Sushila Aggarwal and others Versus State (NCT of Delhi) and another – 29/1/2020

SUPREME COURT OF INDIA JUDGMENTS

“(1) Whether the protection granted to a person under Section 438 Cr.P.C. should be limited to a fixed period so as to enable the person to surrender before the Trial Court and seek regular bail.

(2) Whether the life of an anticipatory bail should end at the time and stage when the accused is summoned by the court.”

SPECIAL LEAVE PETITION (CRIMINAL) NO (s). 7281­7282 OF 2017

SUSHILA AGGARWAL & ORS. …APPELLANT(S)

VERSUS

STATE (NCT OF DELHI) & ANR. …RESPONDENT(S)

FINAL CONCLUSIONS:

In view of the concurring judgments of Justice M.R. Shah and of Justice S. Ravindra Bhat with Justice Arun Mishra, Justice Indira Banerjee and Justice Vineet Saran agreeing with them, the following answers to the reference are set out:

Continue Reading

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.)

Custodial interrogation is not the norm for high officials who have credible roots in society and who are reliable and whose absconding shall not be apprehended: CHC

30.05.2019

Sd./ad Ct. 37.

Rajeev Kumar vs. Central Bureau of Investigation (CBI) & Anr.

CRR 1308 of 2019

Counsels of the Parties :

Mr. Sudipto Moitra
Mr. Gopal Chandra Halder
Mr. Navanil De
Mr. Rudradipta Nandy
Mr. Rajeev Kumar Jha
..For the petitioner.

Mr. Y. Dastoor
Mr. Anirban Mitra
Mr. Samrat Goswami
..For the CBI.

I have heard Mr. Moitra, learned Senior Advocate for the petitioner in respect of the application for quashing of the proceedings.

Even though no notice was served I had desired that in a case of this magnitude where records going upto the Hon’ble Supreme Court have to be considered a notice be given to the Investigating Agency. I was informed that there is no retainer of the Investigating Agency available in the High Court.

When the matter was taken up at a quarter of 4 this afternoon, the learned Additional Solicitor General office was represented by Mr. Dastoor, learned Senior Advocate assisted by Mr. Anirban Mitra and Samrat Goswami.

They frankly submitted that they are at a disadvantage today because no copy of the application was served on them and they have been taken by surprise. He also fairly submitted that since the matter is at a motion stage normally no notice is served without an order of the Court. Yet, because of desire of the Court he has appeared today and has made submissions.

This case covers several years and has generated a lot more records that can be briefly summarized in the course of an order passed at the interim stage. Suffice it to say that in respect of the allegations of a Ponzi scheme misnamed as a chit fund certain complaints were made against, inter alia, the Saradha Group of Companies, a Special Investigation Team was formulated initially under the aegis of the State of West Bengal after orders were passed by the Calcutta High Court. But thereafter, the duty of the investigation was shifted to that of the Central Bureau of Investigation.

It is the case of the C.B.I. that the special investigation team formed by the State of West Bengal of which the present petitioner was a member and incharge of the day to day functioning, made several seizures of relevant documents including documents showing payments to elected representatives of the public. However, it is the further case that such documents allegedly seized by the special investigation team did not find place in the records of the criminal case which is being complied by them and was not handed over to the C.B.I. by the special investigation team.

There are other issues where the action of the petitioner has been impeached by the investigation agency. The petitioner has made out a case that he was merely a member of the special investigation team and was under the overall supervision of his superior officer, being the D.G and the I.G., as mentioned in the Government notification.

The petitioner has made out a three fold case; first before the C.B.I. he has taken a plea of respondeat superior to all questions. He has also made out the case that the notices issued to him right from 2017 till 2019 were in respect of what was essentially under Section 160 of the Cr.P.C have a different connotation than that of custodial interrogation. For the sake of convenience, Section 160 of the said Code is reproduced hereinbelow.

“ 160. Police officer’s power to require attendance of witnesses. – (1)
Any police officer making an investigating under this Chapter may, by order in
writing, require the attendance before himself of any person being within the limits
of his own or any adjoining station who, form the information given or otherwise,
appears to be acquainted with the facts and circumstances of the case; and such
person shall attend as so required:
Provided that no male person under the age of fifteen years or above the age
of sixty-five years or a woman or a mentally or physically disabled person shall be
required to attend at any place other than the place in which such male person or
woman resides.

(2) The State Government may, by rules made in this behalf, provide for the payment by the police officer of the reasonable expenses of every person, attending under sub-section (1) at any place other than his residence.”

Therefore, secondly the petitioner submits that he can only be asked to attend the investigation so as to answer truly all questions in terms of Section 161(1) read with Section 161(2) of the Cr.P.C. Whether the answer is true or not, cannot be decided by the investigating agency at this stage without any court having adjudicated the matter.

Thirdly, the Hon’ble Supreme Court has recorded in so many words that in the contempt application where it withdrew the protection given to the petitioner by an order dated 5th February, 2019 passed in M.A. No. 302 of 2019, it had no jurisdiction to decide the question as to whether the member of the special investigation team should be arrested by the C.B.I. for custodial interrogation.

Nonetheless, by the Order dated May 17, 2019 in the contempt proceedings and the interlocutory application made therein, it had withdrawn the protection of the petitioner from coercive process including arrest, which had been granted by the order dated 5th February, 2019.

Mr. Moitra further submits that where the only thing which even the Hon’ble Supreme Court has recorded can incriminate the petitioner under Sections 201/202 of the Indian Penal Code, if no F.I.R. has been registered even today as against the petitioner under those sections, and if in the charge-sheet already filed along with seven supplementary charge-sheets, the petitioner has neither been cited as a witness nor named as an accused and if no attempt has been made to approach this Court on the part of the investigating agency complaining of suppression of evidence by the petitioner, no coercive process may be allowed to continue against the petitioner. The statements contained in the contempt application/interlocutory application in the contempt application that the C.B.I. requires the petitioner for custodial interrogation is not in accordance with the procedure established by the law. In support of his submission that the C.B.I. has not been given a mandate to become a law unto itself, Mr. Moitra has relied upon the operative part of the order of the Hon’ble Supreme Court dated May 17, 2019. For the sake of convenience the same is extracted hereinbelow:

“Therefore, in the given facts, we would withdraw the protection given to 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.”

On the other hand Mr. Dastoor even though ill prepared today no fault of his own, on a pure question of law asked me to envisage whether in terms of section 173 of the Code of Criminal Procedure, it can be expected that an investigating agency would filed its charge sheet before completing the investigation in such a serious matter as this. He further submitted that before any First Information Report was registered against the petitioner the investigating agency must have reasonable basis to suspect of him committing an offence under Sections 201/202 of the Indian Penal Code. That is why his client is attempting to ask the petitioner questions the answers to which, the petitioner is avoiding. He submits that the neutrality of the investigating agency is clear from the fact that it is giving the petitioner every opportunity to clear doubts before registering any First Information Report against him. He also submitted that this Court should look at the entirety of the circumstances and where the allegation is made against the defender of the law and order of being unable to satisfy the investigating agency as to what happened to the seized materials which were seized during the continuance of the petitioner on the special investigation team as the man in day to day charge of its functioning. He submits that at interrogation on all the occasions when the petitioner appeared before the C.B.I. ultimately the only answer he could give was that he was a mere post office. Mr. Dastoor has shown that his client could not have acted mala fide since they gave him time even on May 26, 2019 to appear when three days’ was sought
by Mr. Moitra’s client and even today Mr. Moitra’s client has not been arrested.
So his apprehension was misplaced.

Mr. Mitra replies reiterating his principal submissions and also for the urgency of the interim relief stating that if no arrest or coercive action was planned or about to be taken, then there was no reason for the C.B.I. to issue a Look-Out notice.

In such view of the matter, it appears to me that the only question is to be determined is whether in the absence of any allegation of an offence under Sections 201/202 of the Indian Penal Code for questioning in connection with another matter as a witness who has not been cited, such course of treatment as meted out to the petitioner is, in accordance with law and due process as mandated by the Hon’ble Supreme Court. This would require further arguments and also the complete assistance of Mr. Dastoor who should not be taken by surprise as he was today.

Accordingly, Mr. Moitra’s learned advocate-on-record shall cause service notice of the present petition on the learned Additional Solicitor General and request Mr. Dastoor to appear on behalf of the investigating agency. Learned Senior Government Advocate/Joint Secretary, Branch Secretariat of the Ministry of Law and Justice and Legal Affairs and/or the Additional Solicitor General shall regularize the appointment of the junior of his choice along with Mr. Dastooor.

The application for contempt or the interlocutory application therein, relied upon by the petitioner to the prejudice of the investigating agency is not a part of the records. I grant leave to the petitioner to affirm and file a Supplementary Affidavit, to bring on record the interlocutory application in contempt application and the contempt application. It shall be affirmed within June 4, 2019 and shall be served on the said offices of the investigating agency and the office of the Joint Secretary within two days thereafter; while it will be open to the opposite parties to use an affidavit in opposition if they so choose, since a question of law involved, not using the said affidavits shall not preclude the investigating agency from opposing this petition.

The petition shall appear before the regular Bench on June 12, 2019 subject to its convenience but it is expected that His Lordship will be pleased to give some preference to this matter considering the gravity.

For a period of one month from the date of reopening or until further order, whichever is earlier, the petitioner shall not be subjected to coercive process or be arrested on the following conditions :

  1. He shall deposit his passport with the investigating agency within 24 hours from the passing of this order.
  2. The petitioner shall intimate the investigating agency through the office of the Joint Secretary, Branch Secretariat, as aforesaid, his present residential address and he shall remain in such address, unless for medical emergency he is removed to a hospital or nursing home until the disposal of this matter.

