# P. CHIDAMBARAM v. DIRECTORATE OF ENFORCEMENT

- **Citation:** [2019] 14 S.C.R. 450
- **Court:** Supreme Court of India
- **Decided:** 2019-12-04
- **Case number:** Criminal Appeal No. 1831 of 2019
- **Bench:** R. Banumathi, A. S. Bopanna, Hrishikesh Roy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/p-chidambaram-v-directorate-of-enforcement-33330
- **Pages:** 23

## Headnote

Code of Criminal Procedure, 1973: s.439 - Bail - Grant of,
in economic offence - In the instant case, CBI registered a case of
corruption against some known and unknown suspects including
the son of the appellant - Appellant was the then Union Finance
Minister - He was however not named in the said FIR - Based on
the said FIR, respondent directorate registered ECIR case for money
laundering against the accused named in the FIR - Allegations in
the said ECIR case were the same as those in the FIR - Appellant
was not named in this case as well - Apprehending his arrest,
appellant applied for anticipatory bail which was rejected -
Appellant was arrested in CBI case and since then he had been in
custody - In ECIR case, appellant was arrested on the grounds that
payment of Rs.3 crores was made at the appellant's instance to the
companies controlled by his son on account of FIPB work done for
INX Group and that due to non-co-operation of appellant,
investigation was not fruitful and certain relevant information which
was within his exclusive knowledge was withheld by him and thus
his custodial investigation was necessary - After his arrest, appellant
moved a regular bail application before High Court - By impugned
order, High Court held test of flight risk, tampering of evidence
and influencing of the witnesses in favour of appellant, however
declined the bail on the ground that prima facie the allegations
were serious in nature and the appellant played key and active role
in the case - On appeal, held: Appellant was declined anticipatory
bail earlier and was available for custodial interrogation for more
than 45 days - In addition to the custodial interrogation, in case
further investigation is made, the appellant would be bound to
participate in such investigation as is required by the respondent -
Further one of the co-accused has been granted bail by the High
 [2019] 14 S.C.R. 450
450
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Court while the other co-accused is enjoying interim protection from
arrest - Appellant is aged about 74 years and as noted by the High
Court itself in its order, the appellant has already suffered two bouts
of illness during incarceration and was put on antibiotics and
advised to take steroids of maximum strength - In that circumstance,
the availability of the appellant for further investigation,
interrogation and facing trial is not jeopardized - In view of all
facts and circumstances, the appellant is granted bail.
Code of Criminal Procedure, 1973: s.439 - Bail -
Consideration of bail application in economic offence - Held: Even
economic offences fall under the category of "grave offence", in
view of the consequences that would befall on the society in cases
of financial irregularities, and in such circumstance while
considering the application for bail in such matters, the Court has
to deal with the same, being sensitive to the nature of allegation
made against the accused - One of the circumstances to consider
the gravity of the offence is the term of sentence that is prescribed
for the offence the accused is alleged to have committed - Such
consideration with regard to the gravity of offence is a factor which
is in addition to the triple test or the tripod test that would be normally
applied - However, it is not a rule that bail should be denied in
every case of economic offence since there is no such bar created
in the relevant enactment passed by the legislature nor does the
bail jurisprudence provides so - The consideration will have to be
on case to case basis on the facts involved therein and securing the
presence of the accused to stand trial.
Allowing the appeal, the Court
HELD: 1. Perusal of the order dated 15.11.2019 impugned
indicates that the Single Judge having taken note of the rival
contentions in so far as the triple test or the tripod test to be
applied while considering an application for grant of regular bail
under Sec. 439 Cr.PC, has answered the same in paragraphs 50
to 53 of the order, in favour of

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SUPREME COURT REPORTS
[2019] 14 S.C.R.
P. CHIDAMBARAM
v.
DIRECTORATE OF ENFORCEMENT
(Criminal Appeal No. 1831 of 2019)
DECEMBER 04, 2019
[R. BANUMATHI, A. S. BOPANNA AND
HRISHIKESH ROY, JJ.]
