Mahipal Vs Rajesh Kumar @ Polia & Anr-05/12/2019

SUPREME COURT OF INDIA JUDGMENTS

Cancellation of Bail: The provision for an accused to be released on bail touches upon the liberty of an individual. It is for this reason that this Court does not ordinarily interfere with an order of the High Court granting bail. However, where the discretion of the High Court to grant bail has been exercised without the due application of mind or in contravention of the directions of this Court, such an order granting bail is liable to be set aside.

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

Criminal Appeal No. 1843 of 2019

@SLP (Crl.) No. 6339 of 2019

Mahipal …Appellant

Versus

Rajesh Kumar @ Polia & Anr. …Respondents

WITH

Criminal Appeal No. 1844 of 2019
@SLP (Crl.) No. 6340 of 2019

WITH

Criminal Appeal No. 1845 of 2019
@SLP (Crl.) No. 6341 of 2019

WITH

Criminal Appeal No. 1846 of 2019

@SLP (Crl.) No. 7052 of 2019

AND WITH
Criminal Appeal No. 1847 of 2019

@SLP (Crl.) No. 7053 of 2019

Act: Sections 147, 148, 149, 302 and 397 of the Indian Penal Code

JUDGMENT

Dr Dhananjaya Y Chandrachud, J

1 Leave granted.

2 This batch of appeals arises from a judgment of a learned Single Judge of the High Court of Rajasthan at its Jaipur Bench dated 10 May 2019. Allowing the bail application filed under Section 439 of the Code of Criminal Procedure 1973 1, the High Court enlarged the first respondent on bail subject to certain conditions therein. The original complainant is in appeal before this Court.

3 By similar orders, the learned Single Judge granted bail to the other four accused – Anil Kumar, Ajay Kumar, Vikas Kumar and Vijay Kumar. The appeals filed by the appellant against those orders have been tagged with the present appeal. Since the facts in all these matters and the questions involved are similar, they have been heard together and are being disposed of by this common judgment. For the sake of convenience, the facts in SLP (Crl.) No. 6339 of 2019 are discussed.

4 A First Information Report2 was lodged by the appellant on 3 December 2018 stating that his now deceased nephew – Akhilesh had visited town on leave for a month for his marriage. It was stated that at about 7.00 pm on 2 December


1 CrPC

2 FIR No. 347/2018


2018, the deceased and his friend Aashish left the matrimonial home to run an errand. At about 7.30 pm, the deceased and Aashish stopped their bike on the road which caused a quarrel with two accused persons – Vijay and Anil, who then hurled abuses at the deceased. At that time, five to six boys armed with dandas assaulted the deceased who was rescued by near-by villagers. It was stated that the deceased left the scene on his motorcycle only to be confronted a short distance thereafter by the accused – Anil, Ajay, Rajesh (the first respondent), Vikas and Vijay. It was alleged that the accused used rods to beat the deceased with an intention to kill him. It was alleged that after beating the deceased, the accused fled from the scene of the incident. The deceased was rushed to Jhunjhunu R & R Hospital at Chirawa. However, owing to the serious nature of the injuries, he was referred to Fortis Hospital at Jaipur where he was declared dead.

5 The post-mortem report was recorded on 3 December 2018. Twenty-seven ante-mortem injuries on the body of the deceased were noted. The first respondent was arrested on 3 December 2018. The statements under Section 161 of the CrPC of the appellant and Aashish were recorded. A charge-sheet was filed against the five accused on 10 March 2019 under Sections 147, 148, 149, 302 and 397 of the Indian Penal Code 1908 3 Cognizance was taken by the Judicial Magistrate, Pilani on 27 March 2019. As the accused were charged under Section 302, the case was committed to the Additional Sessions Judge, Jhunjhunu for trial.


3 Penal Code


6 The bail application filed by the first respondent before the Additional Sessions Judge was rejected on 10 April, 2019. Thereafter, the first respondent filed a bail application before the High Court of Rajasthan, which was allowed. The appellant has filed the present appeal before this Court assailing the order of the High Court enlarging the first respondent on bail. Notice was issued by this Court on 12 July 2019.

7 Assailing the judgment of the High Court, the learned counsel appearing on behalf of the appellant submits:

(i) A prima facie involvement of the accused has emerged upon investigation, in a case involving a gruesome murder. There was no reason for the High Court to exercise its power to grant bail;

(ii) The High Court has not passed a reasoned order justifying the grant of bail to the accused;

(iii) The High Court failed to appreciate the statement of the sole injured eye-witness Aashish who was present at the spot of the incident that the accused were responsible for the death of the deceased;

(iv) The post-mortem report observes twenty-seven ante-mortem injuries and opines that the injuries causing death were inflicted within six hours of death; and

(v) The phone of the deceased was recovered from one of the accused Anil, while the bike involved in the incident was recovered from the first respondent.

8 The second respondent – the State of Rajasthan has filed a counter-affidavit assailing the order of the High Court on grounds similar to those urged by the appellant. It was also stated that another FIR4 had been registered against the friends of the accused alleging an intention to kill the friend of the deceased –
Ashish.

9 On the other hand, the learned counsel appearing on behalf of the first respondent contended that:

(i) On the date of the incident, there was an altercation between the deceased and the first respondent, in which the deceased was the aggressor. Thereafter, the deceased fell off his bike and suffered injuries which caused his eventual death;

(ii) The first respondent has been in custody for five months on the basis of a false allegation in the FIR;

(iii) Even on a reading of the allegations in the FIR and the charge sheet, no prime facie case has been made out against the accused justifying the setting aside of bail; and

(iv) The registration of an FIR against the friends of the accused has no bearing on the present case.

A common counter affidavit was filed by all the five accused before this Court reaffirming the above contentions.

10 These rival submissions fall for our consideration.


4 FIR No. 52/2019


11 Essentially, this Court is required to analyse whether there was a valid exercise of the power conferred by Section 439 of the CrPC to grant bail. The power to grant bail under Section 439 is of a wide amplitude. But it is well settled that though the grant of bail involves the exercise of the discretionary power of the court, it has to be exercised in a judicious manner and not as a matter of course. In Ram Govind Upadhyay v Sudarshan Singh5, Justice Umesh Banerjee, speaking for a two judge Bench of this Court, laid down the factors that must guide the exercise of the power to grant bail in the following terms:

“3. Grant of bail though being a discretionary order — but, however, calls for exercise of such a discretion in a judicious manner and not as a matter of course. Order for bail bereft of any cogent reason cannot be sustained. Needless to record, however, that the grant of bail is dependent upon the contextual facts of the matter being dealt with by the court and facts, however, do always vary from case to case…The nature of the offence is one of the basic considerations for the grant of bail — more heinous is the crime, the greater is the chance of rejection of the bail, though, however, dependent on the factual matrix of the matter.

4. Apart from the above, certain other which may be attributed to be relevant considerations may also be noticed at this juncture, though however, the same are only illustrative and not exhaustive, neither there can be any. The considerations being:

(a) While granting bail the court has to keep in mind not only the nature of the accusations, but the severity of the punishment, if the accusation entails a conviction and the nature of evidence in support of the accusations.

(b) Reasonable apprehensions of the witnesses being tampered with or the apprehension of there being a threat for the complainant should also weigh with the court in the matter of grant of bail.

(c) While it is not expected to have the entire evidence establishing the guilt of the accused beyond reasonable doubt but there ought always to be a prima facie satisfaction of the court in support of the charge.

(d) Frivolity in prosecution should always be considered and it is only the element of genuineness that shall have to be


5 (2002) 3 SCC 598


considered in the matter of grant of bail, and in the event of there being some doubt as to the genuineness of the prosecution, in the normal course of events, the accused is entitled to an order of bail.

12 The determination of whether a case is fit for the grant of bail involves the balancing of numerous factors, among which the nature of the offence, the severity of the punishment and a prima facie view of the involvement of the accused are important. No straight jacket formula exists for courts to assess an application for the grant or rejection of bail. At the stage of assessing whether a case is fit for the grant of bail, the court is not required to enter into a detailed analysis of the evidence on record to establish beyond reasonable doubt the commission of the crime by the accused. That is a matter for trial. However, the Court is required to examine whether there is a prima facie or reasonable ground to believe that the accused had committed the offence and on a balance of the considerations involved, the continued custody of the accused sub-serves the purpose of the criminal justice system. Where bail has been granted by a lower court, an appellate court must be slow to interfere and ought to be guided by the principles set out for the exercise of the power to set aside bail.

13 The principles that guide this Court in assessing the correctness of an order passed by the High Court granting bail were succinctly laid down by this Court in Prasanta Kumar Sarkar v Ashis Chatterjee6. In that case, the accused was facing trial for an offence punishable under Section 302 of the Penal Code. Several bail applications filed by the accused were dismissed by the Additional


6 (2010) 14 SCC 496


Chief Judicial Magistrate. The High Court in turn allowed the bail application filed by the accused. Setting aside the order of the High Court, Justice DK Jain, speaking for a two judge Bench of this Court held:

―9. … It is trite that this Court does not, normally, interfere with an order passed by the High Court granting or rejecting bail to the accused. However, it is equally incumbent upon the High Court to exercise its discretion judiciously, cautiously and strictly in compliance with the basic principles laid down in a plethora of decisions of this Court on the point. It is well settled that, among other circumstances, the factors to be borne in mind while considering an application for bail are:

(i) whether there is any prima facie or reasonable ground to believe that the accused had committed the offence;

(ii) nature and gravity of the accusation;

(iii) severity of the punishment in the event of conviction;

(iv) danger of the accused absconding or fleeing, if released on bail;

(v) character, behaviour, means, position and standing of the accused;

(vi) likelihood of the offence being repeated;

(vii) reasonable apprehension of the witnesses being influenced; and

(viii) danger, of course, of justice being thwarted by grant of bail.

12. It is manifest that if the High Court does not advert to these relevant considerations and mechanically grants bail, the said order would suffer from the vice of non-application of mind, rendering it to be illegal…‖

14 The provision for an accused to be released on bail touches upon the liberty of an individual. It is for this reason that this Court does not ordinarily interfere with an order of the High Court granting bail. However, where the discretion of the High Court to grant bail has been exercised without the due application of mind or in contravention of the directions of this Court, such an order granting bail is liable to be set aside. The Court is required to factor, amongst other things, a prima facie view that the accused had committed the offence, the nature and gravity of the offence and the likelihood of the accused obstructing the proceedings of the trial in any manner or evading the course of justice. The provision for being released on bail draws an appropriate balance between public interest in the administration of justice and the protection of individual liberty pending adjudication of the case. However, the grant of bail is to be secured within the bounds of the law and in compliance with the conditions laid down by this Court. It is for this reason that a court must balance numerous factors that guide the exercise of the discretionary power to grant bail on a case by case basis. Inherent in this determination is whether, on an analysis of the record, it appears that there is a prima facie or reasonable cause to believe that the accused had committed the crime. It is not relevant at this stage for the court to examine in detail the evidence on record to come to a conclusive finding.

The decision of this Court in Prasanta has been consistently followed by this Court in Ash Mohammad v Shiv Raj Singh,7 Ranjit Singh v State of Madhya Pradesh8, Neeru Yadav v State of U.P.9, Virupakshappa Gouda v State of Karnataka10, and State of Orissa v Mahimananda Mishra11.

15 The considerations that guide the power of an appellate court in assessing the correctness of an order granting bail stand on a different footing from an


7 (2012) 9 SCC 446

8 (2013) 16 SCC 797

9 (2014) 16 SCC 508

10 (2017) 5 SCC 406

11 (2018) 10 SCC 516


assessment of an application for the cancellation of bail. The correctness of an order granting bail is tested on the anvil of whether there was an improper or arbitrary exercise of the discretion in the grant of bail. The test is whether the order granting bail is perverse, illegal or unjustified. On the other hand, an application for cancellation of bail is generally examined on the anvil of the existence of supervening circumstances or violations of the conditions of bail by a person to whom bail has been granted. In Neeru Yadav v State of Uttar Pradesh,12 the accused was granted bail by the High Court. In an appeal against the order of the High Court, a two judge Bench of this Court surveyed the precedent on the principles that guide the grant of bail. Justice Dipak Misra (as the learned Chief Justice then was) held:

…It is well settled in law that cancellation of bail after it is granted because the accused has misconducted himself or of some supervening circumstances warranting such cancellation have occurred is in a different compartment altogether than an order granting bail which is unjustified, illegal and perverse. If in a case, the relevant factors which should have been taken into consideration while dealing with the application for bail and have not been taken note of bail or it is founded on irrelevant considerations, indisputably the superior court can set aside the order of such a grant of bail. Such a case belongs to a different category and is in a separate realm. While dealing with a case of second nature, the Court does not dwell upon the violation of conditions by the accused or the supervening circumstances that have happened subsequently. It, on the contrary, delves into the justifiability and the soundness of the order passed by the Court…‖

16 Where a court considering an application for bail fails to consider relevant factors, an appellate court may justifiably set aside the order granting bail. An appellate court is thus required to consider whether the order granting bail suffers


12 (2015) 15 SCC 422


from a non-application of mind or is not borne out from a prima facie view of the evidence on record. It is thus necessary for this Court to assess whether, on the basis of the evidentiary record, there existed a prima facie or reasonable ground to believe that the accused had committed the crime, also taking into account the seriousness of the crime and the severity of the punishment. The order of the High Court in the present case, in so far as it is relevant reads:

―2. Counsel for the petitioner submits that the petitioner has been falsely implicated in this matter. Counsel further submits that, the deceased was driving his motorcycle, which got slipped on a sharp turn, due to which he received injuries on various parts of body including ante-mortem head injuries on account of which he died. Counsel further submits that the challan has already been presented in the court and conclusion of trial may take long time.

3. Learned Public Prosecutor and counsel for the complainant have opposed the bail application.

4. Considering the contentions put-forth by the counsel for the petitioner and taking into account the facts and circumstances of the case and without expressing opinion on the merits of the case, this court deems it just and proper to enlarge the petitioner on bail.‖

17 In assessing the rival submissions, it is necessary to advert to the findings of the post-mortem report dated 3 December 2018.

On the basis of the injuries, the post-mortem report concluded:

―All above mentioned injuries are ante mortem in nature.

Duration within about 6 hrs prior to death.

We the members of medical board are of the opinion that cause of death is COMA brought about as a result of ante mortem head injuries mentioned in this PMR, sufficient to cause death in ordinary course of nature. However final opinion will be given after receiving FSL reports of above sent samples.

A total of twenty-seven ante-mortem injuries were recorded of which seven were found to be inflicted on the head. This led the members of the medical board to conclude that the cause of death was coma brought about by the result of the head injuries. The learned counsel for the first respondent contended that the deceased fell from the bike and sustained injuries which led to his death. However, it is not for the court to assess in detail the evidence on record to come to a conclusive finding on a chain of causation. A court assessing a plea of bail is required to find a prima facie view of the possibility of the commission of the crime by the accused and not conclude that the alleged crime was in fact committed by the accused beyond reasonable doubt.

18 The statement of Aashish Kumar who was allegedly present with the deceased at the time of the incident was recorded under Section 161. The statement details the alleged incident and names all five accused, attributing to them the common intention to kill the deceased. It was stated that the accused thereafter drove away with the bike of the deceased.

19 The following extract from the charge-sheet dated 10 March 2019 is relevant:

―…Thereafter, in compliance to the Order No. Complaint/2018/4899-4900 dated 28.12.18 of the Hon’ble Superintendent of Police of the District, further investigations of the case were started by the Circle Officer, Smt. Mamta Saraswat, R.P.S. Circle, Jhunjhunu City. During investigation proceedings, Circle Officer Smt. Mamta Saraswat, R.P.S. Circle Jhunjhuna City conducted investigations of all the accused persons arrested in the present case namely Vijay Kumar, Ajay Kumar alias Sheodan, Vikas Kumar, Anil Kumar alias Bhirriya and Rajesh Kumat alias Pauliya. Mobile of deceased was recovered from accused Anil Kumar alias Bhirriya according to his disclosure memo under Section

277 of the Evidence Act. Seizure memo of mobile was concluded and attached at the case file. Motorcycle used in the incident, according to the disclosure memo, was recovered from accused Rajesh Kumar alias Pauliya.

Thereafter, friends of Anil Kumar namely Ajay Kumar, Rajesh and Vikas, all the three came at the place of occurrence Garakhera Tiraha and immediately on coming there, they started giving beatings to deceased Akhilesh and Monu with lathies and thereafter, Anil Kumar and Vijay Kumar also started giving beatings to deceased Akhilesh and Monu.

…however, it has been mentioned that seven injuries have been caused at the head of the deceased.This makes clear that the accused persons caused many serious injuries on the head of the deceased at the place of occurrence Mark A at the time of occurrence on the head of the deceased, due to which, deceased after running from there went in Coma and collided with the Tank, due to which, Akhilesh has died due to the injuries sustained by him.‖

(Emphasis supplied)

20 Without expressing any finding or opinion on the merits of the case, a case has been made out for setting aside the bail granted by the High Court. The High Court has manifestly erred in not taking note of the material which has been adverted to above. The order passed by the High Court fails to notice material facts and shows a non-application of mind to the seriousness of the crime and the circumstances referred to earlier which ought to have been taken into consideration.

21 The High Court has erred in not considering material relevant to the determination of whether the accused were to be enlarged on bail. The order of

the High Court enlarging the accused on bail is erroneous and liable to be set aside.

22 There is another reason why the judgment of the learned Single Judge has fallen into error. It is a sound exercise of judicial discipline for an order granting or rejecting bail to record the reasons which have weighed with the court for the exercise of its discretionary power. In the present case, the assessment by the High Court is essentially contained in a single paragraph which reads:

―4. Considering the contentions put-forth by the counsel for the petitioner and taking into account the facts and circumstances of the case and without expressing opinion on the merits of the case, this court deems it just and proper to enlarge the petitioner on bail.

23 Merely recording ―having perused the record‖ and ―on the facts and circumstances of the case‖ does not sub-serve the purpose of a reasoned judicial order. It is a fundamental premise of open justice, to which our judicial system is committed, that factors which have weighed in the mind of the judge in the rejection or the grant of bail are recorded in the order passed. Open justice is premised on the notion that justice should not only be done, but should manifestly and undoubtedly be seen to be done. The duty of judges to give reasoned decisions lies at the heart of this commitment. Questions of the grant of bail concern both liberty of individuals undergoing criminal prosecution as well as the interests of the criminal justice system in ensuring that those who commit crimes are not afforded the opportunity to obstruct justice. Judges are duty bound to explain the basis on which they have arrived at a conclusion.

24 In Kalyan Chandra Sarkar v Rajesh Ranjan13, a two judge Bench of this Court was required to assess the correctness of a decision of a High Court enlarging the accused on bail. Justice Santosh Hegde, speaking for the Court, discussed the law on the grant of bail in non-bailable offences and held:

―11. The law in regard to grant or refusal of bail is very well settled. The court granting bail should exercise its discretion in a judicious manner and not as a matter of course. Though at the stage of granting bail a detailed examination of evidence and elaborate documentation of the merit of the case need not be undertaken, there is a need to indicate in such orders reasons for prima facie concluding why bail was being granted particularly where the accused is charged of having committed a serious offence. Any order devoid of such reasons would suffer from non-application of mind.‖

(Emphasis supplied)

25 Where an order refusing or granting bail does not furnish the reasons that inform the decision, there is a presumption of the non-application of mind which may require the intervention of this Court. Where an earlier application for bail has been rejected, there is a higher burden on the appellate court to furnish specific reasons as to why bail should be granted.

26 The perfunctory analysis by the High Court in the present case cannot be sustained. For the reasons indicated above, the appeal is allowed and the order of the High Court enlarging the first respondent on bail is set aside.

27 The connected appeals also are allowed in terms of the judgment recorded above.


13 (2004) 7 SCC 528


28 Since the accused have been released on bail during the pendency of these proceedings, we order that the bail bonds shall stand cancelled and the five accused shall be taken into custody forthwith. A copy of this judgment shall be forwarded to the Additional Sessions Judge, Chirawa District, Jhunjhunu and the police station concerned to secure compliance.

29 We clarify that the present judgment shall not be construed as the expression of any opinion on the merits of the case at the trial.

J [Dr Dhananjaya Y Chandrachud]

J [Hrishikesh Roy]

New Delhi;

December 5, 2019.

P.Chidambaram Vs Directorate of Enforcement – 4/12/2019

Bail granted-Observed: While the learned Judge was empowered to look at the materials produced in a sealed cover to satisfy his judicial conscience, the learned Judge ought not to have recorded finding based on the materials produced in a sealed cover.

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

(CRIMINAL APPEAL NO.1831/2019)

(Arising out of S.L.P.(Criminal) No.10493 of 2019 )

P. Chidambaram ….Appellant (s)

Versus

Directorate of Enforcement …. Respondent(s)

Act: Section 439 of Cr.PC

JUDGMENT

A.S. Bopanna,J.

Leave granted.

2. The instant appeal has been filed by the appellant assailing the final order dated 15.11.2019 passed by the High Court of Delhi at New Delhi in Bail Application No. 2718 of 2019 whereby the High Court declined to grant regular bail to the appellant.

3. The genesis of the case in question lies in FIR No. RC2202017-E0011 dated 15.5.2017, registered by the CBI under section 120-B r/w 420 IPC and sections 8 and 13 (2) r/w 13 (1) (d) of PC Act against some known and unknown suspects with allegations that M/s INX Media Private Limited (accused no. 1 in the FIR) sought approval of Foreign Investment Promotion Board (FIPB) for permission to issue by way of preferential allotment, certain equity and convertible, non-cumulative, redeemable preference shares for engaging in the business of creating, operating, managing and broadcasting of bouquet of television channels. The company had also sought approval to make a downstream financial investment to the extent of 26% of the issued and outstanding equity share capital of M/s INX News Private Limited (accused no. 2). The FIPB Board recommended the proposal of INX Media for consideration and approval of the Finance Minister. However, the Board did not approve the downstream investment by INX Media (P) Ltd. in INX News (P) Ltd. Further, in the press release dated 30.5.2007 issued by the FIPB Unit indicating details of proposals approved in the FIPB meeting, quantum of FDI/NRI inflow against M/s INX media was shown as Rs. 4.62 crores. Contrary to the approval of FIPB, M/s INX Media Pvt. Ltd. deliberately and in violation of conditions of approval, made a downstream investment to the extent of 26% capital of INX News and also generated more than Rs. 305 crores FDI in INX Media (P) Ltd. against the approved foreign inflow of Rs. 4.62 crores is the allegation. A complaint is stated to have been received by the investigation wing of the Income Tax department which sought clarifications from the FIPB Unit of Ministry of Finance. The FIPB Unit vide letter dated 26.5.2008, sought clarifications from M/s INX Media Limited. It was further alleged in the FIR that upon receipt of this letter, M/s INX Media in order to avoid punitive action entered into criminal conspiracy with Mr. Karti Chidambaram (accused no. 3 in the FIR who is the son of the appellant). Mr. Karti Chidambaram is alleged to have exercised his influence over the officials of FIPB unit which led to the said officials showing undue favour to M/s INX News (P) Ltd. Thereafter by deliberately concealing the investment received in INX Media (P) Ltd., M/s INX News (P) Ltd. again approached the FIPB Unit and sought permission for the downstream investment. This proposal was favourably considered by the officials of ministry of finance and approved by the then Finance Minister. It was also stated in the FIR that Mr. Karti Chidambaram, in lieu of services rendered to M/s INX Group, received consideration in the form of payments. Information disclosed that invoices for approximately Rs. 3.5 crores were got raised in favour of M/s INX Group in the name of companies in which Mr. Karti Chidambaram was having sustainable interests either directly or indirectly. The appellant herein, who was the then Union Finance Minister, was not however named in the said FIR.

4. On the basis of the aforementioned FIR, the Respondent Directorate of Enforcement registered a case ECIR/07/HIU/2017 (hereinafter referred to as ECIR case) under section 3 of Prevention of Money Laundering Act, 2002 (hereinafter PMLA), punishable under section 4 of the said Act against the accused mentioned in the FIR. The allegations in the said ECIR case were the same as those in the aforementioned FIR. The appellant was not named an accused in this case as well.

5. On 23.7.2018, apprehending his arrest by the Respondent, the appellant filed an application before the High Court of Delhi seeking grant of anticipatory bail in the aforementioned ECIR case. The High Court extended interim protection to the appellant until 20.8.2019, when the appellant’s application seeking anticipatory bail was dismissed.

6. The appellant then approached this court by filing Criminal Appeal No. 1340 of 2019 (arising out of SLP (Crl.) No. 7523 of 2019) wherein while dismissing the appeal of the appellant, the court concluded that in the instant case, grant of anticipatory bail to the appellant will hamper the investigation and that this is not a fit case for exercise of discretion to grant anticipatory bail. This court applied the following rationale for coming to the said conclusion: there are sufficient safeguards enshrined in the PMLA to ensure proper exercise of power of arrest; grant of anticipatory bail is not to be done as a matter of rule, especially in matters of economic offences which constitute a class apart. Regard must be had to the fact that grant of anticipatory bail at the stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting useful information and also materials which might have been concealed.

7. In the meanwhile, on 21.8.2019, the appellant was arrested in the CBI case (arising out of the above-mentioned FIR). Since then he has been in custody. In the ECIR case, he was arrested on 16.10.2019 on the grounds that payment of approx. Rs. 3 crores was made at the appellant’s instance to the companies controlled by his son on account of FIPB work done for INX Group. Further it was stated in the grounds of arrest that the investigation is not fruitful due to the appellant’s non-cooperation; the appellant has withheld relevant information which is within his exclusive knowledge and thus his custodial interrogation is necessary.

8. After dismissal of his application seeking anticipatory bail by this court, the appellant moved an application dated 5.9.2019 praying to surrender before the Trial Court (Court of Special Judge (PC Act), CBI) in the ECIR case. This application was rejected on 13.9.2019 in view of the submission on behalf of the respondent Directorate that it was not willing to arrest the appellant at that particular stage since it was completing investigation pertaining to some aspect of the money laundering and only on this background investigation was completed, the interrogation of the appellant would be meaningful. Thereafter, on 11.10.2019, the Respondent Directorate moved an application u/s 267 CrPC seeking issuance of production warrant against the appellant for the purpose of arrest and remand. The allegations which were levelled against the appellant in this application are that in lieu of granting FIPB approval to INX Media Pvt. Ltd., he and his son received a sum of approx. Rs. 3 crores through companies controlled by the son of the Appellant/accused Karti P. Chidambaram. Though INX media in its application did not mention the total amount of FDI inflow which they intended to bring, the appellant without ascertaining their competency, granted approval. Further the appellant became fully aware about the violations made by INX Group when the matter was highlighted by the Income Tax Department and a complaint was also received by him regarding the investment by M/s INX Media into M/s INX News without due approval. Despite this knowledge, the appellant again approved the downstream proposal of INX Group treating it as a fresh approval. Further investigation has revealed that there were at least 17 overseas bank accounts opened by the appellant and co-conspirators. In this regard, summons was issued to 11 persons and statements of some of these persons revealed that the overseas assets were acquired in the name of various shell companies on the instructions of appellant’s son. Thus, it was stated that a need arises to confront the appellant with the material gathered. This application was allowed by the Trial Court vide order dated 11.10.2019. Thereafter on 14.10.2019, the Respondent inter alia moved an application seeking permission to arrest the appellant. The Trial Court treated this application as an application for interrogation of the appellant and allowed it. Subsequently, on 16.10.2019, the appellant was arrested for the grounds stated supra. Vide order dated 17.10.2019, the Trial Court remanded the appellant to the custody of the Respondent for a period of 7 days.

9. After his arrest, on 23.10.2019, the appellant moved a regular bail application (Bail Application No. 2718 of 2019) before the High Court u/s 439 of CrPC averring that he is a law abiding citizen having deep roots in the society; he is not a flight risk and is willing to abide by all conditions as may be imposed by the court while granting bail. It was also submitted that the instant case is a documentary case and being a respectable citizen and former Union Minister, he cannot and will not tamper with the documentary record of the instant case which is currently in the safe and secure possession of the incumbent government or the Trial Court. On merits, it was stated by the Appellant that he merely accorded approval to the unanimous recommendation made by the FIPB which was chaired by the Secretary, Economic Affairs and included 5 other secretaries who were all among the senior most IAS officers (one among them was a senior IFS officer) and had a long and distinguished record of service. Anyone familiar with the working of the FIPB would know that no single officer can take a decision on any proposal. Therefore, it is preposterous to allege that any person could have influenced any official of FIPB, including all 6 senior secretaries to the Government of India. Moreover, the ECIR case is a verbatim copy of the FIR dated 15.5.2017 and allegations registered therein and thus the Special Judge erred in granting remand of the appellant in the ECIR case since the offences allegedly committed in both the cases arise out of the same occurrence and have been committed in the course of the same transaction. Further the Special Court committed an error in not accepting the surrender application of the appellant which was an application limited to surrendering before the Trial Court. The Special Court proceeded on an erroneous basis that the desire of an accused is contingent upon the desire of the investigating agency to arrest the accused and that arrest is a condition precedent for surrendering before the Court.

