Before Considering A Person's Police Statement In Bail Plea, Courts Must Examine If He Is Witness Or Accused Or Likely To Be Accused: Supreme Court

The Court declined the grant of anticipatory bail to P. Krishna Mohan Reddy and K. Dhananjaya Reddy in a case involving alleged misappropriation within the Andhra Pradesh State Beverages Corporation Limited (APSBCL), holding that political vendetta or bias alone is not sufficient grounds for granting anticipatory bail if there are other prima facie materials on record.

A Bench of Justice JB Pardiwala and Justice R Mahadevan held, “Before the court looks into the police statement of any person under Section 161 of the Cr.P.C for the purpose of anticipatory or regular bail, the court must first ascertain whether such person is actually a witness or an accused person, or likely to be an accused person in respect of the offence(s) alleged. This is because, there may be situations where a person while giving his statement under Section 161 of the Cr.P.C may not be an accused, but later arrayed as one. In such a scenario the courts must be mindful of the fact that because the investigation is still ongoing, a person who was originally a witness may happen to be later arrayed as an accused person.”

Senior Advocates Vikas Singh, S Niranjan Reddy, S. Nagamuthu and Siddhartha Dave appeared for the Petitioners, while Senior Advocates Mukul Rohatgi, Siddharth Aggarwal and Sidharth Luthra represented the Respondents.

Brief Facts

The Prosecution alleged the suppression of established popular brands, unfair discrimination in OFS allocation, and preferential allocation to certain new brands in violation of existing norms, leading to their near disappearance from the market and giving new brands undue competitive advantage. It was further alleged that the procurement system was shifted to a manual process from a previous automated system, allowing for manipulation. The prosecution claimed the distilleries involved used methods like transferring funds to gold traders, procuring GST invoices, and remitting cash after deductions.

Investigation had revealed suspicious transactions amounting to approximately Rs. 300-400 crores involving entities such as Leela Agro, S.P.Y. Agro, Tilak Nagar Industries Limited, Arham Bullion, and non-existent entities. The specific allegations against the Petitioners were their responsibility for discontinuing popular brands and promoting favoured ones, and collecting approximately Rs. 3200 Crores in kickbacks for a liquor syndicate.

Court’s Reasoning

The Supreme Court noted that the Andhra Pradesh High Court had denied anticipatory bail to the Petitioners, finding that more than a prima facie case had been made out against them.

“ If the court was to blindly place reliance on statement of such a person merely because he is not named in the first information report, without first seeing whether such person is likely to be arrayed as an accused or not, it would lead to an absurd situation where the statement of such a person may be relied upon up until such person is arrayed as an accused. We also caution the courts, where it emerges from the material on record, that such a person is likely to be arrayed as an accused, the courts should refrain from expressing any such opinion so that the investigation is not prejudiced in any manner,” the Court remarked.

“Where the police statement of the accused is an exculpatory statement i.e., it is neither a confession nor an admission, the statement being one under Section 161, would immediately attract the bar under Section 162 of the Cr.PC., and the same may be used only for the very limited purpose provided in the Proviso for the purpose of contradiction or reexamination of such accused person alone,” the Bench held.

“Even if such exculpatory statement of one accused, implicates another co-accused, the same cannot be taken into consideration against such co-accused, as there can be no credibility attached to an exculpatory statement of an accused implicating another co-accused, more particularly because it is neither required to be given on oath, nor in the presence of the co-accused, the same cannot be tested by crossexamination and the exculpatory nature of such statement militates against the foundational principle that permits taking into consideration a statement of one accused person against another co-accused,” the Bench clarified.

“Where the police statement of an accused is in the form of an admission, such inculpatory statement even if it implicates another co-accused cannot be taken into consideration against such co-accused in terms of Section(s) 17 read with 21 of the Evidence Act, as doing so would militate against the general principle, that an admission may be given as evidence against the maker alone. The exceptions to the aforesaid general principle carved out under the Evidence Act, do not permit the usage of such admission against a co-accused in any scenario whatsoever,” the Court further stated.

Consequently, the Court held, “A confessional statement of one accused implicating another coaccused may be taken into consideration by the court against such coaccused in terms of Section 30 of the Evidence Act, only at the stage of trial, where (1) the confession itself was relevant and admissible in terms of the Evidence Act; (2) was duly proved against the maker; (3) such confessional statement incriminates the maker along with the coaccused and; (4) both the accused persons in question are in a joint trial for the same offence.”

Accordingly, the Supreme Court denied anticipatory bail to the Petitioners.

Cause Title: P Krishna Mohan Reddy v. The State Of Andhra Pradesh (Neutral Citation: 2025 INSC 725)

Appearance:

Petitioners: Senior Advocates Vikas Singh, S Niranjan Reddy, S. Nagamuthu and Siddhartha Dave; AOR Mahfooz Ahsan Nazki; Advocates Akhila Palem Rami Reddy, Sahil Raveen, Palak Arora, Meeran Maqbool and Vivek Rajan D.b.

Respondents: Senior Advocates Mukul Rohatgi, Siddharth Aggarwal and Sidharth Luthra; AOR Guntur Pramod Kumar; Advocates Prerna Singh, Udai Dedhiya, Dhruv Yadav, Rajni Gupta, Suhail Ahmed and Vishwajeet Singh

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