Code of Criminal Procedure, 1973: s.439 - Bail - Grant of,
in economic offence - In the instant case, CBI registered a case of
corruption against some known and unknown suspects including
the son of the appellant - Appellant was the then Union Finance
Minister - He was however not named in the said FIR - Based on
the said FIR, respondent directorate registered ECIR case for money
laundering against the accused named in the FIR - Allegations in
the said ECIR case were the same as those in the FIR - Appellant
was not named in this case as well - Apprehending his arrest,
appellant applied for anticipatory bail which was rejected -
Appellant was arrested in CBI case and since then he had been in
custody - In ECIR case, appellant was arrested on the grounds that
payment of Rs.3 crores was made at the appellant's instance to the
companies controlled by his son on account of FIPB work done for
INX Group and that due to non-co-operation of appellant,
investigation was not fruitful and certain relevant information which
was within his exclusive knowledge was withheld by him and thus
his custodial investigation was necessary - After his arrest, appellant
moved a regular bail application before High Court - By impugned
order, High Court held test of flight risk, tampering of evidence
and influencing of the witnesses in favour of appellant, however
declined the bail on the ground that prima facie the allegations
were serious in nature and the appellant played key and active role
in the case - On appeal, held: Appellant was declined anticipatory
bail earlier and was available for custodial interrogation for more
than 45 days - In addition to the custodial interrogation, in case
further investigation is made, the appellant would be bound to
participate in such investigation as is required by the respondent -
Further one of the co-accused has been granted bail by the High
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Court while the other co-accused is enjoying interim protection from
arrest - Appellant is aged about 74 years and as noted by the High
Court itself in its order, the appellant has already suffered two bouts
of illness during incarceration and was put on antibiotics and
advised to take steroids of maximum strength - In that circumstance,
the availability of the appellant for further investigation,
interrogation and facing trial is not jeopardized - In view of all
facts and circumstances, the appellant is granted bail.
Code of Criminal Procedure, 1973: s.439 - Bail -
Consideration of bail application in economic offence - Held: Even
economic offences fall under the category of "grave offence", in
view of the consequences that would befall on the society in cases
of financial irregularities, and in such circumstance while
considering the application for bail in such matters, the Court has
to deal with the same, being sensitive to the nature of allegation
made against the accused - One of the circumstances to consider
the gravity of the offence is the term of sentence that is prescribed
for the offence the accused is alleged to have committed - Such
consideration with regard to the gravity of offence is a factor which
is in addition to the triple test or the tripod test that would be normally
applied - However, it is not a rule that bail should be denied in
every case of economic offence since there is no such bar created
in the relevant enactment passed by the legislature nor does the
bail jurisprudence provides so - The consideration will have to be
on case to case basis on the facts involved therein and securing the
presence of the accused to stand trial.
Allowing the appeal, the Court
HELD: 1. Perusal of the order dated 15.11.2019 impugned
indicates that the Single Judge having taken note of the rival
contentions in so far as the triple test or the tripod test to be
applied while considering an application for grant of regular bail
under Sec. 439 Cr.PC, has answered the same in paragraphs 50
to 53 of the order, in favour of the appellant. The Solicitor General,
however, contended that the finding on likelihood of tampering
and influencing witness has not been considered in its correct
perspective. The finding in that regard has not been assailed and
in such event, the appellant cannot be taken by surprise. Even
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otherwise as rightly observed by the Single Judge, the evidence
and material stated to have been collected is already available
with the Investigating agency. In the present situation, the
appellant is not in political power nor is he holding any post in
the Government of the day so as to be in a position to interfere.
In that view, such allegation cannot be accepted on its face value.
With regard to the witness having written that he is not prepared
to be confronted as he is from the same State, the appellant cannot
be held responsible for the same when there is no material to
indicate that the appellant or anyone on his behalf had restrained
or threatened the concerned witness who refused to be
confronted with the appellant in custody. [Para 16][465-B-F]
2. The basic jurisprudence relating to bail remains the same
inasmuch as the grant of bail is the rule and refusal is the exception
so as to ensure that the accused has the opportunity of securing
fair trial. However, while considering the same, the gravity of the
offence is an aspect which is required to be kept in view by the
Court. The gravity for the said purpose will have to be gathered
from the facts and circumstances arising in each case. Keeping
in view the consequences that would befall on the society in cases
of financial irregularities, even economic offences would fall under
the category of "grave offence" and in such circumstance while
considering the application for bail in such matters, the Court
will have to deal with the same, being sensitive to the nature of
allegation made against the accused. One of the circumstances
to consider the gravity of the offence is also the term of sentence
that is prescribed for the offence the accused is alleged to have
committed. Such consideration with regard to the gravity of
offence is a factor which is in addition to the triple test or the
tripod test that would be normally applied. In that regard, what is
also to be kept in perspective is that even if the allegation is one
of grave economic offence, it is not a rule that bail should be
denied in every case since there is no such bar created in the
relevant enactment passed by the legislature nor does the bail
jurisprudence provides so. Therefore, the underlining conclusion
is that irrespective of the nature and gravity of charge, the
precedent of another case alone will not be the basis for either
grant or refusal of bail though it may have a bearing on principle.