10. Vide the impugned order, the High Court observed that it has not even been alleged by the Respondent Enforcement Directorate in its counter affidavit that the appellant is a flight risk. Regarding tampering of evidence also the court observed that it is neither argued nor any material is available on record in this regard. Moreover, there is no chance to tamper the material on record as the same is with the investigating agencies, central government or courts. Regarding influencing of witnesses, the court noted that three witnesses have stated in their statements that the appellant and his family members have pressurised them and asked them not to appear before the Enforcement Directorate. However, since their statements have already been recorded, at this stage when the complaint is almost ready to be filed, the Court held that there is no chance to influence any witness. The High Court also took notice of the fact that co-accused have been granted bail. The Court was cognizant of the fact that the appellant has been suffering from illness but the Court opined that the Court has already issued directions to the Jail Superintendent in this regard and therefore this ground is no longer available to the appellant at this stage. The Court noted that during investigation, it has been revealed that there has been layering of proceeds of crime by use of shell companies, most of which are only on paper, and opined that there is cogent evidence collected so far that these shell companies are incorporated by persons who can be shown to be close and connected with the appellant. Next, the Court held that the material in the present case is completely distinct, different and independent from the material which was collected by the CBI in the predicate offence. Even the witnesses in the PMLA investigation are different from the investigation conducted by the CBI. The High Court concluded that prima facie, allegations are serious in nature and the appellant has played key and active role in the present case. On the basis of all these observations, the High Court dismissed the bail application.

11. It is the contention of the learned senior counsel Shri Kapil Sibal and Dr. Abhishek Manu Singhvi on behalf of the appellant before us that the High Court ought to have granted regular bail to the appellant after holding the triple test of flight risk, tampering with evidence and influencing of witnesses in favour of the appellant. The Impugned Order deserves to be set aside only on the ground that the allegations of a completely unrelated case (Rohit Tandon vs. Directorate of Enforcement (2018) 11 SCC 46) have been considered by the High Court as allegations relating to the instant case and findings on merits against the appellant have been rendered based on such unrelated allegations. Next, it has been contended by the appellant that the High Court erred in law in going into and rendering findings on merits of the case in order to deny bail to the appellant despite the settled position of law that merits of a case ought not to be gone into at the time of adjudication of a bail application. This Court in the appellant’s own case seeking regular bail in the case registered by CBI against him titled P. Chidambaram vs. CBI (Crl. Appeal No. 1603/2019) has held that “at the stage of granting bail, an elaborate examination of evidence and detailed reasons touching upon the merit of the case, which may prejudice the accused, should be avoided.” It has also been contended on behalf of the appellant that the High Court erred in accepting at face value the allegations made on merits of the case in the counter affidavit filed by the respondent and converting such allegations verbatim into findings by the Court and declining to grant bail to the appellant solely on the basis of said findings. On merits, the appellant has submitted that he is neither a shareholder nor director of any allegedly connected company nor does he have any connection with any of these companies. No material linking the appellant directly or indirectly with the alleged offence of money laundering has either been put to the appellant so far or been placed on record before the High Court. Further, the 12 officers who signed the file pertaining to the approval of the FDI proposal of INX Media were not even arrested. Only the appellant, who was the 13th signatory has been arrested and denied bail. Moreover, all the other co-accused in the instant ECIR case have also been granted bail or have not been arrested. The High Court also failed to appreciate that the appellant has already been granted regular bail by this Court in the predicate offence FIR vide its order dated 22.10.2019. The High Court erred in denying bail to the appellant on the specious ground that allegations are of a serious nature. It is the submission of the learned senior counsel for the appellant that the gravity of an offence is to be determined from the severity of the prescribed punishment. In the instant case, the alleged offence of money laundering is punishable by imprisonment for a term which shall not exceed 7 years. Thus, the offence is not ‘grave’ or ‘serious’ in terms of the judgment of this Court in Sanjay Chandra vs. CBI, (2012) 1 SCC 40. The High Court should also have considered that the appellant is a 74 year old person whose health is fragile and while being lodged in judicial custody of the Respondent Enforcement Directorate between 16.10.2019 and 30.10.2019 and thereafter being lodged in judicial custody between 30.10.2019 till date, the appellant has suffered multiple bouts of chronic and persistent pain in his abdomen, for which he was taken to AIIMS and Dr. Ram Manohar Lohia Hospital on various occasions (viz. On 23.10.2019, 26.10.2019, 28.10.2019, 30.10.2019 and 1.11.2019) for consultation, diagnosis and tests. The appellant’s health continues to deteriorate and with the onset of the cold weather, the appellant will become more vulnerable.

12. Between 05.09.2019 and 16.10.2019 though the appellant was available in custody the respondent did not choose to interrogate but remand period was sought on 17.10.2019 and 24.10.2019, while the third remand sought was rejected and accordingly the remand period expired on 30.10.2019. No witness was confronted despite seeking remand for that purpose. It is contended that the very manner in which the whole process is being conducted is only to see that the appellant remains in custody. It is contended that the liberty of the appellant cannot be denied in such manner by adopting an unfair procedure. Though much is sought to be made out as if the offence committed is grave there is absolutely no material to indicate that the appellant is involved and even otherwise it is a matter of trial wherein the charge is to be established. The gravity can only beget the length of sentence provided in law and by asserting that the offence is grave, the grant of bail cannot be thwarted. The respondent cannot contend as if the appellant should remain in custody till the trial is over.

13. Shri Tushar Mehta, learned Solicitor General while seeking to oppose the petition has made reference to the counter affidavit filed on behalf of the respondent. It is contended that though the High Court has held that there is no possibility of tampering the evidence and has not influenced any witnesses and has ultimately denied the bail, such conclusion is not justified. It is contended that the appellant having held a very high position and also due to his status is likely to influence the witnesses and one of the witness had already indicated that he hails from the same State to which the appellant belongs and is not in a position to appear for the purpose of being confronted. Hence even in that regard it should be held against the appellant. It is further contended that even otherwise despite holding the triple test in favour of the appellant the gravity of the offence can be considered as a stand-alone aspect as the gravity of the offence in a particular case is also important while considering bail. In that circumstance, the three aspects to be taken note is the manner in which the offence has taken place, gravity of the offence and also the contemporaneous documents to show that the accused either in custody or otherwise, wields influence over the witnesses. Hence, he contends that the finding of the High Court insofar as saying that the appellant has not tampered is factually incorrect. The learned Solicitor General further contends that the economic offences are graver offences which affect the society and the community suffers. The common man loses confidence in the establishment. It is contended that the Investigating Agency has collected documentary evidence such as emails exchanged between the co-conspirators on behalf of the appellant and documents to indicate investment of laundered money in benami properties whose beneficial owners can be traced to the appellant and his family members. The respondent has also recorded the statement of material witnesses who are the part of process of money laundering. It is his contention that the appellant has knowledge of all these aspects and the material will show the share holding pattern of the 16 companies. It is further contended that the learned Judge of the High Court has referred to the documents produced in a sealed cover and in that light has arrived at the conclusion to deny bail. The High Court has, however, not properly considered while recording that a complaint is ready to be filed and therefore, he would not influence the witnesses. Even if the complaint/charge sheet is filed in 60 days it is only to avoid default and the investigation which is not complete would continue. In that light it is contended that when economic offences are premeditated it would require detailed investigation to unearth material and, in such circumstances, if bail is granted it would defeat the case of the prosecution. The learned Solicitor General has also referred to the decisions which would be taken note at the appropriate stage.

14. The learned senior counsel for the appellant in reply to the submissions contended that not a single document is available to indicate that the appellant is involved in the offence. The allegation of the appellant tampering the evidence or influencing the witnesses as sought to be made out on behalf of the respondent cannot be accepted for the reason that the alleged offence is of the year 2007-08 and though the proceedings were initiated in the year 2017, the appellant was arrested only in the year 2019. In such event when the appellant has not influenced any person while he was at large, the allegation of tempering while in custody is not acceptable. The statement of the alleged witnesses is stated to have been recorded in the year 2018 and the case of the respondent that they are seeking to confront the witnesses is being put forth at this stage only to indicate as if the custody of the appellant is still required by them. When there is no document to indicate that the appellant is involved, the mere allegation against the alleged co-conspirators cannot be the basis to indicate that an economic offence has been committed by the appellant. In that light it is contended that the prayer made in the petition be accepted.

15. Though we have heard the matter elaborately and also have narrated the contention of both sides in great detail including those which were urged on the merits of the matter we are conscious of the fact that in the instant appeal the consideration is limited to the aspect of regular bail sought by the appellant under Section 439 of Cr.PC. While stating so, in order to put the matter in perspective it would be appropriate to take note of the observation made by us in the case of this very appellant vs. CBI, in Criminal Appeal No. 1603/2019 which reads as hereunder;

“The jurisdiction to grant bail has to be exercised on the basis of the well-settled principles having regard to the facts and circumstances of each case. The following factors are to be taken into consideration while considering an application for bail:- (i) the nature of accusation and the severity of the punishment in the case of conviction and the nature of materials relied upon by the prosecution; (ii) reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant or the witnesses; (iii) reasonable possibility of securing the presence of the accused at the time of trial or the likelihood of his abscondence; (iv) character behaviour and standing of the accused and the circumstances which are peculiar to the accused; (v) larger interest of the public or the State and similar other considerations (vide Prahlad Singh Bhati v. NCT, Delhi and another (2001) 4 SCC 280. There is no hard and fast rule regarding grant or refusal to grant bail. Each case has to be considered on the facts and circumstances of each case and on its own merits. The discretion of the court has to be exercised judiciously and not in an arbitrary manner.”

16. In the above background, perusal of the order dated 15.11.2019 impugned herein indicates that the learned Single Judge having taken note of the rival contentions in so far as the triple test or the tripod test to be applied while considering an application for grant of regular bail under Sec. 439 Cr.PC, has answered the same in paragraphs 50 to 53 of the order, in favour of the appellant herein. The learned Solicitor General has however sought to contend that though there is not much grievance with regard to the conclusion on ‘flight risk’, the finding on likelihood of tampering and influencing witness has not been considered in its correct perspective. The finding in that regard has not been assailed and in such event, the appellant in our opinion cannot be taken by surprise. Even otherwise as rightly observed by the learned Single Judge the evidence and material stated to have been collected is already available with the Investigating agency. Learned Solicitor General would however contend that still further materials are to be collected and letter rogatory has been issued and as such tampering cannot be ruled out. In the present situation the appellant is not in political power nor is he holding any post in the Government of the day so as to be in a position to interfere. In that view such allegation cannot be accepted on its face value. With regard to the witness having written that he is not prepared to be confronted as he is from the same state, the appellant cannot be held responsible for the same when there is no material to indicate that the appellant or anyone on his behalf had restrained or threatened the concerned witness who refused to be confronted with the appellant in custody.

17. The only other aspect therefore for consideration is as to whether the further consideration made by the learned Judge of the High Court, despite holding the triple test in appellant’s favour was justified and if consideration is permissible, whether the learned Judge was justified in his conclusion.

18. While opposing the contention put forth by the learned Senior Counsel for the appellant that the learned Judge of the High Court ought not to have travelled beyond the consideration on the triple test and holding it in favour of the appellant, the learned Solicitor General would contend that the gravity of the offence and the role played by the accused should also be a part of consideration in the matter of bail. It is contended by the learned Solicitor General that the economic offences is a class apart and the gravity is an extremely relevant factor while considering bail. In order to contend that this aspect has been judicially recognised, the decisions in the case of State of Bihar & Anr. vs. Amit Kumar, (2017)

13 SCC 751; Nimmagadda Prasad vs. CBI, (2013) 7 SCC 466; CBI vs. Ramendu Chattopadhyay, Crl Appeal.No.1711 of 2019; Seniors Fraud Investigation Office vs. Nittin Johari & Anr.; (2019) 9 SCC 165; Y.S. Jagan Mohan Reddy vs. CBI, (2013) 7 SCC 439; State of Gujarat vs. Mohanlal Jitamalji Porwal, (1987) 2 SCC 364 are relied upon. Perusal of the cited decisions would indicate that this Court has held that economic offences are also of grave nature, being a class apart which arises out of deep-rooted conspiracies and effect on the community as a whole is also to be kept in view, while consideration for bail is made.

19. On the consideration as made in the above noted cases and the enunciation in that regard having been noted, the decisions relied upon by the learned senior counsel for the appellant and the principles laid down for consideration of application for bail will require our consideration. The learned senior counsel for the appellant has relied upon the decision of the Constitution Bench of this Court in the case of Shri Gurbaksh Singh Sibbia vs. State of Punjab, (1980) 2 SCC 565 with reference to paragraph 27 which reads as hereunder:

“ It is not necessary to refer to decisions which deal with the right to ordinary bail because that right does not furnish an exact parallel to the right to anticipatory bail. It is, however, interesting that as long back as in 1924 it was held by the High Court of Calcutta in Nagendra v. King-Emperor [AIR 1924 Cal 476, 479, 480 : 25 Cri LJ 732] that the object of bail is to secure the attendance of the accused at the trial, that the proper test to be applied in the solution of the question whether bail should be granted or refused is whether it is probable that the party will appear to take his trial and that it is indisputable that bail is not to be withheld as a punishment. In two other cases which, significantly, are the ‘Meerut Conspiracy cases’ observations are to be found regarding the right to bail which deserve a special mention. In K.N. Joglekar v. Emperor [AIR 1931 All 504 : 33 Cri LJ 94] it was observed, while dealing with Section 498 which corresponds to the present Section 439 of the Code, that it conferred upon the Sessions Judge or the High Court wide powers to grant bail which were not handicapped by the restrictions in the preceding Section 497 which corresponds to the present Section 437. It was observed by the court that there was no hard and fast rule and no inflexible principle governing the exercise of the discretion conferred by Section 498 and that the only principle which was established was that the discretion should be exercised judiciously. In Emperor v. Hutchinson [AIR 1931 All 356, 358 :

32 Cri LJ 1271] it was said that it was very unwise to make an attempt to lay down any particular rules which will bind the High Court, having regard to the fact that the legislature itself left the discretion of the court unfettered. According to the High Court, the variety of cases that may arise from time to time cannot be safely classified and it is dangerous to make an attempt to classify the cases and to say that in particular classes a bail may be granted but not in other classes. It was observed that the principle to be deduced from the various sections in the Criminal Procedure Code was that grant of bail is the rule and refusal is the exception. An accused person who enjoys freedom is in a much better position to look after his case and to properly defend himself than if he were in custody. As a presumably innocent person he is therefore entitled to freedom and every opportunity look after his own case. A presumably innocent person must have his freedom to enable him to establish his innocence.”

We have taken note of the said decision since even though the consideration therein was made in the situation where an application for anticipatory bail under Section 438 was considered, the entire conspectus of the matter relating to bail has been noted by the Constitution Bench.

20. The learned senior counsel for the appellant has also placed reliance on the decision on the decision in the case of Sanjay Chandra vs. CBI, (2012) 1 SCC 40 with specific reference to paragraph 39 which reads as hereunder:

“ Coming back to the facts of the present case, both the courts have refused the request for grant of bail on two grounds: the primary ground is that the offence alleged against the accused persons is very serious involving deep-rooted planning in which, huge financial loss is caused to the State exchequer; the secondary ground is that of the possibility of the accused persons tampering with the witnesses. In the present case, the charge is that of cheating and dishonestly inducing delivery of property and forgery for the purpose of cheating using as genuine a forged document. The punishment for the offence is imprisonment for a term which may extend to seven years. It is, no doubt, true that the nature of the charge may be relevant, but at the same time, the punishment to which the party may be liable, if convicted, also bears upon the issue. Therefore, in determining whether to grant bail, both the seriousness of the charge and the severity of the punishment should be taken into consideration.”

The said case was a case of financial irregularities and in the said circumstance this Court in addition to taking note of the deep-rooted planning in causing huge financial loss, the scope of consideration relating to bail has been taken into consideration in the background of the term of sentence being seven years if convicted and in that regard it has been held that in determining the grant or otherwise of bail, the seriousness of the charge and severity of the punishment should be taken into consideration.

21. Thus from cumulative perusal of the judgments cited on either side including the one rendered by the Constitution Bench of this Court, it could be deduced that the basic jurisprudence relating to bail remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. However, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the Court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of “grave offence” and in such circumstance while considering the application for bail in such matters, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused. One of the circumstances to consider the gravity of the offence is also the term of sentence that is prescribed for the offence the accused is alleged to have committed. Such consideration with regard to the gravity of offence is a factor which is in addition to the triple test or the tripod test that would be normally applied. In that regard what is also to be kept in perspective is that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case since there is no such bar created in the relevant enactment passed by the legislature nor does the bail jurisprudence provides so. Therefore, the underlining conclusion is that irrespective of the nature and gravity of charge, the precedent of another case alone will not be the basis for either grant or refusal of bail though it may have a bearing on principle. But ultimately the consideration will have to be on case to case basis on the facts involved therein and securing the presence of the accused to stand trial.

22. In the above circumstance it would be clear that even after concluding the triple test in favour of the appellant the learned Judge of the High Court was certainly justified in adverting to the issue relating to the gravity of the offence. However, we disapprove the manner in which the conclusions are recorded in paragraphs 57 to

62 wherein the observations are reflected to be in the nature of finding relating to the alleged offence. The learned senior counsel for the appellant with specific reference to certain observations contained in the above noted paragraphs has pointed out that the very contentions to that effect as contained in paragraphs 17, 20 and 24 of the counter affidavit has been incorporated as if, it is the findings of the Court. The learned Solicitor General while seeking to controvert such contention would however contend that in addition to the counter affidavit the respondent had also furnished the documents in a sealed cover which was taken note by the learned Judge and conclusion has been reached.

23. The question as to whether the Court could look into the documents while considering an application for bail had arisen for consideration in the very case between the parties herein in Criminal Appeal No.130/2019 wherein through the judgment dated 05.09.2019 while considering the matter relating to the order dated 20. 08.2019 whereby the High Court had rejected the bail, this Court had held that it would be open for the Court to receive the materials/documents collected during the investigation and peruse the same to satisfy its conscience that the investigation is proceeding in the right lines and for the purpose of consideration of grant of bail/anticipatory bail etc. At the same time, this Court, had disapproved the manner in which the learned Judge of the High Court in the said case had verbatim quoted a note produced by the respondent. If that be the position, in the instant case, the learned Judge while adverting to the materials, ought not have recorded a finding based on the materials produced before him. While the learned Judge was empowered to look at the materials produced in a sealed cover to satisfy his judicial conscience, the learned Judge ought not to have recorded finding based on the materials produced in a sealed cover. Further while deciding the same case of the appellant in Crl. Appeal No.1340 of 2019, after holding so, this Court had consciously refrained from opening the sealed cover and perusing the documents lest some observations are made thereon after perusal of the same, which would prejudice the accused pre-trial. In that circumstance though it is held that it would be open for the Court to peruse the documents, it would be against the concept of fair trial if in every case the prosecution presents documents in sealed cover and the findings on the same are recorded as if the offence is committed and the same is treated as having a bearing for denial or grant of bail.

24. Having said so, in present circumstance we were not very much inclined to open the sealed cover although the materials in sealed cover was received from the respondent. However, since the learned Single Judge of the High Court had perused the documents in sealed cover and arrived at certain conclusion and since that order is under challenge, it had become imperative for us to also open the sealed cover and peruse the contents so as to satisfy ourselves to that extent. On perusal we have taken note that the statements of persons concerned have been recorded and the details collected have been collated. The recording of statements and the collation of material is in the nature of allegation against one of the co-accused Karti Chidambaram- son of appellant of opening shell companies and also purchasing benami properties in the name of relatives at various places in different countries. Except for recording the same, we do not wish to advert to the documents any further since ultimately, these are allegations which would have to be established in the trial wherein the accused/co-accused would have the opportunity of putting forth their case, if any, and an ultimate conclusion would be reached. Hence in our opinion, the finding recorded by the learned Judge of the High Court based on the material in sealed cover is not justified.

25. Therefore, at this stage while considering the bail application of the appellant herein what is to be taken note is that, at a stage when the appellant was before this Court in an application seeking for interim protection/anticipatory bail, this Court while considering the matter in Criminal Appeal No.1340/2019 had in that regard held that in a matter of present nature wherein grave economic offence is alleged, custodial interrogation as contended would be necessary and in that circumstance the anticipatory bail was rejected. Subsequently the appellant has been taken into custody and has been interrogated and for the said purpose the appellant was available in custody in this case from.

16. 10.2019 onwards. It is, however, contended on behalf of the respondent that the witnesses will have to be confronted and as such custody is required for that purpose. As noted, the appellant has not been named as one of the accused in the ECIR but the allegation while being made against the co-accused it is indicated the appellant who was the Finance Minister at that point, has aided the illegal transactions since one of the co-accused is the son of the appellant. In this context even if the statements on record and materials gathered are taken note, the complicity of the appellant will have to be established in the trial and if convicted, the appellant will undergo sentence. For the present, as taken note the anticipatory bail had been declined earlier and the appellant was available for custodial interrogation for more than 45 days. In addition to the custodial interrogation if further investigation is to be made, the appellant would be bound to participate in such investigation as is required by the respondent. Further it is noticed that one of the co-accused has been granted bail by the High Court while the other co-accused is enjoying interim protection from arrest. The appellant is aged about 74 years and as noted by the High Court itself in its order, the appellant has already suffered two bouts of illness during incarceration and was put on antibiotics and has been advised to take steroids of maximum strength. In that circumstance, the availability of the appellant for further investigation, interrogation and facing trial is not jeopardized and he is already held to be not a ‘flight risk’ and there is no possibility of tampering

the evidence or influencing\intimidating the witnesses.

Taking these and all other facts and circumstances

including the duration of custody into consideration the

appellant in our considered view is entitled to be granted

bail. It is made clear that the observations contained

touching upon the merits either in the order of the High

Court or in this order shall not be construed as an opinion

expressed on merits and all contentions are left open to be

considered during the course of trial.

26. For the reasons stated above, we pass the following order:

i) The instant appeal is allowed and the judgment dated 15.11.2019 passed by the High Court of Delhi in Bail Application No.2718 of 2019 impugned herein is set aside;

ii) The appellant is ordered to be released on bail if he is not required in any other case, subject to executing bail bonds for a sum of Rs.2 lakhs with two sureties of the like sum produced to the satisfaction of the learned Special Judge;

iii) The passport ordered to be deposited by this Court in the CBI case shall remain in deposit and the appellant shall not leave the country without specific orders to be passed by the learned Special Judge.

iv) The appellant shall make himself available for interrogation in the course of further investigation as and when required by the respondent.

v) The appellant shall not tamper with the evidence or attempt to intimidate or influence the witnesses;

vi) The appellant shall not give any press interviews nor make any public comment in connection with this case qua him or other co-accused.

vii) There shall be no order as to costs.


J. (R. BANUMATHI)

J. (A.S. BOPANNA)

J. (HRISHIKESH ROY)

New Delhi,
December 04, 2019


REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.1831/2019

(Arising out of S.L.P.(Criminal) No.10493 of 2019 )

P. Chidambaram ….Appellant (s)

Versus

Directorate of Enforcement …. Respondent(s)

ORDER

After pronouncement of the Judgment in the above mentioned matter, Mr. Tushar Mehta, learned Solicitor General appearing for the respondent-Directorate of Enforcement, has submitted that the findings in the Judgment may not have a bearing qua the other accused.

Considering the above submission, we make it clear that the findings in the Judgment, as above, shall not have any bearing qua the other accused in the case and the same shall be considered independently on its own merits.

J. (R. BANUMATHI)

J. (A.S. BOPANNA)

J. (HRISHIKESH ROY)

New Delhi,

December 04, 2019


 

SC granted bail to P. Chidambaram subject to executing bail bonds of Rs.2 lakhs u/s 439 of Cr.PC- 4/11/2019

SUPREME COURT OF INDIA JUDGMENTS

P. Chidambaram Versus Directorate of Enforcement

Observed: While the learned Judge was empowered to look at the materials produced in a sealed cover to satisfy his judicial conscience, the learned Judge ought not to have recorded finding based on the materials produced in a sealed cover.

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

(CRIMINAL APPEAL NO.1831/2019)

(Arising out of S.L.P.(Criminal) No.10493 of 2019 )

P. Chidambaram ….Appellant (s)

Versus

Directorate of Enforcement …. Respondent(s)

Act : Section 439 of Cr.PC

JUDGMENT

A.S. Bopanna,J.

Leave granted.

2. The instant appeal has been filed by the appellant assailing the final order dated 15.11.2019 passed by the High Court of Delhi at New Delhi in Bail Application No. 2718 of 2019 whereby the High Court declined to grant regular bail to the appellant.

3. The genesis of the case in question lies in FIR No. RC2202017-E0011 dated 15.5.2017, registered by the CBI under section 120-B r/w 420 IPC and sections 8 and 13 (2) r/w 13 (1) (d) of PC Act against some known and unknown suspects with allegations that M/s INX Media Private Limited (accused no. 1 in the FIR) sought approval of Foreign Investment Promotion Board (FIPB) for permission to issue by way of preferential allotment, certain equity and convertible, non-cumulative, redeemable preference shares for engaging in the business of creating, operating, managing and broadcasting of bouquet of television channels. The company had also sought approval to make a downstream financial investment to the extent of 26% of the issued and outstanding equity share capital of M/s INX News Private Limited (accused no. 2). The FIPB Board recommended the proposal of INX Media for consideration and approval of the Finance Minister. However, the Board did not approve the downstream investment by INX Media (P) Ltd. in INX News (P) Ltd. Further, in the press release dated 30.5.2007 issued by the FIPB Unit indicating details of proposals approved in the FIPB meeting, quantum of FDI/NRI inflow against M/s INX media was shown as Rs. 4.62 crores. Contrary to the approval of FIPB, M/s INX Media Pvt. Ltd. deliberately and in violation of conditions of approval, made a downstream investment to the extent of 26% capital of INX News and also generated more than Rs. 305 crores FDI in INX Media (P) Ltd. against the approved foreign inflow of Rs. 4.62 crores is the allegation. A complaint is stated to have been received by the investigation wing of the Income Tax department which sought clarifications from the FIPB Unit of Ministry of Finance. The FIPB Unit vide letter dated 26.5.2008, sought clarifications from M/s INX Media Limited. It was further alleged in the FIR that upon receipt of this letter, M/s INX Media in order to avoid punitive action entered into criminal conspiracy with Mr. Karti Chidambaram (accused no. 3 in the FIR who is the son of the appellant). Mr. Karti Chidambaram is alleged to have exercised his influence over the officials of FIPB unit which led to the said officials showing undue favour to M/s INX News (P) Ltd. Thereafter by deliberately concealing the investment received in INX Media (P) Ltd., M/s INX News (P) Ltd. again approached the FIPB Unit and sought permission for the downstream investment. This proposal was favourably considered by the officials of ministry of finance and approved by the then Finance Minister. It was also stated in the FIR that Mr. Karti Chidambaram, in lieu of services rendered to M/s INX Group, received consideration in the form of payments. Information disclosed that invoices for approximately Rs. 3.5 crores were got raised in favour of M/s INX Group in the name of companies in which Mr. Karti Chidambaram was having sustainable interests either directly or indirectly. The appellant herein, who was the then Union Finance Minister, was not however named in the said FIR.

4. On the basis of the aforementioned FIR, the Respondent Directorate of Enforcement registered a case ECIR/07/HIU/2017 (hereinafter referred to as ECIR case) under section 3 of Prevention of Money Laundering Act, 2002 (hereinafter PMLA), punishable under section 4 of the said Act against the accused mentioned in the FIR. The allegations in the said ECIR case were the same as those in the aforementioned FIR. The appellant was not named an accused in this case as well.

5. On 23.7.2018, apprehending his arrest by the Respondent, the appellant filed an application before the High Court of Delhi seeking grant of anticipatory bail in the aforementioned ECIR case. The High Court extended interim protection to the appellant until 20.8.2019, when the appellant’s application seeking anticipatory bail was dismissed.

