The core issue pertains to whether the High Court or Sessions Court can grant an interim order to stay the operation of an order granting bail until the disposal of an application for cancellation of bail under Section 439(2) of the CrPC. The corresponding provision in the BNSS is Section 483(3).

Factual Background:

• The Central Bureau of Investigation (CBI) registered a crime on 1st December 2020, against two companies and two individuals for offenses including conspiracy, cheating, forgery, and corruption.
• The Enforcement Directorate (ED) registered a case under the Prevention of Money Laundering Act (PMLA) on 23rd February 2021, naming eleven accused, excluding the appellant initially.
• The appellant was arrested on 20th January 2023, despite cooperating with the investigation. The first bail application was rejected on 10th March 2023. However, on 17th June 2023, the appellant was granted regular bail by the Special Court, which found the twin conditions for bail under Section 45(1)(ii) of the PMLA satisfied.
• The ED filed an application for cancellation of bail on 21st June 2023, leading to a stay on the bail order by the High Court on 23rd June 2023.

Contentions:

• The appellant's counsel argued that the interim stay was granted without considering the merits, infringing the appellant's liberty under Article 21 of the Constitution.
• The respondent's counsel contended that courts have the power to stay bail orders pending final adjudication of cancellation applications, citing precedents where such stays were granted.

Court's Consideration:

• The Court emphasized that the power to cancel bail under Section 439(2) of the CrPC includes setting aside unjustified, illegal, or perverse orders granting bail. Consequently, the power to stay an order granting bail is implied.
• However, the Court should exercise extreme caution while granting such stays, particularly on an ex parte basis, as they affect the accused's liberty under Article 21. Stays should only be granted in rare and exceptional cases with a strong prima facie case for cancellation of bail.
• The Court noted that the interim stay granted on 23rd June 2023, was done without considering the merits and without hearing the appellant, resulting in the stay continuing for nearly a year without proper adjudication.

Decision: The appeals were allowed, setting aside the High Court's interim stay orders. The Court emphasized the necessity of protecting the fundamental right to liberty and the careful exercise of judicial discretion in matters of bail cancellation and interim orders.