  3. Attendance of the said petitioner shall be recorded at his own residence in the presence of any competent superior officer of the C.B.I. at 4 O’ Clock duly authorized to record his attendance, in the afternoon every day. The C.B.I. officers thus authorized, shall not be hindered in any manner by any person whatsoever in discharging his duty.

  4. The petitioner shall co-operate in the fullest manner with the investigation and strictly in terms of Section 161(2) read with sub-section (1) of the Cr.P.C. answering the questions put to him. It is needless to mention that he will not be forced to incriminate himself as mentioned in Section 162 of the Cr.P.C. read with Article 20 of the Constitution.

  5. When the petitioner is called to meet the officers of the investigating agency, he will be entitled to be accompanied by his staff until the doorway in the room where he may be interrogated. There shall be no representative, apart from the petitioner on his behalf.

  6. The petitioner shall be entitled to take assistance of the mobile phone provided that the number where he is calling, is disclosed to the investigating agency.

  7. The requirement of the Petitioner to stay at home as aforesaid in Kolkata shall stand regardless of any order posting him or assigning him to any duty outside jurisdiction of the Kolkata Police Commissionerate. I make it clear that the State of West Bengal shall not be entitled to send the Petitioner out of Kolkata even on official duties and if necessary he shall be permitted to work from his official residence.

This shall not prevent the C.B.I. for applying to this Court for cancellation of this order or for modification or alteration of the conditions as mentioned hereinabove.

Before parting with this matter at the interim stage, I shall put on record my view that while custodial interrogation is not the norm for high officials who have credible roots in society and who are reliable and whose absconding shall not be apprehended lightly, in the instant case, an attempt was made by both the sides to bring to my notice certain other allegations which, in my humble opinion have no place in judiciary. All that the Court considers is whether the investigating agency has a statutory right or discretion to act as it does and whether it has done so reasonably, fairly and conscionably. Other allegations to incite passions have no place in this Court.

The petitioner is granted liberty to apply for extension of this order on the self-same application. It is recorded that an application for anticipatory bail moved by the petitioner, was dismissed as not maintainable.

Photostat plain copy of this order, duly countersigned by the Assistant  Registrar (Court) shall be made available to the parties upon observing necessary formalities.

( Protik Prakash Banerjee, J. )

On filing of charge sheet the accused under anticipatory bail shall surrender before the Trial Court and take regular bail: Patna HC

If the previous anticipatory bail order was for a limited period till submission of the charge-sheet and the accused after grant of anticipatory bail has surrendered before the Court for furnishing bail bond, whether in such cases on submission of charge-sheet, second anticipatory bail application is maintainable or the applicant will have to surrender and obtain an order of bail under Sections 437 or 439 of the Code of Criminal Procedure.

IN THE HIGH COURT OF JUDICATURE AT PATNA

Cr.Misc. No.1257 of 2010

BISHUNDEO SAHU S/O LATE BIRANCHI SAHU
R/O NORTH HAJIPUR WARD NO.13,NEAR KALI
ASTHAN,P.S.- CHITRGUPTA NAGAR,DIST.- KHAGARIA

Versus

THE STATE OF BIHAR

with

Cr.Misc. No.2875 of 2010

1. RAMA SHANKAR PANDEY
2. ARTI DEVI
3. ASTHA KUMARI
4. SMITA KUMARI ALIAS SMITHA KUMARI
5. SURESH CHANDRA BHATT
6. GAURI SHANKAR PANDEY—–PETITIONERS

Versus

THE STATE OF BIHAR .

with

Cr.Misc. No.21131 of 2010

HARI KUMAR JHA .
Versus
STATE OF BIHAR .

For the Petitioners:- Mr. Rana Pratap Singh, Sr.Advocate & Mr. Rakesh Kumar, Advocates
For the State:- Mr. Lala Kailash Bihari Pd, Sr.Adv.

Dated : 20 January, 2011

ORDER

Dharnidhar Jha, J.

These matters have been referred by Hon`ble Single Judge, for deciding the issue, that if the previous anticipatory bail order was for a limited period till submission of the charge-sheet and the accused after grant of anticipatory bail has surrendered before the Court for furnishing bail bond, whether in such cases on submission of charge-sheet, second anticipatory bail application is maintainable or the applicant will have to surrender and obtain an order of bail under Sections 437 or 439 of the Code of Criminal Procedure. The single Judge has referred these matters in view of divergent opinion among the Judges about the maintainability of the second anticipatory bail application in such circumstance.

2. Petitioners in these applications were granted anticipatory bail till submission of the charge-sheet. Subsequently when the charge-sheet was submitted, again they filed application for grant of anticipatory bail, which gave rise to question whether in terms of previous order, they are required to appear and surrender before the Court below for seeking regular bail or their prayer for grant of anticipatory bail on the second occasion could be allowed.

3. The issue has been framed in view of the constitution bench decision of Apex Court in the case of Guru Baksh Singh Sibia Vs. State of Punjab reported in AIR 1980 SC 1632 as well as divergent views taken by different Benchs in the case of Salauddin Abdul Samad Shaikh Vs. State of Maharashtra reported in (1996) 1 SCC 667, in the case of Nirmaljeet Kaur Vs. State of M.P. as well as in the case of Mahendra Prasad Singh Vs. State of Bihar reported in 2004(3) PLJR 491, Sheochandra Singh Vs. State of Bihar reported in 2007(4) BBCJ V-66 as well as in the case of Jagnarayan Yadav alias Babajee and ors. Vs. State of Bihar, reported in 2010 (2) PLJR 684. The view taken in Salauddin‟s case has been followed in all these cases, with certain observations/modifications but so far the view taken by the learned single Judge in the case of Anirudh Pd. alias Sadhu Yadav Vs. State of Bihar reported in 2006(2) PLJR 676 is concerned, a different view has been taken.

4. Section 438 was introduced in the Code of Criminal Procedure on recommendation of the Law Commission in its forty first Reports. Section 438 Cr.P.C, contemplates an application by a person on an apprehension of arrest in regard to the commission of non-bailable offence. The object of the provision under Section 438 Cr. P.C. was to give relief to a person from unnecessary harassment and discourage in case of apprehension of arrest for non- bailable offence. This privilege could be granted on an application filed before the High Court or the Sessions Court, if the Court concerned is satisfied that (i)the person will not abuse the liberty of anticipatory bail. (ii) The facts of the case reveal false implication of applicant in the matters of non-bailable offence. (iii) The applicant has reasonable apprehension of being arrested in the case. (iv) The person concerned will not abscond and will make himself available to face trial and also that the privilege of anticipatory bail will not be otherwise misused by person concerned.

5. Shri Rana Pratap Singh, Senior Advocate, while addressing the Court on this issue has referred different decisions, right from AIR 1980 SC 1632 ( Gurubaksh Singh Sibia Vs. State of Punjab), up to 2010(2) PLJR 684 ( Jag Narayan Yadav vs. State of Bihar). He has submitted that it was for the first time in the case of Gurubaksh Singh Sibia (supra) that the Apex Court has considered the scope of Section 438 Cr.P.C, while granting anticipatory bail and discussed the jurisdiction of the Court. The view of the Apex Court in Gurubaksh Singh‟s case was that amplitude of judicial discretion, given to the High Court and the Court of Sessions should not be cut down by reading into statute. It is for the High Court and the Court of Sessions, to whom the anticipatory bail application is made to exercise freely their judicial discretion, on the particular facts and circumstances of the case and on such conditions as the case may warrant. The ends of justice will be better served by trusting these Courts governing the grant of bail, then by divesting them of their discretion, which the legislature has conferred upon them, by laying down inflexible rules of general application. The view expressed by the constitution Bench, sufficiently indicated that how and in which manner an application, for anticipatory bail should be considered. The only consideration was the judicial discretion of the concerned Court depending on the facts and circumstances of a particular case.

6. However, in this very decision, the Constitution Bench has held that provisions of Section 438 Cr.P.C. cannot be invoked after the arrest of the accused. Grant of anticipatory bail to an accused, who is under arrest, involves contradiction to term of provision under section 438 Cr.P.C., as the first pre-condition for granting anticipatory bail is a reasonable apprehension of being arrested, on an accusation of having committed a non-bailable offence. The constitution Bench also decided that operation of an order passed under Section 438 Cr.P.C. necessarily should not be limited in point of time. The normal rule should be, not to limit the operation of the order in relation to period of time.

7. But the view of Apex Court in Gurubaksh Singh‟s case was changed in Salauddin Vs. State of Maharashtra (1996) 1 SCC 667. In this decision the view of the Apex Court was that if any person has reason to believe that he may be arrested on an accusation of having committed non-bailable offence, the High Court or the Court of Sessions, may, if it thinks fit, direct that in the event of arrest, he shall be enlarged on bail, it may include such conditions, having regard to the facts of the particular case. It was also held that since anticipatory bail is granted to any person in anticipation of arrest in non-bailable case, it does not mean that the regular Court, which is to try the offender, should be bypassed and for that reason the High Court or the Court of Sessions should fix a outer date for continuation of bail and on the date of its expiry, petitioner should be directed to move for regular bail. The anticipatory bail as per decision was an ad-interim relief till the investigation is going on. Once investigation is completed and charge- sheet submitted bringing some tangible evidence against the accused, he has to surrender before the Court having jurisdiction for regular bail.