6. The appellant then approached this court by filing Criminal Appeal No. 1340 of 2019 (arising out of SLP (Crl.) No. 7523 of 2019) wherein while dismissing the appeal of the appellant, the court concluded that in the instant case, grant of anticipatory bail to the appellant will hamper the investigation and that this is not a fit case for exercise of discretion to grant anticipatory bail. This court applied the following rationale for coming to the said conclusion: there are sufficient safeguards enshrined in the PMLA to ensure proper exercise of power of arrest; grant of anticipatory bail is not to be done as a matter of rule, especially in matters of economic offences which constitute a class apart. Regard must be had to the fact that grant of anticipatory bail at the stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting useful information and also materials which might have been concealed.

7. In the meanwhile, on 21.8.2019, the appellant was arrested in the CBI case (arising out of the above-mentioned FIR). Since then he has been in custody. In the ECIR case, he was arrested on 16.10.2019 on the grounds that payment of approx. Rs. 3 crores was made at the appellant’s instance to the companies controlled by his son on account of FIPB work done for INX Group. Further it was stated in the grounds of arrest that the investigation is not fruitful due to the appellant’s non-cooperation; the appellant has withheld relevant information which is within his exclusive knowledge and thus his custodial interrogation is necessary.

8. After dismissal of his application seeking anticipatory bail by this court, the appellant moved an application dated 5.9.2019 praying to surrender before the Trial Court (Court of Special Judge (PC Act), CBI) in the ECIR case. This application was rejected on 13.9.2019 in view of the submission on behalf of the respondent Directorate that it was not willing to arrest the appellant at that particular stage since it was completing investigation pertaining to some aspect of the money laundering and only on this background investigation was completed, the interrogation of the appellant would be meaningful. Thereafter, on 11.10.2019, the Respondent Directorate moved an application u/s 267 CrPC seeking issuance of production warrant against the appellant for the purpose of arrest and remand. The allegations which were levelled against the appellant in this application are that in lieu of granting FIPB approval to INX Media Pvt. Ltd., he and his son received a sum of approx. Rs. 3 crores through companies controlled by the son of the Appellant/accused Karti P. Chidambaram. Though INX media in its application did not mention the total amount of FDI inflow which they intended to bring, the appellant without ascertaining their competency, granted approval. Further the appellant became fully aware about the violations made by INX Group when the matter was highlighted by the Income Tax Department and a complaint was also received by him regarding the investment by M/s INX Media into M/s INX News without due approval. Despite this knowledge, the appellant again approved the downstream proposal of INX Group treating it as a fresh approval. Further investigation has revealed that there were at least 17 overseas bank accounts opened by the appellant and co-conspirators. In this regard, summons was issued to 11 persons and statements of some of these persons revealed that the overseas assets were acquired in the name of various shell companies on the instructions of appellant’s son. Thus, it was stated that a need arises to confront the appellant with the material gathered. This application was allowed by the Trial Court vide order dated 11.10.2019. Thereafter on 14.10.2019, the Respondent inter alia moved an application seeking permission to arrest the appellant. The Trial Court treated this application as an application for interrogation of the appellant and allowed it. Subsequently, on 16.10.2019, the appellant was arrested for the grounds stated supra. Vide order dated 17.10.2019, the Trial Court remanded the appellant to the custody of the Respondent for a period of 7 days.

9. After his arrest, on 23.10.2019, the appellant moved a regular bail application (Bail Application No. 2718 of 2019) before the High Court u/s 439 of CrPC averring that he is a law abiding citizen having deep roots in the society; he is not a flight risk and is willing to abide by all conditions as may be imposed by the court while granting bail. It was also submitted that the instant case is a documentary case and being a respectable citizen and former Union Minister, he cannot and will not tamper with the documentary record of the instant case which is currently in the safe and secure possession of the incumbent government or the Trial Court. On merits, it was stated by the Appellant that he merely accorded approval to the unanimous recommendation made by the FIPB which was chaired by the Secretary, Economic Affairs and included 5 other secretaries who were all among the senior most IAS officers (one among them was a senior IFS officer) and had a long and distinguished record of service. Anyone familiar with the working of the FIPB would know that no single officer can take a decision on any proposal. Therefore, it is preposterous to allege that any person could have influenced any official of FIPB, including all 6 senior secretaries to the Government of India. Moreover, the ECIR case is a verbatim copy of the FIR dated 15.5.2017 and allegations registered therein and thus the Special Judge erred in granting remand of the appellant in the ECIR case since the offences allegedly committed in both the cases arise out of the same occurrence and have been committed in the course of the same transaction. Further the Special Court committed an error in not accepting the surrender application of the appellant which was an application limited to surrendering before the Trial Court. The Special Court proceeded on an erroneous basis that the desire of an accused is contingent upon the desire of the investigating agency to arrest the accused and that arrest is a condition precedent for surrendering before the Court.

10. Vide the impugned order, the High Court observed that it has not even been alleged by the Respondent Enforcement Directorate in its counter affidavit that the appellant is a flight risk. Regarding tampering of evidence also the court observed that it is neither argued nor any material is available on record in this regard. Moreover, there is no chance to tamper the material on record as the same is with the investigating agencies, central government or courts. Regarding influencing of witnesses, the court noted that three witnesses have stated in their statements that the appellant and his family members have pressurised them and asked them not to appear before the Enforcement Directorate. However, since their statements have already been recorded, at this stage when the complaint is almost ready to be filed, the Court held that there is no chance to influence any witness. The High Court also took notice of the fact that co-accused have been granted bail. The Court was cognizant of the fact that the appellant has been suffering from illness but the Court opined that the Court has already issued directions to the Jail Superintendent in this regard and therefore this ground is no longer available to the appellant at this stage. The Court noted that during investigation, it has been revealed that there has been layering of proceeds of crime by use of shell companies, most of which are only on paper, and opined that there is cogent evidence collected so far that these shell companies are incorporated by persons who can be shown to be close and connected with the appellant. Next, the Court held that the material in the present case is completely distinct, different and independent from the material which was collected by the CBI in the predicate offence. Even the witnesses in the PMLA investigation are different from the investigation conducted by the CBI. The High Court concluded that prima facie, allegations are serious in nature and the appellant has played key and active role in the present case. On the basis of all these observations, the High Court dismissed the bail application.

11. It is the contention of the learned senior counsel Shri Kapil Sibal and Dr. Abhishek Manu Singhvi on behalf of the appellant before us that the High Court ought to have granted regular bail to the appellant after holding the triple test of flight risk, tampering with evidence and influencing of witnesses in favour of the appellant. The Impugned Order deserves to be set aside only on the ground that the allegations of a completely unrelated case (Rohit Tandon vs. Directorate of Enforcement (2018) 11 SCC 46) have been considered by the High Court as allegations relating to the instant case and findings on merits against the appellant have been rendered based on such unrelated allegations. Next, it has been contended by the appellant that the High Court erred in law in going into and rendering findings on merits of the case in order to deny bail to the appellant despite the settled position of law that merits of a case ought not to be gone into at the time of adjudication of a bail application. This Court in the appellant’s own case seeking regular bail in the case registered by CBI against him titled P. Chidambaram vs. CBI (Crl. Appeal No. 1603/2019) has held that “at the stage of granting bail, an elaborate examination of evidence and detailed reasons touching upon the merit of the case, which may prejudice the accused, should be avoided.” It has also been contended on behalf of the appellant that the High Court erred in accepting at face value the allegations made on merits of the case in the counter affidavit filed by the respondent and converting such allegations verbatim into findings by the Court and declining to grant bail to the appellant solely on the basis of said findings. On merits, the appellant has submitted that he is neither a shareholder nor director of any allegedly connected company nor does he have any connection with any of these companies. No material linking the appellant directly or indirectly with the alleged offence of money laundering has either been put to the appellant so far or been placed on record before the High Court. Further, the 12 officers who signed the file pertaining to the approval of the FDI proposal of INX Media were not even arrested. Only the appellant, who was the 13th signatory has been arrested and denied bail. Moreover, all the other co-accused in the instant ECIR case have also been granted bail or have not been arrested. The High Court also failed to appreciate that the appellant has already been granted regular bail by this Court in the predicate offence FIR vide its order dated 22.10.2019. The High Court erred in denying bail to the appellant on the specious ground that allegations are of a serious nature. It is the submission of the learned senior counsel for the appellant that the gravity of an offence is to be determined from the severity of the prescribed punishment. In the instant case, the alleged offence of money laundering is punishable by imprisonment for a term which shall not exceed 7 years. Thus, the offence is not ‘grave’ or ‘serious’ in terms of the judgment of this Court in Sanjay Chandra vs. CBI, (2012) 1 SCC 40. The High Court should also have considered that the appellant is a 74 year old person whose health is fragile and while being lodged in judicial custody of the Respondent Enforcement Directorate between 16.10.2019 and 30.10.2019 and thereafter being lodged in judicial custody between 30.10.2019 till date, the appellant has suffered multiple bouts of chronic and persistent pain in his abdomen, for which he was taken to AIIMS and Dr. Ram Manohar Lohia Hospital on various occasions (viz. On 23.10.2019, 26.10.2019, 28.10.2019, 30.10.2019 and 1.11.2019) for consultation, diagnosis and tests. The appellant’s health continues to deteriorate and with the onset of the cold weather, the appellant will become more vulnerable.

12. Between 05.09.2019 and 16.10.2019 though the appellant was available in custody the respondent did not choose to interrogate but remand period was sought on 17.10.2019 and 24.10.2019, while the third remand sought was rejected and accordingly the remand period expired on 30.10.2019. No witness was confronted despite seeking remand for that purpose. It is contended that the very manner in which the whole process is being conducted is only to see that the appellant remains in custody. It is contended that the liberty of the appellant cannot be denied in such manner by adopting an unfair procedure. Though much is sought to be made out as if the offence committed is grave there is absolutely no material to indicate that the appellant is involved and even otherwise it is a matter of trial wherein the charge is to be established. The gravity can only beget the length of sentence provided in law and by asserting that the offence is grave, the grant of bail cannot be thwarted. The respondent cannot contend as if the appellant should remain in custody till the trial is over.

13. Shri Tushar Mehta, learned Solicitor General while seeking to oppose the petition has made reference to the counter affidavit filed on behalf of the respondent. It is contended that though the High Court has held that there is no possibility of tampering the evidence and has not influenced any witnesses and has ultimately denied the bail, such conclusion is not justified. It is contended that the appellant having held a very high position and also due to his status is likely to influence the witnesses and one of the witness had already indicated that he hails from the same State to which the appellant belongs and is not in a position to appear for the purpose of being confronted. Hence even in that regard it should be held against the appellant. It is further contended that even otherwise despite holding the triple test in favour of the appellant the gravity of the offence can be considered as a stand-alone aspect as the gravity of the offence in a particular case is also important while considering bail. In that circumstance, the three aspects to be taken note is the manner in which the offence has taken place, gravity of the offence and also the contemporaneous documents to show that the accused either in custody or otherwise, wields influence over the witnesses. Hence, he contends that the finding of the High Court insofar as saying that the appellant has not tampered is factually incorrect. The learned Solicitor General further contends that the economic offences are graver offences which affect the society and the community suffers. The common man loses confidence in the establishment. It is contended that the Investigating Agency has collected documentary evidence such as emails exchanged between the co-conspirators on behalf of the appellant and documents to indicate investment of laundered money in benami properties whose beneficial owners can be traced to the appellant and his family members. The respondent has also recorded the statement of material witnesses who are the part of process of money laundering. It is his contention that the appellant has knowledge of all these aspects and the material will show the share holding pattern of the 16 companies. It is further contended that the learned Judge of the High Court has referred to the documents produced in a sealed cover and in that light has arrived at the conclusion to deny bail. The High Court has, however, not properly considered while recording that a complaint is ready to be filed and therefore, he would not influence the witnesses. Even if the complaint/charge sheet is filed in 60 days it is only to avoid default and the investigation which is not complete would continue. In that light it is contended that when economic offences are premeditated it would require detailed investigation to unearth material and, in such circumstances, if bail is granted it would defeat the case of the prosecution. The learned Solicitor General has also referred to the decisions which would be taken note at the appropriate stage.

14. The learned senior counsel for the appellant in reply to the submissions contended that not a single document is available to indicate that the appellant is involved in the offence. The allegation of the appellant tampering the evidence or influencing the witnesses as sought to be made out on behalf of the respondent cannot be accepted for the reason that the alleged offence is of the year 2007-08 and though the proceedings were initiated in the year 2017, the appellant was arrested only in the year 2019. In such event when the appellant has not influenced any person while he was at large, the allegation of tempering while in custody is not acceptable. The statement of the alleged witnesses is stated to have been recorded in the year 2018 and the case of the respondent that they are seeking to confront the witnesses is being put forth at this stage only to indicate as if the custody of the appellant is still required by them. When there is no document to indicate that the appellant is involved, the mere allegation against the alleged co-conspirators cannot be the basis to indicate that an economic offence has been committed by the appellant. In that light it is contended that the prayer made in the petition be accepted.

15. Though we have heard the matter elaborately and also have narrated the contention of both sides in great detail including those which were urged on the merits of the matter we are conscious of the fact that in the instant appeal the consideration is limited to the aspect of regular bail sought by the appellant under Section 439 of Cr.PC. While stating so, in order to put the matter in perspective it would be appropriate to take note of the observation made by us in the case of this very appellant vs. CBI, in Criminal Appeal No. 1603/2019 which reads as hereunder;

“The jurisdiction to grant bail has to be exercised on the basis of the well-settled principles having regard to the facts and circumstances of each case. The following factors are to be taken into consideration while considering an application for bail:- (i) the nature of accusation and the severity of the punishment in the case of conviction and the nature of materials relied upon by the prosecution; (ii) reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant or the witnesses; (iii) reasonable possibility of securing the presence of the accused at the time of trial or the likelihood of his abscondence; (iv) character behaviour and standing of the accused and the circumstances which are peculiar to the accused; (v) larger interest of the public or the State and similar other considerations (vide Prahlad Singh Bhati v. NCT, Delhi and another (2001) 4 SCC 280. There is no hard and fast rule regarding grant or refusal to grant bail. Each case has to be considered on the facts and circumstances of each case and on its own merits. The discretion of the court has to be exercised judiciously and not in an arbitrary manner.”

16. In the above background, perusal of the order dated 15.11.2019 impugned herein indicates that the learned Single Judge having taken note of the rival contentions in so far as the triple test or the tripod test to be applied while considering an application for grant of regular bail under Sec. 439 Cr.PC, has answered the same in paragraphs 50 to 53 of the order, in favour of the appellant herein. The learned Solicitor General has however sought to contend that though there is not much grievance with regard to the conclusion on ‘flight risk’, the finding on likelihood of tampering and influencing witness has not been considered in its correct perspective. The finding in that regard has not been assailed and in such event, the appellant in our opinion cannot be taken by surprise. Even otherwise as rightly observed by the learned Single Judge the evidence and material stated to have been collected is already available with the Investigating agency. Learned Solicitor General would however contend that still further materials are to be collected and letter rogatory has been issued and as such tampering cannot be ruled out. In the present situation the appellant is not in political power nor is he holding any post in the Government of the day so as to be in a position to interfere. In that view such allegation cannot be accepted on its face value. With regard to the witness having written that he is not prepared to be confronted as he is from the same state, the appellant cannot be held responsible for the same when there is no material to indicate that the appellant or anyone on his behalf had restrained or threatened the concerned witness who refused to be confronted with the appellant in custody.

17. The only other aspect therefore for consideration is as to whether the further consideration made by the learned Judge of the High Court, despite holding the triple test in appellant’s favour was justified and if consideration is permissible, whether the learned Judge was justified in his conclusion.

18. While opposing the contention put forth by the learned Senior Counsel for the appellant that the learned Judge of the High Court ought not to have travelled beyond the consideration on the triple test and holding it in favour of the appellant, the learned Solicitor General would contend that the gravity of the offence and the role played by the accused should also be a part of consideration in the matter of bail. It is contended by the learned Solicitor General that the economic offences is a class apart and the gravity is an extremely relevant factor while considering bail. In order to contend that this aspect has been judicially recognised, the decisions in the case of State of Bihar & Anr. vs. Amit Kumar, (2017)

13 SCC 751; Nimmagadda Prasad vs. CBI, (2013) 7 SCC 466; CBI vs. Ramendu Chattopadhyay, Crl Appeal.No.1711 of 2019; Seniors Fraud Investigation Office vs. Nittin Johari & Anr.; (2019) 9 SCC 165; Y.S. Jagan Mohan Reddy vs. CBI, (2013) 7 SCC 439; State of Gujarat vs. Mohanlal Jitamalji Porwal, (1987) 2 SCC 364 are relied upon. Perusal of the cited decisions would indicate that this Court has held that economic offences are also of grave nature, being a class apart which arises out of deep-rooted conspiracies and effect on the community as a whole is also to be kept in view, while consideration for bail is made.

19. On the consideration as made in the above noted cases and the enunciation in that regard having been noted, the decisions relied upon by the learned senior counsel for the appellant and the principles laid down for consideration of application for bail will require our consideration. The learned senior counsel for the appellant has relied upon the decision of the Constitution Bench of this Court in the case of Shri Gurbaksh Singh Sibbia vs. State of Punjab, (1980) 2 SCC 565 with reference to paragraph 27 which reads as hereunder:

“ It is not necessary to refer to decisions which deal with the right to ordinary bail because that right does not furnish an exact parallel to the right to anticipatory bail. It is, however, interesting that as long back as in 1924 it was held by the High Court of Calcutta in Nagendra v. King-Emperor [AIR 1924 Cal 476, 479, 480 : 25 Cri LJ 732] that the object of bail is to secure the attendance of the accused at the trial, that the proper test to be applied in the solution of the question whether bail should be granted or refused is whether it is probable that the party will appear to take his trial and that it is indisputable that bail is not to be withheld as a punishment. In two other cases which, significantly, are the ‘Meerut Conspiracy cases’ observations are to be found regarding the right to bail which deserve a special mention. In K.N. Joglekar v. Emperor [AIR 1931 All 504 : 33 Cri LJ 94] it was observed, while dealing with Section 498 which corresponds to the present Section 439 of the Code, that it conferred upon the Sessions Judge or the High Court wide powers to grant bail which were not handicapped by the restrictions in the preceding Section 497 which corresponds to the present Section 437. It was observed by the court that there was no hard and fast rule and no inflexible principle governing the exercise of the discretion conferred by Section 498 and that the only principle which was established was that the discretion should be exercised judiciously. In Emperor v. Hutchinson [AIR 1931 All 356, 358 :

32 Cri LJ 1271] it was said that it was very unwise to make an attempt to lay down any particular rules which will bind the High Court, having regard to the fact that the legislature itself left the discretion of the court unfettered. According to the High Court, the variety of cases that may arise from time to time cannot be safely classified and it is dangerous to make an attempt to classify the cases and to say that in particular classes a bail may be granted but not in other classes. It was observed that the principle to be deduced from the various sections in the Criminal Procedure Code was that grant of bail is the rule and refusal is the exception. An accused person who enjoys freedom is in a much better position to look after his case and to properly defend himself than if he were in custody. As a presumably innocent person he is therefore entitled to freedom and every opportunity look after his own case. A presumably innocent person must have his freedom to enable him to establish his innocence.”

We have taken note of the said decision since even though the consideration therein was made in the situation where an application for anticipatory bail under Section 438 was considered, the entire conspectus of the matter relating to bail has been noted by the Constitution Bench.

20. The learned senior counsel for the appellant has also placed reliance on the decision on the decision in the case of Sanjay Chandra vs. CBI, (2012) 1 SCC 40 with specific reference to paragraph 39 which reads as hereunder:

“ Coming back to the facts of the present case, both the courts have refused the request for grant of bail on two grounds: the primary ground is that the offence alleged against the accused persons is very serious involving deep-rooted planning in which, huge financial loss is caused to the State exchequer; the secondary ground is that of the possibility of the accused persons tampering with the witnesses. In the present case, the charge is that of cheating and dishonestly inducing delivery of property and forgery for the purpose of cheating using as genuine a forged document. The punishment for the offence is imprisonment for a term which may extend to seven years. It is, no doubt, true that the nature of the charge may be relevant, but at the same time, the punishment to which the party may be liable, if convicted, also bears upon the issue. Therefore, in determining whether to grant bail, both the seriousness of the charge and the severity of the punishment should be taken into consideration.”

The said case was a case of financial irregularities and in the said circumstance this Court in addition to taking note of the deep-rooted planning in causing huge financial loss, the scope of consideration relating to bail has been taken into consideration in the background of the term of sentence being seven years if convicted and in that regard it has been held that in determining the grant or otherwise of bail, the seriousness of the charge and severity of the punishment should be taken into consideration.

21. Thus from cumulative perusal of the judgments cited on either side including the one rendered by the Constitution Bench of this Court, it could be deduced that the basic jurisprudence relating to bail remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. However, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the Court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of “grave offence” and in such circumstance while considering the application for bail in such matters, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused. One of the circumstances to consider the gravity of the offence is also the term of sentence that is prescribed for the offence the accused is alleged to have committed. Such consideration with regard to the gravity of offence is a factor which is in addition to the triple test or the tripod test that would be normally applied. In that regard what is also to be kept in perspective is that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case since there is no such bar created in the relevant enactment passed by the legislature nor does the bail jurisprudence provides so. Therefore, the underlining conclusion is that irrespective of the nature and gravity of charge, the precedent of another case alone will not be the basis for either grant or refusal of bail though it may have a bearing on principle. But ultimately the consideration will have to be on case to case basis on the facts involved therein and securing the presence of the accused to stand trial.

22. In the above circumstance it would be clear that even after concluding the triple test in favour of the appellant the learned Judge of the High Court was certainly justified in adverting to the issue relating to the gravity of the offence. However, we disapprove the manner in which the conclusions are recorded in paragraphs 57 to

62 wherein the observations are reflected to be in the nature of finding relating to the alleged offence. The learned senior counsel for the appellant with specific reference to certain observations contained in the above noted paragraphs has pointed out that the very contentions to that effect as contained in paragraphs 17, 20 and 24 of the counter affidavit has been incorporated as if, it is the findings of the Court. The learned Solicitor General while seeking to controvert such contention would however contend that in addition to the counter affidavit the respondent had also furnished the documents in a sealed cover which was taken note by the learned Judge and conclusion has been reached.

23. The question as to whether the Court could look into the documents while considering an application for bail had arisen for consideration in the very case between the parties herein in Criminal Appeal No.130/2019 wherein through the judgment dated 05.09.2019 while considering the matter relating to the order dated 20. 08.2019 whereby the High Court had rejected the bail, this Court had held that it would be open for the Court to receive the materials/documents collected during the investigation and peruse the same to satisfy its conscience that the investigation is proceeding in the right lines and for the purpose of consideration of grant of bail/anticipatory bail etc. At the same time, this Court, had disapproved the manner in which the learned Judge of the High Court in the said case had verbatim quoted a note produced by the respondent. If that be the position, in the instant case, the learned Judge while adverting to the materials, ought not have recorded a finding based on the materials produced before him. While the learned Judge was empowered to look at the materials produced in a sealed cover to satisfy his judicial conscience, the learned Judge ought not to have recorded finding based on the materials produced in a sealed cover. Further while deciding the same case of the appellant in Crl. Appeal No.1340 of 2019, after holding so, this Court had consciously refrained from opening the sealed cover and perusing the documents lest some observations are made thereon after perusal of the same, which would prejudice the accused pre-trial. In that circumstance though it is held that it would be open for the Court to peruse the documents, it would be against the concept of fair trial if in every case the prosecution presents documents in sealed cover and the findings on the same are recorded as if the offence is committed and the same is treated as having a bearing for denial or grant of bail.

24. Having said so, in present circumstance we were not very much inclined to open the sealed cover although the materials in sealed cover was received from the respondent. However, since the learned Single Judge of the High Court had perused the documents in sealed cover and arrived at certain conclusion and since that order is under challenge, it had become imperative for us to also open the sealed cover and peruse the contents so as to satisfy ourselves to that extent. On perusal we have taken note that the statements of persons concerned have been recorded and the details collected have been collated. The recording of statements and the collation of material is in the nature of allegation against one of the co-accused Karti Chidambaram- son of appellant of opening shell companies and also purchasing benami properties in the name of relatives at various places in different countries. Except for recording the same, we do not wish to advert to the documents any further since ultimately, these are allegations which would have to be established in the trial wherein the accused/co-accused would have the opportunity of putting forth their case, if any, and an ultimate conclusion would be reached. Hence in our opinion, the finding recorded by the learned Judge of the High Court based on the material in sealed cover is not justified.

25. Therefore, at this stage while considering the bail application of the appellant herein what is to be taken note is that, at a stage when the appellant was before this Court in an application seeking for interim protection/anticipatory bail, this Court while considering the matter in Criminal Appeal No.1340/2019 had in that regard held that in a matter of present nature wherein grave economic offence is alleged, custodial interrogation as contended would be necessary and in that circumstance the anticipatory bail was rejected. Subsequently the appellant has been taken into custody and has been interrogated and for the said purpose the appellant was available in custody in this case from.

16. 10.2019 onwards. It is, however, contended on behalf of the respondent that the witnesses will have to be confronted and as such custody is required for that purpose. As noted, the appellant has not been named as one of the accused in the ECIR but the allegation while being made against the co-accused it is indicated the appellant who was the Finance Minister at that point, has aided the illegal transactions since one of the co-accused is the son of the appellant. In this context even if the statements on record and materials gathered are taken note, the complicity of the appellant will have to be established in the trial and if convicted, the appellant will undergo sentence. For the present, as taken note the anticipatory bail had been declined earlier and the appellant was available for custodial interrogation for more than 45 days. In addition to the custodial interrogation if further investigation is to be made, the appellant would be bound to participate in such investigation as is required by the respondent. Further it is noticed that one of the co-accused has been granted bail by the High Court while the other co-accused is enjoying interim protection from arrest. The appellant is aged about 74 years and as noted by the High Court itself in its order, the appellant has already suffered two bouts of illness during incarceration and was put on antibiotics and has been advised to take steroids of maximum strength. In that circumstance, the availability of the appellant for further investigation, interrogation and facing trial is not jeopardized and he is already held to be not a ‘flight risk’ and there is no possibility of tampering

the evidence or influencing\intimidating the witnesses.

Taking these and all other facts and circumstances

including the duration of custody into consideration the

appellant in our considered view is entitled to be granted

bail. It is made clear that the observations contained

touching upon the merits either in the order of the High

Court or in this order shall not be construed as an opinion

expressed on merits and all contentions are left open to be

considered during the course of trial.

26. For the reasons stated above, we pass the following order:

i) The instant appeal is allowed and the judgment dated 15.11.2019 passed by the High Court of Delhi in Bail Application No.2718 of 2019 impugned herein is set aside;

ii) The appellant is ordered to be released on bail if he is not required in any other case, subject to executing bail bonds for a sum of Rs.2 lakhs with two sureties of the like sum produced to the satisfaction of the learned Special Judge;

iii) The passport ordered to be deposited by this Court in the CBI case shall remain in deposit and the appellant shall not leave the country without specific orders to be passed by the learned Special Judge.

iv) The appellant shall make himself available for interrogation in the course of further investigation as and when required by the respondent.

v) The appellant shall not tamper with the evidence or attempt to intimidate or influence the witnesses;

vi) The appellant shall not give any press interviews nor make any public comment in connection with this case qua him or other co-accused.

vii) There shall be no order as to costs.


J. (R. BANUMATHI)

J. (A.S. BOPANNA)

J. (HRISHIKESH ROY)

 

New Delhi,
December 04, 2019


REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.1831/2019

(Arising out of S.L.P.(Criminal) No.10493 of 2019 )

P. Chidambaram

….Appellant (s)

Versus

Directorate of Enforcement

…. Respondent(s)

ORDER

After pronouncement of the Judgment in the above mentioned matter, Mr. Tushar Mehta, learned Solicitor General appearing for the respondent-Directorate of Enforcement, has submitted that the findings in the Judgment may not have a bearing qua the other accused.

Considering the above submission, we make it clear that the findings in the Judgment, as above, shall not have any bearing qua the other accused in the case and the same shall be considered independently on its own merits.

J. (R. BANUMATHI)

J. (A.S. BOPANNA)

J. (HRISHIKESH ROY)

New Delhi,

December 04, 2019

Justice S.P. Talukdar committee failed to sell property of Tower Group accused of Rs.350 Crores Scam, SC observed while cancelling bail of the group Chairman

SUPREME COURT OF INDIA JUDGMENTS

Central Bureau of Investigation Vs. Ramendu Chattopadhyay -19/11/2019

Justice S.P. Talukdar, was appointed for this purpose. A letter dated 08.08.2019 written by Justice Talukdar, a copy of which was produced before this Court, reveals that no property of the Tower Group of companies has been sold by the One Man Committee so far, and as a consequence, no amount has been deposited in the account of the One Man Committee or returned to the investors.

