling will align magistrate-level practice in Rajasthan on when and how NBWs may be issued at cognizance and whether/when conversion to bailable warrants is permissible. It will likely articulate criteria to prevent both casual NBW issuance and mechanical conversion.

• Recalibrating “bail-by-warrant” strategies:

  Defense strategies relying on Section 70(2) CrPC / Section 72(2) BNSS to neutralize NBWs without surrender or a formal pre-arrest bail application may face systemic curtailment. Litigants may need to resort to regular or anticipatory bail, with attendant scrutiny under the gravity-of-offence line of cases.

• Economic offences and GST/PMLA/Customs prosecutions:

  The reference expressly spans economic offences and even heinous IPC/BNS offences. For GST, PMLA, and Customs cases—where allegations often include fake firms, bogus invoicing, and large-scale ITC fraud—the Larger Bench is likely to affirm a firmer process posture, while demanding reasoned orders to protect Article 21 rights.

• BNSS transition and harmonization:

  As courts apply Section 72(2) BNSS in place of Section 70(2) CrPC, the Larger Bench guidance will help harmonize the new code’s recall/cancellation powers with bail jurisprudence, ensuring the recall of process is not misused to bypass statutory bail thresholds.

• Operational status quo:

  Pending the Larger Bench decision, NBWs issued by trial courts in serious economic offence cases are unlikely to be converted as a matter of course; any conversion will likely require a compelling, reasoned justification on case-specific facts.

Complex concepts simplified

• What is “cognizance”?

  The stage when a magistrate or court formally takes notice of an offence based on a complaint or charge-sheet and decides there is sufficient ground to proceed against the accused. After cognizance, the court issues process (summons/warrants) to secure the accused’s presence.

• Summons, bailable warrant, non-bailable warrant (NBW)

  Summons is a notice to appear voluntarily. A bailable warrant directs arrest but allows release on bail at the police station. An NBW directs arrest without an immediate right to bail; the accused must be produced before the court for orders. Courts generally escalate from summons to bailable warrant to NBW, unless case gravity or evasion risks justify an NBW earlier.

• Section 70(2) CrPC and Section 72(2) BNSS

  These provisions empower a court to recall/cancel warrants it has issued. They are discretionary case-management tools, not a source of a substantive right to obtain pre-arrest protection or to replace the bail process.

• “Bail-by-warrant”

  A colloquial description of attempts to secure de facto pre-arrest protection by asking the court to convert an NBW into a bailable warrant, rather than applying for anticipatory bail. The Court cautions against treating this as a right; it risks undermining the structured bail regime.

• Economic offences/white-collar crimes

  Financially motivated crimes such as tax fraud, money laundering, or corporate scams, often involving deliberate planning and complex structures. The Supreme Court has consistently treated them as a distinct class warranting stricter scrutiny in bail and process decisions due to their systemic harm.

• Coordinate bench discipline and Larger Bench reference

  A judge of a High Court (single or division bench) is bound by an earlier decision of a bench of equal strength. If a different view is considered, judicial discipline requires referring the issue to a bench of larger strength. This avoids inconsistent intra-court law and safeguards certainty.

• Per incuriam

  A decision rendered in ignorance of binding authority. While the Court notes that P.C. Purohit did not consider the earlier Bajoria ruling, it exercises restraint and opts for a Larger Bench reference instead of unilaterally declaring per incuriam, respecting collegial comity.

• Input Tax Credit (ITC) fraud

  Alleged practices involving fake invoices, non-existent suppliers, or sham transactions to unjustly avail or pass on ITC under GST, thereby depleting the public exchequer. Courts treat such allegations as grave economic offences given the scale of potential loss and sophistication of schemes.

Conclusion

This judgment is less about the petitioner’s immediate relief and more about restoring coherence in a sensitive procedural domain that implicates personal liberty, judicial economy, and the integrity of prosecutions for grave crimes. The Court:

• Rejects the notion that NBW-to-bailable conversion can be asserted as a matter of right under Section 70(2) CrPC/Section 72(2) BNSS, particularly in serious economic offence cases.
• Reaffirms that economic offences occupy a distinct, stringent space in bail and process jurisprudence, anchored in Supreme Court authority.
• Recognizes conflicting intra-High Court precedent and—faithful to judicial discipline—refers the controlling legal question to a Larger Bench.

The forthcoming Larger Bench ruling will likely become the touchstone in Rajasthan for calibrating the use of NBWs at the cognizance stage and for delineating the narrow circumstances, if any, where conversion to bailable warrants is legally and prudentially justified. Until then, trial courts and litigants should expect rigorous, reasoned scrutiny rooted in gravity, evasion risk, evidence integrity, and the larger public interest, rather than any presumption favoring conversion or a per se bar against NBWs.

Case capsule

• Court: High Court of Judicature for Rajasthan, Jaipur Bench
• Bench: Justice Anoop Kumar Dhand
• Case: S.B. Criminal Misc. (Petition) No. 1947/2025
• Parties: Nirmal Kumar Sharma v. Union of India (through Superintendent, TEB, CGST & Central Excise, Jaipur)
• Date of Judgment: 13-11-2025 (Reportable)
• Holding: Conflicting coordinate-bench views on conversion of NBWs to bailable warrants post-cognizance in economic/heinous offences necessitate reference to a Special/Larger Bench; NBW conversion is not a matter of right and amounts to seeking anticipatory bail by another name.
• Referred Question: Whether NBWs in economic/heinous offences can be converted into bailable warrants as a matter of right under Section 70(2) CrPC / Section 72(2) BNSS?