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But ultimately the consideration will have to be on case to case
basis on the facts involved therein and securing the presence of
the accused to stand trial. In the circumstance, it would be clear
that even after concluding the triple test in favour of the appellant,
the Judge of the High Court was certainly justified in adverting
to the issue relating to the gravity of the offence. However, the
manner in which the conclusions are recorded in paragraphs 57
to 62 are disapproved wherein the observations are reflected to
be in the nature of finding relating to the alleged offence.
[Paras 21, 22][468-E-H; 469-A-D]
Shri Gurbaksh Singh Sibbia vs. State of Punjab, (1980)
2 SCC 565 : [1980] 3 SCR 383 - followed.
State of Bihar & Anr. v. Amit Kumar (2017) 13 SCC
751 : [2017] 4 SCR 503; Nimmagadda Prasad v. CBI
(2013) 7 SCC 466; CBI v. Ramendu Chattopadhyay,
Crl Appeal.No. 1711 of 2019; Seniors Fraud
Investigation Office v. Nittin Johari & Anr. (2019) 9
SCC 165; Y.S. Jagan Mohan Reddy v. CBI (2013) 7
SCC 439; State of Gujarat v. Mohanlal Jitamalji Porwal
(1987) 2 SCC 364 : [1987] 2 SCR 677 - relied on
3. The question as to whether the Court could look into
the documents while considering an application for bail had arisen
for consideration in the very case between the parties in Criminal
Appeal No.130/2019 wherein through the judgment dated
05.09.2019 while considering the matter relating to the order
dated 20.08.2019 whereby the High Court had rejected the bail,
this Court had held that it would be open for the Court to receive
the materials/documents collected during the investigation and
peruse the same to satisfy its conscience that the investigation
is proceeding in the right lines and for the purpose of
consideration of grant of bail/anticipatory bail etc. At the same
time, this Court, had disapproved the manner in which the Judge
of the High Court in the said case had verbatim quoted a note
produced by the respondent. If that be the position, in the instant
case, the Judge while adverting to the materials, ought not have
recorded a finding based on the materials produced before him.
While the Judge was empowered to look at the materials
produced in a sealed cover to satisfy his judicial conscience, the
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Judge ought not to have recorded finding based on the materials
produced in a sealed cover. Further while deciding the same case
of the appellant in Crl. Appeal No.1340 of 2019, after holding so,
this Court had consciously refrained from opening the sealed
cover and perusing the documents lest some observations are
made thereon after perusal of the same, which would prejudice
the accused pre-trial. In that circumstance though it is held that
it would be open for the Court to peruse the documents, it would
be against the concept of fair trial if in every case the prosecution
presents documents in sealed cover and the findings on the same
are recorded as if the offence is committed and the same is treated
as having a bearing for denial or grant of bail. However, since
the Single Judge of the High Court had perused the documents
in sealed cover and arrived at certain conclusion and since that
order is under challenge, it had become imperative for this Court
to also open the sealed cover and peruse the contents so as to
satisfy ourselves to that extent. A perusal showed that the
statements of persons concerned have been recorded and the
details collected have been collated. The recording of statements
and the collation of material is in the nature of allegation against
one of the co-accused son of appellant of opening shell companies
and also purchasing benami properties in the name of relatives
at various places in different countries. Except for recording
the same, documents are not adverted to any further since
ultimately, these allegations would have to be established in the
trial wherein the accused/co-accused would have the opportunity
of putting forth their case, if any, and an ultimate conclusion would
be reached. Hence, the finding recorded by the Judge of the High
Court based on the material in sealed cover is not justified. [Paras
23, 24][469-F-H; 470-A-H]
4. The appellant has not been named as one of the accused
in the ECIR but the allegation while being made against the coaccused, it was indicated the appellant who was the Finance
Minister at that point, has aided the illegal transactions since
one of the co-accused is the son of the appellant. In this context,
even if the statements on record and materials gathered are taken
note, the complicity of the appellant will have to be established
in the trial and if convicted, the appellant will undergo sentence.
As taken note the anticipatory bail had been declined earlier and
the appellant was available for custodial interrogation for more
than 45 days. In addition to the custodial interrogation, if further
investigation is to be made, the appellant would be bound to
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participate in such investigation as is required by the respondent.
Further, one of the co-accused has been granted bail by the High
Court while the other co-accused is enjoying interim protection
from arrest. The appellant is aged about 74 years and as noted by
the High Court itself in its order, the appellant has already suffered
two bouts of illness during incarceration and was put on antibiotics
and has been advised to take steroids of maximum strength. In
that circumstance, the availability of the appellant for further
investigation, interrogation and facing trial is not jeopardized and
he is already held to be not a 'flight risk' and there is no possibility
of tampering the evidence or influencing/intimidating the
witnesses. Taking these and all other facts and circumstances
including the duration of custody into consideration the appellant
is entitled to be granted bail. [Para 25] [471-C-G]
Rohit Tandon vs. Directorate of Enforcement (2018) 11
SCC 46; P. Chidambaram v. CBI (Crl. Appeal No.