SUPREME COURT OF INDIA

Central Bureau of Investigation Vs. Ramendu Chattopadhyay -19/11/2019

[Criminal Appeal No. 1711 of 2019 @ Special Leave Petition (Criminal) No. 120 of 2019]

Republic of India (C.B.I.) Versus Ashis Chatterjee

[Criminal Appeal No. 1712 of 2019 @ Special Leave Petition (Criminal) No. 462 of 2019]

MOHAN M. SHANTANAGOUDAR, J.

[Criminal Appeal No. of 2019 @ Special Leave Petition (Criminal) No. 120 of 2019]

Leave granted.

2. This appeal by special leave has been filed by the Central Bureau of Investigation (“the CBI”) questioning the order dated 15.02.2018 granting bail to the Respondent passed by the High Court of Orissa at Cuttack in BLAPL No. 5748 of 2016.

3. In compliance with the order dated 09.05.2014 passed by this Court in Writ Petition (Civil) No. 401 of 2013 in Subrata Chattoraj v. Union of India, the CBI registered an FIR vide Case No. RC10( S)/2014CBI/ SCB/Kol, dated 04.06.2014, against one Tower Infotech Ltd. (“the accused company”), and several persons in connection with the affairs of the company, including the Respondent Ramendu Chattopadhyay, the Chief Managing Director of the accused company, treating Baliapal PS (Dist. Balasore, Orissa) Case No. 85/2013 dated 15.05.2013 as the base FIR.

The case of the CBI revolves around the allegation that all the accused conspired amongst themselves to run collective investment schemes in the name of the accused company; and by inducing the public to invest under these schemes with the allure of high returns, collected funds amounting to Rs. 255,91,00,541/-, but did not repay the amount to the tune of Rs. 15,69,35,003/, thereby cheating the investors of such amount. During the course of investigation, it was prima facie established that the Respondent, the accused company, and one Ashis Chatterjee, a director in several companies under the Tower Group, were liable to be chargesheeted.

Though material was also found against another director of the accused company, Ranjit Mullick, no further action was taken since he had expired by then. In pursuance of the above findings, a chargesheet was filed against the Respondent, and against Ashis Chatterjee and the accused company, under Section 120B read with Sections 420 and 409 of the Indian Penal Code (“the IPC”), and Sections 4 and 6 of the Prizes and Chit Money Circulation Scheme (Banning) Act, 1978. Further investigation under Section 173(8) of the Code of Criminal Procedure was kept open. The Respondent was arrested on 10.03.2016, before being released on bail by the impugned order. During the interregnum also, he was released on bail several times.

4. It is submitted by the CBI that the High Court granted bail to the Respondent without assigning any reason, and such grant of bail by the High Court is in question in this petition. Per contra, Shri Basanth, learned Senior Counsel for the Respondent argues in support of the impugned order by contending that the Respondent has not misused his liberty and has not come in the way of selling of company assets by the OneMan Committee constituted for the purpose. On the contrary, it is submitted that the Respondent is cooperating with the investigation agencies and the One Man Committee.

5. The records prima facie reveal that the Respondent was the founding director of the accused company. He was a key decision making authority of the company, and used to sign certificates issued to the investors and other important documents. He was also an authorised signatory of all bank accounts of the company and used to conduct agents’ meetings. As per the allegations, he used to mislead the agents by stating that the company had necessary permissions from the regulatory authorities to collect funds, and also used to project in the meetings that the returns paid by the accused company to its investors were higher than any other agency. As per the chargesheet, the accused company used to receive cash from the investors so that the Respondent, who used to receive cash directly from the company account frequently, without proper accounting, could easily siphon off the money.

6. The Respondent was granted interim bail by the High Court on 09.05.2017 in Misc. Case No. 738 of 2017 for three months, inter alia for the purpose of his cooperation with the authorities in liquidating the assets of the company for repaying the investors. The aforementioned period of interim bail was extended from time to time by the High Court, i.e. on 13.09.2017 upto 25.10.2017, on 25.10.2017 upto 09.11.2017, and on 27.11.2017 upto 04.12.2017. Subsequently, he was released on bail by the impugned order, as mentioned supra. It has been brought to the notice of this Court by the CBI that during the said periods of availing bail, not a single property of the accused company could be sold, and the very purpose of his availing interim bail was frustrated, though a One Man Committee headed by a retired Judge of the High Court, namely, Justice S.P. Talukdar, was appointed for this purpose. A letter dated 08.08.2019 written by Justice Talukdar, a copy of which was produced before this Court, reveals that no property of the Tower Group of companies has been sold by the One Man Committee so far, and as a consequence, no amount has been deposited in the account of the One Man Committee or returned to the investors.

7. It has also been brought to the notice of this Court that the Respondent, with the dishonest intention of deceiving and alluring investors, as well as agents and business developers, had got brochures of the Tower Group of companies published. In the aforesaid brochures, a letter was published in the name of Smt. Sheela Bhide, IAS, Chairman and Managing Director, India Trade Promotion Organisation. On the basis of this purported letter, it prima facie appears that the accused tried to falsely impress upon the public that the accused company was doing lawful business and also gaining huge profits. Though Smt. Sheela Bhide was also named as an accused in the FIR, during investigation, she denied having issued this letter.

8. This Court is conscious of the need to view such economic offences having a deep rooted conspiracy and involving a huge loss of investors’ money seriously. Though further investigation is going on, as of now, the investigation discloses that the Respondent played a key role in the promotion of the chit fund scam described supra, thereby cheating a large number of innocent depositors and misappropriating their hard earned money.

9. We are of the prima facie view that if the Respondent continues on bail, there is little chance of realising any amount by selling the properties of the Tower Group of companies, since he may use unlawful tactics to keep prospective buyers away. Moreover, it is relevant to note that the investigating agency has not yet assessed the exact total amount invested by the people of Orissa in the accused company, so as to find out the specific liability of the company in that regard. However, it is argued by both the Counsel that the amount may be about Rs. 350 Crores. Be that as it may, having regard to the material on record, and since a huge amount of money belonging to investors has been siphoned off, as well as for the aforesaid reasons, the High Court, in our considered opinion, should not have released the Respondent on bail.

11. Consequently, the impugned order granting interim bail to the Respondent stands set aside. His bail bonds are cancelled.

12. The appeal is allowed accordingly.


[Criminal Appeal No. of 2019 @ Special Leave Petition (Criminal) No. 462 of 2019]

Leave granted.

2. This appeal by special leave has been filed by the CBI questioning the order of the High Court of Orissa at Cuttack granting bail to the Respondent herein in BLAPL No. 1451 of 2017.

3. Since the facts emerging in this appeal are the same as in the criminal appeal arising out of S.L.P. (Crl.) No. 120 of 2019, they have not been referred to again for the sake of brevity.

4. It is submitted by the CBI as regards the role of the Respondent that he was a director in various companies under the Tower Group, and was also a key decision making authority therein. It is alleged that the accused company used to receive cash so that the directors, including the Respondent, could easily siphon off the money for their personal use, through their personal accounts. The Respondent was arrested on 10.03.2016 and was granted interim bail by the High Court vide order dated 17.08.2017 in Misc. Case No. 947 of 2017, for the purpose of settling disputes with the investors of M/s Tower Infotech Ltd. His interim bail was extended on 15.09.2017 upto 25.10.2017 as a last opportunity, but on 25.10.2017 his bail was further extended upto 09.11.2017.

The Respondent was released on bail again by the impugned order. It is submitted that no company asset could be sold by the OneMan Committee consisting of Justice S.P. Talukdar with the assistance of the Respondent, similar to the situation in S.L.P. (Crl.) No. 120 of 2019. It has also been brought to our notice that the Respondent has not been attending meetings called by Justice Talukdar, to show that the Respondent has not been cooperating with the OneMan Committee constituted for liquidating the properties of the company to pay off the money to investors. Even in this case, we are of the view that if the Respondent is released on bail, he may obstruct efforts to liquidate the properties of the Tower Group.

5. Having regard to the material on record and since large amounts of money belonging to innocent investors have been siphoned off, as well as for the aforesaid reasons, the High Court, in our considered opinion, should not have released the Respondent on bail.

6. Consequently, the impugned order granting interim bail to the Respondent stands set aside. His bail bonds are cancelled.

7. The appeal is allowed accordingly.

J. (MOHAN M. SHANTANAGOUDAR)

J. (SANJIV KHANNA)

New Delhi;

November 19, 2019


Central Bureau of Investigation Vs. Ramendu Chattopadhyay- 19/11/2019

Rajeev Kumar -Vs CBI, SP, Economic Offences –IV, CGO Complex-CHC 01/10/2019

Calcutta High Court Grants Anticipatory Bail to IPS Rajeev Kumar

The status of a witness is convertible to the accused during the course of investigation subject to the collection of independent sufficient incriminating materials against the petitioner, which must be in the nature of startling and clinching in sense.

ACTS :Section 438 of the Code of Criminal Procedure

IN THE HIGH COURT AT CALCUTTA

CRIMINAL APPELLATE JURISDICTION

APPELLATE SIDE

Before :

The Hon’ble Justice SAHIDULLAH MUNSHI

And

The Hon’ble Justice SUBHASIS DASGUPTA

C.R.M. No. 9230 Of 2019

Rajeev Kumar -Versus CBI, SP, Economic Offences –IV, CGO Complex,

Mr. Sekhar Kumar Basu,

Mr. Debasis Roy,
Mr. Gopal Haldar,
Mr. Rudradipta Nandy,
Mr. Rajib Kumar Jha.

… for the petitioner.

Mr. Y. J. Dastur,

Mr. K.C. Mishra,
Mr. Anirban Mitra,
Mr. Samrat Goswami.
… for the CBI

Heard on :. 26.09.2019 & 30.09.2019

Judgment on : October 1 , 2019

Sahidullah Munshi, J.: This is an application under Section 438 of the Code of Criminal Procedure, filed by the petitioner apprehending arrest in connection with case no. R.C.- 04 (S) of 2014 under Section 120B read with Sections 420/406/409 of Indian Penal Code and Section 4 / 6 of Prize Chits and Money Circulation Scheme (Banning) Act, 1978.

It is the petitioner’s case that he has never been entangled in any criminal offences, or has been rendered to be guilty of any misconduct, while he was serving as the Commissioner of Police, Bidhannagar City Police. At the relevant time, he was entrusted to look after the day to day functioning of the SIT, formed by the Government of West Bengal, Home Department, which was notified under Police Gazette on 26th April, 2013. The SIT was headed by the Director General and IGP, West Bengal, who were supposed to be assisted from time to time by the Additional Director General, CID, West Bengal. This petitioner had the role to look after day to day functioning of SIT as a member thereof.

In this application the petitioner has disclosed that although, he rendered his all cooperation during the tenure of his office from January, 2012 to February, 2015, as Commissioner of Bidhannagar Police Commissionerate, and consequently no allegation was made against him, but recently the investigating agency sought for examination of the petitioner for the progress of investigation.

Investigating Authority, has, however, complained repeatedly before this Court in different proceedings including the proceeding of contempt, now pending before the Hon’ble Apex Court, that the petitioner is not cooperating with the investigation process.

The background, which we get of this case arises from one writ petition, being no. W.P. (C) 413 of 2013, which was filed before the Hon’ble Supreme Court with other writ petitions and the Hon’ble Apex Court by a judgment and order dated 9th May, 2014 directed transfer of the investigation from the State Agency to the Central Bureau of Investigation (CBI) under Delhi Police Establishment Act, after having considered the magnitude of the offence, interstate ramification, plight of investors, and the need for swift and efficient investigation.

The application for anticipatory bail discloses that the petitioner all throughout was under protective order of the Hon’ble Apex Court, but because of intervention of certain untoward incident, occurred on 3rd February, 2019, against which the contempt petition was moved by the CBI before the Hon’ble Apex Court, the protective cover was sought to be withdrawn on the prayer of CBI. The protective cover granted on 05.02.2019 was withdrawn by the Apex Court on 17.05.2019. While passing this order the Hon’ble Apex Court observed as follows:

“Therefore, in the given facts, we would withdraw the protection given to Mr. Mr. Rajeev Kumar, former Commissioner of Police, Kolkata, vide our order dated

February 05, 2019 restraining the CBI from arresting him and thereby, leave it open to the CBI to act in accordance with the law. At the same time, we direct that the interim order dated February 05, 2019 would continue for a period of seven days from the date of pronouncement of this order to enable Mr. Rajeev Kumar to approach competent Court for relief, if so advised. The aforesaid directions would be in consonance with the decision in A.R. Antulay v. R.S. Nayak and Another, (1988) 2 SCC 602, which mandates that the procedure established in law should be strictly complied with and should not be departed from to the disadvantage or detriment of any person. We clarify that we have not made any comments on the merits of the contentions and the reasons recorded in the present order would not be a ground to accept or reject the request of custodial interrogation or grant of protection, if any such application/petition is moved.”

We have been given to understand by the parties before us that the said Contempt petition is still pending before the Hon’ble Apex Court. There was a controversy regarding the power and function between the State Police and the CBI. The conflict regarding calling upon the State Police Officials to CBI and the CBI Officials to State assumed a critical dimension. When by order dated 05.02.2019 the Apex Court observed “However, we make it clear that no coercive steps including arrest shall be taken against the Commissioner of Police. To avoid all unnecessary controversy we direct the Commissioner of police

to appear before the Investigating agency in Shillong, Meghalaya on such date as may be fixed.”

The controversy regarding non-cooperation continued even after the petitioner subjected himself for questioning session in Shillong, which continued from 09.02.2019 to 13.02.2019 consuming a period of 40 hours (approx).

It may not be out of place to mention that the Hon’ble Apex Court also passed an order on 16th July, 2018 regarding certain things, which are important to be taken note of while considering this application of the petitioner under Section 438 of the Code of Criminal Procedure. “It is not happy state of affairs that CBI Officers should be called by the State Police; they have to work in tandem with each other is the exception of the Court as per investigation of the Criminal Case is required; however, in the main case since this Court had confined itself to the investigation to be made by the CBI, there are certain other matters with respect to investigation which equipments like laptop, mobile phones etc. are required for this Court to go into. It is not the object of this Court to adjudicate upon such issues on the first instance. Since the investigation is pending it would be open for the CBI, in case any obstructions is faced by its officers, similarly, in case the State machinery had no objection, they are free to approach the High Court at Calcutta.

It was submitted that under the guise of an order of 23rd October

2017 the State Police had asked for certain details from the CBI in case

CBI agreed by the said order we are gave liberty by filing appropriate petition in accordance with law within a period of six weeks in the High Court.”

In consonance of this direction, nothing is brought to our notice that the liberty granted to either of the parties was ever exercised having understood the purport of the order conveyed therein. After the interrogation in Shillong, spanning over a period of 40 hours, this petitioner in compliance of the order passed by the Hon’ble Apex Court, offered himself to be interrogated further by the CBI on 17.06.2019 in connection with this case in Calcutta, which, however, continued covering another session of four hours (approx).

Mr. Dastur, appearing for the opposite party, CBI, has pointed out before this Court by filing certain documents in compilation, being the relevant extract from the Case Diary together with an index in front containing 9 serials with pages from 1 to 138, adverting to seizure list dated 17th April, 2013, on the apparent time discrepancies, shown in the seizure and that of the relevant G.D. Entry of the P.S. recorded for the purpose. Referring to this anomaly in the Case Diary and the seizure list, Mr. Dastur further submits that this is a serious contradiction amongst others, for which petitioner’s role is to be found out by custodial interrogation confronting with the materials already collected, irrespective of the repeated questioning sessions, held earlier.

We, however, do not justify custodial interrogation merely on this score as submitted by Mr. Dastur in the absence of some other convincing materials. According to our considered view, such discrepancy could be appropriately decided at the time of trial.

The prime allegation against the petitioner, as submitted by Mr. Dastur learned Senior Advocate appearing for the CBI is that the petitioner deliberately showed his non-cooperation with the ongoing investigation, questioning the notice since beginning, alleging biasness in the investigation, wrongly interpreting the text of the notice, thereby exposed his arrogancy, obstinancy and defying attitude to obey the terms of the notice, upon advancing frivolous excuses on innumerable counts, and further deliberately tampered and doctorred the CDRs with a delay of about four years, after it was requisitioned, with sole intention of destroying and damaging the material evidence, extending his hands in glove with some other men of potentiality including political dignitaries, so as to give a go by to the allegations levelled against him, and to gloss over some other designed personalities. He has also pointed out to the notices served upon the petitioner and his attitude to evade those notices by taking shelter under the law. It may not be out of place to mention that after such notices under Section 160 of the Code of Criminal Procedure was served upon the petitioner by the investigating agency to examine him, he filed an application under Section 482 of the Code of Criminal Procedure being CRR no. 1308 of 2009, in which the petitioner challenged the proceeding itself and prayed for quashing of the same.

The said CRR 1308 of 2019 was, ultimately, held to be not maintainable at the instance of a third party meaning thereby, the petitioner had no locus standi to pray for quashing of instant criminal proceeding, when apparently a notice under Section 160 of Cr.P.C. was served upon the petitioner calling upon his co-operation to unearth the prosecution.

Mr. Roy, appearing for the petitioner submits that, however, the petitioner was not appropriately advised and wrong forum was chosen by him. Protection which was granted initially in CRR 1308 of 2019 passed by the Single Bench of our High Court, ultimately, stood vacated by the final decision, given on 13th September, 2019.

It is the contention of Mr. Dastur, that after the said CRR was finally disposed of and having lost the protective cover, the petitioner even did not appear before the investigating agency, pursuant to the notice being served afresh upon him requiring his presence on subsequent dates, as mentioned in the notices, found in the compilation, placed before us by the CBI for consideration.

Mr. Roy, however, attempted to justify that the petitioner was on leave till 25th September, 2019 with due intimation to CBI and the instant application for anticipatory bail was taken up for hearing on urgent basis on 26th September, 2019.

Mr. Dastur, further submits that if this application under Section 438 is allowed giving the petitioner protection against

custodial interrogation the investigation which reached certain stage would be grossly hampered.

Mr. Roy in support of his submission has placed reliance on two decisions:

• Siddharam Satlingappa Mhetre –Vs. – State of Maharashtra reported in (2011) 1 SCC 694 &

• Santosh s/o Dwarkadas Fafat –Vs. – State of Maharashtra reported in (2017) 9 SCC 714.

Mr. Dastur appearing for the CBI has relied on three decisions:

• State represented by the CBI –Vs. – Anil Sharma reported in (1997) 7 SCC 187;

• Sudhir –Vs. – State of Maharashtra & Anr. reported in

(2016) 1 SCC 146 &

P. Chidambaram –Vs. – Directorate of Enforcement Published in 2019 SCC online SC 1143

In order to correctly assess the prayer for pre-arrest bail, and the ratio decided by the Hon’ble Apex Court, we deem it appropriate to first consider the decision, which have been relied on by Mr. Dastur.

The first decision delivered in State represented by CBI (supra), relied on by Mr. Dastur, is on the issue of custodial interrogation for eliciting more useful information and material from the interrogatee. Mr. Dastur has drawn our attention to paragraphs 4, 6 and 7. This decision is, however, distinguishable not only from the facts, but also conspicuously differentiable from the judgment, delivered by the Hon’ble Apex Court in the case of Siddharam Satlingappa Mhetre (supra), which basically concerned the personal liberty of a person available under Article 21 of the Constitution of India in context with the decision of the Apex Court, delivered in the case of Gurbaksh Singh Sibbia Etc –Vs. – State Of Punjab reported in (1980) 2 SCC 565. In the case referred above by Mr. Dastur there was allegation levelled by CBI that the respondent amassed wealth far in excess of his known sources of income rendering him to be subjected to a prosecution under Section 13(2) of the Prevention and Corruption Act, 1988. The court at the first instance granted pre-arrest bail, which was cancelled by the concerned High Court and cancellation was however, affirmed by the Hon’ble Apex Court observing therein that the respondent having held a high office, the chance of exercising his influence would create a great handicap to the investigating agency, while interrogating a person, already armed with an order of anticipatory bail, because the custodial interrogation being qualititably more elicitation oriented and that questioning a suspect who is well protected with a favourable order under Section 438 of the Code would render the questioning a mere ritual. The petitioner herein involved in this case not only once, but in all twice subjected himself for questioning purpose covering a period of 44 hours (approx) meaning thereby he had consciously offered himself to be interrogated in the interest of ongoing investigation.

The next decision relied on by Mr. Dastur in Sudhir (supra) relates to case where allegations are of serious nature including corruption and mis-appropriation of public fund requiring custodial interrogation. The appeal before the Hon’ble Apex Court was against the order of cancellation of bail granted by the High Court. The case is distinguishable on fact, that in the cited decision the two First Information Reports were registered against the accused/appellants against themselves with serious allegations of criminal mis-appropriation of funds, released for implementation of scheme of drinking water in the villages, in the context with which, the Apex Court felt the necessity of custodial interrogation for the conduct of the appellants causing the investigation to hold up for sometimes, and upon consideration of such conduct, the anticipatory bail was cancelled observing therein that the investigation could not be proceeded in the event of the appellants being armed with an anticipatory bail. The gist of the materials being extract of the case diary, placed before us in the form of compilation, as mentioned hereinabove, do not conspicuously transpire anything that at the instance of the petitioner the investigation got halted for his active contribution, because investigation has extensively dealt with to reveal the scam examining several persons not only from the police but also from the side of the State.

In context of that fact, the Hon’ble Apex Court considering the ratio of the decision in Gurbaksh Singh Sibbia (supra) has held that the relief of anticipatory bail cannot be said to be barred merely for

the reasons that the allegations relate to economic offences or corruption and clarified that where the allegations are mala fide, prayer for anticipatory bail can be accepted.

Considering the ratio of Siddharam Satlingappa Mhetre (supra) the Hon’ble Apex Court discussed in paragraph 112 thereof, which stated “While considering the prayer for grant of anticipatory bail, a balance has to be struck between two factors namely, no prejudice should be caused to the free, fair and full investigation and there should be prevention of harassment, humiliation and unjustified detention of the accused.”

In the case of P. Chidambaram (supra), unlike the case in hand, there is no allegation of money laundering proceeds of the crime as against the present petitioner seeking pre-arrest bail. The significant aspect to be kept in mind is that petitioner has come before the Court with a prayer for anticipatory bail even after subjecting himself for interrogation/ questioning not only once in Shillong, but also here in Kolkata to facilitate investigation. It is thus, not the position that petitioner purposefully kept himself concealed avoiding the desired questioning by CBI. This case is also distinguishable against the petitioner, who was subjected to repeated interrogation, as pointed out earlier, alleging to have made concealment of the materials, yet to be collected. The purpose of custodial interrogation being to elicit materials which may lead to recovery of relevant information, in our considered perception, needs to be critically appreciated in context with the peculiarity of the circumstances involved in this case, wherein petitioner offered himself for interrogation on repeated occasions, when investigating agency was left with sufficient opportunity to collect and/or derive relevant information in the interest of unearthing the prosecution.

We have considered the submissions of Mr. Roy and the principles laid down in the decisions on which he placed reliance. The case of Siddharam Satlingappa Mhetre (supra) has been cited by Mr. Roy, to enlighten the Court for the consideration of the parameters, laid down by the Supreme Court. In the said decision, the Hon’ble Apex Court observed that in the earlier Constitution Bench decision in Gurbaksh Singh Sibbia Etc –Vs. – State Of Punjab reported in (1980) 2 SCC 565 it was held that a person seeking anticipatory bail is still free man, entitled to the presumption of innocence, and the person seeking anticipatory bail, submit himself to the restraint and conditions on his freedom, by accepting the conditions which the Court may deem fit to impose any consideration of the assurance that if he is arrested, he shall be enlarged on bail. We also find that the Hon’ble Apex Court observed that the appropriate course of action ought to be that after evaluating averments and accusation available on record, if the Court is inclined to grant anticipatory bail then an interim bail, can be granted and notice be issued to the Public Prosecutor. After hearing the Public Prosecutor, the Court may either reject the bail application, or confirm initial order of granting bail. The Court would certainly be entitled to impose conditions for grant of anticipatory bail. The Public Prosecutor or the complainant would be at liberty to move the same Court for cancellation or modifying the conditions of bail any time, if liberty granted by the Court is misused.

Therefore, the bail granted by the Court should ordinarily continue till trial of the case. The provisions of Section 438 of the Code of Criminal Procedure is not an unfettered power granted in favour of the accused rather the same is very restricted and subject to reasonable restrictions.

Section 438 Cr.P.C. itself supplied the conditions which the Court can impose at the time of granting bail to the petitioner. Even the Court can impose such other condition, if it thinks fit and proper. Considering the application for anticipatory bail the appropriate Court while dealing with a regular application for anticipatory bail should come to an independent conclusion whether under the facts and circumstances and the available materials, the prayer for anticipatory bail should be allowed or not.

In the aforesaid decision of Siddharam Satlingappa Mhetre (supra) the principles and parameters have been laid down in paragraphs 109 and112 respectively and the same are set out below:

“Para 109: A good deal of misunderstanding with regard to the ambit and scope of section 438 Cr.P.C. could have been avoided in case the Constitution Bench decision of this court in Sibbia’s case was correctly understood, appreciated and applied. This Court in the Sibbia’s case laid down the following principles with regard to anticipatory bail:

a) Section 438(1) is to be interpreted in the light of Article 21 of the Constitution of India.

b) Filing of FIR is not a condition precedent to exercise of power under section 438.
c) Order under section 438 would not affect the right of police to conduct investigation.

d) Conditions mentioned in section 437 cannot be read into section 438.

e) Although the power to release on anticipatory bail can be described as of an “extraordinary” character this would “not justify the conclusion that the power must be exercised in exceptional cases only.” Powers are discretionary to be exercised in the light of the circumstances of each case.
f) Initial order can be passed without notice to the Public Prosecutor. Thereafter, notice must be issued forthwith and question ought to be re- examined after hearing. Such ad interim order must conform to requirements of the section and suitable conditions should be imposed on the applicant.

Para 112: The following factors and parameters can be taken into consideration while dealing with the anticipatory bail:

i. The nature and gravity of the accusation and the exact role of the accused must be properly comprehended before arrest is made;

ii. The antecedents of the applicant including the fact as to whether the accused has previously undergone imprisonment on conviction by a Court in respect of any cognizable offence;

iii. The possibility of the applicant to flee from justice;

iv. The possibility of the accused’s likelihood to repeat similar or the other offences.

v. Where the accusations have been made only with the object of injuring or humiliating the applicant by arresting him or her.

vi. Impact of grant of anticipatory bail particularly in cases of large magnitude affecting a very large number of people.

vii. The courts must evaluate the entire available material against the accused very carefully. The court must also clearly comprehend the exact role of the accused in the case. The cases in which accused is implicated with the help of sections 34 and 149 of the Indian Penal Code, the court should consider with even greater care and caution because over implication in the cases is a matter of common knowledge and concern;

viii. While considering the prayer for grant of anticipatory bail, a balance has to be struck between two factors namely, no prejudice should be caused to the free, fair and full investigation and there should be prevention of harassment, humiliation and unjustified detention of the accused;

ix. The court to consider reasonable apprehension of tampering of the witness or apprehension of threat to the complainant;

x. Frivolity in prosecution should always be considered and it is only the element of genuineness that shall have to be considered in the matter of grant of bail and in the event of there being some doubt as to the genuineness of the prosecution, in the normal course of events, the accused is entitled to an order of bail.”

In paragraph 113, however, the Supreme Court more specifically stated that “arrest should be the last option and it should be restricted to those exceptional cases where arresting the accused is imperative in the facts and circumstances of that case. The Court must carefully examine the entire available record and particularly the allegations which have been directly attributed to the accused and these allegations are corroborated by other material and circumstances on record.”

The ratio of the decision arising out of Siddaram Mahtre (supra), being basically founded upon Gurbaksh Singh Sibbia (supra), the same was reinforced in the case of Bhadresh Bipinbhai Sheth vs State Of Gujarat & Anr, reported in (2016) 1 SCC 152 which has, however, not been cited by either of the parties fighting over the issue before us.