8. The earlier view of the Apex Court in (1996) 1 SCC 667 was also upheld in the decision reported in (1998) 9 SCC 348 ( K.L.Verma Vs. State and another), where the Apex Court was of the view that the order of anticipatory bail do not ensure restraining from arrest till the end of trial but for a limited duration. The matter should be left for regular bail, giving sufficient time to the accused to move regular Court for bail and only in case of refusal by the Regular Court, to approach Higher Court.

9. The view taken in K.L. Verma‟s case did not find favour in Bharat Choudhary Vs. State of Bihar ( 2003) 8 SCC 77. In this case anticipatory bail of the petitioner had been rejected by the High Court and appeal was preferred by him before the Supreme Court. The Apex Court was inclined to grant bail to the petitioner Bharat Chowdhary but a serious objection was raised by the counsel appearing for the State. The objection of the State Counsel was that since trial court had taken cognizance of the offence, section 438 Cr.P.C. cannot be made applicable for granting anticipatory bail and only remedy available to the appellant is to approach trial Court, surrender before it and apply for regular bail. The objection raised by the State Counsel, however was not found acceptable to the Supreme Court and it was held that object of Section 438 Cr.P.C. was to prevent undue harassment of the accused persons on account of pre-trial arrest. While granting anticipatory bail, the consideration of gravity of the offence should an important factor. Simply because cognizance has been taken, these things in itself cannot be construed as prohibition against grant of anticipatory bail.

10. The Apex Court‟s again reverted back to the findings recorded in Salauddin case (Supra) in Nirmaljeet Kaur‟s case. The view of the Apex Court in this case was also that anticipatory bail should be granted for a limited duration, so as to enable the accused to move the regular Court for bail, in terms of Section 439 Cr.P.C. Such limited duration may extend to the date on which bail application filed by the accused is disposed of or even few days thereafter to enable the accused to move higher Court. This view was not accepted by another Bench of the Apex Court in K.L.Verma‟s case (Supra). However in Nirmaljeet Kaur Vs. State of M.P (2004) 7 SCC 558, also the view taken in 1996(1) SCC 667 was affirmed, holding that a person who had been granted anticipatory bail under Section 438 Cr.P.C. for a limited period, has to move regular court for bail under Section 439 Cr.P.C. But in this case a new theory was propounded that after bail is not granted within that period, he has to surrender so that application under section 439 Cr.P.C. can be taken for disposal. High court, cannot during the pendency of the application under Section 439 Cr.P.C., by a blanket order extend the ad-interim anticipatory bail, so as to enable the accused to obtain bail under Section 439 Cr.P.C.

11. Observation of the Supreme Court in K.L.Verma‟s case was that even after expiry of the limited period of anticipatory bail, for a few days ad- interim relief can be granted to the accused to move higher Court. This view was held per in curium as the decision was without giving reference to the requirement of Section 439 Cr.P.C.

12. Similar view has also been taken in the decision reported in 2009 (2) BBCJ 119, where it has been held that protection in terms of Section 438 Cr.P.C is for a limited duration, during which one has to move to the regular Court for bail in terms of Section 439 Cr.P.C. Mandate of Section 439 Cr.P.C. is that the applicant has to be in custody. The distinction between order under Sections 438 and 439 Cr.P.C. shall be rendered meaningless and redundant, if the protective umbrella under Section 438 Cr.P.C. is extended beyond the required period.

13. The view taken in the decision reported in 2006(2) PLJR 676 (Anirudh Prasad vs. State of Bihar), is on the line of decision reported in Gurubaksh Singh‟s case as well as Bharat Choudhary‟s case, where it has been held that mere submission of the charge-sheet does not denude the Court, the power to grant anticipatory bail. As a proposition of law, it cannot be said that in a case, in which once the anticipatory bail is given till submission of charge-sheet, another application cannot be entertained, based on the premise that later, on investigation, fresh materials come.

14. On perusal of all these decisions what transpires, that the scope of Section 438 Cr.P.C. has been considered differently in different decisions. In most of the cases the view of the Apex Court is that an accused cannot be granted anticipatory bail from the stage of investigation, till the stage of trial, since it is a protection given to the accused from harassment, in a case where the investigation is in the initial stage. But once the accused is charge-sheeted and material evidence has been collected against him, he will have to surrender before the Trial Court and pray for regular bail.

15. What I find that scope of Section 438 Cr.P.C. is to give relief to an accused who anticipates his arrest in connection with non- bailable offence. The Court is empowered in exercise of jurisdiction under Section 438 Cr.P.C. to grant him bail in anticipation of arrest. That arrest can be before submission of charge-sheet or after submission of the charge-sheet or after the cognizance has been taken in the case. If the Court has applied its juridical mind and is of this view that the person concerned despite being named as accused in a non-bailable offence is capable of granting anticipatory bail for the reason that (i) there is no chance of misuse of privilege of bail by him (ii) There is no apprehension of his absconding (iii) no chance of tampering with the evidence and (iv) will present himself for facing trial, in such cases, even if charge-sheet is submitted or cognizance is taken, anticipatory bail can be granted. Anticipatory bail which was granted earlier to an accused will not come to an end, and it will continue till conclusion of the trial, unless the order granting anticipatory bail is either cancelled by a judicial order, or the accused has been taken into custody, simply because the charge-sheet is submitted, it does not mean that the person who was granted anticipatory bail, has come beyond the protective umbrella of section 438 Cr.P.C.

16. Only distinction in between Sections 438 and 439 Cr.P.C. is that bail granted in exercise of jurisdiction under Section 438 Cr.P.C. is before the arrest of the accused and under Section 439 Cr.P.C, it is granted when the accused has either surrendered or has been taken into custody. The privilege which is given to the accused under both the sections are the same, but only distinction is of stage.

17. On account of certain changes and amendment brought in Section 438 Cr.P.C., in case of grant of anticipatory bail, the petitioners-accused has to surrender before the Court concerned. In case where anticipatory bail has been granted for a limited period, till submission of the charge-sheet, the petitioner again has to make a fresh prayer for bail, since, already on earlier occasion he had to surrender before the concerned Court and had furnished bail bond, so on submission of charge- sheet, the first pre-requisite for grant of anticipatory bail i.e. the person concerned must not have been arrested or surrendered before any Court, is not available to him. He has lost the requisite criteria of granting anticipatory bail, in that case except the surrendering before the competent Court for grant of regular bail, he is left with no other option.

18. A similar matter was considered in case of bailable offence. A person who is named as accused for bailable offences and granted bail by the police on execution of bail bond. Subsequently on completion of investigation, if the charge-sheet is submitted for non-bailable offence or despite submission of charge-sheet for bailable offence, cognizance is taken by the Magistrate for non- bailable offence, which he can make prayer for anticipatory bail. This issue was considered and decided in the case of Mahendra Pd. Singh vs. State of Bihar ( 2004 (3) PLJR 491). In this decision it was held that once the bail had been granted and bail bond executed, at a later stage, if the offence is treated as non-bailable, the applicant cannot file his application for grant of anticipatory bail. The only remedy available to him is to surrender before the concerned Court. The Court concerned will grant him bail without taking into custody, considering his conduct while on police bail and also that he has not misused the privilege of bail.

19. In case of non-bailable offences also, similar view can be taken, in case anticipatory bail was granted for a limited period till submission of the charge-sheet. Since the accused has already surrendered before the Court below for grant of anticipatory bail and has executed bail bond, as such at his instance another anticipatory bail application can not be maintainable. He will have to surrender and pray for regular bail under Section 439 of the Code of Criminal procedure. The Court concerned, instead of taking him into custody, considering the previous order of anticipatory bail passed in his favour and also that he has not misused the privilege or his conduct is such that despite submission of charge-sheet or order taking cognizance, he is capable of granting bail, will grant him bail. In case where the anticipatory bail granted for limited period has been misused, the concerned Court will have discretion, either to grant or refuse the bail. In case of non-bailable offence, Anticipatory bail, if granted for limited period, the Court concerned will pass order in similar manner as laid down in the case of Mahendra Pd. Singh (supra). In no case, second anticipatory bail application at the instance of such accused person is maintainable.

20. So far petitioners in these Criminal Miscellaneous applications are concerned, they are also directed to surrender before the concerned Court within four weeks from the date of this order. In case these petitioners will surrender and file their applications for bail under Section 439 of the Code of Criminal Procedure, the concerned Court will pass an order in the similar manner as has been decided in the case of Mahendra Prasad Singh vs. State of Bihar reported in 2004(3) PLJR 491.

21. These petitioners will be granted bail without taking them into custody as there is no allegation against them that during the limited period of anticipatory bail or the provisional bail order passed during pendency of these applications by the High Court, they have misused the privilege of bail.

22. These applications are allowed.

(Mridula Mishra,J.)

23. Dharnidhar Jha, J.- I had the privilege of going through the order proposed by my esteemed sister Smt. Mishra, J., on the reference made by the learned Single Judge by order dated 12.5.2010, jointly passed in Cr. Misc. petition No. 1257 of 2010 and Cr. Misc. petition No. 2875 of 2010. It appears that subsequently another petition bearing Cr. Misc. No. 21131 of 2010 was also referred to the larger Bench by an order passed on 7.7.2010 by the same learned Judge who had passed the order of reference on 12.5.2010.

24. Considering the matter and the issue which was referred and placed before us for decision in spite of having deeply been benefited by the erudite order proposed by my esteemed Sister, I want to express my own opinion on the issue.