1603/2019); Sanjay Chandra v. CBI, (2012) 1 SCC 40:
[2011] 13 SCR 309; Sanjay Chandra v. CBI, (2012) 1
SCC 40 : [2011] 13 SCR 309 - referred to.
Case Law Reference
(2018) 11 SCC 46
referred to
Para 11
[2011] 13 SCR 309
referred to
Para 11
[2017] 4 SCR 503
relied on
Para 18
(2013) 7 SCC 466
relied on
Para 18
(2019) 9 SCC 165
relied on
Para 18
(2013) 7 SCC 439
relied on
Para 18
[1987] 2 SCR 677
relied on
Para 18
[1980] 3 SCR 383
followed
Para 19
[2011] 13 SCR 309
referred to
Para 20
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
1831 of 2019.
From the Judgment and Order dated 15.11.2019 of the High Court
of Delhi at New Delhi in Bail Application No. 2718 of 2019.
 Kapil Sibal, Abhishek Manu Singhvi, Sr. Advs., Arshdeep Singh
Khurana, Kunal Vajani, Amit Bhandari, Hitesh Rai, Akshat Gupta, Ayush
Agarwal, Aman Brar, Savya Baweja, Jayant Mohan, Advs. for the
Appellant.
P. CHIDAMBARAM v. DIRECTORATE OF ENFORCEMENT
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Tushar Mehta, SG, K.M. Nataraj, ASG, Ms. Sonia Mathur,
Sr. Adv., Amit Mahajan, Rajat Nair, Kanu Agrawal, Shantanu Sharma,
Bhuvan Kapoor, Sushil Kumar Dubey, Ms. Divya Nair, Puneet Pathak,
Anuj Aggarwal, B. Krishna Prasad, Advs. for the Respondent.
The Judgment and Order of the Court were delivered/passed by
A. S. BOPANNA, J.
1. Leave granted.
2. The instant appeal has been filed by the appellant assailing the
final order dated 15.11.2019 passed by the High Court of Delhi at New
Delhi in Bail Application No. 2718 of 2019 whereby the High Court
declined to grant regular bail to the appellant.
3. The genesis of the case in question lies in FIR No. RC2202017E0011 dated 15.5.2017, registered by the CBI under section 120-B r/w
420 IPC and sections 8 and 13 (2) r/w 13 (1) (d) of PC Act against some
known and unknown suspects with allegations that M/s INX Media
Private Limited (accused no. 1 in the FIR) sought approval of Foreign
Investment Promotion Board (FIPB) for permission to issue by way of
preferential allotment, certain equity and convertible, non-cumulative,
redeemable preference shares for engaging in the business of creating,
operating, managing and broadcasting of bouquet of television channels.
The company had also sought approval to make a downstream financial
investment to the extent of 26% of the issued and outstanding equity
share capital of M/s INX News Private Limited (accused no. 2). The
FIPB Board recommended the proposal of INX Media for consideration
and approval of the Finance Minister. However, the Board did not approve
the downstream investment by INX Media (P) Ltd. in INX News (P)
Ltd. Further, in the press release dated 30.5.2007 issued by the FIPB
Unit indicating details of proposals approved in the FIPB meeting, quantum
of FDI/NRI inflow against M/s INX media was shown as Rs. 4.62
crores. Contrary to the approval of FIPB, M/s INX Media Pvt. Ltd.
deliberately and in violation of conditions of approval, made a downstream
investment to the extent of 26% capital of INX News and also generated
more than Rs. 305 crores FDI in INX Media (P) Ltd. against the approved
foreign inflow of Rs. 4.62 crores is the allegation. A complaint is stated
to have been received by the investigation wing of the Income Tax
department which sought clarifications from the FIPB Unit of Ministry
of Finance. The FIPB Unit vide letter dated 26.5.2008, sought
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clarifications from M/s INX Media Limited. It was further alleged in the
FIR that upon receipt of this letter, M/s INX Media in order to avoid
punitive action entered into criminal conspiracy with Mr. Karti
Chidambaram (accused no. 3 in the FIR who is the son of the appellant).