When the apex Court granted protection to the petitioner, by an order dated 05.02.2019 prohibiting CBI from arresting the petitioner, the interrogation/investigation in respect of CDRs with insufficient particulars being sent on 28.06.2018, is expected to have been directed towards securing explanation from the petitioner as regards the alleged delay caused in sending the CDRs together with the alleged suppression, and also for causing disappearance of material evidence in connivance with some designed persons. No new material was, however, sent to CBI at the instance of the petitioner subsequent to 28.06.2018 creating a confusion, or a further mismatch with the materials pertaining to the CDRs already sent. For the alleged discrepancies in the CDRs, the CBI had already collected the relevant information from the service providers, applicable to the case and compared the same with that of the CDRs with insufficient particulars. In paragraph 7 of the additional affidavit, dated 18th February, 2019, filed on behalf of the CBI in connection with the contempt petition pending before the Apex Court, the CBI had specifically contended that the CDRs of the accused, when analysed by the CBI were found to be tampered/doctorred and the material evidence had been destroyed. It was also contended therein that comparison of the doctorred/tampered CDRs, given by petitioner and the CDRs obtained by the CBI from the service providers left no manner of doubt that the CDRs handed over by the petitioner on 28.06.2018 were tampered and doctored. That being the position, relying upon such assertion of the CBI, made in paragraph 7 of such affidavit, referred above, the scope of requirement of any extensive investigation taking the petitioner into custody has been minimised. As has been brought to our attention by the learned advocate for the CBI that the petitioner always attempted to obfuscate the investigation revealing his strong sense of avoidance to the notices and in doing so, the order dated 06.12.2018 and 18.12.2018 passed in CRR 2456 of 2018 has been wrongly interpreted upon misconstruction of such orders in as much as such orders had no reasonable nexus with the instant case. Rightly attention of the Court has been drawn by the learned Senior Advocate for the CBI to the communication issued to petitioner on the basis of misconstruction of the orders dated 06.12.2018 and 18.12.2018 rendering the petitioner to become hostile to the terms of the notice. True it is that the petitioner is the top cop of the State, and at the same time it is also true that he has to rely upon the communication, made to him legally from the State authorities, responsible to make communication. If there be any irregularities in the matter of misconstruction of such orders, pursuant to the valid legal communication being made to the petitioner, the petitioner cannot be made to suffer the consequence, that arose beyond his control.

Notice under Section 160 of the Cr.P.C. describing the petitioner to be a witness was served on innumerable occasions. Learned advocate for both the parties are ad idem to the stand that so long the proceeding pending before the High Court in connection with CRR 1308 of 2019 before a learned Single Judge of this Court, the status of the petitioner was not above the witness. The situation turned a dramatic turn, when the CBI prayed for issuance of a warrant of arrest before the learned Additional Chief Judicial Magistrate, Alipore, South 24 Parganas, which was rejected, accepting the petitioner to be an accused involved in this case. It is, therefore, quite relevant to take note that till 13.09.2019, the petitioner, whose status remained as witness suddenly transformed into the category of accused, presumably with the collection of startling/clinching materials, that have been collected in the meantime against the petitioner requiring custodial interrogation, is conspicuously absent. The words “any person” appearing in Sections 160 and 161 Cr. P.C. are wide enough to include the person, who subsequently becomes an accused in course of investigation, and such proposition came to be decided in the case of Mahabir Mandal And Others –Vs. – State Of Bihar reported in AIR 1972 SC 1331.

Therefore, the status of a witness is convertible to the accused during the course of investigation subject to the collection of independent sufficient incriminating materials against the petitioner, which must be in the nature of startling and clinching in sense.

Much has been emphasized by the learned advocate for the petitioner regarding the antecedent of petitioner for his avoidance to the notice on innumerable occasions, and even after making a breach of the conditions while enjoying interim protection in connection with CRR 1308 of 2019 limiting his movement and further confining him to his residence, but uptil now there is nothing produced before us to challenge the order passed in CRR 1308 of 2019, which paves the way for us to conclude that disputing with the conditions and even for a violation of the conditions of the interim protection, the CBI had never challenged taking out an appropriate application, in spite of the liberty being granted to that effect, and that apart in pursuance of liberty being granted by the Apex Court, while withdrawing interim protection against the petitioner to take appropriate steps, the CBI has only moved before the concerned Magistrate with a prayer for issuance of non-bailable warrant.

Antecedent, if isolatedly viewed of recent past of a person, without looking into the entire tenure of the petitioner, when he continued to discharge his police function, proper reflection of antecedent cannot be perfectly ascertained.

In order to unfurl the larger conspiracy to prevent unearthing money, there has been extensive repeated questioning session as regards the petitioner and several persons were also subjected to interrogation for their respective role in the scam, and upon consideration of the materials produced before us being the relevant extract of the Case Diary, shown in the compilation referred above, we have hardly any scope to assume that it is the petitioner only clogging the investigation and without which the investigation is supposed to face the undesirable consequence.

Before this judgment is delivered, we ourselves made threadbare discussion over all the pros and cons of the matter relating to the scope of grant or refusal of the prayer for anticipatory bail. At the commencement of the hearing, we pointed out to the learned advocates for both the sides requesting them to make their precise argument only on the scope of Section 438. While passing the judgment we have persuaded ourselves to confine within the statutory limit of Section 438 of the Code of Criminal Procedure. We have reached a consensus in passing this judgment having equal contribution.

Having considered the rival contentions of the parties and the materials placed before us, in our honest effort while ensuring to strike a balance between the individual’s right to personal freedom and the right of the investigation agency to interrogate the petitioner as to the materials so far collected, we are of the considered view that this is not an appropriate case, when custodial interrogation would be justified.

Consequently, the custodial interrogation, as sought to be enforced by the CBI in the given set of circumstances, is not encouraging one, as it does not inspire confidence of this Court to justify custodial interrogation of the petitioner in this case, when he has rendered his cooperation substantially in the interest of investigation.

Accordingly, we direct that in the event of his arrest the petitioner shall be released on bail upon furnishing a bond of Rs.50,000/- with two sureties of like amount each, one of whom must be local having landed property within the jurisdiction of Kolkata, and he shall comply with the conditions as laid down in Section 438(2) of the Code of Criminal Procedure, and on further condition that he will render cooperation to the investigating officer by physically presenting himself for interrogation before the CBI at Kolkata, as and when demanded, but at least upon 48 hours prior notice being served upon him.

We make it clear that non-observance of the conditions so imposed, apart from the conditions imbeded in Section 438(2) Cr. P.C., as imposed hereinabove, would enable the CBI to seek cancellation of the bail here in granted without making any reference to the Court and the learned Court below would be at his liberty to go for cancellation on a proven breach of the condition without making reference to this Court.

The application for anticipatory bail stands allowed.

CRM no. 9230 of 21019 is thus, disposed of.

The Criminal Section is directed to send down the lower Court records together with a copy of the judgment forthwith to the concerned learned trial Court.

Urgent Photostat certified copy, if applied for, be delivered to the learned counsel for the parties, upon compliance with all usual formalities.

I agree.

(Subhasis Dasgupta, J.) (Sahidullah Munshi, J.)

P. CHIDAMBARAM VS DIRECTORATE OF ENFORCEMENT – 5/9/2019

SUPREME COURT OF INDIA JUDGMENTS

Grant of anticipatory bail at the stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting the useful information and also the materials which might have been concealed. Success in such interrogation would elude if the accused knows that he is protected by the order of the court. Grant of anticipatory bail, particularly in economic offences would definitely hamper the effective investigation.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1340 2019

(Arising out of SLP(Crl.) No.7523 of 2019)

P. CHIDAMBARAM VS DIRECTORATE OF ENFORCEMENT

JUDGMENT

R. BANUMATHI, J.

1. Leave granted.

2. This appeal relates to the alleged irregularities in Foreign Investment Promotion Board (FIPB) clearance given to the INX Media for receiving foreign investment to the tune of Rs.305 crores against approved inflow of Rs.4.62 crores. The High Court of Delhi rejected the appellant’s plea for anticipatory bail in the case registered by Central Bureau of Investigation (CBI) being RC No.220/2017-E-0011 under Section 120B IPC read with the Prevention of Corruption Act, 1988. By the impugned order dated 20.08.2019, the High Court also refused to grant anticipatory bail in the case registered by the Enforcement Directorate in ECIR No.07/HIU/2017 punishable under Sections 3 and 4 of the Prevention of Money-Laundering Act, 2002.

3. Grievance of the appellant is that against the impugned order of the High Court, the appellant tried to get the matter listed in the Supreme Court on 21.08.2019; but the appellant could not get an urgent hearing in the Supreme Court seeking stay of the impugned order of the High Court. The appellant was arrested by the CBI on the night of 21.08.2019. Since the appellant was arrested and remanded to custody in CBI case, in view of the judgment of the Constitution Bench in Shri Gurbaksh Singh Sibbia and others v. State of Punjab (1980) 2 SCC 565, the appellant cannot seek anticipatory bail after he is arrested. Accordingly, SLP(Crl.) No.7525 of 2019 preferred by the appellant qua the CBI case was dismissed as infructuous vide order dated 26.08.2019 on the ground that the appellant has already been arrested and remanded to custody. This Court granted liberty to the appellant to work out his remedy in accordance with law.

4. On 15.05.2017, CBI registered FIR in RC No.220/2017-E-0011 under Section 120B IPC read with Section 420 IPC, Section 8 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 against the accused viz. (i) INX Media through its Director Indrani Mukherjea; (ii) INX News through its Director Sh. Pratim Mukherjea @ Peter Mukherjea and others; (iii) Sh. Karti P. Chidambaram; (iv) Chess Management Services through its Director Sh. Karti P. Chidambaram and others; (v) Advantage Strategic Consulting through its Director Ms. Padma Vishwanathan @ Padma Bhaskararaman and others; (vi) unknown officers/officials of Ministry of Finance, Govt. of India; and (vii) other unknown persons for the alleged irregularities in giving FIPB’s clearance to INX Media to receive overseas funds of Rs.305 crores against approved Foreign Direct Investment (FDI) of Rs.4.62 crores.

5. Case of the prosecution in the predicate offence is that in 2007, INX Media Pvt. Ltd. approached Foreign Investment Promotion Board (FIPB) seeking approval for FDI upto 46.216 per cent of the issued equity capital. While sending the proposal by INX Media to be placed before the FIPB, INX Media had clearly mentioned in it the inflow of FDI to the extent of Rs.4,62,16,000/- taking the proposed issue at its face value. The FIPB in its meeting held on 18.05.2007 recommended the proposal of INX Media subject to the approval of the Finance Minister-the appellant. In the meeting, the Board did not approve the downstream investment by INX Media in INX News. In violation of the conditions of the approval, the recommendation of FIPB:- (i) INX Media deliberately made a downstream investment to the extent of 26% in the capital of INX News Ltd. without specific approval of FIPB which included indirect foreign investment by the same Foreign Investors; (ii) generated more than Rs.305 crores FDI in INX Media which is in clear violation of the approved foreign flow of Rs.4.62 crores by issuing shares to the foreign investors at a premium of more than Rs.800/- per share.

6. Upon receipt of a complaint on the basis of a cheque for an amount of Rs.10,00,000/- made in favour of M/s Advantage Strategic Consulting Private Limited (ASCPL) by INX Media, the investigation wing of the Income Tax Department proceeded to investigate the matter and the relevant information was sought from the FIPB, which in turn, vide its letter dated 26.05.2008 sought clarification from the INX Media which justified its action saying that the downstream investment has been authorised and that the same was made in accordance with the approval of FIPB. It is alleged by the prosecution that in order to get out of the situation without any penal provision, INX Media entered into a criminal conspiracy with Sh. Karti Chidambaram, Promoter Director, Chess Management Services Pvt. Ltd. and the appellant-the then Finance Minister of India. INX Media through the letter dated 26.06.2008 tried to justify their action stating that the downstream investment has been approved and the same was made in accordance with approval.

7. The FIR further alleges that for the services rendered by Sh. Karti

Chidambaram to INX Media through Chess Management Services in getting the issues scuttled by influencing the public servants of FIPB unit of the Ministry of Finance, consideration in the form of payments were received against invoices raised on INX Media by ASCPL. It is alleged in the FIR that the very reason for getting the invoices raised in the name of ASCPL for the services rendered by Chess Management Services was with a view to conceal the identity of Sh. Karti Chidambaram inasmuch as on the day when the invoices were raised and payment was received. It is stated that Sh. Karti Chidambaram was the Promoter, Director of Chess Management Services whereas ASCPL was being controlled by him indirectly. It is alleged that the invoices approximately for an amount of Rs.3.50 crores were falsely got raised in favour of INX Media in the name of other companies in which Sh. Karti Chidambaram was having sustainable interest either directly or indirectly. It is alleged that such invoices were falsely got raised for creation of acquisition of media content, consultancy in respect of market research, acquisition of content of various genre of Audio-Video etc. It is alleged that INX Media Group in his record has clearly mentioned the purpose of payment of Rs.10,00,000/- to ASCPL as towards “management consultancy charges towards FIPB notification and clarification”. Alleging that the above acts of omission and commission prima facie disclose commission of offence, CBI has registered FIR in RC No.220/2017-E-0011 on 15.05.2017 under Section 120B read with Section

420 IPC, Section 8 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 against the aforesaid accused.

8. On the basis of the said FIR registered by CBI, the Enforcement Directorate registered a case in ECIR No.07/HIU/2017 against the aforesaid accused persons for allegedly committing the offence punishable under Sections 3 and 4 of the Prevention of Money-Laundering Act, 2002 (PMLA). Ever since the registration of the cases in 2017, there were various proceedings seeking bail and number of other proceedings pending filed by Sh. Karti Chidambaram and other accused. Finally, the Delhi High Court granted bail to Sh. Karti Chidambaram in INX Media case filed by CBI on 23.03.2018. Thereafter, the appellant moved Delhi High Court seeking anticipatory bail both in CBI case and also in money-laundering case filed by Enforcement Directorate. On 25.07.2018, the Delhi High Court granted the appellant interim protection from arrest in both the cases and the same was extended till 20.08.2019 – the date on which the High Court dismissed the appellant’s petition refusing to grant anticipatory bail.

9. The High Court dismissed the application refusing to grant anticipatory bail to the appellant by holding that “it is a classic case of money-laundering”. The High Court observed that “it is a clear case of money-laundering”. The learned Single Judge dismissed the application for anticipatory bail by holding “that the alleged irregularities committed by the appellant makes out a prima facie case for refusing pre-arrest bail to the appellant”. The learned Single Judge also held that “considering the gravity of the offence and the evasive reply given by the appellant to the questions put to him while he was under the protective cover extended to him by the court are the twin factors which weigh to deny the pre-arrest bail to the appellant”. Being aggrieved, the appellant has preferred this appeal.

10. Lengthy arguments were heard on number of hearings stretched over for long time. Learned Senior counsel appearing for the appellant Mr. Kapil Sibal and Mr. Abhishek Manu Singhvi made meticulous submissions on the concept of life and liberty enshrined in Article 21 of the Constitution of India to urge that the appellant is entitled to the privilege of anticipatory bail. Arguments were also advanced on various aspects – whether the court can look into the materials produced by the respondent-Enforcement Directorate to seek custody of the appellant when the appellant was not confronted with those documents on the three dates of interrogation of the appellant conducted on 19.12.2018, 01.01.2019 and 21.01.2019. Interlocutory application was filed by the appellant to produce the transcripts of the questions put to the appellant and the answers given by the appellant, recorded by Enforcement Directorate. Countering the above submissions, Mr. Tushar Mehta, learned Solicitor General made the submissions that grant of anticipatory bail is not part of Article 21 of the Constitution of India. Mr. Tushar Mehta urged that having regard to the materials collected by the respondent-Enforcement Directorate and the specific inputs and in view of the provisions of the special enactment-PMLA, custodial interrogation of the appellant is required and the appellant is not entitled to the privilege of anticipatory bail.

Contention of Mr. Kapil Sibal, learned Senior counsel:-

11. Mr. Kapil Sibal, learned Senior counsel appearing on behalf of the appellant submitted that the clearance for INX FDI was approved by Foreign Investment Promotion Board (FIPB) consisting of six Secretaries and the appellant as the then Finance Minister granted approval in the normal course of official business. The learned Senior counsel submitted that the crux of the allegation is that the appellant’s son Sh. Karti Chidambaram tried to influence the officials of FIPB for granting ex-post facto approval for downstream investment by INX Media to INX News; whereas neither the Board members of FIPB nor the officials of FIPB have stated anything about the appellant’s son Sh. Karti Chidambaram that he approached and influenced them for ex-post facto approval. The learned Senior counsel contended that the entire case alleges about money paid to ASCPL and Sh. Karti Chidambaram is neither the share-holder nor a Director in the said ASCPL; but the Enforcement Directorate has falsely alleged that Sh. Karti Chidambaram has been controlling the company-

ASCPL. It was submitted that the appellant has nothing to do with the said ASCPL to whom money has been paid by INX Media.

12. Taking us through the impugned judgment and the note said to have been submitted by the Enforcement Directorate before the High Court, the learned Senior counsel submitted that the learned Single Judge has “copied and pasted” paragraphs after paragraphs of the note given by the respondent in the court. It was urged that there was no basis for the allegations contained in the said note to substantiate the alleged transactions/transfer of money as stated in the tabular column given in the impugned order.

13. So far as the sealed cover containing the materials sought to be handed over by the Enforcement Directorate, the learned Senior counsel raised strong objections and submitted that the Enforcement Directorate cannot randomly produce the documents in the court “behind the back” of the appellant for seeking custody of the appellant. Strong objections were raised for the plea of Enforcement Directorate requesting the court to receive the sealed cover and for looking into the documents/material collected during the investigation allegedly showing the trail of money in the name of companies and the money-laundering.

14. The appellant was interrogated by the respondent on three dates viz. 19.12.2018, 01.01.2019 and 21.01.2019. So far as the observation of the

High Court that the appellant was “evasive” during interrogation, the learned Senior counsel submitted that the appellant has well cooperated with the respondent and the respondent cannot allege that the appellant was “non-cooperative”. On behalf of the appellant, an application has also been filed seeking direction to the respondent to produce the transcripts of the questioning conducted on 19.12.2018, 01.01.2019 and 21.01.2019. The learned Senior counsel submitted that the transcripts will show whether the appellant was “evasive” or not during his questioning as alleged by the respondent.

15. Learned Senior counsel submitted that the provision for anticipatory bail i.e. Section 438 Cr.P.C. has to be interpreted in a fair and reasonable manner and while so, the High Court has mechanically rejected the anticipatory bail. It was further submitted that in case of offences of the nature alleged, everything is borne out by the records and there is no question of the appellant being “evasive”. The learned Senior counsel also submitted that co-accused Sh. Karti Chidambaram and Padma Bhaskararaman were granted bail and the other accused Indrani Mukherjea and Sh. Pratim Mukherjea @ Peter Mukherjea are on statutory bail and the appellant is entitled to bail on parity also.

Contention of Mr. Abhishek Manu Singhvi, learned Senior counsel:-

16. Reiterating the submission of Mr. Kapil Sibal, Mr. Abhishek Manu Singhvi, learned Senior counsel submitted that the Enforcement Directorate cannot say that the appellant was “non-cooperative” and “evasive”. Mr. Singhvi also urged for production of transcripts i.e. questions put to the appellant and the answers which would show whether the appellant has properly responded to the questions or not. Placing reliance upon Additional District Magistrate, Jabalpur v. Shivakant Shukla (1976) 2 SCC 521, the learned Senior counsel submitted that the respondent cannot rely upon the documents without furnishing those documents to the appellant or without questioning the appellant about the materials collected during the investigation. Reiterating the submission of Mr. Sibal, Mr. Singhvi contended that the High Court has denied anticipatory bail to the appellant on the basis of materials produced by the respondent in the cover before the court which were never shown to the appellant nor was the appellant confronted with the same. The learned Senior counsel submitted that the alleged occurrence was of the year 2007-08 and Sections 420 IPC and 120B IPC and Section 13 of the Prevention of Corruption Act were not part of the “scheduled offence” of Prevention of Money-Laundering Act in 2008 and were introduced by a notification dated 01.06.2009 and in view of the protection given under Article 20(1) of the Constitution of India, there can never be a retrospective operation of a criminal/penal statute. Placing reliance upon Rao Shiv Bahadur Singh and another v. State of Vindhya Pradesh AIR 1953 SC 394, it was contended that the appellant has to substantiate the contention that the acts charged as offences were offences “at the time of commission of the offence”. The learned Senior counsel urged that in 2007-2008 when the alleged acts of commission and omission were committed, they were not “scheduled offences” and hence prosecution under Prevention of Money-Laundering Act, 2002 is not maintainable.

17. The learned Senior counsel has taken strong exception to the two factors stated by the High Court in the impugned order for denying pre-arrest bail i.e. (i) gravity of the offence; and (ii) the appellant was “evasive” to deny the anticipatory bail. The learned Senior counsel submitted that the “gravity of the offence” cannot be the perception of the individual or the court and the test for “gravity of the offence” should be the punishment prescribed by the statute for the offence committed. Insofar as the finding of the High Court that “the appellant was evasive to the questions”, the learned Senior counsel submitted that the investigating agency-Enforcement Directorate cannot expect an accused to give answers in the manner they want and that the accused is entitled to protection under Article 20(3) of the Constitution of India. Reliance was placed upon Santosh s/o Dwarkadas Fafat v. State of Maharashtra (2017) 9 SCC 714.

Contention of Mr. Tushar Mehta, learned Solicitor General:-

18. Taking us through the Statement of Objects and Reasons and salient features of the PMLA, the learned Solicitor General submitted that India is a part of the global community having responsibility to crackdown on money-laundering with an effective legislation and PMLA is a result of the joint initiatives taken by several nations. Taking us through the various provisions of the PMLA, the learned Solicitor General submitted that money-laundering poses a serious threat to the financial system and financial integrity of the nation and has to be sternly dealt with. It was submitted that PMLA offence has two dimensions – predicate offence and money-laundering. Money-laundering is a separate and independent offence punishable under Section 4 read with Section 3 of the PMLA.

19. Learned Solicitor General submitted that under Section 19 of PMLA, specified officers, on the basis of material in possession, having reason to believe which is to be recorded in writing that the person has been guilty of the offence under the Act, have power to arrest. It was urged that the power to arrest and necessary safeguards are enshrined under Section 19 of the Act. It was submitted that since respondent has collected cogent materials to show that it is a case of money-laundering and the Enforcement Directorate has issued Letter rogatory and if the Court intervenes by granting anticipatory bail, the authority cannot exercise the statutory right of arrest and interrogate the appellant.

20. The learned Solicitor General submitted that they have obtained specific inputs from overseas banks and also about the companies and properties and it is a clear case of money-laundering. The learned Solicitor General submitted that the Court has power to look into the materials so collected by the Enforcement Directorate and the same cannot be shared with the appellant at this initial stage when the Court is considering the matter for grant of pre-arrest bail. Relying upon number of judgments, the learned Solicitor General has submitted that as a matter of practice, Courts have always perused the case diaries produced by the prosecution and receive and peruse the materials/documents to satisfy its judicial conscience. In support of his contention, learned Solicitor General placed reliance upon Romila Thapar and Others v. Union of India and Others (2018) 10 SCC 753, Jai Prakash Singh v. State of Bihar and Another (2012) 4 SCC 379 and Directorate of Enforcement and Another v. P.V. Prabhakar Rao (1997) 6 SCC 647 and other judgments and requested the Court to peruse the materials produced by the Enforcement Directorate in the sealed cover.

21. Opposing the grant of anticipatory bail, the learned Solicitor General submitted that the Enforcement Directorate has cogent evidence to prove that it is a case of money-laundering and there is a need of custodial interrogation of the appellant. The learned Solicitor General submitted that the economic offences stand as a class apart and custodial interrogation is required for the Enforcement Directorate to trace the trail of money and prayed for dismissal of the appeal.

22. As noted earlier, the predicate offences are under Sections 120B IPC and 420 IPC, Section 8 and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act. Case is registered against the appellant and others under Sections 3 and 4 of PMLA. The main point falling for consideration is whether the appellant is entitled to the privilege of anticipatory bail. In order to consider whether the appellant is to be granted the privilege of anticipatory bail, it is necessary to consider the salient features of the special enactment – Prevention of Money-Laundering Act, 2002.

23. Prevention of Money-laundering Act, 2002Special Enactment:-

Money-laundering is the process of concealing illicit sources of money and the launderer transforming the money proceeds derived from criminal activity into funds and moved to other institution or transformed into legitimate asset. It is realised world around that money laundering poses a serious threat not only to the financial systems of the countries but also to their integrity and sovereignty. The Prevention of Money-laundering Act, 2002 was enacted in pursuance of the Political Declaration adopted by the Special Session of the United Nations General Assembly held in June 1998, calling upon the Member States to adopt national money-laundering

legislation and programme, primarily with a view to meet out the serious threat posed by money laundering to the financial system of the countries and to their integrity and sovereignty.

24. Statement of Objects and Reasons to the Prevention of Money-laundering Act, 2002 recognises that money laundering poses a serious threat not only to the financial systems of the countries but also to their integrity and sovereignty. PMLA is a special enactment containing the provisions with adequate safeguards with a view to prevent money-

laundering. The Preamble to the Prevention of Money-Laundering Act, 2002 states that “An Act to prevent money-laundering and to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto.”

25. Chapter II of PMLA contains provisions relating to the offences of money-laundering. Section 2(1)(p) of PMLA defines “money-laundering” that it has the same meaning assigned to it in Section 3. Section 2(1)(ra) of PMLA defines “offence of cross border implications”. To prevent offences of “cross border implications”, PMLA contains Sections 55 to 61 dealing with reciprocal arrangement for assistance in certain matters and procedure for attachment and confiscation of property between the contracting States with regard to the offences of money-laundering and predicate offences.

Section 2(1)(y) of PMLA defines “scheduled offence” which reads as

under:-

“2. Definitions –

(1)……

(y) “scheduled offence” means –

(i) the offences specified under Part A of the Scheduled; or

(ii) the offences specified under Part B of the Schedule if the total value involved in such offences is one crore rupees or more; or

(iii)the offences specified under Part C of the Schedule.”

“Scheduled Offence” is a sine qua non for the offence of money-laundering which would generate the money that is being laundered. PMLA contains Schedules which originally contained three parts namely Part A, Part B and Part C. Part A contains various paragraphs which enumerate offences under the Indian Penal Code, Narcotic Drugs and Psychotropic Substances Act, 1985, offences under the Explosives Substances Act, 1908 and the offences under the Prevention of Corruption Act, 1988 (paragraph 8) etc. The Schedule was amended by Act 21 of 2009 (w.e.f. 01.06.2009). Section 13 of Prevention of Corruption Act was inserted in the Part A of the Schedule to PMLA by the Amendment Act, 16 of 2018 (w.e.f. 26.07.2018).

26. Section 3 of PMLA stipulates “money-laundering” to be an offence. Section 3 of PMLA states that whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of the crime and projecting it as untainted property shall be guilty of the offences of money laundering. The provisions of the PMLA including Section 3 have undergone various amendments. The words in Section 3 “with the proceeds of crime and projecting” has been amended as “proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming” by the Amendment Act 2 of 2013 (w.e.f. 15.02.2013).

27. Section 4 of PMLA deals with punishment for money laundering. Prior to Amendment Act 2 of 2013, Section 4 provided punishment with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and the fine which may extend to Rs.5,00,000/-. By Amendment Act 2 of 2013, Section 4 is amended w.e.f. 15.02.2013 vide S.O. 343(E) dated 08.02.2013. Now, the punishment prescribed under Section 4 of PMLA to the offender is rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and the offender is also liable to pay fine. The limit of fine has been done away with and now after the amendment, appropriate fine even above Rs.5,00,000/- can be imposed against the offender.

28. Section 5 of PMLA which provides for attachment of property involved in money laundering, states that where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this Section, has “reason to believe” (the reason for such belief to be recorded in writing), on the basis of material in his possession, that (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under Chapter III, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and fifty days from the date of the order, in such manner as may be prescribed. Section 5 provides that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under Section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be.

29. The term “reason to believe” is not defined in PMLA. The expression “reason to believe” has been defined in Section 26 of IPC. As per the definition in Section 26 IPC, a person is said to have “reason to believe” a thing, if he has sufficient cause to believe that thing but not otherwise. The specified officer must have “reason to believe” on the basis of material in his possession that the property sought to be attached is likely to be concealed, transferred or dealt with in a manner which may result in frustrating any proceedings for confiscation of their property under the Act. It is stated that in the present case, exercising power under Section 5 of the PMLA, the Adjudicating Authority had attached some of the properties of the appellant. Challenging the attachment, the appellant and others are said to have preferred appeal before the Appellate Tribunal and stay has been granted by the Appellate Authority and the said appeal is stated to be pending.

30. As rightly submitted by the learned Solicitor General, sufficient safeguards are provided under the provisions of PMLA. Under Section 5 of PMLA, the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of Section 5 who passed the impugned order is required to have “reason to believe” that the properties sought to be attached would be transferred or dealt with in a manner which would frustrate the proceedings relating to confiscation of such properties. Further, the officer who passed the order of attachment is required to record the reasons for such belief. The provisions of the PMLA and the Rules also provide for manner of forwarding a copy of the order of provisional attachment of property along with material under sub-section (2) of Section 5 of PMLA to the Adjudicating Authority.