25. The three petitions had been filed by the accused persons of three different cases, as indicated in the orders of reference, who had been granted anticipatory bail by competent courts for a particular duration, i.e., up to the submission of the charge-sheet. On the charge sheets being submitted, the original court of jurisdiction took cognizance of the offence on those basis and issued summons for appearance of the accused persons. Because the accused of those three cases were on bail under Section 438 Cr. P.C. for that limited period, they filed fresh petitions before the respective Sessions Judges, namely, of Khagaria, Buxar and Patna, but those petitions were dismissed by different orders passed in the fresh petitions preferred by the accused persons. Those accused persons preferred three Cr.Misc. petitions in this Court which were listed before the learned Single Judge. The learned Single Judge, finding that the petitioners were placing before his Lordship the decision of this Court reported in 2006(2) P.L.J.R. 676 Anirudh Prasad Yadav alias Sadhu Yadav Vs. State of Bihar to buttress their submission that their petitions were very much maintainable in spite of the three decisions of this Court reported in 2004(3) P.L.J.R. 491, Mahendra Singh Vs. State of Bihar, 2007(4) B.B.C.J. V-66 Sheo Chandra Singh and anr. Vs. State of Bihar and 2010(2) P.L.J.R. 684 Jag Narayan Yadav alias Babajee Yadav Vs. State of Bihar taking a contrary view, found that there was a conflict of opinion on the maintainability of such petitions amongst the Judges of this Court and, as such, directed listing of the three petitions before a larger Bench so as to ironing out the differences in opinion of the Court on similar issue. This was how the three petitions were placed before us for reconsideration.

26. On perusing the order of reference dated 12.5.2010 passed jointly in Cr. Misc. No. 1257 of 2010 and Cr. Misc. No. 2875 of 2010 what appears is that the learned Judge was rather referring the issue to a larger Bench for deciding the correctness of the above decisions by noting as to whether an accused who had been granted anticipatory bail under Section 438 Cr. P.C. for a limited period, i.e., up to the submission of the charge sheet, could he be entitled to maintain a similar petition under Section 438 Cr. P.C. before the competent court again after submission of the charge sheet.

27. While enacting the Code of Criminal Procedure, 1973, the legislature was considering the 41st Report of the Law Commission which had proposed introduction of the provision in the Code enabling the court to grant anticipatory bail. The relevant suggestion was appearing in paragraph 39.9 of its Report. The Law Commission, at the same time, was also presenting a draft Section for consideration. It was pointing out, “the necessitity for granting anticipatory bail arises mainly because some influential persons try to implicate their rivals in false case for the purpose of disgracing them or for other purposes by getting them detained in jail for some time. In the recent times, with the accentuation of the political rivalry, this tendency is showing signs of steady increase. Apart from false cases, where there are reasonable grounds for holding that a person accused of an offence is not likely to abscond, or otherwise misuse his liberty while on bail, there seems no justification to require him first to submit to the custody, remain in prison for some days and then apply for bail.” 28 The report of the Law Commission was accepted by the Parliament. While amending Cr. P.C., 1898, it introduced a new provision vide Section 438 Cr. P.C. What is the crux in matters of granting anticipatory bail has been pointed out time and again and it has consistently been noted by different decisions, probably, the first which was coming from this Court in 1974 P.L.J.R. 516 Sk. Nizamuddin Vs. State of Bihar and anr. In that case S.K.Jha,J. ( as his Lordship then was) was pointing out in paragraph 4 of the report as to what could be the import of the terms like „accusation‟ and „reason to believe‟ besides the meaning of other terms like „suspected of the commission of any non-bailable offence.‟ While considering the ambit and scope of the section his Lordship was further considering the comparative scope and ambit of Section 438 Cr. P.C. with Sections 437 and 439 Cr.P.C. and was holding as under:

“It was submitted that whereas Section 437 speaks of bail to be granted to „any person accused of or suspected of the commission of any non-bailable offence‟ and Section 439 (1) speaks of such bail to „any person accused of an offence and in custody‟, Section 438(1) on the contrary speaks of an anticipatory bail to „any person having reason to believe that he may be arrested on an accusation of having committed a non-bailable offence‟. Stress has been laid by learned counsel on the difference between the words „ accused‟ and „may be arrested on an accusation‟ and it is sought to be contended that by implication it must be held that the Legislature intended to preclude a case where accusation has already been made from the operation of Section 438. Learned counsel wants me to read after the word „accusation‟ in Section 438(1) „likely to be made‟. In other words, the term „accusation‟ is sought to be qualified by the term „likely to be made‟ and not covering a case of accusation already made. I am afraid, this contention cannot be held to be tenable in law. Where the term „accusation‟, has been used in Section 438(1), it must in the fitness of things include an accusation made as such as an accusation likely to be made. So far as Sections 437 and 439 are concerned, the terms „accusation‟ or „suspected of the commission of any non-bailable offence‟ had to be used as they were dealing with the cases of persons already arrested or detained and in custody. In Section 438, on the other hand, the person approaching the Court of Session or the High Court is neither arrested nor detained nor in custody. A person may have „reason to believe that he may be arrested on account of an accusation‟ which has already been made against him of having committed a non-
bailable offence. Such a person may also have reason to believe that he may be arrested on an accusation likely to be made of having committed a non-bailable offence. I see no reason to restrict the language of Section 438 to only such cases where accusation is only likely to be made and not to cases where accusation has already been made, for it is seldom, if at all there be any such case, where a person without any accusation being made against him shall have reason to believe that he may be arrested. The very object of the legislation will be frustrated if such a narrow construction be put upon the language of Section 438 as learned counsel for the petitioner wants me to put.”

29. The Supreme Court also considered the scope and ambit of Section 438 Cr. P.C. in Gurbaksh Singh Sibbia Vs. State of Punjab reported in A.I.R. 1980 S.C. 1632 and while so doing was pointing out the distinction between an ordinary order of bail and order of anticipatory bail. It was pointed out that „distinction between an ordinary order of bail and an order of anticipatory bail is that whereas the former is granted after arrest and, therefore, is release from custody of the police, the latter is granted in anticipation of the arrest and is, therefore, effective at the very moment of arrest. Police custody is an inevitable concomitant of arrest for non-bailable offence. An order of anticipatory bail constitutes, so to say, an insurance against police custody following upon arrest for offence and offences in respect of which the order is issued. In other words, unlike a post- arrest order of bail, it is a pre arrest legal process which directs that if the person in whose favour it is issued, is thereafter arrested on the accusation in respect of which the direction is issued, he may be released on bail. Thus, a petition under Section 438 Cr. P.C. could be maintainable only when a person reasonably believes him being arrested on an accusation of having committed a non-bailable offence. As soon as the person is arrested, there is no scope for him to take resort to the remedy under Section 438 Cr. P.C. He is left only with the remedies which could be available to him under Sections 437 and 439 Cr. P.C.‟

30. While passing the judgment in Gurbaksh Singh Sibbia(supra) the Supreme Court was also considering as to what could be the duration for which such an order of bail could be made. The learned Single Judge has also referred to those observations of the Supreme Court in his order. Considering the context and the issue, I also want to reproduce the relevant part of the Supreme Court observation in paragraph 38 of the report which appears at page 1649:-

“There was some discussion before us on certain minor modalities regarding the passing of bail orders under S.438(1). Can an order of bail be passed under that section without notice to the public prosecutor? It can be. But notice should issue to the public prosecutor or the Government Advocate forthwith and the question of bail should be re-examined in the light of the respective contentions of the parties. The ad interim order too must conform to the requirements of the section and suitable conditions should be imposed on the applicant even at that stage. Should the operation of an order passed under Section 438(1) be limited in point of time? Not necessarily. The Court may, if there are reasons for doing so, limit the operation of the order to a short period until after the filing of an F.I.R. in respect of the matter covered by the order. The applicant may in such cases be directed to obtain an order of bail under S. 437 or 439 of the Code within a reasonably short period after the filing of the F.I.R. as aforesaid. But this need not be followed as an invariable rule. The normal rule should be not to limit the operation of the order in relation to a period of time.”
Thus, as per the observation of the Supreme Court the order of bail under Section 438 Cr.P.C. may be for the whole period of the case or may be for a limited stage of the case.

31. Subsequently, in several decisions right from (1996) 1 S.C.C. 667 Salauddin Abdul Samad Shaikh V State of Maharashtra the Apex Court was considering the same question which was considered by the Constitution Bench of the Supreme Court in Gurbaksh Singh Sibbia(supra) regarding the duration of the period for which such an order of anticipatory bail could be existing. In Salauddin Abdul Samad Shaikh(supra) it was held :

“When the Court of Session or the High Court is granting anticipatory bail, it is granted at a stage when the investigation is incomplete and, therefore, it is not informed about the nature of evidence against the alleged offender. It is, therefore, necessary that such anticipatory bail orders should be of a limited duration only and ordinarily on the expiry of that duration or extended duration, the court granting anticipatory bail should leave it to the regular court to deal with the matter on an appreciation of evidence placed before it after the investigation has made progress or the charge-sheet is submitted.”
It was further held in that judgment as under:

“Ordinarily the court granting anticipatory bail should not substitute itself for the original court which is expected to deal with the offence. It is that court which has then to consider whether, having regard to the material placed before it, the accused person is entitled to bail.”