Mr. Karti Chidambaram is alleged to have exercised his influence over
the officials of FIPB unit which led to the said officials showing undue
favour to M/s INX News (P) Ltd. Thereafter by deliberately concealing
the investment received in INX Media (P) Ltd., M/s INX News (P)
Ltd. again approached the FIPB Unit and sought permission for the
downstream investment. This proposal was favourably considered by
the officials of ministry of finance and approved by the then Finance
Minister. It was also stated in the FIR that Mr. Karti Chidambaram, in
lieu of services rendered to M/s INX Group, received consideration in
the form of payments. Information disclosed that invoices for
approximately Rs. 3.5 crores were got raised in favour of M/s INX
Group in the name of companies in which Mr. Karti Chidambaram was
having sustainable interests either directly or indirectly. The appellant
herein, who was the then Union Finance Minister, was not however
named in the said FIR.
4. On the basis of the aforementioned FIR, the Respondent
Directorate of Enforcement registered a case ECIR/07/HIU/2017
(hereinafter referred to as ECIR case) under section 3 of Prevention of
Money Laundering Act, 2002 (hereinafter PMLA), punishable under
section 4 of the said Act against the accused mentioned in the FIR. The
allegations in the said ECIR case were the same as those in the
aforementioned FIR. The appellant was not named an accused in this
case as well.
5. On 23.7.2018, apprehending his arrest by the Respondent, the
appellant filed an application before the High Court of Delhi seeking
grant of anticipatory bail in the aforementioned ECIR case. The High
Court extended interim protection to the appellant until 20.8.2019, when
the appellant's application seeking anticipatory bail was dismissed.
6. The appellant then approached this court by filing Criminal
Appeal No. 1340 of 2019 (arising out of SLP (Crl.) No. 7523 of 2019)
wherein while dismissing the appeal of the appellant, the court concluded
that in the instant case, grant of anticipatory bail to the appellant will
hamper the investigation and that this is not a fit case for exercise of
discretion to grant anticipatory bail. This court applied the following
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[A. S. BOPANNA,J.]
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rationale for coming to the said conclusion: there are sufficient safeguards
enshrined in the PMLA to ensure proper exercise of power of arrest;
grant of anticipatory bail is not to be done as a matter of rule, especially
in matters of economic offences which constitute a class apart. Regard
must be had to the fact that grant of anticipatory bail at the stage of
investigation may frustrate the investigating agency in interrogating the
accused and in collecting useful information and also materials which
might have been concealed.
7. In the meanwhile, on 21.8.2019, the appellant was arrested in
the CBI case (arising out of the above-mentioned FIR). Since then he
has been in custody. In the ECIR case, he was arrested on 16.10.2019
on the grounds that payment of approx. Rs. 3 crores was made at the
appellant's instance to the companies controlled by his son on account
of FIPB work done for INX Group. Further it was stated in the grounds
of arrest that the investigation is not fruitful due to the appellant's noncooperation; the appellant has withheld relevant information which is
within his exclusive knowledge and thus his custodial interrogation is
necessary.
8. After dismissal of his application seeking anticipatory bail by
this court, the appellant moved an application dated 5.9.2019 praying to
surrender before the Trial Court (Court of Special Judge (PC Act), CBI)
in the ECIR case. This application was rejected on 13.9.2019 in view of
the submission on behalf of the respondent Directorate that it was not
willing to arrest the appellant at that particular stage since it was
completing investigation pertaining to some aspect of the money laundering
and only on this background investigation was completed, the interrogation
of the appellant would be meaningful. Thereafter, on 11.10.2019, the
Respondent Directorate moved an application u/s 267 CrPC seeking
issuance of production warrant against the appellant for the purpose of
arrest and remand. The allegations which were levelled against the
appellant in this application are that in lieu of granting FIPB approval to
INX Media Pvt. Ltd., he and his son received a sum of approx. Rs. 3
crores through companies controlled by the son of the Appellant/accused
Karti P. Chidambaram. Though INX media in its application did not
mention the total amount of FDI inflow which they intended to bring, the
appellant without ascertaining their competency, granted approval. Further
the appellant became fully aware about the violations made by INX
Group when the matter was highlighted by the Income Tax Department
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and a complaint was also received by him regarding the investment by
M/s INX Media into M/s INX News without due approval. Despite this
knowledge, the appellant again approved the downstream proposal of
INX Group treating it as a fresh approval. Further investigation has
revealed that there were at least 17 overseas bank accounts opened by
the appellant and co-conspirators. In this regard, summons was issued
to 11 persons and statements of some of these persons revealed that the
overseas assets were acquired in the name of various shell companies
on the instructions of appellant's son. Thus, it was stated that a need
arises to confront the appellant with the material gathered. This
application was allowed by the Trial Court vide order dated 11.10.2019.