31. In order to ensure the safeguards, in exercise of power under Section

73 of PMLA, the Central Government has framed “The Prevention of Money-Laundering (The Manner of Forwarding a Copy of the Order of Provisional Attachment of Property along with the Material, and Copy of the Reasons along with the Material in respect of Survey, to the Adjudicating Authority and its period of Retention) Rules, 2005”. Rule 3 of the said Rules provides for manner of forwarding a copy of the order of provisional attachment of property along with the material under sub-section (2) of Section 5 of the Act to the Adjudicating Authority. Rule 3 stipulates various safeguards as to the confidentiality of the sealed envelope sent to the Adjudicating Authority.

32. Section 17 of PMLA deals with the search and seizure. Section 17 which deals with search and seizure states that where the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section on the basis of the information in his possession has “reason to believe” (reason for such belief to be recorded in writing) that any person has committed an offence which constitutes the money laundering or is in possession of any proceeds of crime involved in money laundering etc. may search building, place and seize any record or property found as a result of such search. Section 17 of PMLA also uses the expression “reason to believe” and “reason for such belief to be recorded in writing”. Here again, the authorised officer shall immediately on search and seizure or upon issuance of freezing order forward a copy of the reasons so recorded along with the material in his possession to the Adjudicating Authority in a “sealed envelope” in the manner as may be prescribed and such Adjudicating Authority shall keep such reasons and material for such period as may be prescribed. In order to ensure the sanctity of the search and seizure and to ensure the safeguards, in exercise of power under Section 73 of PMLA, the Central Government has framed “The Prevention of Money-Laundering (Forms, Search and Seizure or Freezing and the Manner of Forwarding the Reasons and Material to the Adjudicating Authority, Impounding and Custody of Records and the period of Retention) Rules, 2005”.

33. Section 19 of PMLA deals with the power of the specified officer to arrest. Under sub-section (1) of Section 19 of PMLA, the specified officer viz. the Director, the Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, on the basis of the material in possession, having “reason to believe” and “reasons for such belief be recorded in writing” that the person has been guilty of offence punishable under the PMLA, has power to arrest such person. The authorised officer is required to inform the accused the grounds for such arrest at the earliest and in terms of sub-section (3) of Section 19 of the Act, the arrested person is required to be produced to the jurisdictional Judicial Magistrate or Metropolitan Magistrate within 24 hours excluding the journey time from the place of arrest to the Magistrate’s Court. In order to ensure the safeguards, in exercise of power under Section 73 of the Act, the Central Government has framed “The Prevention of Money-Laundering (The Forms and the Manner of Forwarding a Copy of Order of Arrest of a Person along with the Material to the Adjudicating Authority and its Period of Retention) Rules, 2005”. Rule 3 of the said Rules requires the arresting officer to forward a copy of order of arrest and the material to the Adjudicating Authority in a sealed cover marked “confidential” and Rule 3 provides for the manner in maintaining the confidentiality of the contents.

34. As rightly submitted by Mr. Tushar Mehta, the procedure under PMLA for arrest ensures sufficient safeguards viz.:- (i) only the specified officers are authorised to arrest; (ii) based on “reasons to believe” that an offence punishable under the Act has been committed; (iii) the reasons for such belief to be recorded in writing; (iv) evidence and the material submitted to the Adjudicating Authority in sealed envelope in the manner as may be prescribed ensuring the safeguards in maintaining the confidentiality; and

(v) every person arrested under PMLA to be produced before the Judicial Magistrate or Metropolitan Magistrate within 24 hours. Section 19 of PMLA provides for the power to arrest to the specified officer on the basis of material in his possession and has “reason to believe” and the “reasons for such belief to be recorded in writing” that any person has been guilty of an offence punishable under PMLA. The statutory power has been vested upon the specified officers of higher rank to arrest the person whom the officer has “reason to believe” that such person has been guilty of an offence punishable under PMLA. In cases of PMLA, in exercising the power to grant anticipatory bail would be to scuttle the statutory power of the specified officers to arrest which is enshrined in the statute with sufficient safeguards.

35. Section 71 of PMLA gives overriding effect to the provisions of PMLA. Section 71 of PMLA states that the provisions of the Act would have overriding effect on the provisions of all other Acts applicable. The provisions of PMLA shall prevail over the contrary provisions of the other Acts. Section 65 of PMLA states that the provisions of Code of Criminal Procedure, 1973 shall apply to the provisions under the Act insofar as they are not inconsistent with the provisions of PMLA.

36. Insofar as the issue of grant of bail is concerned, Section 45 of PMLA starts with non-obstante clause. Section 45 imposes two conditions for grant of bail to any person accused of any offence punishable for a term of imprisonment of more than three years under Part-A of the Schedule of the Act viz., (i) that the prosecutor must be given an opportunity to oppose the application for such bail; (ii) that the court must be satisfied that there are reasonable grounds for believing that the accused persons is not guilty of such offence and that he is not likely to commit any offence while on bail.

37. The twin conditions under Section 45(1) for the offences classified thereunder in Part-A of the Schedule was held arbitrary and discriminatory and invalid in Nikesh Tarachand Shah v. Union of India and another (2018) 11 SCC 1. Insofar as the twin conditions for release of accused on bail under Section 45 of the Act, the Supreme Court held the same to be unconstitutional as it violates Articles 14 and 21 of the Constitution of India. Subsequently, Section 45 has been amended by Amendment Act 13 of 2008. The words “imprisonment for a term of imprisonment of more than three years under Part A of the Schedule” has been substituted with “accused of an offence under this Act…..”. Section 45 prior to Nikesh Tarachand and post Nikesh Tarachand reads as under:-

Section 45 – Prior to Nikesh Tarachand Shah Section 45. Offence to be cognizable and non- bailable.

(1) Notwithstanding contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail or on his own bond unless-

(i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and
(ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail;

Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs:

Section 45 – Post Nikesh Tarachand Shah Section 45. Offences to be cognizable and non-bailable.

(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence under this Act shall be released on bail or on his own bond unless-

(i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and
(ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail;

Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, or is accused either on his own or along with other co-accused of money laundering a sum of less than one crore rupees may be released on bail, if the Special court so directs.

38. The occurrence was of the year 2007-2008. CBI registered the case against Sh. Karti Chidambaram, the appellant and others on 15.05.2017 under Sections 120-B IPC read with Section 420 IPC and under Section 8 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act. Learned Senior counsel for the appellant, Mr. A.M. Singhvi has submitted that there could not have been ‘reasons to believe’ that the appellant has committed the offence under Section 3 of PMLA, since in 2007-2008 the time of commission of alleged offence, Sections 120-B IPC and 420 IPC and Section 13 of the Prevention of Corruption Act were not there in Part ‘A’ of the Schedule to PMLA and were included in Part ‘A’ of the Schedule only by Amendment Act 21 of 2009 w.e.f. 01.06.2009 and w.e.f. 26.07.2018 respectively and therefore, no prima-facie case of commission of offence by the appellant under PMLA is made out. It was urged that under Article 20 of the Constitution, no person shall be convicted of any offence except for violation of law in force at the time of the commission of that act charged as offence. When Section 120B IPC and Section 420 IPC and Section 13 of Prevention of Corruption Act were not then included in Part A of the Schedule, in 2007-2008, then the appellant and others cannot be said to have committed the offence under PMLA. Insofar as Section 8 of the Prevention of Corruption Act is concerned, it was submitted that Section 8 of the Prevention of Corruption Act is not attracted against the appellant as there are no allegations in the FIR that the appellant accepted or agreed to accept any gratification as a motive or reward for inducing any public servant and hence, the accusation under Section 8 of the Prevention of Corruption Act does not apply to the appellant. It was further submitted that even assuming Section 8 of the Prevention of Corruption Act is made out, the amount allegedly paid to ASCPL was only Rs.10,00,000/- whereas, Rs.30,00,000/- was the amount then stipulated to attract Section 8 to be the Scheduled offence under Part A of the Schedule to the Act and therefore, there was no basis for offence against the appellant and in such view of the matter, the appellant is entitled for anticipatory bail.

39. Section 45 of the PMLA makes the offence of money laundering cognizable and non-bailable and no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail unless the twin conditions thereon are satisfied. Section 120-B IPC – Criminal Conspiracy and Section 420 IPC – Cheating and dishonestly inducing delivery of property were included in Part A of the Schedule to PMLA by way of Amendment Act 21 of 2009 w.e.f. 01.06.2009 and by way of Amendment Act 2 of 2013 w.e.f. 15.02.2013. Likewise, Section 13 of the Prevention of Corruption Act has been introduced to Part A of the Schedule (Paragraph 8) by way of Amendment Act 16 of 2018 w.e.f. 26.07.2018. As pointed out earlier, the FIR was registered by CBI under Section 8 of the Prevention of Corruption Act also which was then in Part A of the Schedule at the time of alleged commission of offence.

40. Learned Senior counsel submitted that since the offence under Sections 120-B IPC and 420 IPC and under Section 13 of Prevention of Corruption Act were included in the Schedule only w.e.f. 01.06.2009 and w.e.f. 26.07.2018 respectively and there can never be a retrospective operation of a criminal/penal statue and the test is not whether the proceeds are retained by the person; but the test as laid down by the Constitution Bench of this Court is, the test of the acts constituting the offence at the time of the commission of the offence and the appellant cannot be proceeded with prosecution under PMLA in violation of constitutional protection under Article 20(1) of the Constitution of India.

41. Under Article 20(1) of the Constitution, no person shall be convicted of any offence except for violation of law in force at the time of commission of that act charged as an offence. FIR for the predicate offence has been registered by CBI under Section 120B IPC, 420 IPC and Section 13 of the Prevention of Corruption Act and also under Section 8 of the Prevention of Corruption Act. As discussed earlier, Section 120B IPC and Section 420 IPC were included in Part A of the Schedule only by Amendment Act 21 of 2009 w.e.f. 01.06.2009. Section 13 of the Prevention of Corruption Act was included in Part A of the Schedule by Amendment Act 16 of 2018 w.e.f. 26.07.2018. Section 8 of the Prevention of Corruption Act is punishable with imprisonment extending upto seven years. Section 8 of the Prevention of Corruption Act was very much available in Part A of the Schedule of PMLA at the time of alleged commission of offence in 2007-2008. It cannot therefore be said that the appellant is proceeded against in violation of Article 20(1) of the Constitution of India for the alleged commission of the acts which was not an offence as per law then in existence. The merits of the contention that Section 8 of the Prevention of Corruption Act cannot be the predicate offence qua the appellant, cannot be gone into at this stage when this Court is only considering the prayer for anticipatory bail.

42. Yet another contention advanced on behalf of the appellant is that minimum threshold for the Enforcement Directorate to acquire jurisdiction at the relevant time was Rs.30 lakhs whereas, in the present case, there is no material to show any payment apart from the sum of Rs.10 lakhs (approximately) allegedly paid by INX Media to ASCPL with which the appellant is said to be having no connection whatsoever. The merits of the contention that Section 8 of the Prevention of Corruption Act (then included in Schedule A of the PMLA in 2007-08) whether attracted or not and whether the Enforcement Directorate had the threshold to acquire jurisdiction under PMLA cannot be considered at this stage while this Court is considering only the prayer for anticipatory bail.

43. In terms of Section 4 of the PMLA, the offence of money-laundering is punishable with rigorous imprisonment for a term not less than three years extending to seven years and with fine. The Second Schedule to the Criminal Procedure Code relates to classification of offences against other laws and in terms of the Second Schedule of the Code, an offence which is punishable with imprisonment for three years and upward but not more than seven years is a cognizable and non-bailable offence. Thus, Section 4 of the Act read with the Second Schedule of the Code makes it clear that the offences under the PMLA are cognizable offences. As pointed out earlier, Section 8 of the Prevention of Corruption Act was then found a mention in Part ‘A’ of the Schedule (Paragraph 8). Section 8 of the Prevention of Corruption Act is punishable for a term extending to seven years. Thus, the essential requirement of Section 45 of PMLA “accused of an offence punishable for a term of imprisonment of more than three years under Part ‘A’ of the Schedule” is satisfied making the offence under PMLA. There is no merit in the contention of the appellant that very registration of the FIR against the appellant under PMLA is not maintainable.

Whether Court can look into the documents/materials collected during investigation

44. During the course of lengthy hearing, much arguments were advanced mainly on the question whether the court can look into the documents and materials produced by the prosecution before the court without first confronting the accused with those materials.

45. The learned Solicitor General submitted that during investigation, the Enforcement Directorate has collected materials and overseas banks have given specific inputs regarding the companies and properties that money has been parked in the name of shell companies and the said money has been used to make legitimate assets and that custodial interrogation is necessary with regard to the materials so collected. The learned Solicitor General sought to produce the materials so collected in the sealed cover and requested the court to peruse the documents and the materials to satisfy the conscience of the court as to the necessity for the custodial interrogation.

46. Contention of learned Solicitor General requesting the court to peruse the documents produced in the sealed cover was strongly objected by the appellant on the grounds :– (i) that the Enforcement Directorate cannot randomly place the documents in the court behind the back of the accused to seek custody of the accused; (ii) the materials so collected by Enforcement Directorate during investigation cannot be placed before the court unless the accused has been confronted with such materials.

47. Mr. Kapil Sibal, learned Senior counsel submitted that the statements recorded under Section 161 Cr.P.C. are part of the case diary and the case diary must reflect day to day movement of the investigation based on which the investigating agency came to the conclusion that the crime has been committed so that a final report can be filed before the court. The learned Senior counsel submitted that during the course of such investigation, the investigating officer may discover several documents which may have a bearing on the crime committed; however the documents themselves can never be the part of the case diary and the documents would be a piece of documentary evidence during trial which would be required to be proved in accordance with the provisions of the Evidence Act before such documents can be relied upon for the purpose of supporting the case of prosecution. Enforcement Directorate does not maintain a case diary; but maintain the file with paginated pages. It was urged that even assuming that there is a case diary maintained by the respondent in conformity with Section 172 Cr.P.C., the opinion of the investigating officer for the conclusion reached by the authorised officer under PMLA, can never be relied upon for the purposes of consideration of anticipatory bail.

48. Having regard to the submissions, two points arise for consideration –

(i) whether the court can/cannot look into the documents/materials produced before the court unless the accused was earlier confronted with those documents/materials?; and (ii) whether the court is called upon to

hold a mini inquiry during the intermediary stages of investigation by examining whether the questions put to the accused are ‘satisfactory’ or ‘evasive’, etc.?

49. Sub-section (2) of Section 172 Cr.P.C. permits any court to send for case diary to use them in the trial. Section 172(3) Cr.P.C. specifically provides that neither the accused nor his agents shall be entitled to call for case diary nor shall he or they be entitled to see them merely because they are referred to by the court. But if they are used by the police officer who made them to refresh his memory or if the court uses them for the purpose of contradicting the such police officer, the provisions of Section 161 Crl.P.C. or the provision of Section 145 of the Evidence Act shall be complied with. In this regard, the learned Solicitor General placed reliance upon Balakram v. State of Uttarakhand and others (2017) 7 SCC 668. Observing that the confidentiality is always kept in the matter of investigation and it is not desirable to make available the police diary to the accused on his demand, in Balakram, the Supreme Court held as under:-

“15. The police diary is only a record of day-to-day investigation made by the investigating officer. Neither the accused nor his agent is entitled to call for such case diary and also are not entitled to see them during the course of inquiry or trial. The unfettered power conferred by the statute under Section 172(2) CrPC on the court to examine the entries of the police diary would not allow the accused to claim similar unfettered right to inspect the case diary.

……….

17. From the aforementioned, it is clear that the denial of right to the accused to inspect the case diary cannot be characterised as unreasonable or arbitrary. The confidentiality is always kept in the matter of investigation and it is not desirable to make available the police diary to the accused on his demand.”

50. Reiterating the same principles in Sidharth and others v. State of Bihar (2005) 12 SCC 545, the Supreme Court held as under:-

“27. Lastly, we may point out that in the present case, we have noticed that the entire case diary maintained by the police was made available to the accused. Under Section 172 of the Criminal Procedure Code, every police officer making an investigation has to record his proceedings in a diary setting forth the time at which the information reached him, the time at which he began and closed his investigation, the place or places visited by him and a statement of the circumstances ascertained through his investigation. It is specifically provided in sub-clause (3) of Section 172 that neither the accused nor his agents shall be entitled to call for such diaries nor shall he or they be entitled to see them merely because they are referred to by the court, but if they are used by the police officer who made them to refresh his memory, or if the court uses them for the purpose of contradicting such police officer, the provisions of Section 161 CrPC or the provisions of Section 145 of the Evidence Act shall be complied with. The court is empowered to call for such diaries not to use it as evidence but to use it as aid to find out anything that happened during the investigation of the crime. These provisions have been incorporated in the Code of Criminal Procedure to achieve certain specific objectives. The police officer who is conducting the investigation may come across a series of information which cannot be divulged to the accused. He is bound to record such facts in the case diary. But if the entire case diary is made available to the accused, it may cause serious prejudice to others and even affect the safety and security of those who may have given statements to the police. The confidentiality is always kept in the matter of criminal investigation and it is not desirable to make available the entire case diary to the accused. In the instant case, we have noticed that the entire case diary was given to the accused and the investigating officer was extensively cross-examined on many facts which were not very much relevant for the purpose of the case. The learned Sessions Judge should have been careful in seeing that the trial of the case was conducted in accordance with the provisions of CrPC.” [underlining added]

The same position has been reiterated in Naresh Kumar Yadav v. Ravindra Kumar and others (2008) 1 SCC 632 [Paras 11 to 14], Malkiat Singh and others v. State of Punjab (1991) 4 SCC 341 [Para 11] and other judgments.

51. It is seen from various judgments that on several instances, court always received and perused the case diaries/materials collected by the prosecution during investigation to satisfy itself as to whether the investigation is proceeding in the right direction or for consideration of the question of grant of bail etc. In Directorate of Enforcement and another v. P.V. Prabhakar Rao (1997) 6 SCC 647, the Supreme Court perused the records to examine the correctness of the order passed by the High Court granting bail. In R.K. Krishna Kumar v. State of Assam and others (1998) 1 SCC 474, the Supreme Court received court diary maintained under Section 172 Cr.P.C. and perused the case diary to satisfy itself that the investigation has revealed that the company thereon has funded the organisation (ULFA) and that the appellants thereon had a role to play in it. While considering the question of arrest of five well known human rights activists, journalists, advocates and political workers, in Romila Thapar and Others v. Union of India and Others (2018) 10 SCC 753, this Court perused the registers containing relevant documents and the case diary produced by the State of Maharashtra. However, the court avoided to dilate on the factual position emerging therefrom on the ground that any observation made thereon might cause prejudice to the accused or to the prosecution in any manner. Upholding the validity of Section 172(3) Crl.P.C. and observing that “there can be no better custodian or guardian of the interest of justice than the court trying the case”, in Mukund Lal v. Union of India and another 1989 Supp. (1) SCC 622, the Supreme Court held as under:-

3. …..

“So far as the other parts are concerned, the accused need not necessarily have a right of access to them because in a criminal trial or enquiry, whatever is sought to be proved against the accused, will have to be proved by the evidence other than the diary itself and the diary can only be used for a very limited purpose by the court or the police officer as stated above. ………. When in the enquiry or trial,

everything which may appear against the accused has to be established and brought before the court by evidence other than the diary and the accused can have the benefit of cross-examining the witnesses and the court has power to call for the diary and use it, of course not as evidence but in aid of the enquiry or trial, I am clearly of the opinion, that the provisions under Section 172(3) CrPC cannot be said to be unconstitutional.”

We fully endorse the reasoning of the High Court and concur with its conclusion. We are of the opinion that the provision embodied in sub-section

(3) of Section 172 of the CrPC cannot be characterised as unreasonable or arbitrary. Under sub-section (2) of Section 172 CrPC the court itself has the unfettered power to examine the entries in the diaries. This is a very important safeguard. The legislature has reposed complete trust in the court which is conducting the inquiry or the trial. It has empowered the court to call for any such relevant case diary; if there is any inconsistency or contradiction arising in the context of the case diary the court can use the entries for the purpose of contradicting the police officer as provided in sub-section (3) of Section 172 of the CrPC. Ultimately there can be no better custodian or guardian of the interest of justice than the court trying the case. No court will deny to itself the power to make use of the entries in the diary to the advantage of the accused by contradicting the police officer with reference to the contents of the diaries. In view of this safeguard, the charge of unreasonableness or arbitrariness cannot stand scrutiny. ……. Public interest demands that such an entry is not made available to the accused for it might endanger the safety of the informants and it might deter the informants from giving any information to assist the investigating agency, …….” [underlining added]

52. So far as the production of the case diary during trial and reference to the same by the court and the interdict against accused to call for case diary is governed by Section 172 Cr.P.C. As per sub-section (3) of Section 172, neither the accused nor his agent is entitled to call for such case diaries and also not entitled to see them during the course of enquiry or trial. The case diaries can be used for refreshing memory by the investigating officer and court can use it for the purpose of contradicting such police officer as per provisions of Section 161 or Section 145 of the Indian Evidence Act. Unless the investigating officer or the court so uses the case diary either to refresh the memory or for contradicting the investigating officer as previous statement under Section 161, after drawing his attention under Section 145, the entries in case diary cannot be used by the accused as evidence (vide Section 172(3) Cr.P.C.).

53. It is well-settled that the court can peruse the case diary/materials collected during investigation by the prosecution even before the commencement of the trial inter-alia in circumstances like:- (i) to satisfy its conscience as to whether the investigation is proceeding in the right direction; (ii) to satisfy itself that the investigation has been conducted in the right lines and that there is no misuse or abuse of process in the investigation; (iii) whether regular or anticipatory bail is to be granted to the accused or not; (iv) whether any further custody of the accused is required for the prosecution; (v) to satisfy itself as to the correctness of the decision of the High Court/trial court which is under challenge. The above instances are only illustrative and not exhaustive. Where the interest of justice requires, the court has the powers, to receive the case diary/materials collected during the investigation. As held in Mukund Lal, ultimately there can be no better custodian or guardian of the interest of justice than the court trying the case. Needless to point out that when the Court has received and perused the documents/materials, it is only for the purpose of satisfaction of court’s conscience. In the initial stages of investigation, the Court may not extract or verbatim refer to the materials which the Court has perused (as has been done in this case by the learned Single Judge) and make observations which might cause serious prejudice to the accused in trial and other proceedings resulting in miscarriage of justice.

54. The Enforcement Directorate has produced the sealed cover before us containing the materials collected during investigation and the same was received. Vide order dated 29.08.2019, we have stated that the receipt of the sealed cover would be subject to our finding whether the court can peruse the materials or not. As discussed earlier, we have held that the court can receive the materials/documents collected during the investigation and peruse the same to satisfy its conscience that the investigation is proceeding in the right lines and for the purpose of consideration of grant of bail/anticipatory bail etc. In the present case, though sealed cover was received by this Court, we have consciously refrained from opening the sealed cover and perusing the documents. Lest, if we peruse the materials collected by the respondent and make some observations thereon, it might cause prejudice to the appellant and the other co-accused who are not before this court when they are to pursue the appropriate relief before various forum. Suffice to note that at present, we are only at the stage of considering the pre-arrest bail. Since according to the respondent, they have collected documents/materials for which custodial interrogation of the appellant is necessary, which we deem appropriate to accept the submission of the respondent for the limited purpose of refusing pre-arrest bail to the appellant.

55. Of course, while considering the request for anticipatory bail and while perusing the materials/note produced by the Enforcement Directorate/CBI, the learned Single Judge could have satisfied his conscience to hold that it is not a fit case for grant of anticipatory bail. On the other hand, the learned Single Judge has verbatim quoted the note produced by the respondent-Enforcement Directorate. The learned Single Judge, was not right in extracting the note produced by the Enforcement Directorate/CBI which in our view, is not a correct approach for consideration of grant/refusal of anticipatory bail. But such incorrect approach of the learned Single Judge, in our view, does not affect the correctness of the conclusion in refusing to grant of anticipatory bail to the appellant in view of all other aspects considered herein.

Re: Contention:- The appellant should have been confronted with the materials collected by the Enforcement Directorate earlier, before being produced to the court.

56. On behalf of the appellant, it was contended that the materials produced by the Enforcement Directorate could have never been relied upon for the purpose of consideration of anticipatory bail unless the appellant was earlier confronted with those documents/materials. It was submitted that if the appellant’s response was completely “evasive” and “non co-operative” during the three days when he was interrogated i.e. 19.12.2018, 01.01.2019 and 21.01.2019, the respondent should place before the court the materials put to the appellant and the responses elicited from the accused to demonstrate to the court that “the accused was completely evasive and non-co-operative”.

57. Contention of the appellant that the court will have to scrutinise the questions put to the accused during interrogation and answers given by the appellant and satisfy itself whether the answers were “evasive or not”, would amount to conducting “mini trial” and substituting court’s view over the view of the investigating agency about the “cooperation” or “evasiveness” of the accused and thereafter, the court to decide the questions of grant of anticipatory bail. This contention is far-fetched and does not merit acceptance.

58. As rightly submitted by learned Solicitor General that if the accused are to be confronted with the materials which were collected by the prosecution/Enforcement Directorate with huge efforts, it would lead to devastating consequences and would defeat the very purpose of the investigation into crimes, in particular, white collar offences. If the contention of the appellant is to be accepted, the investigating agency will have to question each and every accused such materials collected during investigation and in this process, the investigating agency would be exposing the evidence collected by them with huge efforts using their men and resources and this would give a chance to the accused to tamper with the evidence and to destroy the money trail apart from paving the way for the accused to influence the witnesses. If the contention of the appellant is to be accepted that the accused will have to be questioned with the materials and the investigating agency has to satisfy the court that the accused was “evasive” during interrogation, the court will have to undertake a “mini trial” of scrutinizing the matter at intermediary stages of investigation like interrogation of the accused and the answers elicited from the accused and to find out whether the answers given by the accused are ‘evasive’ or whether they are ‘satisfactory’ or not. This could have never been the intention of the legislature either under PMLA or any other statute.

59. Interrogation of the accused and the answers elicited from the accused and the opinion whether the answers given by the accused are “satisfactory” or “evasive”, is purely within the domain of the investigating agency and the court cannot substitute its views by conducting mini trial at various stages of the investigation.

60. The investigation of a cognizable offence and the various stages thereon including the interrogation of the accused is exclusively reserved for the investigating agency whose powers are unfettered so long as the investigating officer exercises his investigating powers well within the provisions of the law and the legal bounds. In exercise of its inherent power under Section 482 Cr.P.C., the court can interfere and issue appropriate direction only when the court is convinced that the power of the investigating officer is exercised mala fide or where there is abuse of power and non-compliance of the provisions of Code of Criminal Procedure.

However, this power of invoking inherent jurisdiction to issue direction and interfering with the investigation is exercised only in rare cases where there is abuse of process or non-compliance of the provisions of Criminal Procedure Code.

61. In King-Emperor v. Khwaja Nazir Ahmad AIR 1945 PC 18 : 1944 SCC Online PC 29, it was held as under:-

“…..it is of the utmost importance that the judiciary should not interfere with the police in matters which are within their province and into which the law imposes upon them the duty of enquiry.

In India as has been shown there is a statutory right on the part of the police to investigate the circumstances of an alleged cognizable crime without requiring any authority from the judicial authorities, and it would, as their Lordships think, be an unfortunate result if it should be held possible to interfere with those statutory rights by an exercise of the inherent jurisdiction of the Court. The functions of the judiciary and the police are complementary not overlapping and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, of course, subject to the right of the Court to intervene in an appropriate case when moved under S. 491 of the Crl. P.C. ….” [underlining added]

62. The above decision in Khwaja Nazir Ahmad has been quoted with approval by the Supreme Court in Abhinandan Jha and others v. Dinesh Mishra AIR 1968 SC 117 and State of Bihar and another v. J.A.C. Saldanha and others (1980) 1 SCC 554. Observing that the investigation of the offence is the field exclusively reserved for the executive through the police department and the superintendence over which vests in the State

Government, in J.A.C. Saldanha, it was held as under:-

“25. There is a clear-cut and well demarcated sphere of activity in the field of crime detection and crime punishment. Investigation of an offence is the field exclusively reserved for the executive through the police department the superintendence over which vests in the State Government. The executive which is charged with a duty to keep vigilance over law and order situation is obliged to prevent crime and if an offence is alleged to have been committed it is its bounded duty to investigate into the offence and bring the offender to book. Once it investigates and finds an offence having been committed it is its duty to collect evidence for the purpose of proving the offence. Once that is completed and the investigating officer submits report to the court requesting the court to take cognizance of the offence under Section 190 of the Code its duty comes to an end. On a cognizance of the offence being taken by the court the police function of investigation comes to an end subject to the provision contained in Section 173(8), there commences the adjudicatory function of the judiciary to determine whether an offence has been committed and if so, whether by the person or persons charged with the crime by the police in its report to the court, and to award adequate punishment according to law for the offence proved to the satisfaction of the court. There is thus a well defined and well demarcated function in the field of crime detection and its subsequent adjudication between the police and the Magistrate. This had been recognised way back in King Emperor v. Khwaja Nazir Ahmad AIR 1944 PC 18 ………”.

