Section 362 Cr.P.C. Does Not Bar Modification of Bail Conditions: High Court’s Inherent Power Under Section 482 to Revoke Onerous Deposit Conditions

1. Introduction

The decision in Baldev Raj Arora v. Cbi/ Acb Lko. (Allahabad High Court, Lucknow Bench; decided on 02.07.2026 by Hon’ble Subhash Vidyarthi, J.) addresses a recurring procedural and constitutional question: can a High Court later modify/relax a condition imposed by itself while granting bail, or is such modification barred by Section 362 Cr.P.C.?

The applicant, Baldev Raj Arora, sought modification of a bail condition imposed in 2013 requiring him to deposit Rs. 64,00,000/- as a fixed deposit (FDR) in favour of the Airports Authority of India, with the bail order operative only upon such deposit. The opposite party was CBI/ACB, Lucknow, which opposed modification on the ground of the statutory bar under Section 362 Cr.P.C. and the High Court being functus officio after deciding the bail application.

The factual backdrop was significant: the underlying CBI case concerned alleged inflated/forged bills causing a loss of Rs. 25,74,065/-. The applicant was later charge-sheeted, but ultimately faced charge under Section 420 IPC only, having been discharged of other offences. Separately, due to developments regarding prosecution sanction of co-accused public servants, the trial court had closed proceedings and consigned the record, with no meaningful prospect of conclusion of trial in the near future.

Key Issues

  1. Maintainability: Whether Section 362 Cr.P.C. bars alteration of a bail condition imposed by the High Court, and whether Section 482 can be invoked for such modification.
  2. Nature of a bail order: Whether a bail order is a “judgment” or “final order disposing of a case” within the meaning of Section 362.
  3. Merits: Whether a pre-trial deposit condition (Rs. 64 lakhs FDR) is impermissibly onerous and unjust, especially when trial is not proceeding.

2. Summary of the Judgment

The High Court:

  • Rejected CBI’s preliminary objection that modification is barred by Section 362 Cr.P.C.
  • Held that an order granting bail is interlocutory and is not a “judgment” or “final order disposing of a case” for Section 362 purposes.
  • Declared the coordinate bench decision in Aparna Purohit Vs. State of U.P., Application under Section 482 No. 6022 of 2022 to be per incuriam (non-binding) for not considering statutory provisions and binding Supreme Court authority on the interlocutory nature of bail orders.
  • Revoked the bail condition requiring deposit of Rs. 64,00,000/- in FDR in favour of Airports Authority of India.
  • Directed release of the deposited amount along with accrued interest to the applicant within 30 days.

3. Analysis

3.1 Precedents Cited (and their role)

(A) On Section 362 Cr.P.C. and the “interlocutory” nature of bail orders

  • Amar Nath v. State of Haryana: (1977) 4 SCC 137
    The High Court relied on the Supreme Court’s explanation of “interlocutory order” and noted that “passing orders for bail” are classic interlocutory steps “in aid of the pending proceeding.” This supported the conclusion that bail orders do not fall within “judgment” or “final order disposing of a case” in Section 362.
  • V.C Shukla v. State Through C.B.I .: 1980 Supp SCC 92 and Usmanbhai Dawoodbhai Memon v. State of Gujarat: (1988) 2 SCC 271
    These were used for the test of finality (whether an order finally disposes of parties’ rights) and, crucially, for the explicit proposition in Usmanbhai that “grant or refusal of a bail application is essentially an interlocutory order,” with no finality as bail can be renewed/varied.
  • Ramadhar Sahu Vs. The State of Madhya Pradesh Criminal Appeal No. 3223 of 2023 arising from SLP (Crl.) No. 11130/2023
    This decision was central to rebutting the “Section 362 bar” argument: the Supreme Court recognized that bail orders, and their conditions, may be reconsidered/varied upon alteration of circumstances, and Section 362 does not apply in such a scenario.

