whether the Court could look
into the documents while considering an application for
bail had arisen for consideration in the very case between
the parties herein in Criminal Appeal No.130/2019
wherein through the judgment dated 05.09.2019 while
considering the matter relating to the order dated
20.08.2019 whereby the High Court had rejected the bail,
this Court had held that it would be open for the Court to
receive the materials/documents collected during the
investigation and peruse the same to satisfy its conscience
that the investigation is proceeding in the right lines and
for the purpose of consideration of grant of
bail/anticipatory bail etc.
Sealed cover
While the learned Judge was empowered to look at the materials produced in a sealed cover to satisfy his judicial conscience, the learned Judge ought not to have recorded finding based on the materials produced in a sealed cover. Further while deciding the same case of the appellant in Crl. Appeal No.1340 of 2019, after holding so, this Court had consciously refrained from opening the sealed cover and perusing the documents lest some observations are made thereon after perusal of the same, which would prejudice the accused pre-trial. In that circumstance though it is held that it would be open for the Court to peruse the documents, it would be against the concept of fair trial if in every case the prosecution presents documents in sealed cover and the findings on the same are recorded as if the offence is committed and the same is treated as having a bearing for denial or grant of bail.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
(CRIMINAL APPEAL NO.1831/2019)
(Arising out of S.L.P.(Criminal) No.10493 of 2019 )
P. Chidambaram ….Appellant (s)
Versus
Directorate of Enforcement …. Respondent(s)
J U D G M E N T
A.S. Bopanna,J.
Leave granted.
2. The instant appeal has been filed by the appellant
assailing the final order dated 15.11.2019 passed by the
High Court of Delhi at New Delhi in Bail Application No.
2718 of 2019 whereby the High Court declined to grant
regular bail to the appellant.
3. The genesis of the case in question lies in FIR No.
RC2202017-E0011 dated 15.5.2017, registered by the CBI
under section 120-B r/w 420 IPC and sections 8 and 13
Page 1 of 36
(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
Page 2 of 36
Media Pvt. Ltd. deliberately and in violation of conditions
of approval, made a downstream investment to the extent
of 26% capital of INX News and also generated more than
Rs. 305 crores FDI in INX Media (P) Ltd. against the
approved foreign inflow of Rs. 4.62 crores is the allegation.
A complaint is stated to have been received by the
investigation wing of the Income Tax department which
sought clarifications from the FIPB Unit of Ministry of
Finance. The FIPB Unit vide letter dated 26.5.2008,
sought clarifications from M/s INX Media Limited. It was
further alleged in the FIR that upon receipt of this letter,
M/s INX Media in order to avoid punitive action entered
into criminal conspiracy with Mr. Karti Chidambaram
(accused no. 3 in the FIR who is the son of the appellant).
Mr. Karti Chidambaram is alleged to have exercised his
influence over the officials of FIPB unit which led to the
said officials showing undue favour to M/s INX News (P)
Ltd. Thereafter by deliberately concealing the investment
received in INX Media (P) Ltd., M/s INX News (P) Ltd. again
approached the FIPB Unit and sought permission for the
downstream investment. This proposal was favourably
Page 3 of 36
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.
Page 4 of 36
5. On 23.7.2018, apprehending his arrest by the
Respondent, the appellant filed an application before the
High Court of Delhi seeking grant of anticipatory bail in
the aforementioned ECIR case. The High Court extended
interim protection to the appellant until 20.8.2019, when
the appellant’s application seeking anticipatory bail was
dismissed.
6. The appellant then approached this court by filing
Criminal Appeal No. 1340 of 2019 (arising out of SLP (Crl.)
No. 7523 of 2019) wherein while dismissing the appeal of
the appellant, the court concluded that in the instant
case, grant of anticipatory bail to the appellant will
hamper the investigation and that this is not a fit case for
exercise of discretion to grant anticipatory bail. This court
applied the following rationale for coming to the said
conclusion: there are sufficient safeguards enshrined in
the PMLA to ensure proper exercise of power of arrest;
grant of anticipatory bail is not to be done as a matter of
rule, especially in matters of economic offences which
constitute a class apart. Regard must be had to the fact
that grant of anticipatory bail at the stage of investigation
Page 5 of 36
may frustrate the investigating agency in interrogating the
accused and in collecting useful information and also
materials which might have been concealed.
7. In the meanwhile, on 21.8.2019, the appellant was
arrested in the CBI case (arising out of the
above-mentioned FIR). Since then he has been in custody.