The same view was reiterated in Dukhishyam Benupani, Asstt. Director, Enforcement Directorate (FERA) v. Arun Kumar Bajoria (1998) 1 SCC 52, M.C. Abraham and Another v. State of Maharashtra and Others (2003) 2 SCC 649, Subramanian Swamy v. Director, Central Bureau of Investigation and another (2014) 8 SCC 682 and Divine Retreat Centre v. State of Kerala and Others (2008) 3 SCC 542.

63. Investigation into crimes is the prerogative of the police and excepting

in rare cases, the judiciary should keep out all the areas of investigation. In State of Bihar and another v. P.P. Sharma, IAS and another 1992 Supp. (1) 222, it was held that “The investigating officer is an arm of the law and plays a pivotal role in the dispensation of criminal justice and maintenance of law and order. …..Enough power is therefore given to the police officer in the area of investigating process and granting them the court latitude to exercise its discretionary power to make a successful investigation…”. In Dukhishyam Benupani, Asstt. Director, Enforcement Directorate (FERA) v. Arun Kumar Bajoria (1998) 1 SCC 52, this Court held that “……it is not the function of the court to monitor investigation processes so long as such investigation does not transgress any provision of law. It must be left to the investigating agency to decide the venue, the timings and the questions and the manner of putting such questions to persons involved in such offences. A blanket order fully insulating a person from arrest would make his interrogation a mere ritual.”

64. As held by the Supreme Court in a catena of judgments that there is a well-defined and demarcated function in the field of investigation and its subsequent adjudication. It is not the function of the court to monitor the investigation process so long as the investigation does not violate any provision of law. It must be left to the discretion of the investigating agency to decide the course of investigation. If the court is to interfere in each and every stage of the investigation and the interrogation of the accused, it would affect the normal course of investigation. It must be left to the investigating agency to proceed in its own manner in interrogation of the accused, nature of questions put to him and the manner of interrogation of the accused.

65. It is one thing to say that if the power of investigation has been exercised by an investigating officer mala fide or non-compliance of the provisions of the Criminal Procedure Code in the conduct of the investigation, it is open to the court to quash the proceedings where there is a clear case of abuse of power. It is a different matter that the High Court in exercise of its inherent power under Section 482 Cr.P.C., the court can always issue appropriate direction at the instance of an aggrieved person if the High Court is convinced that the power of investigation has been exercised by the investigating officer mala fide and not in accordance with the provisions of the Criminal Procedure Code. However, as pointed out earlier that power is to be exercised in rare cases where there is a clear abuse of power and non-compliance of the provisions falling under Chapter-XII of the Code of Criminal Procedure requiring the interference of the High Court. In the initial stages of investigation where the court is considering the question of grant of regular bail or pre-arrest bail, it is not for the court to enter into the demarcated function of the investigation and collection of evidence/materials for establishing the offence and interrogation of the accused and the witnesses.

66. Whether direction to produce the transcripts could be issued:-

Contention of the appellant is that it has not been placed before the court as to what were the questions/aspects on which the appellant was interrogated on 19.12.2018, 01.01.2019 and 21.01.2019 and the Enforcement Directorate has not been able to show as to how the answers given by the appellant are “evasive”. It was submitted that the investigating agency-Enforcement Directorate cannot expect the accused to give answers in the manner they want and the investigating agency should always keep in their mind the rights of the accused protected under Article 20(3) of the Constitution of India. Since the interrogation of the accused and the questions put to the accused and the answers given by the accused are part of the investigation which is purely within the domain of the investigation officer, unless satisfied that the police officer has improperly and illegally exercised his investigating powers in breach of any statutory provision, the court cannot interfere. In the present case, no direction could be issued to the respondent to produce the transcripts of the questions put to the appellant and answers given by the appellant.

Grant of Anticipatory bail in exceptional cases:-

67. Ordinarily, arrest is a part of procedure of the investigation to secure not only the presence of the accused but several other purposes. Power

under Section 438 Cr.P.C. is an extraordinary power and the same has to be exercised sparingly. The privilege of the pre-arrest bail should be granted only in exceptional cases. The judicial discretion conferred upon the court has to be properly exercised after application of mind as to the nature and gravity of the accusation; possibility of applicant fleeing justice and other factors to decide whether it is a fit case for grant of anticipatory bail. Grant of anticipatory bail to some extent interferes in the sphere of investigation of an offence and hence, the court must be circumspect while exercising such power for grant of anticipatory bail. Anticipatory bail is not to be granted as a matter of rule and it has to be granted only when the court is convinced that exceptional circumstances exist to resort to that extraordinary remedy.

68. On behalf of the appellant, much arguments were advanced contending that anticipatory bail is a facet of Article 21 of the Constitution of India. It was contended that unless custodial interrogation is warranted, in the facts and circumstances of the case, denial of anticipatory bail would amount to denial of the right conferred upon the appellant under Article 21 of the Constitution of India.

69. Article 21 of the Constitution of India states that no person shall be deprived of his life or personal liberty except according to procedure prescribed by law. However, the power conferred by Article 21 of the Constitution of India is not unfettered and is qualified by the later part of the

Article i.e. “…except according to a procedure prescribed by law.” In State of M.P. and another v. Ram Kishna Balothia and another (1995) 3 SCC 221, the Supreme Court held that the right of anticipatory bail is not a part of Article 21 of the Constitution of India and held as under:-

“7. ……We find it difficult to accept the contention that Section 438 of the Code of Criminal Procedure is an integral part of Article 21. In the first place, there was no provision similar to Section 438 in the old Criminal Procedure Code. The Law Commission in its 41st Report recommended introduction of a provision for grant of anticipatory bail. It observed:

“We agree that this would be a useful advantage. Though we must add that it is in very exceptional cases that such power should be exercised.”

In the light of this recommendation, Section 438 was incorporated, for the first time, in the Criminal Procedure Code of 1973. Looking to the cautious recommendation of the Law Commission, the power to grant anticipatory bail is conferred only on a Court of Session or the High Court. Also, anticipatory bail cannot be granted as a matter of right. It is essentially a statutory right conferred long after the coming into force of the Constitution. It cannot be considered as an essential ingredient of Article 21 of the Constitution. And its non-application to a certain special category of offences cannot be considered as violative of Article 21.” [underlining added]

70. We are conscious of the fact that the legislative intent behind the introduction of Section 438 Cr.P.C. is to safeguard the individual’s personal liberty and to protect him from the possibility of being humiliated and from being subjected to unnecessary police custody. However, the court must also keep in view that a criminal offence is not just an offence against an individual, rather the larger societal interest is at stake. Therefore, a delicate balance is required to be established between the two rights – safeguarding the personal liberty of an individual and the societal interest. It cannot be said that refusal to grant anticipatory bail would amount to denial of the rights conferred upon the appellant under Article 21 of the Constitution of India.

71. The learned Solicitor General has submitted that depending upon the facts of each case, it is for the investigating agency to confront the accused with the material, only when the accused is in custody. It was submitted that the statutory right under Section 19 of PMLA has an in-built safeguard against arbitrary exercise of power of arrest by the investigating officer. Submitting that custodial interrogation is a recognised mode of interrogation which is not only permissible but has been held to be more effective, the learned Solicitor General placed reliance upon State Rep. By The CBI v. Anil Sharma (1997) 7 SCC 187; Sudhir v. State of Maharashtra and Another (2016) 1 SCC 146; and Assistant Director, Directorate of Enforcement v. Hassan Ali Khan (2011) 12 SCC 684.

72. Ordinarily, arrest is a part of the process of the investigation intended to secure several purposes. There may be circumstances in which the accused may provide information leading to discovery of material facts and relevant information. Grant of anticipatory bail may hamper the investigation. Pre-arrest bail is to strike a balance between the individual’s right to personal freedom and the right of the investigating agency to interrogate the accused as to the material so far collected and to collect more information which may lead to recovery of relevant information. In State Rep. By The CBI v. Anil Sharma (1997) 7 SCC 187, the Supreme Court held as under:-

“6. We find force in the submission of the CBI that custodial interrogation is qualitatively more elicitation-oriented than questioning a suspect who is well ensconced with a favourable order under Section 438 of the Code. In a case like this effective interrogation of a suspected person is of tremendous advantage in disinterring many useful informations and also materials which would have been concealed. Success in such interrogation would elude if the suspected person knows that he is well protected and insulated by a pre-arrest bail order during the time he is interrogated. Very often interrogation in such a condition would reduce to a mere ritual. The argument that the custodial interrogation is fraught with the danger of the person being subjected to third-degree methods need not be countenanced, for, such an argument can be advanced by all accused in all criminal cases. The Court has to presume that responsible police officers would conduct themselves in a responsible manner and that those entrusted with the task of disinterring offences would not conduct themselves as offenders.”

73. Observing that the arrest is a part of the investigation intended to secure several purposes, in Adri Dharan Das v. State of W.B. (2005) 4 SCC 303, it was held as under:-

“19. Ordinarily, arrest is a part of the process of investigation intended to secure several purposes. The accused may have to be questioned in detail regarding various facets of motive, preparation, commission and aftermath of the crime and the connection of other persons, if any, in the crime. There may be circumstances in which the accused may provide information leading to discovery of material facts. It may be necessary to curtail his freedom in order to enable the investigation to proceed without hindrance and to protect witnesses and persons connected with the victim of the crime, to prevent his disappearance, to maintain law and order in the locality. For these or other reasons, arrest may become an inevitable part of the process of investigation. The legality of the proposed arrest cannot be gone into in an application under Section 438 of the Code. The role of the investigator is well defined and the jurisdictional scope of interference by the court in the process of investigation is limited. The court ordinarily will not interfere with the investigation of a crime or with the arrest of the accused in a cognizable offence. An interim order restraining arrest, if passed while dealing with an application under Section 438 of the Code will amount to interference in the investigation, which cannot, at any rate, be done under Section 438 of the Code.”

74. In Siddharam Satlingappa Mhetre v. State of Maharashtra and Others (2011) 1 SCC 694, the Supreme Court laid down the factors and parameters to be considered while dealing with anticipatory bail. It was held that the nature and the gravity of the accusation and the exact role of the accused must be properly comprehended before arrest is made and that the court must evaluate the available material against the accused very carefully. It was also held that the court should also consider whether the accusations have been made only with the object of injuring or humiliating the applicant by arresting him or her.

75. After referring to Siddharam Satlingappa Mhetre and other judgments and observing that anticipatory bail can be granted only in exceptional circumstances, in Jai Prakash Singh v. State of Bihar and another (2012) 4 SCC 379, the Supreme Court held as under:-

“19. Parameters for grant of anticipatory bail in a serious offence are required to be satisfied and further while granting such relief, the court must record the reasons therefor. Anticipatory bail can be granted only in exceptional circumstances where the court is prima facie of the view that the applicant has falsely been enroped in the crime and would not misuse his liberty. (See D.K. Ganesh Babu v. P.T. Manokaran (2007) 4 SCC 434, State of Maharashtra v. Mohd. Sajid Husain Mohd. S. Husain (2008) 1 SCC 213 and Union of India v. Padam Narain Aggarwal (2008) 13 SCC 305.)”

Economic Offences:-

76. Power under Section 438 Cr.P.C. being an extraordinary remedy, has to be exercised sparingly; more so, in cases of economic offences.

Economic offences stand as a different class as they affect the economic fabric of the society. In Directorate of Enforcement v. Ashok Kumar Jain (1998) 2 SCC 105, it was held that in economic offences, the accused is not entitled to anticipatory bail.

77. The learned Solicitor General submitted that the “Scheduled offence” and “offence of money laundering” are independent of each other and PMLA being a special enactment applicable to the offence of money laundering is not a fit case for grant of anticipatory bail. The learned Solicitor General submitted that money laundering being an economic offence committed with much planning and deliberate design poses a serious threat to the nation’s economy and financial integrity and in order to unearth the laundering and trail of money, custodial interrogation of the appellant is necessary.

78. Observing that economic offence is committed with deliberate design with an eye on personal profit regardless to the consequence to the community, in State of Gujarat v. Mohanlal Jitamalji Porwal and others (1987) 2 SCC 364, it was held as under:-

“5. ….The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even-handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest…..”

79. Observing that economic offences constitute a class apart and need to be visited with different approach in the matter of bail, in Y.S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 439, the Supreme Court held as under:-
“34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.

35. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations.” [underlining added]

80. Referring to Dukhishyam Benupani, Assistant Director, Enforcement Directorate (FERA) v. Arun Kumar Bajoria (1998) 1 SCC 52, in Enforcement Officer, Ted, Bombay v. Bher Chand Tikaji Bora and others (1999) 5 SCC 720, while hearing an appeal by the Enforcement Directorate against the order of the Single Judge of the Bombay High Court granting anticipatory bail to the respondent thereon, the Supreme Court set aside the order of the Single Judge granting anticipatory bail.

81. Grant of anticipatory bail at the stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting the useful information and also the materials which might have been concealed. Success in such interrogation would elude if the accused knows that he is protected by the order of the court. Grant of anticipatory bail, particularly in economic offences would definitely hamper the effective investigation. Having regard to the materials said to have been collected by the respondent-Enforcement Directorate and considering the stage of the investigation, we are of the view that it is not a fit case to grant anticipatory bail.

82. In a case of money-laundering where it involves many stages of “placement”, “layering i.e. funds moved to other institutions to conceal origin” and “interrogation i.e. funds used to acquire various assets”, it requires systematic and analysed investigation which would be of great advantage. As held in Anil Sharma, success in such interrogation would elude if the accused knows that he is protected by a pre-arrest bail order. Section 438 Cr.P.C. is to be invoked only in exceptional cases where the case alleged is frivolous or groundless. In the case in hand, there are allegations of laundering the proceeds of the crime. The Enforcement Directorate claims to have certain specific inputs from various sources, including overseas banks. Letter rogatory is also said to have been issued and some response have been received by the department. Having regard to the nature of allegations and the stage of the investigation, in our view, the investigating agency has to be given sufficient freedom in the process of investigation. Though we do not endorse the approach of the learned Single Judge in extracting the note produced by the Enforcement Directorate, we do not find any ground warranting interference with the impugned order. Considering the facts and circumstances of the case, in our view, grant of anticipatory bail to the appellant will hamper the investigation and this is not a fit case for exercise of discretion to grant anticipatory bail to the appellant.

83. In the result, the appeal is dismissed. It is for the appellant to work out his remedy in accordance with law. As and when the application for regular bail is filed, the same shall be considered by the learned trial court on its own merits and in accordance with law without being influenced by any of the observations made in this judgment and the impugned order of the High Court.

J. [R. BANUMATHI]

J. [A.S. BOPANNA]

New Delhi;

September 05, 2019


P. CHIDAMBARAM VS DIRECTORATE OF ENFORCEMENT

P. CHIDAMBARAM Vs. CENTRAL BUREAU OF INVESTIGATION [DHC]-20/08/2019

Pre-arrest is not meant for high profile economic offenders. Time has come to recommend to the Parliament to suitably amend the Law to restrict the provisions of pre-arrest bail and make it inapplicable to economic offenders of high profile cases like the instant one.

Acts : Section 120B r/w Section 420 of IPC and Section 8 and Section 13 (1)(d) r/w Section 13(2) of the PC Act

IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 11th March, 2019

Pronounced on: 20th August, 2019

BAIL APPLN. 1316/2018 & Crl. M. A. 10976/2018

P. CHIDAMBARAM ….. Petitioner

Through: Mr. Kapil Sibbal Mr. Abhishek
Manu Singhvi, Mr. Dayan
Krishnan and Mr. Mohit Mathur,
Senior Advocates with Mr. P. K.
Dubey, Mr. Arshdeep Singh, Mr.
Adit Pujari, Mr. Amit Bhandari,
Mr. Akshat Gupta, Mr. Avishkar
Singhvi, Mr. AyushAgarwal, Ms.
Ishita Garg, Mr. Sanjeevi Seshadri
& Mr. Harpreet Kalsi, Advocates

Versus

CENTRAL BUREAU OF INVESTIGATION ….. Respondent

Through: Mr. Tushar Mehta, Solicitor
General with Mr. K. M. Natraj,
Additional Solicitor General and
Mr. Amit Mahajan, Central
Government Standing Counsel
with Mr. Rajat Nair, Advocate

And

BAIL APPLN. 1713/2018 & Crl. M. (B) 1163/2018

P. CHIDAMBARAM ….. Petitioner

Through: Mr. Kapil Sibbal Mr. Abhishek
Manu Singhvi, Mr. Dayan
Krishnan and Mr. Mohit Mathur,
Senior Advocates with Mr. P. K.
Dubey, Mr. Arshdeep Singh, Mr.Adit Pujari, Mr. Amit Bhandari,
Mr. Akshat Gupta, Mr. Avishkar
Singhvi, Mr. AyushAgarwal, Ms.
Ishita Garg, Mr. Sanjeevi Seshadri

& Mr. Harpreet Kalsi, Advocates

Versus

DIRECTORATE OF ENFORCEMENT, DELHI ….. Respondent

Through: Mr. Tushar Mehta, Solicitor General with Mr. K. M. Natraj, Additional Solicitor General and Mr. Amit Mahajan, Central Government Standing Counsel with Mr. Rajat Nair, Advocate

CORAM:

HON’BLE MR. JUSTICE SUNIL GAUR

ORDER

1. In the above captioned first application [Bail Appln. 1316/2018], petitioner seeks pre-arrest bail in FIR No. RC220-2017-E-0011, under Section 120B read with Section 420 of IPC and Sections 8 and 13 (2) r/w Section 13(1) (d) of The Prevention of Corruption Act, 1988 (henceforth referred to as the ‘PC Act’), whereas in the above captioned second application [Bail Appln. 1713/2018], petitioner seeks pre-arrest bail in ECIR/07/HIU/2017, registered under the provisions of The Prevention of Money-Laundering Act, 2002 (henceforth referred to as the ‘PMLA’).

2. With the consent of learned counsel representing both the sides, these applications have been heard together and are being disposed of by this common order.

3. It is the case of petitioner that M/s INX Media Pvt. Ltd. sought approval for FDI in a proposed TV channel upto 46.216 percent of the issued equity capital. The policy allowed investment upto 74 percent of equity. Foreign Investment Promotion Board (FIPB) Unit examined the proposal, found it to be in order and submitted the case to the Finance Minister. FIPB consisted of six secretaries to the Government of India and was chaired by the Secretary, Economic Affairs. FIPB unanimously recommended the proposal and placed it before the Finance Minister for his approval, along with several other proposals. In May, 2007, the Finance Minister (i.e. the petitioner herein) granted his approval in the normal course of official business.

4. According to learned senior counsel for petitioner, ten years later, based on alleged ‘oral source of information’, Central Bureau of Investigation (CBI) recorded an FIR on 15th May, 2017 against four companies, Karti P. Chidambaram (i.e. petitioner’s son), unknown officers/officials of the Ministry of Finance and other unknown persons under Section 120B r/w Section 420 of IPC and Section 8 and Section 13 (1)(d) r/w Section 13(2) of the PC Act. The petitioner was not named as an accused or suspect; there is no allegation against the petitioner in the body of the FIR. The allegation in the FIR was that M/s INX Media Pvt. Ltd. had made down-stream investment without obtaining prior approval of the FIPB and, in order to regularize that investment, had approached

the petitioner’s son and made a payment of ₹10 Lakh to another company allegedly associated with petitioner’s son. It is submitted that petitioner learnt that it is the case of the said company that it had received the said payment towards consultancy work and further, the petitioner’s son was never a shareholder or Director of the said company. It is further submitted by petitioner’s counsel that ECIR/07/HIU/2017 is baseless, politically motivated and an act of vendetta against petitioner and his son, because petitioner is a vocal critic and opponent of the present Central Government both inside Parliament and outside. It is also submitted that petitioner is a sitting member of Rajya Sabha.

5. According to learned senior counsel for petitioner, based on ECIR/07/HIU/2017, registered by the CBI, Enforcement Directorate (ED) recorded an ECIR, which ED has maintained is an internal record. It is submitted by learned senior counsel for petitioner that copy of the said ECIR has not been given to petitioner. However, petitioner understands and states that ECIR is virtually the same as an FIR.

6. It is a matter of record that while entertaining both these bail applications, interim protection was granted to petitioner subject to joining investigation and that petitioner had joined the investigation. According to senior counsel for petitioner, respondent-CBI has sought sanction to prosecute petitioner in January, 2019, which means that draft charge-sheet has been put up before the authorities concerned to obtain sanction to prosecute petitioner. So, it is submitted that investigation by CBI is complete and there is no ground for ED to oppose the bail or to seek petitioner’s custody. It is urged that since petitioner is cooperating in investigation, therefore, there is no ground to deny bail to petitioner.

7. Learned senior counsel for petitioner vehemently argued that there is no averment or allegation in the FIR that the petitioner accepted or

agreed to accept any gratification as a motive or reward for inducing any public servant and hence, prima facie the accusation under Section 8 of PC Act does not apply to the case of petitioner. It is further submitted that since offence under Section 8 of PC Act is not made out, therefore, the ED cannot lodge money laundering case against petitioner. Learned senior counsel for petitioner vehemently submits that offences under Sections 420/120B IPC and under the PC Act were not Scheduled Offences under the PMLA and so, petitioner cannot be prosecuted under the provisions of PMLA. It is pointed out by learned senior counsel for petitioner that minimum threshold for ED to acquire jurisdiction at the relevant time was ₹30 Lakh and in the instant case, there is no averment of any payment apart from ₹10 Lakh approximately, which was allegedly paid by M/s INX Media Pvt. Ltd. to M/s Advantage Strategic Consulting Pvt. Ltd., with which petitioner is not concerned whatsoever in any manner. The precise argument of learned senior counsel for petitioner is that if any of the offences are applied qua petitioner, it would amount to giving retrospective application to the provisions of the PMLA which would be violative of petitioner’s fundamental rights enshrined under Article 20(3) of the Constitution of India, 1950. To submit so, reliance is placed upon decision in Arun Kumar Mishra Vs. Directorate of Enforcement 2015 SCC OnLine Del 8658.

8. It was pointed out by learned senior counsel for petitioner that in the case of co-accused Karti Chidambaram, this Court had stayed the arrest of petitioner in proceedings under the PMLA and so, petitioner is also entitled to similar relief. Learned senior counsel for petitioner

submits that there are no allegations of petitioner tampering with the evidence and nothing is to be recovered from petitioner and that co-accused of petitioner are already on anticipatory bail or statutory bail and thus, petitioner deserves to be granted pre-arrest bail, as his antecedents are impeccable.

9. It was also pointed out that petitioner is a sitting member of Rajya Sabha and there are no chances of his fleeing from justice. According to learned senior counsel for petitioner, offence of money laundering is a non-cognizable offence and investigation of ED is in violation of

petitioner’s fundamental rights. It is further submitted by learned senior counsel for petitioner that amendment made in the year 2018 in the PMLA does not restore Sub-Clause II of Section 45(1) of PMLA. So, it is submitted that petitioner deserves the concession of pre-arrest bail. In support of above submissions, reliance is placed upon Supreme Court’s decisions in Central Bureau of Investigation Vs. Ashok Kumar Aggarwal 2014 (14) SCC 295; Arun Kumar Mishra Vs. Directorate of Enforcement 2015 SCC OnLine Del 8658; Bhadresh Bipinbhai Sheth Vs. State of Gujarat and another (2016) 1 SCC 152; Nikesh Tarachand Shah Vs. Union of India and another (2018) 11 SCC 1 and decisions of High Court of Andhra Pradesh in W.P. 17525/2014 titled as Tech Mahindra Limited Vs. Directorate of Enforcement; CRLRC No. 3222/2016 titled as Ashok Kumar Jain Vs. Asst. Director, Hyderabad; W.P.No.37487/2012 titled as M/S Satyam Computer Services Ltd. Vs. Directorate of Enforcement and decision of High Court of Mumbai in Bail Appl. No. 286/2018 titled as Sameer M. Bhujbal Vs. Assistant Director, Directorate of Enforcement &

Ors. and decision of High Court of Madhya Pradesh in M.Cr.C.No.34201/2018, titled as Vinod Bhandari Vs. Assistant Director, Directorate of Enforcement.

10. On behalf of respondents, it is submitted that Section 19 of PMLA empowers the ED to arrest petitioner on the basis of material collected so far and respondents have reason to believe that petitioner is guilty of offences of money laundering, cheating etc. and some of the proceeds of crime have been already identified and have been attached vide provisional attachment order of 10th October, 2018 and that petitioner’s

custodial interrogation is necessary in order to trace out further proceeds of the crime. According to respondents, petitioner’s son Karti Chidambaram is involved in INX Media case, which is being currently investigated by CBI and ED and that petitioner’s son has committed offences under the IPC and PMLA at the behest of petitioner. According to learned Attorney General of India, material on record manifestly indicates that petitioner was personally involved in the act of money laundering and he is also found to be a beneficiary of the Proceeds of Crime and to unearth the money trail, custodial interrogation of petitioner is essential. Learned Attorney General of India has sought to rely upon the diary of proceedings of investigation and has handed over a copy of the diary of proceedings of investigation in a sealed cover to the Court for perusal while seeking to maintain confidentiality in respect of these case diaries. Highlighting the non-cooperation in investigation by petitioner, learned Attorney General of India had vehemently submitted that in the absence of custodial interrogation of petitioner, investigation in this case

cannot be taken to its logical conclusion and in view of nature of gravity of offence, custodial investigation of petitioner be granted. It is submitted that petitioner is giving evasive replies and is not cooperating in the investigation while he is under the protective umbrella of interim orders.

11. Reliance is place upon decision in CBI Vs. Anil Sharma (1997) 7 SCC 187 to justify custodial interrogation of petitioner by pointing out that interrogation conducted under the protection order of the Court has proved to be a mere ritual in the instant case. It is also submitted that petitioner cannot claim parity with co-accused Karti Chidambaram, as the said co-accused had committed the offence in question at the behest of petitioner. In support of their case, respondents rely upon decisions in

State of Gujarat Vs. Mohanlal Jitamalji Porwal & Anr. (1987) 2 SCC 364; Prahlad Singh Bhati Vs. NCT, Delhi & Anr. (2001) 4 SCC 280 Ram Pratap Yadav Vs. Mitra Sen Yadav And Anr. (2003) 1 SCC 15; Kalyan Chandra Sarkar Vs. Rajesh Ranjan @ Pappu Yadav & Anr. (2004) 7 SCC 528; Anwari Begum Vs. Sher Mohammad & Anr. (2005) 7 SCC 326; Prasanta Kumar Sarkar Vs. Ashis Chatterjee & Anr. (2010) 14 SCC 496; Y.S. Jagan Mohan Reddy Vs. CBI (2013) 7 SCC 439; Gautam Kundu Vs. Directorate of Enforcement (2015) 16 SCC 1; Sunil Dahiya Vs. State 2016 SCC Online Del 5566; Suresh Thimri Vs. State of Maharashtra 2016 SCC OnLine Bom 2602; Chhagan Chandrakant Bhujbal Vs. Union of India 2016 SCC OnLine Bom 9938; State of Bihar & Anr. Vs. Amit Kumar @ Bachcha Rai (2017) 13 SCC 751 and Rohit Tandon Vs. Directorate of Enforcement (2018) 11 SCC 46.