(B) Conflicting coordinate-bench positions within the High Court

  • Aparna Purohit Vs. State of U.P., Application under Section 482 No. 6022 of 2022
    This was cited by CBI to argue that after final disposal of bail, the bench becomes functus officio and modification is barred by Section 362. The present judgment rejects that approach, holding it per incuriam because it did not consider: (i) the Cr.P.C. definition of “judgment” (Section 353) and the “final orders” referenced in Chapter XXVII, and (ii) binding Supreme Court rulings treating bail orders as interlocutory.
  • Vinod Kumar Sharma Vs. C.B.I.: 2023:AHC:228832 = 2023 (12) ADJ 743 and Vivek Yadav and another Vs. State, Crl. Misc. Anticipatory Bail Application No.1224 of 2023
    These were treated as consistent with the permissible use of inherent powers to relax/modify bail conditions. The Court declined to label them per incuriam merely because they did not follow Aparna Purohit, since Aparna Purohit itself was found per incuriam.

(C) On impermissibility of “deposit/recovery” conditions while granting bail

  • Sumit Mehta v. State (Nct Of Delhi) .): (2013) 15 SCC 570
    This authority was used to hold that requiring a large fixed deposit as a condition precedent for bail may be “onerous and unreasonable,” especially when truth of allegations is untested and trial is pending. The High Court treated the Rs. 64 lakhs deposit condition as falling within this disapproved category.
  • Dilip Singh v. State of M.P.: (2021) 2 SCC 779
    The Court used this to reinforce that criminal proceedings are not a mechanism for realization of disputed dues, and that a bail court should not act as a “recovery agent.”
  • Gajanan Dattatray Gore v. State of Maharashtra: 2025 SCC OnLine SC 1571
    This was treated as a strong contemporary directive: courts “henceforth” should not grant regular/anticipatory bail based on undertakings to deposit money. The High Court read the Supreme Court’s admonition as condemning precisely the practice exemplified by the 2013 condition.

(D) On inherent powers, change of circumstances, and constitutional footing

  • Simrikhia v. Dolley Mukherjee: (1990) 2 SCC 437
    Relied on to distinguish impermissible “review” from permissible exercise of inherent power where there is changed circumstance. The High Court used this to justify intervention given the later collapse/stalling of trial proceedings and allied developments.
  • Prabhu Chawla v. State of Rajasthan: (2016) 16 SCC 30
    Quoted to reiterate that Section 482 contains a non obstante clause and that the limitation is self-restraint, especially where “abuse of process” or “extraordinary situation” exists.
  • Asian Resurfacing of Road Agency (P) Ltd. v. CBI: (2018) 16 SCC 299
    Used to emphasize that inherent power of a Constitutional court of record is not merely statutory; it inheres in the High Court under Article 215, and also connects with the duty to protect liberty.
  • Powers, Privileges and Immunities of State Legislatures, In re, Special Reference No. 1 of 1964 [AIR 1965 SC 745]
    Cited (via Asian Resurfacing) for the principle that a superior court of record can determine questions about its own jurisdiction.
  • M.V. Elisabeth v. Harwan Investment and Trading (P) Ltd.: 1993 Supp (2) SCC 433 (and reference to Naresh Shridhar Mirajkar v. State of Maharashtra [(1966) 3 SCR 744 : AIR 1967 SC 1])
    Invoked to support the broader proposition that High Courts possess inherent and plenary powers unless expressly or impliedly barred.

3.2 Legal Reasoning

(i) Why Section 362 Cr.P.C. was held inapplicable

The Court’s interpretive route was textual and structural:

  • Section 362 bars alteration/review only of a “judgment” or “final order disposing of a case.”
  • The Court referred to Section 353 Cr.P.C. (judgment in trial) and noted that the Cr.P.C. “final orders” in that cluster (Sections 356–360) are of a different character; bail orders are not listed/treated as such final orders.
  • On binding Supreme Court authority, the Court treated bail orders as interlocutory—hence outside Section 362’s prohibition.

This reasoning rejects the “functus officio” objection in the bail-condition context by holding that the statutory bar is simply not triggered.

(ii) Section 482 Cr.P.C. as the vehicle for modification

The Court held that Section 482 “saves” inherent power to secure the ends of justice and prevent abuse of process. It went further, locating inherent power in the High Court’s constitutional status as a court of record (Article 215), describing Section 482 as a statutory manifestation of a broader constitutional capacity to do justice.