Thereafter on 14.10.2019, the Respondent inter alia moved an application
seeking permission to arrest the appellant. The Trial Court treated this
application as an application for interrogation of the appellant and allowed
it. Subsequently, on 16.10.2019, the appellant was arrested for the grounds
stated supra. Vide order dated 17.10.2019, the Trial Court remanded the
appellant to the custody of the Respondent for a period of 7 days.
9. After his arrest, on 23.10.2019, the appellant moved a regular
bail application (Bail Application No. 2718 of 2019) before the High
Court u/s 439 of CrPC averring that he is a law abiding citizen having
deep roots in the society; he is not a flight risk and is willing to abide by
all conditions as may be imposed by the court while granting bail. It was
also submitted that the instant case is a documentary case and being a
respectable citizen and former Union Minister, he cannot and will not
tamper with the documentary record of the instant case which is currently
in the safe and secure possession of the incumbent government or the
Trial Court. On merits, it was stated by the Appellant that he merely
accorded approval to the unanimous recommendation made by the FIPB
which was chaired by the Secretary, Economic Affairs and included 5
other secretaries who were all among the senior most IAS officers (one
among them was a senior IFS officer) and had a long and distinguished
record of service. Anyone familiar with the working of the FIPB would
know that no single officer can take a decision on any proposal.
Therefore, it is preposterous to allege that any person could have
influenced any official of FIPB, including all 6 senior secretaries to the
Government of India. Moreover, the ECIR case is a verbatim copy of
the FIR dated 15.5.2017 and allegations registered therein and thus the
Special Judge erred in granting remand of the appellant in the ECIR
case since the offences allegedly committed in both the cases arise out
P. CHIDAMBARAM v. DIRECTORATE OF ENFORCEMENT
[A. S. BOPANNA,J.]
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of the same occurrence and have been committed in the course of the
same transaction. Further the Special Court committed an error in not
accepting the surrender application of the appellant which was an
application limited to surrendering before the Trial Court. The Special
Court proceeded on an erroneous basis that the desire of an accused is
contingent upon the desire of the investigating agency to arrest the
accused and that arrest is a condition precedent for surrendering before
the Court.
10. Vide the impugned order, the High Court observed that it has
not even been alleged by the Respondent Enforcement Directorate in its
counter affidavit that the appellant is a flight risk. Regarding tampering
of evidence also the court observed that it is neither argued nor any
material is available on record in this regard. Moreover, there is no chance
to tamper the material on record as the same is with the investigating
agencies, central government or courts. Regarding influencing of
witnesses, the court noted that three witnesses have stated in their
statements that the appellant and his family members have pressurised
them and asked them not to appear before the Enforcement Directorate.
However, since their statements have already been recorded, at this
stage when the complaint is almost ready to be filed, the Court held that
there is no chance to influence any witness. The High Court also took
notice of the fact that co-accused have been granted bail. The Court
was cognizant of the fact that the appellant has been suffering from
illness but the Court opined that the Court has already issued directions
to the Jail Superintendent in this regard and therefore this ground is no
longer available to the appellant at this stage. The Court noted that during
investigation, it has been revealed that there has been layering of proceeds
of crime by use of shell companies, most of which are only on paper, and
opined that there is cogent evidence collected so far that these shell
companies are incorporated by persons who can be shown to be close
and connected with the appellant. Next, the Court held that the material
in the present case is completely distinct, different and independent from
the material which was collected by the CBI in the predicate offence.
Even the witnesses in the PMLA investigation are different from the
investigation conducted by the CBI. The High Court concluded that prima
facie, allegations are serious in nature and the appellant has played key
and active role in the present case. On the basis of all these observations,
the High Court dismissed the bail application.