32. In K.L.Verma Vs. State and another reported in (1998) 9 S.C.C.348 the Apex Court was issuing a direction which was somewhat contrary to the procedure and practice prevailing as regards the provision of Section 438 Cr. P.C. In that case an accused who had been granted anticipatory bail for a limited period approached the Apex Court and while not disturbing the earlier direction or not holding that it could not have been issued, the Supreme Court directed the appellant before their Lordships to approach the original courts for bail after submission of the charge sheet at the end of the duration for which the order under Section 438 Cr. P.C. was available to him and directed that High Court may extend it with a direction to the accused to move the original court for grant of regular bail. However, the above observation of the Apex Court appears not approved by its subsequent decision in Nirmal Jeet Kaur Vs. State of M.P. and anr, reported in 2004(7) S.C.C. 558 by referring to the provisions of Sections 437 and 439 Cr. P.C. which require an accused to move for bail under those provisions only when he was in custody of the courts. Reference in the above behalf was made to the decision in Niranjan Singh and another Vs. Prabhakar Rajaram Kharote and others reported in A.I.R. 1980 S.C. 785 in which the Apex Court adumbrated upon the word „custody‟ and it was held that direction issued in K.L.Verma (Supra) was per incuriam.

33. In Bharat Chaudhary and another Vs. State of Bihar and anr. reported in (2003)8 S.C.C.77 the issue was not as is before us, that‟s to say, as to whether an accused who had been earlier admitted to an order under Section 438 Cr.P.C. for a particular duration, could file a similar prayer after expiry of that duration or, say, after submission of charge sheet or passing of cognizance order. For that the accused in that case had filed a petition under Section 438 Cr.PC. for the first time after cognizance order had been passed. It appears that the resistance to the maintainability of the anticipatory bail petition after submission of the charge sheet and passing of the cognizance order was on the ground that as soon as the order of cognizance was passed the petition was not maintainable and for resisting the prayer reliance was placed on Salauddin Abdul Samad Shaikh V. State of Maharashtra ( supra). The Apex Court made the following observations in paragraph 11 of Bharat Chaudhary‟s case( supra):

“We respectfully agree with the observations of this Court in the said case that the duration of anticipatory bail should be normally limited till the trial court has the necessary material before it to pass such orders and it thinks fit on the material available before it. That is only a restriction in regard to blanket anticipatory bail for an unspecified period. This judgment in our opinion does not support the extreme argument addressed on behalf of the learned counsel for the respondent State that the courts specified in Section 438 of Cr PC are denuded of their power under the said section where either the cognizance is taken by the court concerned or a charge- sheet is filed before the appropriate court. As stated above, this would only amount to defeat the very object for which Section 438 was introduced in Cr PC in the year 1973.”
Thus, what appears from the above observations is that the Supreme Court was never laying down the proposition in Bharat Chaudhary that in a case in which an accused had obtained a protective order under Section 438 Cr. P.C. till submission of the charge sheet, he could again file a similar petition after cognizance order had been passed. In fact, the whole decision in Bharat Chaudhary does not appear considering the above issue and the observations contained in paragraph 11 extracted above were simply negating the submission of the respondent State that the courts were not empowered to act under Section 438 Cr. P.C.

34. However, the proposition which appears laid down in Bharat Chaudhary in paragraph 11 was laid down by this Court long back in 1989 P.L.J.R. 767 Bajranglal Agrawal and Ors. Vs. The State of Bihar. In that case also the accused had applied for anticipatory bail after submission of the charge sheet and passing of cognizance order. Before that he had not prayed for bail under any of the provisions of the Cr. P.C. The State was resisting the prayer on the same premise as was done by the respondent State in Bharat Chaudhary. Hon‟ble late L.M.Sharma, J.( as his Lordship then was) was pointing out in Bajranglal Agrawal( supra) that the petition was very much maintainable even after submission of the charge sheet or taking of cognizance because the language employed to frame the provision of Section 438 Cr. P.C. did not permit a narrow construction of it.

35. From the discussions of the relevant law set down by the Supreme Court, it is abundantly clear that an order of anticipatory bail may also be only for a limited period of time or till a particular stage of investigation of the case, like, till submission of the charge sheet or passing of order of cognizance in a case and it may not be bad if the accused was directed to surrender and pray for regular bail thereafter before the original courts of competent jurisdiction. The above view appears taken by three of the decisions of this Court cited by the learned Single Judge in his order of reference which are reported in 2004(3) P.L.J.R.491 Mahendra Prasad Singh Vs. State of Bihar, 2007(4) B.B.C.J. V-66 Sheochandra Singh and Ors. Vs.State and 2010(2) P.L.J.R. 684 Jagnarayan Yadav alias Babajee Yadav & Ors. Vs. The State of Bihar. However, what I find is that except the proposition that such accused persons could not file another anticipatory bail petition and the same could not be maintainable, no further and definite reason has been assigned by any of the decisions including those of the Apex Court in support of the above as regards explaining the scope, ambit and application ofthe provision of Section 438 Cr. P.C. I, in fact, find that there could be some very good reason flowing from the provision and scheme of the Cr. P.C. itself in the above behalf which gets clear support from the prevailing practice on the provisions regarding bail. In my considered view, the reason for not maintaining the anticipatory bail petition again by such accused persons could be deduced from some of the provisions in the same Chapter XXXIII of the Cr.P.C

36. As may appear from the provision of Section 438 Cr. P.C., the accused may be directed to be released on bail if his case is found fit for granting him the relief prayed for under that provision. After the accused is granted bail, he is required to furnish his bond before the competent court and the contents of the bond which is required to be executed by an accused in the case including one under Section 438 Cr. P.C. is indicated by the provision of Section 441 Cr. P.C. which reads as under:

” 441. Bond of accused and sureties.- (1) Before any person is released on bail or released on his own bond, a bond for such sum of money as the police Officer or Court, as the case may be, thinks sufficient shall be executed by such person, and, when he is released on bail, by one or more sufficient sureties conditioned that such person shall attend at the time and place mentioned in the bond, and shall continue so to attend until otherwise directed by the police Officer or Court, as the case may be.
(2) Where any condition is imposed for the release of any person on bail, the bond shall also contain that condition.
(3) If the case so requires, the bond shall also bind the person released on bail to appear when called upon at the High Court, Court of Session or other Court to answer the charge .
(4) For the purpose of determining whether the sureties are fit or sufficient, the Court may accept affidavits in proof of the facts contained therein relating to the sufficiency or fitness of the sureties, or, if it considers necessary, may either hold an inquiry itself or cause an inquiry to be made by a Magistrate subordinate to the Court, as to such sufficiency or fitness.”
Thus, the bond has to be executed by the accused after appearing and undertaking before the court that he shall attend the court at the time and place mentioned in the bond and shall continue to so attend until otherwise directed by the Police Officer or court, as the case may be. It hardly requires to be noted that the accused could execute the bond only when he had appeared before the court and had submitted himself to its custody. The word „custody‟ does not appear either in the provision of Section 438 Cr. P.C. or under Section 441 Cr. P.C. extracted above. However, the same appears in Sections 437 and 439 Cr. P.C. The very Section 441 presupposes that no bond could be executed by an accused unless he appears before the court to execute the bond which has to be accepted by it. Not only that, the very provision also indicates that the accused shall have to put down the conditions which might have been imposed upon him for his release on bail in the very bond to be executed by him. The provision of Section 441 Cr. P.C. itself indicates that before the accused is released on bail on his bond, the bond has to be executed before the court. Therefore, I have noted that such an accused who has been ordered to be released on bail even under Section 438 Cr. P.C., shall have to appear before a court for executing the bond. In other words, what is meant by the above is that the accused has to submit himself to the custody of the court for executing the bond.

37. The word „custody‟ has not been defined in the Cr.P.C., though this has some vital importance as regards the chapter of bail. The Supreme Court in Niranjan Singh and another V. Prabhakar Rajaram Kharote and others reported in A.I.R. 1980 S.C. 785 was considering and indicating its import. In that case the accused had been summoned for committing offences under Section 302, etc., of the Indian Penal Code and his prayer for bail had been refused by the Magistrate. The refusal was without surrender of the accused and the Magistrate also stayed the warrant of arrest which had been issued by him for appearance of the accused. The Sessions Judge was approached by the accused before whom later he surrendered too, and the Sessions Judge without satisfying that the accused was in custody of the Magistrate who refused his prayer, admitted the accused to bail which order was challenged before the High Court and the High Court also upheld the order of the Sessions Judge by putting certain conditions in its order of bail. Niranjan Singh, the complainant, challenged the order before the Apex Court. This is how the Apex Court was considering the issue as to when a person could be said to be in „custody‟ in the light of Section 439 Cr. P.C. It was held as follows:

” When he is in duress either because he is held by the investigating agency or other police or allied authority or is under the control of the court having been remanded by judicial order, or having offered himself to the court‟s jurisdiction and submitted to its orders by physical presence. No lexical dexterity nor precedential profusion is needed to come to the realistic conclusion that he who is under the control of the court or is in the physical hold of an officer with coercive power is in custody for the purpose of S. 439. This word is of elastic semantics but its core meaning is that the law has taken control of the person. The equivocatory quibblings and hide-and-seek niceties sometimes heard in court that the police have taken a man into informal custody but not arrested him, have detained him for interrogation but not taken him into formal custody and other like terminological dubiotics are unfair evasions of the straightforwardness of the law. We need not dilate on this shady facet here because we are satisfied that the accused did physically submit before the Sessions Judge and the jurisdiction to grant bail thus arose.

Custody, in the context of S.

439,( we are not, be it noted, dealing with anticipatory bail under S.438) is physical control or at least physical presence of the accused in court coupled with submission to the jurisdiction and orders of the court.

He can be in custody not merely when the police arrests him, produces him before a Magistrate and gets a remand to judicial or other custody. He can be stated to be in judicial custody when he surrenders before the court and submits to its directions.”