In the ECIR case, he was arrested on 16.10.2019 on the
grounds that payment of approx. Rs. 3 crores was made at
the appellant’s instance to the companies controlled by his
son on account of FIPB work done for INX Group. Further
it was stated in the grounds of arrest that the investigation
is not fruitful due to the appellant’s non-cooperation; the
appellant has withheld relevant information which is
within his exclusive knowledge and thus his custodial
interrogation is necessary.
8. After dismissal of his application seeking
anticipatory bail by this court, the appellant moved an
application dated 5.9.2019 praying to surrender before the
Trial Court (Court of Special Judge (PC Act), CBI) in the
ECIR case. This application was rejected on 13.9.2019 in
view of the submission on behalf of the respondent
Page 6 of 36
Directorate that it was not willing to arrest the appellant
at that particular stage since it was completing
investigation pertaining to some aspect of the money
laundering and only on this background investigation was
completed, the interrogation of the appellant would be
meaningful. Thereafter, on 11.10.2019, the Respondent
Directorate moved an application u/s 267 CrPC seeking
issuance of production warrant against the appellant for
the purpose of arrest and remand. The allegations which
were levelled against the appellant in this application are
that in lieu of granting FIPB approval to INX Media Pvt.
Ltd., he and his son received a sum of approx. Rs. 3 crores
through companies controlled by the son of the
Appellant/accused Karti P. Chidambaram. Though INX
media in its application did not mention the total amount
of FDI inflow which they intended to bring, the appellant
without ascertaining their competency, granted approval.
Further the appellant became fully aware about the
violations made by INX Group when the matter was
highlighted by the Income Tax Department and a
complaint was also received by him regarding the
Page 7 of 36
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.
Page 8 of 36
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
Page 9 of 36
that any person could have influenced any official of FIPB,
including all 6 senior secretaries to the Government of
India. Moreover, the ECIR case is a verbatim copy of the
FIR dated 15.5.2017 and allegations registered therein
and thus the Special Judge erred in granting remand of
the appellant in the ECIR case since the offences allegedly
committed in both the cases arise out of the same
occurrence and have been committed in the course of the
same transaction. Further the Special Court committed an
error in not accepting the surrender application of the
appellant which was an application limited to
surrendering before the Trial Court. The Special Court
proceeded on an erroneous basis that the desire of an
accused is contingent upon the desire of the investigating
agency to arrest the accused and that arrest is a condition
precedent for surrendering before the Court.
10. Vide the impugned order, the High Court observed
that it has not even been alleged by the Respondent
Enforcement Directorate in its counter affidavit that the
appellant is a flight risk. Regarding tampering of evidence
also the court observed that it is neither argued nor any
Page 10 of 36
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
Page 11 of 36
so far that these shell companies are incorporated by
persons who can be shown to be close and connected with
the appellant. Next, the Court held that the material in the
present case is completely distinct, different and
independent from the material which was collected by the
CBI in the predicate offence. Even the witnesses in the
PMLA investigation are different from the investigation
conducted by the CBI. The High Court concluded that
prima facie, allegations are serious in nature and the
appellant has played key and active role in the present
case. On the basis of all these observations, the High
Court dismissed the bail application.
11. It is the contention of the learned senior counsel
Shri Kapil Sibal and Dr. Abhishek Manu Singhvi on behalf
of the appellant before us that the High Court ought to
have granted regular bail to the appellant after holding the
triple test of flight risk, tampering with evidence and
influencing of witnesses in favour of the appellant. The
Impugned Order deserves to be set aside only on the
ground that the allegations of a completely unrelated case
(Rohit Tandon vs. Directorate of Enforcement (2018)
Page 12 of 36
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
Page 13 of 36
of said findings. On merits, the appellant has submitted
that he is neither a shareholder nor director of any
allegedly connected company nor does he have any
connection with any of these companies. No material
linking the appellant directly or indirectly with the alleged
offence of money laundering has either been put to the
appellant so far or been placed on record before the High
Court. Further, the 12 officers who signed the file
pertaining to the approval of the FDI proposal of INX
Media were not even arrested. Only the appellant, who
was the 13th signatory has been arrested and denied bail.