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11. It is the contention of the learned senior counsel Shri Kapil
Sibal and Dr. Abhishek Manu Singhvi on behalf of the appellant before
us that the High Court ought to have granted regular bail to the appellant
after holding the triple test of flight risk, tampering with evidence and
influencing of witnesses in favour of the appellant. The Impugned Order
deserves to be set aside only on the ground that the allegations of a
completely unrelated case (Rohit Tandon vs. Directorate of
Enforcement (2018) 11 SCC 46) have been considered by the High
Court as allegations relating to the instant case and findings on merits
against the appellant have been rendered based on such unrelated
allegations. Next, it has been contended by the appellant that the High
Court erred in law in going into and rendering findings on merits of the
case in order to deny bail to the appellant despite the settled position of
law that merits of a case ought not to be gone into at the time of adjudication
of a bail application. This Court in the appellant's own case seeking
regular bail in the case registered by CBI against him titled
P. Chidambaram vs. CBI (Crl. Appeal No. 1603/2019) has held that
"at the stage of granting bail, an elaborate examination of evidence and
detailed reasons touching upon the merit of the case, which may prejudice
the accused, should be avoided." It has also been contended on behalf
of the appellant that the High Court erred in accepting at face value the
allegations made on merits of the case in the counter affidavit filed by
the respondent and converting such allegations verbatim into findings by
the Court and declining to grant bail to the appellant solely on the basis
of said findings. On merits, the appellant has submitted that he is neither
a shareholder nor director of any allegedly connected company nor does
he have any connection with any of these companies. No material linking
the appellant directly or indirectly with the alleged offence of money
laundering has either been put to the appellant so far or been placed on
record before the High Court. Further, the 12 officers who signed the
file pertaining to the approval of the FDI proposal of INX Media were
not even arrested. Only the appellant, who was the 13th signatory has
been arrested and denied bail. Moreover, all the other co-accused in the
instant ECIR case have also been granted bail or have not been arrested.
The High Court also failed to appreciate that the appellant has already
been granted regular bail by this Court in the predicate offence FIR vide
its order dated 22.10.2019. The High Court erred in denying bail to the
appellant on the specious ground that allegations are of a serious nature.
P. CHIDAMBARAM v. DIRECTORATE OF ENFORCEMENT
[A. S. BOPANNA,J.]
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SUPREME COURT REPORTS
[2019] 14 S.C.R.
It is the submission of the learned senior counsel for the appellant that
the gravity of an offence is to be determined from the severity of the
prescribed punishment. In the instant case, the alleged offence of money
laundering is punishable by imprisonment for a term which shall not
exceed 7 years. Thus, the offence is not 'grave' or 'serious' in terms of
the judgment of this Court in Sanjay Chandra vs. CBI, (2012) 1 SCC
40. The High Court should also have considered that the appellant is a
74 year old person whose health is fragile and while being lodged in
judicial custody of the Respondent Enforcement Directorate between
16.10.2019 and 30.10.2019 and thereafter being lodged in judicial custody
between 30.10.2019 till date, the appellant has suffered multiple bouts of
chronic and persistent pain in his abdomen, for which he was taken to
AIIMS and Dr. Ram Manohar Lohia Hospital on various occasions (viz.
On 23.10.2019, 26.10.2019, 28.10.2019, 30.10.2019 and 1.11.2019) for
consultation, diagnosis and tests. The appellant's health continues to
deteriorate and with the onset of the cold weather, the appellant will
become more vulnerable.
12. Between 05.09.2019 and 16.10.2019 though the appellant was
available in custody the respondent did not choose to interrogate but
remand period was sought on 17.10.2019 and 24.10.2019, while the third
remand sought was rejected and accordingly the remand period expired
on 30.10.2019. No witness was confronted despite seeking remand for
that purpose. It is contended that the very manner in which the whole
process is being conducted is only to see that the appellant remains in
custody. It is contended that the liberty of the appellant cannot be denied
in such manner by adopting an unfair procedure. Though much is sought
to be made out as if the offence committed is grave there is absolutely
no material to indicate that the appellant is involved and even otherwise
it is a matter of trial wherein the charge is to be established. The gravity
can only beget the length of sentence provided in law and by asserting
that the offence is grave, the grant of bail cannot be thwarted. The
respondent cannot contend as if the appellant should remain in custody
till the trial is over.
13. Shri Tushar Mehta, learned Solicitor General while seeking to
oppose the petition has made reference to the counter affidavit filed on
behalf of the respondent. It is contended that though the High Court has
held that there is no possibility of tampering the evidence and has not
influenced any witnesses and has ultimately denied the bail, such
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conclusion is not justified. It is contended that the appellant having held
a very high position and also due to his status is likely to influence the
witnesses and one of the witness had already indicated that he hails
from the same State to which the appellant belongs and is not in a position
to appear for the purpose of being confronted. Hence even in that regard
it should be held against the appellant. It is further contended that even
otherwise despite holding the triple test in favour of the appellant the
gravity of the offence can be considered as a stand-alone aspect as the
gravity of the offence in a particular case is also important while
considering bail. In that circumstance, the three aspects to be taken note
is the manner in which the offence has taken place, gravity of the offence
and also the contemporaneous documents to show that the accused either
in custody or otherwise, wields influence over the witnesses. Hence, he
contends that the finding of the High Court insofar as saying that the
appellant has not tampered is factually incorrect. The learned Solicitor
General further contends that the economic offences are graver offences
which affect the society and the community suffers. The common man
loses confidence in the establishment. It is contended that the Investigating
Agency has collected documentary evidence such as emails exchanged
between the co-conspirators on behalf of the appellant and documents
to indicate investment of laundered money in benami properties whose
beneficial owners can be traced to the appellant and his family members.