Thus, if an accused puts himself in the control of the court even after surrendering himself or even, in my opinion, appearing before it for the purposes of fulfilling formalities of executing a bail bond directed to be executed by him by an order under Section 438 Cr. P.C. then he could be said to have offered himself to the courts‟ jurisdiction and have further submitted himself to its orders by his physical presence in court. Is not it even in case of an order under Section 438 Cr. P.C. that the accused has to execute a bond and as I have just noticed, only when he had executed a bond he is legally and truly released on bail? Further, from where he is said to be released on bail as per the provision of Section 441 Cr. P.C.? He has definitely to be from the custody of the court. When we consider the provision of Section 441 and Form no. 45 which is the form created by the legislature for executing a bond by the accused in pursuant to an order of bail in his favour then it may be more clear that as soon as he appears before a court, he submits himself to its jurisdiction and custody and, thus, undertakes to it to remain present before it as and when the court requires him to. Thus, what appears from the above discussion is that as soon as an accused appears and goes into the custody of the court so as to observing the legal obligation cast upon him by Section 441 Cr. PC., he is in custody of the court and that custody in spite of his release, is subject to the terms of the bond and those terms are further creating perennial and permanent constructive custody of the court in which the accused puts himself and could be said to be lying in spite of having got an order of bail. Thus, as soon as an accused appears before a court and executes a bond in terms of Section 441 Cr. P.C. and Form No. 45 appended to its II Schedule, he could remain very well in the constructive custody of the court and, as such, there could not be any question of any statutory right being vested in him for filing yet another application for bail under Section 438 Cr. P.C.

38. The learned Judge who passed the judgment in Anirudh Prasad Yadav alias Sadhu Yadav Vs. State of Bihar reported in 2006(2) P.L.J.R. 676 was simply extracting a single line from the decision of the Supreme Court in Bharat Chaudhary reported in (2003) 8 S.C.C.77 which is as under:

“This judgment in our opinion does not support the extreme argument addressed on behalf of the learned counsel for the respondent State that the courts specified in Section 438 of Cr. P.C. are denuded of their power under the said section where either the cognizance is taken by the court concerned or a charge-sheet is filed before the appropriate court.”

I have already referred to the case of Bharat Chaudhary(supra) and I have already held that it never fell for consideration by the Apex Court in that case as to whether an accused who had been admitted to anticipatory bail till submission of the charge sheet could prefer yet another anticipatory bail petition after submission of the charge sheet and passing of cognizance order. In my considered view, the judgment in Anirudh Prasad Yadav alias Sadhu Yadav ( Supra) rendered by the learned Single Judge was not laying down the correct proposition of law and appears a thoroughly bad law which is hereby over ruled.

A.Kumar Kanth J.

39. My esteemed Sister has issued certain directions in such cases of granting anticipatory bail up to a particular stage as may appear from paragraph 19 of the order of her Lordship for guidance of the courts which could be approached by such accused after expiry of the period of anticipatory bail. I simply want to add that in all such cases, in which charge sheet is submitted and the period of bail comes to an end, the only course left to the accused has to pray for regular bail before the original courts of jurisdiction which shall have the advantage of perusing and considering the materials which had been collected by the investigating agency during the investigation and could, thus, come to a conclusion as to whether his liberty should be protected further or it be cut down on account of commission of some serious offence. In all such cases, the original courts must consider some important factors, like, that the accused was granted anticipatory bail after considering some material by the competent court and that he had enjoyed that liberty. If the material as against him remains the same or almost the same, and there is no complain of tampering, etc., then his liberty must not be put to jeopardy. The court, in such case, may have to undertake hearing which may spill over a few days. In all such cases, the court should not send the accused into custody, rather allow him to remain on bail till the court finds, for definite reasons, it no more permissible in the facts of the case as presented before it. One has hardly to be worried about circumstances under which anticipatory bail may be granted as the same appears very much restricted to the newly incorporated provision of Section 438 Cr. P.C. which has made it compulsory for considering many factors as may appear from the newly amended provision. The court which has to consider the prayer for anticipatory bail, has to consider the nature and gravity of the accusation, antecedents of the accused including the instance of his previous conviction and imprisonment by a court in respect of any cognizable offence, the possibility of the accused running away from justice and, lastly, whether the accusation had been made with the object of injuring or humiliating the applicant by having him arrested. One aspect of the matter which is often confronted by us in Court is that in spite of having been granted anticipatory bail, sometimes the accused may be remanded to custody as he had not furnished the bail bond. It is expected that the courts below shall consider proceeding under Section 438 (3) Cr. P.C. and act in that light in all such cases.

40. With these reasons, I completely agree with the order passed by my esteemed Sister.

( Dharnidhar Jha, J.)

A.Kumar Kanth J

Dated: 20 January, 2011


Whether anticipatory bail can be granted after submission of the charge-sheet : No Calcutta HC

Calcutta High Court

Bimaladak And Ors. vs State

Dated:  8 October, 1996

Bench: S Mookherjee, R Bhattacharyya

JUDGMENT

R. Bhattacharyya, J.

1. The point came to be debated at the bar is whether the submission of charge-sheet of a non-bailable offence entails forfeiture of right to anticipatory bail. The rival contention is that, that submission of the charge-sheet does not preclude or disentitle any petitioner to anticipatory bail merely because the charge-sheet has seen the light of the day.

2. In adjudging the rival contentions, it is worthwhile to mention, since loaded with legion of judicial precedents that there is a sharp distinction and difference between Sections 437 and 438 of the Cr. P. C. The considerations of granting post arrest bail and pre-arrest bail are mutually exclusive of each other impelling the Court to consider the circumstances when such bail could be granted, Section 437 is fastened with discretion of the Court which is patently absent in considering the application for anticipatory bail by Court objectively.

3. In the matter of according the prayer for bail, the Court should be circumspect when the offence complained of is non-bailable, in particular, where the trial has not yet commenced and, therefore, the Court is saddled with an obligation to take into consideration a variety of factors and circumstances about the gravity of the offence, the character of the evidence, circumstances which are peculiar to the accused, a reasonable possibility of the presence of the accused not being secured at the trial, reasonable apprehension of a witness being tampered with, the larger interests of the public or the State and similar other considerations. The above was endorsed by the Apex Court in State v. Jasphal Singh Gil, . Thus, the matter in connection with the grant or refusal of bail invites judicious exercise of discretion by the Court on merits. The upshots of the judicial decisions have established that the Court in granting bail must consider the serious nature of the offence along with other associated factors listed above. The same view has not been disturbed by any other decision of the Courts of our country.

4. Reverting to pre-arrest bail, Section 438 of the Cr. P. C. contemplates an application to be made by a person apprehending arrest of an accusation of having committed a non-bailable offence. It is indicative of the fact that an application for anticipatory bail pivoted is on an apprehension of arrest which invites the exercise of power under Section 438. The expressions, “in the event of arrest” have much dominance in the shrine of Section 438.

5. In the back ground of the above noted two Sections, it appears from the threshold of Section 438 that an ordinary order of bail is distinguished from an order of anticipatory bail in that the former is granted after the arrest and, therefore, means release from the custody of the police after having resorted the provisions of Section 437 of the Cr. P. C. So far Section 438 is concerned the anticipatory bail is granted in anticipation of arrest and, is, therefore, effective at the very moment of arrest. Police custody is an inevitable concomitant of arrest for having committed non-bailable offences. The parade of the anticipatory bail continues till a person is arrested. It is an insurance against police custody following upon arrest for offence or offences in respect of which the order was issued. The Apex Court in the above manner has drawn a thin line of distinction between an ordinary bail and anticipatory bail to avoid any confusion in the forensic war.

6. To begin with, this Court is not slow to hold that an order of anticipatory bail is a panace to cure all non-bailable offences. Nor it is an antidote to commission of non-bailable offences. It docs not accord any immunity against commission of non-bailable offences.

7. With that end in view, there could be no scope or ground to refuse on the part of the Court to admit a person or a petitioner to an anticipatory bail is rather seriously ill and in need of radical surgery. Accordingly, it requires a decision wealth of details without any mole on it which is pregnantful of justice projecting on the liberty of the individual. It is the shield to thwart the powerful processes of criminal law that can be pervaded for achieving extraneous ends. The law does not encompass with the progress of the modern jurisprudence that respectable persons should be often paraded in handcuffs, apparently on way to Courts of justice. The submission of charge-sheet can never denude the right of a petitioner to be enlarged on anticipatory bail, however, the nature of non-bailable offence there could be.

8. The expression “reason to believe” or reasonable apprehension of arrest, a term substitute for each other is the governing factor to let off a person on anticipatory bail where submission of charge-sheet, is an idle parade. This is the most explosive argument made by the learned Advocates for the respective petitioners which has created a ripple.

9. In order to swim the river, the learned Advocates for the petitioners have filed a batch of petitions to excavate the anticipatory bail after submission of charge-sheet. It is hotly debated at the bar that submission of charge-sheet does not silence the claim of any petitioner to be enlarged on anticipatory bail having committed a non-bailable offence. The right of the petitioner, according to the learned Advocates, still survives. The submission of the charge-sheet is not a lock gate for the petitioner to be enlarged on anticipatory bail but it ensures question of apprehension of arrest.

10. The learned Advocate for the State has crossed his sword with his opponents on the ground that the claim of the petitioner to be released on anticipatory bail after submission of charge-sheet is a futile exercise of right. The anticipatory bail is not a universal medicine for release of a petitioner on anticipatory bail when a non-bailable offence has been committed. The learned Public Prosecutor inspired by the above concept has back fired the claim of the learned Advocates for the petitioners that their right to be enlarged on anticipatory bail upon submission of charge-sheet has no legal scenario.