Moreover, all the other co-accused in the instant ECIR
case have also been granted bail or have not been
arrested. The High Court also failed to appreciate that the
appellant has already been granted regular bail by this
Court in the predicate offence FIR vide its order dated
22.10.2019. The High Court erred in denying bail to the
appellant on the specious ground that allegations are of a
serious nature. It is the submission of the learned senior
counsel for the appellant that the gravity of an offence is
to be determined from the severity of the prescribed
Page 14 of 36
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
Page 15 of 36
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
Page 16 of 36
contended that though the High Court has held that there
is no possibility of tampering the evidence and has not
influenced any witnesses and has ultimately denied the
bail, such conclusion is not justified. It is contended that
the appellant having held a very high position and also
due to his status is likely to influence the witnesses and
one of the witness had already indicated that he hails from
the same State to which the appellant belongs and is not
in a position to appear for the purpose of being
confronted. Hence even in that regard it should be held
against the appellant. It is further contended that even
otherwise despite holding the triple test in favour of the
appellant the gravity of the offence can be considered as a
stand-alone aspect as the gravity of the offence in a
particular case is also important while considering bail. In
that circumstance, the three aspects to be taken note is
the manner in which the offence has taken place, gravity
of the offence and also the contemporaneous documents
to show that the accused either in custody or otherwise,
wields influence over the witnesses. Hence, he contends
that the finding of the High Court insofar as saying that
Page 17 of 36
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
Page 18 of 36
not influence the witnesses. Even if the complaint/charge
sheet is filed in 60 days it is only to avoid default and the
investigation which is not complete would continue. In
that light it is contended that when economic offences are
premeditated it would require detailed investigation to
unearth material and, in such circumstances, if bail is
granted it would defeat the case of the prosecution. The
learned Solicitor General has also referred to the decisions
which would be taken note at the appropriate stage.
14. The learned senior counsel for the appellant in
reply to the submissions contended that not a single
document is available to indicate that the appellant is
involved in the offence. The allegation of the appellant
tampering the evidence or influencing the witnesses as
sought to be made out on behalf of the respondent cannot
be accepted for the reason that the alleged offence is of the
year 2007-08 and though the proceedings were initiated in
the year 2017, the appellant was arrested only in the year
2019. In such event when the appellant has not
influenced any person while he was at large, the allegation
of tempering while in custody is not acceptable. The
Page 19 of 36
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;
Page 20 of 36
“The jurisdiction to grant bail has to be exercised on the
basis of the well-settled principles having regard to the
facts and circumstances of each case. The following
factors are to be taken into consideration while
considering an application for bail:- (i) the nature of
accusation and the severity of the punishment in the
case of conviction and the nature of materials relied
upon by the prosecution; (ii) reasonable apprehension of
tampering with the witnesses or apprehension of threat
to the complainant or the witnesses; (iii) reasonable
possibility of securing the presence of the accused at the
time of trial or the likelihood of his abscondence; (iv)
character behaviour and standing of the accused and
the circumstances which are peculiar to the accused; (v)
larger interest of the public or the State and similar
other considerations (vide Prahlad Singh Bhati v. NCT,
Delhi and another (2001) 4 SCC 280. There is no hard
and fast rule regarding grant or refusal to grant bail.
Each case has to be considered on the facts and
circumstances of each case and on its own merits. The
discretion of the court has to be exercised judiciously
and not in an arbitrary manner.”
16. In the above background, perusal of the order
dated 15.11.2019 impugned herein indicates that the
learned Single Judge having taken note of the rival
contentions in so far as the triple test or the tripod test to
be applied while considering an application for grant of
regular bail under Sec. 439 Cr.PC, has answered the same
in paragraphs 50 to 53 of the order, in favour of the
appellant herein. The learned Solicitor General has
however sought to contend that though there is not much
grievance with regard to the conclusion on ‘flight risk’, the
finding on likelihood of tampering and influencing witness
Page 21 of 36
has not been considered in its correct perspective. The
finding in that regard has not been assailed and in such
event, the appellant in our opinion cannot be taken by
surprise. Even otherwise as rightly observed by the
learned Single Judge the evidence and material stated to
have been collected is already available with the
Investigating agency. Learned Solicitor General would
however contend that still further materials are to be
collected and letter rogatory has been issued and as such
tampering cannot be ruled out. In the present situation
the appellant is not in political power nor is he holding
any post in the Government of the day so as to be in a
position to interfere. In that view such allegation cannot
be accepted on its face value. With regard to the witness
having written that he is not prepared to be confronted as
he is from the same state, the appellant cannot be held
responsible for the same when there is no material to
indicate that the appellant or anyone on his behalf had
restrained or threatened the concerned witness who
refused to be confronted with the appellant in custody.
Page 22 of 36
17. The only other aspect therefore for consideration is
as to whether the further consideration made by the
learned Judge of the High Court, despite holding the triple
test in appellant’s favour was justified and if consideration
is permissible, whether the learned Judge was justified in
his conclusion.