The respondent has also recorded the statement of material witnesses
who are the part of process of money laundering. It is his contention that
the appellant has knowledge of all these aspects and the material will
show the share holding pattern of the 16 companies. It is further
contended that the learned Judge of the High Court has referred to the
documents produced in a sealed cover and in that light has arrived at the
conclusion to deny bail. The High Court has, however, not properly
considered while recording that a complaint is ready to be filed and
therefore, he would not influence the witnesses. Even if the complaint/
charge sheet is filed in 60 days it is only to avoid default and the
investigation which is not complete would continue. In that light it is
contended that when economic offences are premeditated it would require
detailed investigation to unearth material and, in such circumstances, if
bail is granted it would defeat the case of the prosecution. The learned
Solicitor General has also referred to the decisions which would be taken
note at the appropriate stage.
P. CHIDAMBARAM v. DIRECTORATE OF ENFORCEMENT
[A. S. BOPANNA,J.]
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SUPREME COURT REPORTS
[2019] 14 S.C.R.
14. The learned senior counsel for the appellant in reply to the
submissions contended that not a single document is available to indicate
that the appellant is involved in the offence. The allegation of the appellant
tampering the evidence or influencing the witnesses as sought to be
made out on behalf of the respondent cannot be accepted for the reason
that the alleged offence is of the year 2007-08 and though the proceedings
were initiated in the year 2017, the appellant was arrested only in the
year 2019. In such event when the appellant has not influenced any
person while he was at large, the allegation of tempering while in custody
is not acceptable. The statement of the alleged witnesses is stated to
have been recorded in the year 2018 and the case of the respondent that
they are seeking to confront the witnesses is being put forth at this stage
only to indicate as if the custody of the appellant is still required by them.
When there is no document to indicate that the appellant is involved, the
mere allegation against the alleged co-conspirators cannot be the basis
to indicate that an economic offence has been committed by the appellant.
In that light it is contended that the prayer made in the petition be accepted.
15. Though we have heard the matter elaborately and also have
narrated the contention of both sides in great detail including those which
were urged on the merits of the matter we are conscious of the fact that
in the instant appeal the consideration is limited to the aspect of regular
bail sought by the appellant under Section 439 of Cr.PC. While stating
so, in order to put the matter in perspective it would be appropriate to
take note of the observation made by us in the case of this very appellant
vs. CBI, in Criminal Appeal No. 1603/2019 which reads as hereunder;
"The jurisdiction to grant bail has to be exercised on the basis of
the well-settled principles having regard to the facts and
circumstances of each case. The following factors are to be taken
into consideration while considering an application for bail:- (i) the
nature of accusation and the severity of the punishment in the
case of conviction and the nature of materials relied upon by the
prosecution; (ii) reasonable apprehension of tampering with the
witnesses or apprehension of threat to the complainant or the
witnesses; (iii) reasonable possibility of securing the presence of
the accused at the time of trial or the likelihood of his abscondence;
(iv) character behaviour and standing of the accused and the
circumstances which are peculiar to the accused; (v) larger interest
of the public or the State and similar other considerations (vide
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Prahlad Singh Bhati v. NCT, Delhi and another (2001) 4 SCC
280. There is no hard and fast rule regarding grant or refusal to
grant bail. Each case has to be considered on the facts and
circumstances of each case and on its own merits. The discretion
of the court has to be exercised judiciously and not in an arbitrary
manner."
16. In the above background, perusal of the order dated 15.11.2019
impugned herein indicates that the learned Single Judge having taken
note of the rival contentions in so far as the triple test or the tripod test to
be applied while considering an application for grant of regular bail under
Sec. 439 Cr.PC, has answered the same in paragraphs 50 to 53 of the
order, in favour of the appellant herein. The learned Solicitor General
has however sought to contend that though there is not much grievance
with regard to the conclusion on 'flight risk', the finding on likelihood of
tampering and influencing witness has not been considered in its correct
perspective. The finding in that regard has not been assailed and in such
event, the appellant in our opinion cannot be taken by surprise. Even
otherwise as rightly observed by the learned Single Judge the evidence
and material stated to have been collected is already available with the
Investigating agency. Learned Solicitor General would however contend
that still further materials are to be collected and letter rogatory has
been issued and as such tampering cannot be ruled out. In the present
situation the appellant is not in political power nor is he holding any post
in the Government of the day so as to be in a position to interfere. In that
view such allegation cannot be accepted on its face value.