11. In developing the lone contention, the learned Advocate for the petitioners has made a research in his argument that Section 438 of the CrPC maintains an unnatural silence that anticipatory bail could not be granted for the submission of charge-sheet. He has exercised in his oratorical skill blended with dexterity that the words and languages employed in Section 438 of the Cr PC do not for a moment foreshadow any inhibition on the Court to enlarge a petitioner on an anticipatory bail for submission of charge-sheet. The Court is to consider, in the background of the allegations, as to whether it foster any reasonable apprehension of arrest when filing of the charge-sheet cannot be a ground to refuse the prayer for anticipatory bail, as the Court is saddled with an obligation to dispose of the application objectively.

12. In support of contention, Mr. Mukherjee has laid foundation in his argument having its pedastal on various decisions of the Courts that the judicial precedents have much persuasive value for other Courts which should be followed in letter to dispose off he issue. Mr. Mukherjee has been inspired by a large number of decisions to explore relief. He has laid much stress on Gurbaksh Singh Sibbia v. State, 1980 SCC (Cri) 465 : (1980 Cri LJ 1125) to contend that the principle of law laid down by the apex Court generates ample support for a petitioner to be enlarged on anticipatory bail.

13. In the perspective of the above, the claim of the State that submission of charge-sheet negatives the right of the petitioners to be enlarged on anticipatory bail is more imaginary than real. The Court, according to the above decision, is well fortified and armed with jurisdiction to release a person on anticipatory bail after submission of charge-sheet. The filing of the charge-sheet can never be the cynosure of the mailer. The Court, if does not weild its jurisdiction in line with the principle of law laid down by the apex Court, there would be an invasion on liberty of an individual where individual will be sacrificed at the alter of justice.

14. The weighty factor, according to the learned Advocates for the petitioner governing the decision of the apex Court, is confined to “reason to believe” expelling from its consideration that filing of charge-sheet could never formulate the decision.

15. The next case cited by the learned Advocate for the petitioner is Khasim v. State of Andhra Pradesh, (FB). to contend that their Lordships upon analysis of Section 438 and other provisions of the Code came to the conclusion, “filing of a charge-sheet and issuance of a warrant are certainly the grounds which make the person not only to believe that he would be arrested but also to move the Court under Section 438(1)”. The same view has been endorsed by their Lordships in the entire gamut of the decision.

16. To strengthen a claim for anticipatory bail upon submission of charge-sheet, the learned Advocate for the petitioner has relied on Sheikh Alim v. State of West Bengal, 1993 C. Crlr 137 (sic) to contend that the prayer for anticipatory bail “cannot be disallowed merely on a ground on submission of charge-sheet because it is not permissible to import anything which is not in the Section as thereby the liberty of a person may be jeopardised. Such a course might be vulnerable constitutionally as indicated in Gurbaksh Singh Case”. The decision under reference falls in line with Shekh Khasim Bi v. State (1986 Cri LJ 1303 (AP) (FB) (supra).

17. The combination of the aforesaid decisions and the law laid down therein, according to Mr. Mukherjee, has emphasised the right of a petitioner to be released on anticipatory bail even upon submission of charge-sheet. The section itself when maintains a silence which is conspicuous that submission of charge-sheet does not dethrown a claim of a petitioner to be enlarged on anticipatory bail, the Court cannot take any other view. The judicial climate has not undergone any profound mutation to alter the view.

18. In the background of the aforesaid immaculate view, the Court cannot over emphasize that Section 433 of the Cr PC does not envisage that the petitioner is stripped of right to be enlarged on anticipatory bail upon submission of charge-sheet when there arc decisions of apex Court, which have a sigh of relief for the petitioner. If it does, it would be a strain on the languages and the power exercised by the Court could never be an over-generous infusion of constraint and condition which are not patent in Section 438. Mr. Mukherjee has argued with much labour and industry that the Court, if harbours a different view, it is saddled with an obligation to refer the mailer to a larger Bench for a uniform decision to dominate the field. According to the learned Advocate, therefore, the issue should be referred to the larger Bench for a decision in the event a contrary view is taken by the Division Bench. Nobody could raise his finger of protest about the proposition of law.

19. We are not unmindful that the persuasive value of judicial precedents is a guiding factor to reach a conclusion as the issue since sealed by a higher Court where the identical question sprang up for decision.

20. Mr. Mukherjee has relied on a number of decisions Atmaram v. State of Punjab, . Union of India v. Godfray Philips India Ltd., to contend that decision by a larger Bench is the last asylum to avoid a conflicting decision of a co-ordinate Bench. Thus, the law laid down in Salauddin Samad Shaikh v. State of Maharashtra, 1996 SCC (Cri) 198 : (AIR 1996 SC 1 (142) is devoid of context as the same is not weighty in number.

21. The learned Public Prosecutor of the State Mr. Sufiulla has refuted the claim of the petitioner that submission of charge-sheet is the last nail on the coffin on the claim of the petitioner to be enlarged on an anticipatory bail upon submission of charge-sheet. He has thoroughly argued the scheme and object of the section which never for a moment gained any momentum when the offence committed is non-bailable and the allegations are prima facie true. If both the sections namely 437 and 438 are brought on the common platform, the legislature in its ample wisdom would never legislate such a provision in the statute book the object of which is manifestly different. “Reason to believe” or apprehension of arrest for having committed a non-bailable offence does not grant any licence to any wrongdoer to be enlarged on anticipatory bail. Submission of charge-sheet, according to him. is to hold the ground where the “reason to believe” is tainted.

22. Undoubtedly, it is an umbrella ensuring liberty to an individual against arrest entitling him to be released on anticipatory bail. But this cannot be a universal formula to enlarge an offender to be admitted to an anticipatory bail for having committed a non-bailable offence. He has borrowed wisdom from Salauddin Abdul Samad Shaikh (supra) to repel the contention of the learned Advocates for the petitioners. According to him it is not the plurality of the number of the learned Judges that governs the decision. It is the stare decisis that becomes the patent governing factor which in any event cannot be shrugged off. No Court can frown its eyes with it nor can take any oblique view.

23. In making evaluation of the contentions, if we go through the creeks of the decision under reference, the decision in Gurbaksh Singh (1980 Cri LJ 1125) (supra) by the apex Court read with Section 438 of the Cr PC does not interweave latently or patently that the apex Court dealt with the right of the petitioner to be enlarged on anticipatory bail upon submission of charge-sheet. A dispassionate reading of the decision manifests incurable wounds and bruises of the Advocates contentions beyond repair.

24. The Supreme Court in analysing the scope of anticipatory bail remarked in paragraph 31 that “the nature and seriousness of the proposed charges, the context of the events likely to lead to be making of the charges, a reasonable possibility of the applicant’s presence not being secured at the trial, a reasonable apprehension that witnesses will be tampered with and “the larger interests of the public or the Stale” are some of the considerations which the Court has to keep in mind while deciding an application for anticipatory bail. The relevance of these considerations was pointed out in State v. Captain Jagjit Singh, which, though, was a case under the old Section 498 which corresponds to the present Section 439 of the Code. It is of paramount consideration to remember that the freedom of the individual is as necessary for the survival of the society as it is for the egoistic purposes of the individual. A person seeking anticipatory bail is still a free man entitled to the presumption of innocence. He is willing to submit to restraints on his freedom, by the acceptance of conditions which the Court may think fit to impose, in consideration of the assurance that if arrested, he shall be enlarged on bail”. The presumption of innocence is prima facie lost for submission of charge-sheet.

25. Only the application of mind of the Court is imperative to consider the anticipatory bail objectively as it should be the germane for consideration while disposing of the prayer for anticipatory bail.

26. The astute reflection of mind of the Supreme Court as embodied in paragraph 35 of the said decision is the vanishing point of an anticipatory bail. The Supreme Court held that Section 438 lays down a condition which has to be satisfied before anticipatory bail can be granted. The applicant must show that he has “reason to believe” that he may be arrested for a non-bailable offence. The use of the expression “reason to believe” shows that the belief that the applicant may be so arrested must be founded on reasonable grounds. Mere ‘fear’ is not belief; for which reason it is not enough for the applicant to show that he has some sort of a vague apprehension that some one is going to make an accusation against him, in pursuance of which he may be arrested. The grounds on which the belief of the applicant is based that he may be arrested for a non-bailable offence, must be capable, of being examined by the Court objectively, because it is then alone that the Court can determine whether the applicant has reason to believe that he may be so arrested. Section 438(1), therefore, cannot be invoked on the basis of vague and general allegations, as if to arm oneself in perpetuity against a possible arrest. Otherwise, the number of applications for anticipatory bail will be as large as, at any rate, the adult populace. Anticipatory bail is a device to secure the individual’s liberty; it is neither a passport to the commission of crimes nor a shield against any and all kinds of accusations, likely or unlikely.

Secondly, if an application for anticipatory bail is made to the High Court or the Court of Session it must apply its own mind to the question and decide whether a case has been made out for granting such relief. It cannot leave the question for the decision of the Magistrate concerned under Section 437 of the Code, as and when an occasion arises. Such a course will defeat the very object of Section 438.

Thirdly, the filing of an FIR is not a condition precedent to the exercise of the power under Section 438. The imminence of a likely arrest founded on a reasonable belief can be shown to exist even if an FIR is filed, so long as the applicant has not been arrested.

Fifthly, the provisions of Section 438 cannot be invoked after the arrest of the accused. The grant of “anticipatory bail” to an accused who is under arrest involves a contradiction in terms, in so far as the offence or offences for which he is arrested, are concerned. After arrest, the accused must seek his remedy under Section 437 or Section 439 of the Code, if he wants to be released on bail in respect of the offence or offences for which he is arrested.