18. While opposing the contention put forth by the
learned Senior Counsel for the appellant that the learned
Judge of the High Court ought not to have travelled
beyond the consideration on the triple test and holding it
in favour of the appellant, the learned Solicitor General
would contend that the gravity of the offence and the role
played by the accused should also be a part of
consideration in the matter of bail. It is contended by the
learned Solicitor General that the economic offences is a
class apart and the gravity is an extremely relevant factor
while considering bail. In order to contend that this
aspect has been judicially recognised, the decisions in the
case of State of Bihar & Anr. vs. Amit Kumar, (2017)
13 SCC 751; Nimmagadda Prasad vs. CBI, (2013) 7 SCC
466; CBI vs. Ramendu Chattopadhyay, Crl
Page 23 of 36
Appeal.No.1711 of 2019; Seniors Fraud Investigation
Office vs. Nittin Johari & Anr.; (2019) 9 SCC 165; Y.S.
Jagan Mohan Reddy vs. CBI, (2013) 7 SCC 439; State
of Gujarat vs. Mohanlal Jitamalji Porwal, (1987) 2 SCC
364 are relied upon. Perusal of the cited decisions would
indicate that this Court has held that economic offences
are also of grave nature, being a class apart which arises
out of deep-rooted conspiracies and effect on the
community as a whole is also to be kept in view, while
consideration for bail is made.
19. On the consideration as made in the above noted
cases and the enunciation in that regard having been
noted, the decisions relied upon by the learned senior
counsel for the appellant and the principles laid down for
consideration of application for bail will require our
consideration. The learned senior counsel for the
appellant has relied upon the decision of the Constitution
Bench of this Court in the case of Shri Gurbaksh Singh
Sibbia vs. State of Punjab, (1980) 2 SCC 565 with
reference to paragraph 27 which reads as hereunder:
“ It is not necessary to refer to decisions which
deal with the right to ordinary bail because that
Page 24 of 36
right does not furnish an exact parallel to the right
to anticipatory bail. It is, however, interesting that
as long back as in 1924 it was held by the High
Court of Calcutta
in Nagendra v. King-Emperor [AIR 1924 Cal 476,
479, 480 : 25 Cri LJ 732] that the object of bail is
to secure the attendance of the accused at the
trial, that the proper test to be applied in the
solution of the question whether bail should be
granted or refused is whether it is probable that
the party will appear to take his trial and that it is
indisputable that bail is not to be withheld as a
punishment. In two other cases which,
significantly, are the ‘Meerut Conspiracy cases’
observations are to be found regarding the right
to bail which deserve a special mention. In K.N.
Joglekar v. Emperor [AIR 1931 All 504 : 33 Cri LJ
94] it was observed, while dealing with Section
498 which corresponds to the present Section 439
of the Code, that it conferred upon the Sessions
Judge or the High Court wide powers to grant bail
which were not handicapped by the restrictions in
the preceding Section 497 which corresponds to
the present Section 437. It was observed by the
court that there was no hard and fast rule and no
inflexible principle governing the exercise of the
discretion conferred by Section 498 and that the
only principle which was established was that the
discretion should be exercised judiciously.
In Emperor v. Hutchinson [AIR 1931 All 356, 358 :
32 Cri LJ 1271] it was said that it was very unwise
to make an attempt to lay down any particular
rules which will bind the High Court, having
regard to the fact that the legislature itself left the
discretion of the court unfettered. According to
the High Court, the variety of cases that may
arise from time to time cannot be safely classified
and it is dangerous to make an attempt to classify
the cases and to say that in particular classes a
bail may be granted but not in other classes. It
was observed that the principle to be deduced
from the various sections in the Criminal
Procedure Code was that grant of bail is the rule
and refusal is the exception. An accused person
who enjoys freedom is in a much better position
to look after his case and to properly defend
himself than if he were in custody. As a
presumably innocent person he is therefore
entitled to freedom and every opportunity look
Page 25 of 36
after his own case. A presumably innocent person
must have his freedom to enable him to establish
his innocence.”
We have taken note of the said decision since even though
the consideration therein was made in the situation where
an application for anticipatory bail under Section 438 was
considered, the entire conspectus of the matter relating to
bail has been noted by the Constitution Bench.
20. The learned senior counsel for the appellant has
also placed reliance on the decision on the decision in the
case of Sanjay Chandra vs. CBI, (2012) 1 SCC 40 with
specific reference to paragraph 39 which reads as
hereunder:
“ Coming back to the facts of the present case,
both the courts have refused the request for grant
of bail on two grounds: the primary ground is that
the offence alleged against the accused persons is
very serious involving deep-rooted planning in
which, huge financial loss is caused to the State
exchequer; the secondary ground is that of the
possibility of the accused persons tampering with
the witnesses. In the present case, the charge is
that of cheating and dishonestly inducing delivery
of property and forgery for the purpose of cheating
using as genuine a forged document. The
punishment for the offence is imprisonment for a
term which may extend to seven years. It is, no
doubt, true that the nature of the charge may be
relevant, but at the same time, the punishment to
which the party may be liable, if convicted, also
bears upon the issue. Therefore, in determining
whether to grant bail, both the seriousness of the
Page 26 of 36
charge and the severity of the punishment should
be taken into consideration.”
