P. Chidambaram vs. Directorate of Enforcement

In the Supreme Court of India: 
Criminal Appellant Jurisdiction (Criminal Appeal No: 1831 of 2019) 
Appellant: P. Chidambaram 
Respondent: Directorate of Enforcement 
Decided on: 4th December 2019 
Bench: Hon’ble Justice R. Banumathi, Hon’ble Justice A. S. Bopanna, Hon’ble Justice Hrishikesh Roy

Background:

The CBI filed an FIR alleging that M/s INX Media Private Limited filled an application for approval from the Foreign Investment Promotion Board (FIPB) to issue equity and shares along with the permission to make a downstream financial investment in M/s INX News upto the extent of 26%. The Board forwarded the proposal to the Finance Minister for approval and consideration. However, the Board denied the downstream investment. 

Contrary to the proposal approved by the FIPB, M/s INX Media deliberately made a downstream investment upto 26% in INX News Pvt. Ltd and made more than Rs.305crores FDI which was against the approved FDI inflow. A complaint regarding the same was made to the Income Tax Department. From the fear of punishment M/s INX Media entered into a criminal conspiracy with Mr. Karti Chidambaram. M/s INX News Pvt. Ltd then again approached FIPB seeking approval for the downstream investment which was this time considered and approved by the then Finance Minister. It was alleged that the officials of the FIPB were under the influence or Mr. Karti Chidambaram which led them to show undue favour to M/s INX News and that Mr. Karti Chidambaram received consideration of approximately Rs.3.5crores which was raised in favour of M/s INX Group.

Under Section 3 of the Prevention of Money Laundering Act, 2002 (PLMA) another case known as the ECIR case was filed by the Directorate of Enforcement alleging the same mentioned by the CBI. 

However, Mr. P. Chidambaram the then Union Finance Minister and the father of Mr. Karti Chidambaram was not mentioned as accuse in any of the above case. 

Facts

On 23rd July, 2018 Mr. P. Chidambaram [hereinafter referred to as the “Appellant”] filed an application seeking anticipatory bail from the High Court of Delhi as he was arrested by Directorate of Enforcement [hereinafter referred to as the “Respondent”] in the ECIR case. The Court dismissing the application provided the appellant with interim protection until July 20th, 2019.

The appellant by way of special leave petition filed an appeal in the Supreme Court which was dismissed on the grounds that if anticipatory bail was granted it would hinder the investigation process. 

On 21st August 2019, the CBI arrested the appellant and he has been in custody since then as he was further arrested in the ECIR case on 16th October 2019 on the grounds that it was at his instructions that payment of Rs.3crore was made for work done for INX Group.

The appellant filed another application before the High Court on 23rd October 2019 under Section 439 of Criminal Procedural Code but was further dismissed by the High Court on the grounds that the allegations imposed on the appellant were of serious nature and thereby stated that the appellant has played an active role in the said case.

Issue:

Whether, bail should be granted to the Appellant. 

Whether, the Court on findings of merit consider the application for granting bail. 

Contentions raised:

By the Appellant side:

The Senior Counsel on behalf of the appellant contended that the order of the High Court ought to be set aside on the grounds that the allegations imposed on the appellant were of a completely unrelated case as not a single document was provided to prove that the appellant was involved in the conspiracy. 

They further contended that in the case Chidambaram vs. CBI (Crl. Appeal no: 1603 of 2019) it was stated that “at the stage of granting bail, an elaborate examination of evidence and detailed reasons touching upon the merits of the case, which may prejudice the accused, should be avoided” but, the High Court, in this case, denied bail by rendering the findings on merit. 

It was stated by the counsel that the appellant was neither a shareholder nor a director and had no relation with any of the companies. Also, the officers who approved the FDI proposal for INX Media were not arrested and those arrested in the ECIR case have been granted bail. Further, being in judicial custody for so long the appellant who is of 74 years of age, health continued to deteriorate and he was taken to doctors frequently for consultations and tests. 

By the Respondent side:

The Solicitor General for the respondent side contended that due to the high held position of the appellant it is very likely that the appellant has influenced the witness and tempered with the evidence. 

Further, the evidence provided by the Investigating Agency, shows that the emails exchanged by the other conspirators and the money invested in the Benami properties were likely carried out on the instructions of the appellant or his family members. 

He further contended, for considering bail it is likely important to take the gravity of offense into consideration as economic offenses are more serious and a bail granted during such investigation would defeat the purpose of investigation. 

Observations:

The Court observed that economic offences would be considered grave offence as the consequences of financial irregularities will befall society.  However, there is no rule in the legislature or jurisprudence making it compulsory to deny bail in case of a grave offence. Further irrespective of the nature or gravity of the offence no bail shall be granted or denied solely on the precedent of another case. The Court thereby disapproved the manner of conclusions carried out by the High Court wherein the observations were made based on the findings related to the offence.  

Observing the fact that the other accused are granted bail or are enjoying interim protection and the appellant was in judicial custody from 16th October 2019, being 74 years old and suffered from illness while being in custody for more than 45 days there was probably no chance for him to tamper with the evidence or influence the witnesses. The Court was of the view that the appellant was entitled to bail. 

Judgement

The Supreme Court granted the bail by setting aside the order of the High Court of Delhi provided the executing bail bond for a sum of Rs.2 lakhs along with two securities be provided before the learned Special Judge. 

The Court also instructed the appellant to not leave the country without specific orders and his passport to remain deposited with the CBI. Further, he shall not temper with the evidence or try to influence the witness. The appellant was instructed to not give any interview or public comment regarding the case. 

Conclusion:

Therefore, given the reasons mentioned above, the Supreme Court granted the appellant with bail by setting aside the order of the High Court.