After having heard both the sides at length and on perusal of the FIR of this case, short reply of respondent-CBI, material on record and the decisions cited, I find that from the material collected by the Investigating Agency, it prima facie appears that ₹3 Crores approximately has come into the account of M/s Advantage Strategic Consulting Pvt. Ltd. (ASCPL) and other concerns during the tenure of the petitioner as the Finance Minister. The table below shows the payments made from Span Fibre and Satyam Fibres to ASCPL and associated

  1. entities:-
BROKER YEAR PERIOD TOTAL TDS AMOUNT Paid by
NAME Amount DEDUCTED PAID in ₹
in ₹ @
ASCPL 2007-08 Q1 3875077 439046 3436031 Span
2007-08 Q2 3462875 392344 3070531 Span
2007-08 Q3 2617386 296550 2320836 Span
2007-08 Q4 2573662 291596 2282066 Span
TOTAL 12529000 1419536 11109464
KRIYA 2007-08 Q1 2662667 301680 2360987 Span
FMCG
DISTRIBUTO
RS PVT. LTD.
2007-08 Q2 2259514 256003 2003511 Span
2007-08 Q3 1981732 224530 1757202 Span
2007-08 Q4 1331656 150876 1180780 Span
TOTAL 8235569 933089 7302480
CBN 2007-08 Q1 3186072 360982 2825090 Span
PLACEMENT
&
MANAGEMEN
T CENTRE
2007-08 Q2 3109656 352324 2757332 Span
Q3 1544592 175002 1369590 Satyam
Q4 2257155 255735 2001420 Satyam
TOTAL 10097475 1144043 8953432
Grand 30862044 3496668 27365376/-
Total

13. From the investigation conducted, it appeared that ASCPL and other concerns are beneficially controlled and managed by Karti P. Chidambaram. The beneficial ownership of Shri Karti P. Chidambaram in ASCPL and associated entity becomes clear from the projected facts enumerated as under:-

(a) In the year 2009-10, Shri Karti P. Chidambaram secured mandate from Vasan Healthcare to raise funds through Spark Capital from which Karti P. Chidambaram demanded money and in this connection several emails were exchanged between Karti P. Chidambaram and K. Ramamkrishnan of Spark Capital. Later on, Spark Capital received funds from three entities i.e. M/s Advantage Strategic Consulting Pvt. Ltd., Kriya FMCG and Northstar as per the details given below:

S. Date Name  of the Invoice Description Value
No. Entity
1. 20.03.2009 M/s Advantage Consultancy on new 9,50,000/-
Strategic business opportunities
Consulting for the YE 31.03.09
Pvt. Ltd.
2. 16.03.2009 M/s Kriya Consultancy on new 7,50,000/-
FMCG business opportunities
Distributors for the YE 31.03.09
Pvt. Ltd.
3. 10.03.2009 M/s Northstar Professional Charges 8,00,000/-
Software towards Legal due
Solution Pvt. Diligence &
Ltd. Researches.
4. 04.01.2010 M/s Northstar Management 12,50,000/-
Software Consultancy Fees
Solution Pvt. towards professional
Ltd. services.

(b) When GIC, a leading global investment firm headquartered in Singapore, wanted to invest in Vasan Healthcare, Karti P. Chidambaram had demanded ₹20 Crores in lieu of shares of ASCPL in Vasan Healthcare for smooth closure of the transaction.

(c) One Shri R. Joseph Kennedy of Blue Bugs was given the task of designing the logo, stationery of M/s Castle Gordon Global Advisory Ltd., UK, development of its website, domain name registration, hosting and email facilities. An invoice of ₹ 46,175/- for the work was raised by Blue Bugs in the name of ASCPL. Shri Mike Nithavrianakis who had allegedly floated M/s Castle Gordon Global Advisory Ltd. is the Director and partner of Shri Karti P. Chidamdaram in M/s Totus Tennis Ltd.

(d) Incorporation expenses of M/s Ausbridge Holding and Investments Pvt. Ltd. (in which Karti P. Chidambaram and Mohanan Rajesh were promoters, directors and shareholders ) were paid by ASCPL vide cheque no. 116868 dated 23.02.2006. Karti P. Chidambaram held 95% shares in Ausbridge in 2006.

(e) Mohanan Rajesh, Director in ASCPL and a schoolmate of Karti P. Chidambaram has disclosed in his statement that on Karti’s instructions

ASCPL allotted 66.67% of the total share to Ausbridge Holding and Investments Pvt. Ltd., a company for purchase of shares of ASCPL was made by Mohanan Rajesh from his personal account and he was later compensated by way of payments from companies controlled by acquaintances of Shri Karti P. Chidambaram.

(f) Ms. Meena Saundarajan, a family friend of Karti P. Chidambaram, had transferred about ₹30 Lakhs to Ausbridge through her companies for purchase of shares of ASCPL on instructions of Karti P. Chidambaram.

(g) Expenses on internet used on the telephone number 9884216000 used by Karti.P Chidambaram.

(h) Expenses on travel by Karti P. Chidambaram and his associates were borne by ASCPL. Also personal expenses of Karti P. Chidambaram were borne by ASCPL viz, repair of his Patek Phillippe watch, hotel stays, meals and tickets for tennis tournaments, paintings seized during searches from the office of Karti P. Chidambaram (Chess Global Advisory Services) etc. Even expenses of Sh. Murali, PA of Karti P Chidambaram were paid by ASCPL.

(i) M/s Northstar Software Solutions Pvt Ltd, a company in which Sh. CBN Reddy was a Director issued invoices for collection of illegal gratification from INX Media in September 2008, after the FIPB approval was granted by Shri P Chidambaram. Sh. CBN Reddy is one of the Directors in ASCPL and also a tennis partner of Karti P.Chidambaram.

(j) Devender Saharia of M/s AGS Health had received ₹11 Crores from M/s ASCPL on instructions of Karti P. Chidambaram in lieu of which Karti P. Chidambaram had got inducted his CA, Mr. S. Bhaskaraman and Mr. CBN Reddy as directors of ASG Health.

(k) Mr. Manoj Mohanka, in his statement recorded on 14.10.2016 in Aircel Maxis case, has stated that 60 Lakh shares of Artevea Digital Ltd. of value 0.01 Pound each, were allotted to ASC, Singapore without any payment on the instructions of Karti P. Chidambaram. He explained that

when Artevea Digital Ltd., UK was in financial crises in the year 2008, its director Mr. Manoj Mohanka had met Karti P. Chidambaram for help in arranging funds for the company because Manoj Mohanka’s wife, Payal Singh Mohanka, was a contemporary of Karti P. Chidambaram at Cambridge University, UK in 1990s. In response to the request, Karti P. Chidambaram had asked Manoj Mohanka to place him suitably so that he may act on behalf of Artevea, UK for raising capital and requested Manoj to allot the above shares amounting to ₹60 Lakhs approximately (60 Thousand Pounds). In compliance to the request M/s Artevea Digital Ltd. allotted 6 Lakhs shares without any payment and Karti P. Chidambaram failed to raise funds for Artevea but he did not return these 60 Lakhs shares or compensate any money for them.

(l)The recovery of paintings purchased by ASCPL from the premises of Karti P. Chidambaram during searches conducted on 13.01.2018, the statements of Shri S. Bhaskararaman recorded under Section 50 of PMLA, the extracts of books of accounts of ASCPL as recovered from the hard disks of Shri S. Bhaskararaman seized from the premises of Shri Karti P. Chidambaram on 1.12.2015, banks statements of ASCPL, statements of people dealing with ASCPL recorded under section 50 of PMLA, emails of Shri Karti P. Chidambaram, Shri S. Bhaskararaman etc. recovered from the aforesaid hard disks seized on 1.12.2015 all show that every aspect of the business affairs of ASCPL was controlled by Karti P. Chidamabram, every expense incurred by ASCPL no matter how small was approved by Karti P. Chidambaram, expenses of Karti P. Chidambaram were paid by ASCPL and the people making payments to

ASCPL said that the payments were made to Karti P. Chidambaram. This shows that the ASCPL was beneficially owned by Karti P. Chidambaram.

14. The investigation conducted reveals that ASCPL and other concerns are not conducting any genuine and bona fide business activities. The two Debit Notes raised by CBN Placement and Management Center dated 01.10.2007, 17.11.2007 and Debit Note dated 01.04.2008 of Kriya FMCG were prepared by Bhaskararaman, who had brought those Debit Notes for his signatures. He signed those Debit Notes and he had no idea about the parties mentioned in the Debit Notes. The money which was received from Span Fibre was utilised by him for purchase of shares in his name in ASCPL, Chennai and various other expenses and investments made in ASCPL on the instructions of Karti P. Chidambaram. Mohanan Rajesh has stated that Debit Notes raised by Kriya FMCG on Span Fibers, dated 1.10.2007 and 17.11.2007 bear the signatures of Mr. S. Sundar, who resigned in January, 2008.

15. The third Debit Note dated 1.4.2008 bears the signatures of Sh. C.B.N. Reddy, Director. The parties mentioned in the Debit Notes are not known to him. It is only now that he had come to know about the existence of these debit notes. Mr. S. Bhaskararaman, CA, had told him that Polyester Fibre was sold for M/s. Span Fibre for the reason that commission income was generated. He stated that the illegal gratification in the form of commission received from M/s SPAN Fibre India Pvt. Ltd. was split among M/s. ASCPL, M/s. Kriya FMCG and CBN Placement and Management Centre as Sh. CBN Reddy was the common link among the three entities, he was the director and major shareholder in M/s. ASCPL, M/s. Kriya FMCG and proprietor of CBN Placement and Management Centre. The decision to split the said commission was collectively taken by Karti P. Chidambaram, Sh. CBN Reddy and Mr. Bhaskararaman himself. He further stated that the proportion of commission between ASCPL, CBN Placement and Kriya FMCG was also decided by Karti P. Chidambaram.

16. As per Bhaskararaman, CBN Reddy was the link between the 3 entities. Sh. CBN Reddy, however, has stated that this money belonged to Karti P. Chidambaram and that he has no knowledge of the work done. Thus, he admits that money is related to Shri Karti P. Chidambaram and that money was received by three entities acting together i.e. CBN Placement and Management Centre, Kriya FMCG and ASCPL. He also stated that no separate work was done by CBN Placement and Management Centre and M/s. Kriya FMCG. The Debit Notes were raised through CBN Placement and Management Centre. These Debit Notes bear the signature of Sh. CBN Reddy.

17. The investigation conducted further revealed that no brokerage services were actually rendered by ASCPL or associate entities (CBN Placement and Management Centre and Kriya FMCG). The investigation conducted with the buyers of PSF shows that they had never interacted with ASCPL or associate entities. This fact was also admitted by the directors of ASCPL, including Sh. CBN Reddy who is also the proprietor of CBN Placement and Management Centre and the director and shareholder of Kriya FMCG. Sh. Bhaskararaman, the main person behind the laundering of these funds also stated that these debit notes were raised on the directions of Sh. Karti P. Chidambaram to show some transaction which in-fact did not occur. It is further revealed that fake invoices were raised to the companies by ASCPL and other concerns in order to show and legitimize the payments received from those companies which were in fact the bribe money for the favours shown by the petitioner. It is also established that the money was collected by Karti P. Chidambaram through these concerns on behalf of the petitioner for the favours shown by the petitioner to the companies who had transferred money into the account of ASCPL and other concerns. The illegal gratification collected was thereafter invested in other companies /entities. The money received by ASCPL from M/s Span Fibre India Pvt. Ltd. was nothing but illegal gratification received for the approval given by the Finance Minister for FDI in INX Media Ltd. The Bank statement of ASCPL for A/c No. 0602100003711 maintained with DCB Bank shows that ASCPL received money from M/s Span Fibre India Pvt. Ltd. in 2007-08, as follows :-

Sl. No. Date Amount in ₹
1 10.11.2007 34,36,031
2 21.01.2008 30,70,531
3 21.02.2008 23,20,836
4 29.05.2008 22,82,066
Total 1,11,09,464

18. The bank statement of ASCPL shows that initially this amount was invested by ASCPL in fixed deposits. Thereafter the money was invested in shares of Vasan Health Care Ltd. Although the shares were acquired by Smt. Meera Arun for ₹3 Crores, she gifted the shares to her father and he immediately sold the same to ASCPL for ₹1.5 Crores at a price lower than the price at which they themselves bought the shares at a loss of ₹1.5 Crores. Even though the sale was at a price of ₹1.5 Crores, at the time of the sale, ASCPL paid Dwarkanathan (father of Smt. Meera Arun) a sum of ₹50 Lakhs and that too after one year. The balance sheet of ASCPL for the year 2007-08 and 2008-09 shows that at this time the only source of funds available to ASCPL was the money received from Span Fibre India Pvt. Hence, the share of Vasan Health Care Pvt. Ltd. (Vasan) acquired by ASCPL were generated from proceeds of crime as they had been acquired from the illegal gratification received by ASCPL for the approval granted by Finance Minister, P. Chidambaram to INX Media Ltd. The remaining payment of Rs 1 Crore due for the shares of Vasan Health Care Pvt. Ltd. purchased by ASCPL was made on 29.10.2010, only after these shares were sold by ASCPL to Sequoia Capital India Growth Investment Holding (Sequoia) on 26.10.2010.

19. It was projected by the Investigating Agencies that ASCPL received ₹22,50,00,600/- from Sequoia for sale of Vasan shares and this money is tainted money as it arises out of sale of shares of Vasan Healthcare that are themselves acquired from tainted funds and is property involved in money laundering. It is further projected that the remaining shares of Vasan Health Care held by ASCPL is properly involved in money laundering and thereafter, ASCPL sold further 36245 share of Vasan to Vasan Medical Hall @ ₹5242/- per share at a total value of ₹19 Crores. Therefore, it is projected that the amount of ₹19 Crores is also property involved in money laundering as it is arising from sale of shares of Vasan i.e. property involved in money laundering.

20. The investigation conducted further reveals as follows:-

Out of the above property involved in money laundering i.e. amount received by ASCPL from sale of shares of Vasan Healthcare, further property was purchased including that of AGS Healthcare acquired for ₹11 Crores. These shares are also property involved in money laundering as they were bought from tainted money. They were further sold by ASCPL for a sum of ₹29,49,25,885/- i.e. at benefit of ₹18.49 Crores approx. This money is again tainted money as it arises out of sale of property involved in money laundering. The funds of ₹22.5 Crores derived by ASCPL from the sale of shares of Vasan Health Care to Sequoia, funds of ₹19 Crores derived from the sale of shares of Vasan to Vasan Medical Hall and the profit of ₹18.49 Crores approx. on the sale of shares of AGS Health Care was arising out of sale of property involved in money laundering. So, the funds of ₹59.99 Crores are property involved in money laundering. In addition, Span Fibre (India) Pvt. Ltd. and Satyam Fibres (India) Pvt. Ltd paid an amount of ₹3 Crores to ASCPL and associate companies, out of which only ₹50 Lakhs was used and the remaining ₹2.5 Crores were Proceeds of Crime in the hands of ASCPL as both Kriya FMCG and CBN Placement and Management Centre channelled the money back to ASCPL. The remaining shares of Vasan held by ASCPL are also proceeds of crime. In addition ₹10 Lakhs were received by ASCPL from INX Media on 22.07.2008. ₹62.68 Crores

approximately worth properties are involved in money laundering by ASCPL as a result of criminal activity relating to a Schedule Offence.

The remaining shares (83,755) of Vasan Health Care (1,50,000 less 30,000 less 36,245 = 83,755) held by ASCPL are also proceeds of crime as they are derived from criminal activity relating to a Scheduled Offence.

21. This Court is conscious of the fact that personal liberty of a citizen is sacrosanct, but no one is above the law. Law makers cannot be allowed to turn into law breakers with impunity, particularly in cases of this magnitude. What is so far to be seen is the tip of ice berg. Pre-arrest is not meant for high profile economic offenders. Time has come to recommend to the Parliament to suitably amend the Law to restrict the provisions of pre-arrest bail and make it inapplicable to economic offenders of high profile cases like the instant one. It is need of the hour. The law must come down upon economic offenders with a heavy hand. It is often seen that when economic offenders are on pre-arrest bail, then the investigation conducted is at a superficial level, like in the instant case. This not only weakens mega scam cases but it actually stiffs the prosecution. This Court cannot permit the prosecution in this sensitive case to end up in smoke like it has happened in some other high profile cases. Tendering of charge-sheet after obtaining sanction for prosecution of petitioner cannot dilute the gravity of the offence in question. Both the sides have cited legal precedents but the facts of instant case prima facie

reveal that petitioner is the king pin i.e. the key conspirator in this case. Law enforcing agencies cannot be made ineffective by putting legal

obstacles of offences in question being Scheduled or not Scheduled, as

these legal pleas are sub-judice before Supreme Court and cannot

persuade this Court to grant pre-arrest bail, as the gravity of offence

committed by petitioner is quite evident from case diaries etc. produced

by the Investigating Agencies. The gravity of offence committed by

petitioner demands denial of pre-arrest bail to him.

22. Economic offences constitute a class part and need to be visited with a different approach in matters of bail. Taking note of huge magnitude of conspiracy angle qua petitioner, it would be premature to jump to a conclusion that provisions of PMLA would not apply to the instant case, as it cannot be said that the amount involved is below Rs30

Lakhs. Rather, money laundering involved in this INX Media Scam and Aircel Maxis deal scandal is of Rs 3,500 Crores.

23. Supreme Court in Y.S Jagan Mohan Reddy (Supra) while dealing with a money laundering case, has reiterated as under:-

“34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.”

24. The pertinent observations made by Supreme Court in ‘Gautam Kundu Vs. Directorate of Enforcement (Prevention of Money-Laundering Act)’ (2015) 16 SCC 1, which apply to the instant case, are as under:-

“32. We have heard the learned counsel for the parties. At this stage we refrained ourselves from deciding the questions tried to be raised at this stage since it is nothing but a bail application. We cannot forget that this case is relating to “money-laundering” which we feel is a serious threat to the national economy and national interest. We cannot brush aside the fact that the schemes have been prepared in a calculative manner with a deliberative design and motive of personal gain, regardless of the consequence to the members of the society.”

25. Applying the afore-noted dictum to the instant case, this Court finds that not naming of petitioner in FIR, is inconsequential, as petitioner has been projected to be the main accused on whose dictates the offence of this magnitude could be committed. Petitioner cannot claim parity with co-accused who are on bail. It cannot be forgotten that petitioner was the Finance Minister at the relevant time and he had given FDI clearances to INX Media Group for receiving overseas funds to the tune of ₹305

Crores. The alleged irregularities committed by petitioner makes out a

case for refusing pre-arrest bail to petitioner. Simply because petitioner is

a sitting member of Parliament, would not justify grant of pre-arrest bail

to petitioner in this sensitive case. Offenders must be exposed, no matter

what their status is. Petitioner is member of legal fraternity too. But this

by itself does not and cannot justify concession of pre-arrest bail to him.

Discretion to grant or deny pre-arrest bail cannot be exercised de hors the

gravity of offence. It would be preposterous to say that prosecution of

petitioner is baseless, politically motivated and act of vendetta as on the

basis of material collected so far, it can be safely said that prima facie

case is made out against petitioner, thereby, justifying denial of pre-arrest

bail to him. The magnitude of this case dissuades this Court to grant pre-arrest bail to petitioner.

26. The pertinent observations of Supreme Court in CBI Vs. Anil Sharma (Supra) which aptly apply to the instant case, are as follows:-

“6. We find force in the submission of the CBI that custodial interrogation is qualitatively more elicitation-oriented than questioning a suspect who is well ensconced with a favourable order under Section 438 of the Code. In a case like this effective interrogation of a suspected person is of tremendous advantage in disinterring many useful informations and also materials which would have been concealed. Success in such interrogation would elude if the suspected person knows that he is well protected and insulated by a pre-arrest bail order during the time he is interrogated. Very often interrogation in such a condition would reduce to a mere ritual. The argument that the custodial interrogation is fraught with the danger of the person being subjected to third-degree methods need not be countenanced, for, such an argument can be advanced by all accused in all criminal cases. The Court has to presume that responsible police officers would conduct themselves in a responsible manner and that those entrusted with the task of disinterring offences would not conduct themselves as offenders.”

27. Supreme Court in Y.S.Jagan Mohan Reddy (Supra), while dealing with multiple investigations involving multiple conspirators has reiterated that the approach to be followed while dealing with bail plea in cases involving criminal conspiracy to commit economic offences of huge magnitude relating to public money ought to be strict as fraudulent transactions affect the economic system to the detriment of the country. It was pertinently observed that economic crimes of such mammoth scale

are craftily planned and executed. Thus, grant of bail in cases like instant one will send a wrong message to the society.

28. In the instant case, in view of the enormous material placed on record in respect of distinguished entities, various transactions etc, this Court unhesitatingly opines that bail plea of petitioner is not acceptable. Recently, Supreme Court in Rohit Tandon Vs. Directorate of Enforcement (2018) 11 SCC 46 while dealing with the bail plea in a money laundering case, has again reiterated that white collar crimes/ economic offenders have deep rooted conspiracies involving huge amount of public funds and this should be viewed seriously and such offences ought to be considered as grave offences. Pertinently, the bail plea in the case of Rohit Tandon (Supra) was repelled by the Supreme Court while observing that duty of the Court at the bail stage is not to weigh the evidence meticulously but to arrive at a finding on the broad probabilities of the case.

29. This is a classic case of money laundering. The twin factors which have weighed to deny pre-arrest bail to petitioner are: (i) Gravity of offence and (ii) evasive replies given by petitioner to the questions put to him while he was under protective cover extended to him by this Court. The parameters governing pre-arrest bail and regular bail are altogether different. I have pondered over this matter for long and after weighing the pros and cons, I am of the considered view that the gravity of the offence committed in the instant case amply justifies denial of pre-arrest bail to petitioner. Grant of pre-arrest bail in a serious matter like instant

one to an accused simply on the ground that investigation is complete and

charge sheet has been filed, would defeat the ends of justice. In bail matters, gravity of the offence is of utmost consideration which weighs with the Court in granting or refusing pre-arrest bail or regular bail. The facts of this case persuades me to decline pre-arrest bail to petitioner while refraining to comment on the merits of the case.

30. Upon considering the case set up against petitioner in its entirety, this Court is of prima facie opinion that it is not a fit case for grant of pre-arrest bail to petitioner. Consequentially, both these applications are accordingly disposed of, while observing that anything stated herein shall not be taken as an expression on merits at trial.

Dasti.

(SUNIL GAUR)
JUDGE

AUGUST 20, 2019

Bail Appl. 1316/2018 & 1713/2018

In Re: Harish K. Madan-13.08.2019

CALCUTTA HIGH COURT

13.08.2019

C.R.M. 6375 of 2019
tkm/ct 28
sl no. 20

In Re : An application for anticipatory bail under section 438 of the Code of Criminal Procedure filed on 18.7.2019 in connection with Ballygunge P.S  case no. 27 of 2019 dated 1.3.2019 under sections 420/406/467/468/471/120B of the IPC

And

Allowed

In Re : Harish K. Madan …… petitioner

Mr. Sekhar Basu, Sr. Adv.

Mr. Sandipan Ganguly, Sr. Adv.
Mr. Saryati Datta
…… for the petitioner

Mr. S. G. Mukherjee, ld PP

Mr. Sudip Ghosh
…… for the State

Mr. Sabyasachi Banerjee
Mr. Sourav Chatterjee
Mr. A. Ghatak
…… for the de facto complainant

Petitioner submits that co-accused Sisir Agarwal has been granted pre-arrest bail and the petitioner stands on the same footing as the said co-accused person. Further investigation does not reveal any incriminating materials so as to justify the rejection of his prayer for pre-arrest bail.

Learned Public Prosecutor submits that co-caused Sarat Agarwal was arrested in this case and further investigation reveals that accounts and other documents relating to M/s. Intimate Fasions India Pvt. Ltd., a non-existing company appear to be forged. Co-accused who has been granted pre-arrest bail are not co-operating with investigation.

Learned lawyer for the de facto complainant submits by adopting similar modus operandi other entities have also been cheated by the petitioners. Civil suits have been filed against the petitioner over such issue.

We have considered materials on record. There is a pending dispute between the petitioner and the de facto complainant over the affairs of M/s. Sishir Exports (P) Ltd. and the de facto complainant had shareholdings in the said company since 2016.

In view of the fact that the de facto complainant had share holding and involvement in the affairs of the aforesaid company which is the holding company of M/s. Intimate Fashions India Pvt. Ltd., alleged non-existence firm, we had granted pre-arrest bail to co-accused Sisir Agarwal. Investigation throws some doubt with regard to documents and/or papers relating to the said firm. In the backdrop of the aforesaid facts, it is a matter to be adjudicated at the appropriate stage of the proceeding whether the de facto complainant was wholly unaware of the activities of the petitioner in the alleged transaction. Status of the de facto complainant, who appears to have considerable interest in the holding firm, cannot be at par with other entities who have filed civil suits against the petitioner. Nothing has been placed on record to show that any of the other entities have initiated criminal proceedings against the petitioner and others. With regard to the allegation that the co-accused persons have not co-operated with investigation, we refrain from making any observation with regard thereto as they are not before us and no application for cancellation of their pre-arrest bail has also been filed before this court till date.

Under such circumstances, we are of the opinion petitioner may be granted anticipatory bail.

Accordingly, we direct that in the event of arrest, the petitioner shall be released on bail upon furnishing a bond of Rs. 50,000/- with two sureties of like amount each, to the satisfaction of the Arresting Officer and also subject to the conditions as laid down under section 438(2) of the Code of Criminal Procedure, 1973 and on further condition that the petitioner shall meet the investigating officer once in a week while on bail until further orders and shall deposit his passport to the instigating agency within a period of seven days from date and that the petitioner shall appear before the court below and pray for regular bail within four weeks from date.

The application being CRM 6375 of 2019 is disposed of.

(Joymalya Bagchi, J.)

(Manojit Mandal, J.)

Prayer for pre-arrest bail was turned down by Apex Court granted by Calcutta High Court -13.08.2019

The accused was not named in the first information report and as co-accused persons are on regular bail/anticipatory bail, we are inclined to grant bail to the petitioner.

CALCUTTA HIGH COURT

163

13.08.2019

rkd Ct. No.28

Allowed

C.R.M. 7297 of 2019

In Re: – An application for bail under Section 439 of the Code of Criminal Procedure filed on 07/08/2019 in connection with Kaliachak P.S. Case No. 505 of 2018 dated 17/07/2018 under Sections 286/120B/304 of the Indian Penal Code and under Sections 3/4/5 of the E.S. Act.

And

In the matter of: Riday @ Hriday Ghosh @ Ridoy

….petitioner.

Mr. A. Karmakar,
Mr. A. K. Bhowmick

                               …for the petitioner.

Mr. N. Ahmed,
Ms. A. Roy
…for the State.

Petitioner is in custody for 30 days and it is submitted that some of

the accused persons are on regular bail/anticipatory bail.

Learned counsel appearing on behalf of the State opposes the prayer for bail and submits that the prayer for pre-arrest bail of the petitioner was turned down by the Apex Court.

Having considered the materials in the case diary and bearing in mind the extent of complicity of the petitioner in the alleged crime and in the light of the aforesaid submission that he was not named in the first information report and as co-accused persons are on regular bail/anticipatory bail, we are inclined to grant bail to the petitioner.

Accordingly, the petitioner is directed to be released on bail upon furnishing a Bond of Rs. 10,000/- with two sureties of like amount each, one of whom must be local, to the satisfaction of the Learned Chief Judicial Magistrate, Malda subject to the condition that during bail he shall appear before the learned trial court regularly till disposal of the trial and he shall not intimidate witnesses or tamper with evidence in any manner whatsoever.

In the event the petitioner fails to comply with the conditions as enshrined hereinbefore, it is open to the trial court to cancel the bail without any further reference to this Court.
The application for bail is, thus, disposed of.

(Manojit Mandal, J.)

(Joymalya Bagchi, J.)

SRI MURUGESH Vs. STATE OF KARNATAKA

KARNATAKA HIGH COURT

SINGLE BENCH

( Before : P.D. Dinakaran, C.J )

SRI MURUGESH — Appellant

Vs.

STATE OF KARNATAKA — Respondent

Criminal P. No. 932 of 2009

Decided on : 17-03-2009

Penal Code, 1860 (IPC) – Section 302, Section 498A

Counsel for Appearing Parties

Amar A. Correa, for the Appellant; Basavaraj Kareddy, GA., for the Respondent

ORDER

P.D. Dinakaran, C.J.—Heard.

2. The Petitioner is arrested for the offence punishable under Sections 498(A), 302 of IPC. According to the learned SPP, investigation is already over and the charge-sheet also has been filed and the case is committed for trial.

3. Considering the facts and circumstances of the case, the petitioner shall be enlarged on bail on his executing a bond for a sum of Rs. 15.000/- (Rupees Fifteen Thousand) with two sureties each for a like sum to the satisfaction of the jurisdictional Court, subject to the following conditions.

a. The petitioner shall report before the concerned jurisdictional Court where the case is pending, on every Monday of the first week of every month at 10 am and thereafter, shall also make himself available before the respondent as and when required.

b. Petitioner shall not leave the jurisdictional police limits without prior permission.

c. Petitioner shall not tamper with the witnesses or in any manner interfere with or put obstacle to the investigation,

d. Breach of any one of the above conditions will entitle the prosecution to move this Court for cancellation of the bail granted.