27. Upon walking through the corridors of Gurbaksh Singh, we repeat once again that the Supreme Court never dealt with the issue involved in this case as to whether the submission of the charge-sheet forecloses the right of a petitioner to be enlarged on anticipatory bail for having committed a non-bailable offence. The decision is conspicuously silent about the fate of a petitioner after submission of the charge-sheet against him charged with the commission of a non-bailable offence.

28. In our view, neither Section 437 nor 438 of the Cr PC is a supplemental provision to each other nor the same can be interpreted to be a proviso to each other. They are independent of each other having different field for their applicability. Section 438 of the Code of Criminal Procedure has no universal application which only could be applied in the restrictive field. It does not provide any discretion for the Court to enlarge a petitioner on anticipatory bail which is available in Section 437.

29. The learned Advocates for the petitioners are very much eloquent and vociferous in his submission in interpreting the expression “reason to believe” which, according to them, is the potent factor for the petitioners to be released on anticipatory bail. The said expression in the body of the Section 438 affords an unbriddled right to be enlarged on bail having committed a non-bailable offence.

30. According to the rule of construction, the expression ‘reason to believe’ should be construed with the aim, object and scheme of Section 438. The inflamatory allegations having their pedestal on falsity, mala fide, and motive afford considerable grounds to be enlarged on anticipatory bail as the object of it is to protest an individual from humiliation and harassment. Thus, the expression “reason to believe” must be the belief of reasonable mind where the petitioner or the individual is immune. The reason to belief never contemplates nor it accords any licence to any individual to commit the offence and to seek protection within the realm of Section 438. The expression ‘reasonable belief, fosters a belief of genuine apprehension of arrest of an allegation which prima facie is unsubstantial and made with a sinister motive, the object being to malign a person where his arrest by prosecuting agency is immediate than remote. But when a non-bailable offence has been committed by an accused, such ‘reason to believe’ or apprehension of arrest can never be equated with the genuine belief of apprehension of arrest proceeding from prima facie substantial material entitling him to pre-arrest bail. The section can never be used by any individual to cultivate his rights when he is prima facie liable for an accusation and does not commensurate with his innocence. Reasonable belief is not colourable belief.

31. Thus, the legislature in its ample wisdom has couched the section in a manner distinct from the concept of post-bail to suit the ends. It does not afford any key for a pertitioner to be enlarged on anticipatory bail against whom charge-sheet has already been submitted for having committed a non-bailable offence.

32. In our view, the “reason to believe” is the genuine inflexible belief which is implicit in it. But not the tainted ‘reason to belief emanating from commission of a prima facie non-bailable offence. The demand for bail upon submission of charge-sheet is therefore, smacks of logic.

33. The Supreme Court in Salauddin Abdul Samad Shaikh v. State of Maharashtra, upon consideration of the prayer for bail arrived at a decision that the filing of the charge-sheet should put an end of the right of the petitioner to be enlarged on anticipatory bail which must be left to the care of the regular Court which is to deal with the matter on an appreciation of the evidence placed before it after the investigation made progress or the charge-sheet has been submitted.

34. In the event of the said decision, it does not project any shadow on the law laid down by the Supreme Court in Gurbaksh Singh (1980 Cri LJ 1125) (SC) (supra) and forfeits the right of an accused to be enlarged on anticipatory bail. Therefore, in our view, we cannot afford to accept that the right of an accused still survives to be enlarged on an anticipatory bail after submission of the charge-sheet. The apex Court, as it appears from the decision, went deep into the matter where their Lordships observed that the regular Court should not be by-passed by the Court granting anticipatory bail. It should not substitute itself for the original Court which is to deal with the offence. The same, of according to the apex Court, is the correct procedure to be followed because it must be realised the Court of Session or High Court is granting anticipatory bail granted at a stage when the investigation is incomplete, and, therefore, docs not inform about the offender. The above conclusion does not run counter to the principle of law laid down by the apex Court in the celebrated decision. The life of investigation is the breathing space for a petitioner who may be admitted to anticipatory bail which loses its sting after submission of charge-sheet.

35. In the context, we cannot but hold that the right to be enlarged on anticipatory bail if allowed to remain alive even after the submission of the charge-sheet Section 437 of the Cr PC will be the vanishing point of the existing Code of the Criminal Procedure.

36. Another side fact of importance has been canvassed by the learned Advocates for the petitioners on the footing that judicial precedents must be followed and obeyed. The co-ordinate jurisdiction will run into rough weather, if there are conflicting decisions where the judicial decision and judicial discipline are sure to crumble down. We can only say that the principle of law is applicable to a decision of the same Court. But when the decision is rendered by the Superior Court, as in this case by the apex Court, the judicial discipline can never run into rough weather when the areal legal atmosphere is serene and placid. Therefore, the argument is ill-founded.

37. It does not warrant any long debate to hold that the anticipatory bail continues during the life tenure of the investigation or during the period of investigation which immediately comes to an end upon submission of charge-sheet which is a part of the investigation.

38. Section 438 of the Code of Criminal Procedure 1973, docs not postulate the weilding of jurisdiction by a Court in granting anticipatory bail upon submission of charge-sheet as the investigation comes to an end. The filing of the charge-sheet is an indicia prima facie commission of a non-bailable offence and, therefore, it does not behove resurrection of jurisdiction of the Court over which it had already lost jurisdiction.

39. So far the case of Bimal is concerned, we are unable to persuade ourselves that he is entitled to anticipatory bail upon submission of charge-sheet prima facie having committed an offence of abstraction of electricity under Section 379 of the IPC. Therefore, the claim of Bimal is not maintainable. The petitioner cannot ride on the back of anticipatory bail upon termination of investigation which included amongst others the submission of charge-sheet. Therefore, submission of charge-sheet is the trauma for a petitioner to be released on such bail. For the foregoing reasons, we cannot accept the contentions of Mr. Mukherjee and Mr. Sen and reject them and uphold the contentions of the learned P. P. The learned Advocates deserve commendation for their due assistance to the Court. In fine, this application fails.

S.K. Mookherjee, J.

40. I concur respectfully with the very reasoned judgment of my learned brother. The reasonings, in my view, clearly bring out the grounds and necessity for the difference in language of Sections 437 and 438 of the Code of Criminal Procedure. ‘Reason to believe’ or ‘in the event of arrest’, he has justifiably held, refers to an expected slate of affair or that an affair which is yet to occur, to wit apprehended arrest, which is yet to take place. The object and reasons, as stated by the Law Commission, for enacting the section, coupled with the presumption that Legislature does not waste words, the provisions made by it for enjoyment of liberty by a person at pre-arrest and post-arrest stages cannot be construed to overlap each other. Submission of a chargesheet, being the beginning of the later stage, should, therefore, be construed to bring an end to the right to pray for anticipatory bail.

41. Court in view of the pendency of the present case, a large number of anticipatory bail applications, in which similar points as regards maintainability of an application under Section 438, after submission of charge-sheet has arisen, were disposed of or dealt with fixing the life of the interim or final order in such cases till a week after the disposal of the instant case. In view of disposal of the present application, the concerned criminal Department of our Court is directed to note, whenever such other applications, having such fixed life period, are requisitioned by Courts, to bring to the notice of the learned Judge/Judges through its report in the Order Book, the fact of disposal of the instant case, so that the orders passed conform, to appropriate legal end.


Equivalent citations: 1997 CriLJ 1969 : (1997) 1 CALLT 94 HC

Granting bail u/s 438 of Cr.P.C. for a limited period is not alien to the very concept of Anticipatory Bail

The provisions contained in Section 438, Cr.P.C. confer special powers on the High Court and the Sessions Judge for directing the release of a person on bail in the event of his arrest on a charge of committing non-bailable offence. As observed by their Lordships of the Supreme Court the salutary provision was enshrined in Section 438 to see that the liberty of the subject is not put in jeopardy on frivolous grounds at the instance of unscrupulous or irresponsible persons or officers who may be in-charge of prosecution. (See AIR 1977 SC 366, Balchand v. State. Sub-section (2) of Section 438 provides that while making direction a /Sec. 438(1), the Court granting anticipatory bail to a person, may include such conditions in such directions, in the light of the facts of the particular case, as it may think fit. The sub-section enlists certain conditions but such conditions are simply illustrative and not exhaustive. The use of the word ‘including’ in the language of Sub-section (2) clearly indicates that the Court may impose such conditions also as have not been enumerated in Clauses (i) to (iv) of the sub-section. Since a number of considerations such as nature or seriousness of the charges, the context of events leading to those charges, possibility of the applicant’s evading the trial or tampering with the prosecution evidence and even “the larger interest of the public or the State”, as pointed out by the Apex Court in the case of Jagjit Singh (AIR 1962 SC 253), may weigh with the Court while granting or refusing to grant bail u/ Section 438, Cr.P.C. to an applicant. After considering the entire facts and circumstances of the case the Court may even decide to grant bail fora short specified period only.Continue Reading

Anticipatory bail is subject to extraordinary equitable discretion of Court

An order of anticipatory bail virtually converts a non bailable offence under the Code to a bailable one subject, of course, to appropriate conditions which the Court can in the interests of justice impose. The circumstances are not enumerated in detail in Section 438 of the Cr. P.C. on proof of which such extraordinary equitable discretion can be invoked. The legislature has thought it fit to leave it to the trained intuitions and informed discretion of superior Courts to identify the cases where such extraordinary equitable discretion can and ought to be invoked. Such powers are certainly there for the superior Courts. But such powers have to be invoked only sparingly and in exceptional cases in aid of justice.Continue Reading