Prima facie case exists. Co-accused absconded. The Supreme Court still granted bail.

Two years in jail. A supplementary charge sheet delayed. The Supreme Court asked: what's the point of keeping him?

Sandeep Gururaj was an employee of a corporate group whose offshore dealings—exposed in the Paradise Papers—had landed him in the crosshairs of a criminal investigation. He was arrested, charged with criminal breach of trust involving corporate funds, and had spent over two years in custody. The trial court had not granted him bail. The High Court of Karnataka at Bengaluru had rejected his petition on 25 September 2020. By the time his appeal reached the Supreme Court, the investigation was complete, the supplementary charge sheet had been filed, his assets in India were attached, and his passport was with the complainant company. The only thing still pending was his freedom.

The stakes were simple: another year or more in jail before trial, or release on conditions that would keep him in the country to face the proceedings. The Supreme Court chose the latter.

What the Paradise Papers had to do with it

The case began with a corporate scandal. The Paradise Papers—a leak of offshore financial documents—had revealed that the corporate group Gururaj was associated with had used offshore entities to mobilise resources. The State alleged that this amounted to criminal breach of trust. Gururaj was arrested and remained in custody. The investigation dragged on. A supplementary charge sheet that was due in March 2020 was delayed significantly. By the time the matter reached the Supreme Court, the supplementary charge sheet had finally been filed, but the delay had already cost Gururaj months behind bars.

The prosecution's case was not weak. A prima facie case existed. One of the co-accused had absconded. The learned Counsel for the State argued that Gururaj was a flight risk—if released, he might not return to face trial. The Solicitor General, appearing for the State, requested three more months to file the supplementary charge sheet when the matter was heard on 18 December 2020. The Court noted the request but did not grant it. Instead, it heard the bail application on its merits.

The triple test the Court applied

The Supreme Court, in a Bench comprising Justice Sanjay Kishan Kaul (author), Justice Dinesh Maheshwari, and Justice Hrishikesh Roy, applied what practitioners call the triple test for bail: prima facie case, flight risk, and tampering with evidence. The Court acknowledged that a prima facie case existed. It also noted that one co-accused had absconded—a fact that ordinarily weighs against bail. But the Court refused to treat that as a blanket disqualification.

"The co-accused absconding cannot be a reason to indefinitely keep the appellant in custody," the Bench observed. That single sentence—obiter, but significant—cut through the prosecution's primary objection. The Court was not willing to impute one accused's flight risk to another.

Why the absence of public money mattered

The Court then turned to the nature of the funds involved. The alleged misappropriation concerned corporate money, not public funds. That distinction, the Bench held, was a relevant factor in assessing bail applications. "No public money is involved," the Court noted. This was not a case where the State's treasury had been looted. It was a private corporate dispute that had been criminalised. The absence of public money weighed heavily in favour of granting bail.

The Court also considered that Gururaj's assets in India were attached. His passport was with the complainant company. These were not theoretical safeguards—they were concrete measures that reduced the risk of flight. The Court concluded that the triple test, on balance, favoured release.

The witness rule the Supreme Court applied

The Court did not lay down a new legal principle. Instead, it applied an existing one with unusual clarity: where the investigation is complete, the supplementary charge sheet has been filed, no public money is involved, assets are attached, and the passport is deposited, bail should be granted with appropriate conditions to ensure attendance at trial. This is not a radical proposition. But it is one that trial courts and High Courts often ignore when faced with a prima facie case and an absconding co-accused.

The Supreme Court's message was clear: prolonged custody is not a default position. The fact that the investigation is over and the charge sheet is filed means the State no longer needs the accused in custody to complete its probe. The only remaining concern is ensuring the accused appears for trial. That concern can be addressed through conditions—not indefinite incarceration.

THE PLAY: When arguing bail after a completed investigation, lead with the fact that the charge sheet is filed, the assets are attached, and the passport is deposited. Then address the flight risk—not by denying it, but by showing that the conditions you propose are sufficient to neutralise it.

What the operative order actually said

The Supreme Court allowed the appeal. It granted bail to Sandeep Gururaj on terms and conditions to be fixed by the trial court. The Court directed that the passport remain deposited and that the conditions ensure Gururaj stays in India to face trial. The order was simple, clean, and left the mechanics to the trial court. "The appeal is allowed in the aforesaid terms leaving parties to bear their own costs," the Bench concluded.

The judgment was delivered on 18 January 2021. It took the Court less than eight paragraphs to undo two years of custody.

Why this matters in practice

For advocates, this judgment is a reminder that the triple test is not a rigid checklist. A prima facie case does not automatically mean bail should be denied. An absconding co-accused does not automatically mean the present accused is a flight risk. The Court's willingness to distinguish between public and private money is also significant—it suggests that corporate fraud cases, however serious, may be treated differently from cases involving the State's funds.

For CFOs and founders, the takeaway is more practical. If you or your employees are caught in a corporate investigation, the fact that the money is private—not public—is a relevant argument for bail. So is the fact that your assets are in India and your passport is surrendered. The Supreme Court has now made it clear that these factors, taken together, can outweigh even a strong prima facie case.

For startup founders, the lesson is about risk management. The Paradise Papers leak shows how offshore structures can become a criminal liability. If your company uses offshore entities, ensure that the funds are properly accounted for and that the management is prepared for scrutiny. A two-year custody is not a hypothetical risk—it happened to Sandeep Gururaj.

The bottom line

If the investigation is complete, the charge sheet is filed, no public money is involved, your assets are attached, and your passport is deposited, the Supreme Court will grant you bail—even if a prima facie case exists and a co-accused has absconded.