Importantly, the Court drew a line between:

  • Impermissible review on the same material (barred), and
  • Permissible variation in light of changed circumstances and continuing injustice (per Simrikhia and Ramadhar Sahu).

(iii) Why the Rs. 64 lakh FDR condition was revoked on merits

  • The condition was viewed as unreasonably onerous, akin to the disapproved condition in Sumit Mehta v. State (Nct Of Delhi) .).
  • The Court treated such conditions as effectively converting bail jurisdiction into a recovery mechanism, contrary to Dilip Singh v. State of M.P..
  • The Court noted supervening events: quashing of prosecution sanction/cognizance in respect of co-accused public servants, the trial court’s order closing proceedings and consigning the record, and the applicant’s advanced age (77 years), making continued deprivation of his funds for an indefinite period a failure of justice.
  • The Supreme Court’s directions in Gajanan Dattatray Gore v. State of Maharashtra were treated as a strong policy and normative signal that the practice of attaching monetary-deposit undertakings/conditions to bail must stop.

3.3 Impact

(A) Procedural impact: a clarified path to modify bail conditions

The judgment sets a clear rule for future cases within the jurisdiction: Section 362 Cr.P.C. does not bar modification of bail conditions because bail orders are interlocutory. Consequently, applications under Section 482 Cr.P.C. can be maintainable to relax/modify bail conditions, particularly where changed circumstances or continuing injustice is demonstrated.

(B) Substantive impact: discouraging “deposit-as-bail” conditions

By applying Sumit Mehta, Dilip Singh, and especially Gajanan Dattatray Gore, the decision strengthens a rights-oriented approach: bail conditions must be reasonable and not operate as pre-trial punishment or indirect restitution.

(C) Institutional impact: resolving coordinate-bench conflict via per incuriam

The Court’s declaration that Aparna Purohit Vs. State of U.P., Application under Section 482 No. 6022 of 2022 is per incuriam is practically significant: it provides a doctrinal basis for benches to prefer the “bail-modification permissible” line without being constrained by that coordinate decision.

4. Complex Concepts Simplified

  • Section 362 Cr.P.C.: A bar on courts changing a signed “judgment” or “final order” (except clerical/arithmetic corrections). The key is whether the earlier order is of that kind.
  • Interlocutory order: An interim/temporary order during proceedings (not finally deciding guilt/innocence or finally disposing rights). The Court held bail orders fall in this category.
  • Functus officio: The idea that once a court has finally decided a matter, it has no further authority over it. The judgment limits this argument by holding Section 362 is not attracted to bail orders, and inherent power remains to prevent injustice.
  • Inherent power (Section 482): The High Court’s residual power to pass orders to give effect to the Code, prevent abuse of process, or secure the ends of justice—described here as rooted in the High Court’s constitutional position under Article 215.
  • Per incuriam: A decision rendered in ignorance of binding law/statutory provision; such a decision is treated as non-binding precedent.
  • Prosecution sanction: Legal permission required to prosecute certain public servants; if invalid, proceedings can collapse or stall.
  • Onerous bail condition: A condition so burdensome that it effectively defeats bail or imposes pre-trial penalty (e.g., large deposits unrelated to ensuring appearance/non-tampering).

5. Conclusion

Baldev Raj Arora v. Cbi/ Acb Lko. establishes and reinforces two connected propositions:

  1. Doctrinal rule: A bail order is interlocutory; therefore Section 362 Cr.P.C. (bar on altering “judgment/final order”) does not prevent the High Court from modifying bail conditions, including through Section 482 Cr.P.C., especially upon changed circumstances.
  2. Normative restraint on bail conditions: Monetary deposit conditions—particularly those resembling recovery or restitution without trial— are disfavoured as unreasonable/onerous and inconsistent with bail jurisprudence, a view strengthened by Gajanan Dattatray Gore v. State of Maharashtra.

The judgment’s immediate significance lies in its practical relief—revocation of the Rs. 64 lakh FDR condition and release of money with interest. Its broader significance is in clarifying that High Courts retain the capacity, and indeed the duty, to undo continuing injustice caused by onerous bail conditions, without being incorrectly restrained by Section 362.