The said case was a case of financial irregularities and in
the said circumstance this Court in addition to taking note
of the deep-rooted planning in causing huge financial loss,
the scope of consideration relating to bail has been taken
into consideration in the background of the term of
sentence being seven years if convicted and in that regard
it has been held that in determining the grant or otherwise
of bail, the seriousness of the charge and severity of the
punishment should be taken into consideration.
21. Thus from cumulative perusal of the judgments
cited on either side including the one rendered by the
Constitution Bench of this Court, it could be deduced
that the basic jurisprudence relating to bail remains the
same inasmuch as the grant of bail is the rule and refusal
is the exception so as to ensure that the accused has the
opportunity of securing fair trial. However, while
considering the same the gravity of the offence is an
aspect which is required to be kept in view by the Court.
The gravity for the said purpose will have to be gathered
Page 27 of 36
from the facts and circumstances arising in each case.
Keeping in view the consequences that would befall on the
society in cases of financial irregularities, it has been held
that even economic offences would fall under the category
of “grave offence” and in such circumstance while
considering the application for bail in such matters, the
Court will have to deal with the same, being sensitive to
the nature of allegation made against the accused. One of
the circumstances to consider the gravity of the offence is
also the term of sentence that is prescribed for the offence
the accused is alleged to have committed. Such
consideration with regard to the gravity of offence is a
factor which is in addition to the triple test or the tripod
test that would be normally applied. In that regard what
is also to be kept in perspective is that even if the
allegation is one of grave economic offence, it is not a rule
that bail should be denied in every case since there is no
such bar created in the relevant enactment passed by the
legislature nor does the bail jurisprudence provides so.
Therefore, the underlining conclusion is that irrespective
of the nature and gravity of charge, the precedent of
Page 28 of 36
another case alone will not be the basis for either grant or
refusal of bail though it may have a bearing on principle.
But ultimately the consideration will have to be on case to
case basis on the facts involved therein and securing the
presence of the accused to stand trial.
22. In the above circumstance it would be clear that
even after concluding the triple test in favour of the
appellant the learned Judge of the High Court was
certainly justified in adverting to the issue relating to the
gravity of the offence. However, we disapprove the manner
in which the conclusions are recorded in paragraphs 57 to
62 wherein the observations are reflected to be in the
nature of finding relating to the alleged offence. The
learned senior counsel for the appellant with specific
reference to certain observations contained in the above
noted paragraphs has pointed out that the very
contentions to that effect as contained in paragraphs 17,
20 and 24 of the counter affidavit has been incorporated
as if, it is the findings of the Court. The learned Solicitor
General while seeking to controvert such contention would
however contend that in addition to the counter affidavit
Page 29 of 36
the respondent had also furnished the documents in a
sealed cover which was taken note by the learned Judge
and conclusion has been reached.
23. The question as to whether the Court could look
into the documents while considering an application for
bail had arisen for consideration in the very case between
the parties herein in Criminal Appeal No.130/2019
wherein through the judgment dated 05.09.2019 while
considering the matter relating to the order dated
20.08.2019 whereby the High Court had rejected the bail,
this Court had held that it would be open for the Court to
receive the materials/documents collected during the
investigation and peruse the same to satisfy its conscience
that the investigation is proceeding in the right lines and
for the purpose of consideration of grant of
bail/anticipatory bail etc. At the same time, this Court,
had disapproved the manner in which the learned Judge
of the High Court in the said case had verbatim quoted a
note produced by the respondent. If that be the position,
in the instant case, the learned Judge while adverting to
the materials, ought not have recorded a finding based on
Page 30 of 36
the materials produced before him. While the learned
Judge was empowered to look at the materials produced in
a sealed cover to satisfy his judicial conscience, the
learned Judge ought not to have recorded finding based on
the materials produced in a sealed cover. Further while
deciding the same case of the appellant in Crl. Appeal
No.1340 of 2019, after holding so, this Court had
consciously refrained from opening the sealed cover and
perusing the documents lest some observations are made
thereon after perusal of the same, which would prejudice
the accused pre-trial. In that circumstance though it is
held that it would be open for the Court to peruse the
documents, it would be against the concept of fair trial if
in every case the prosecution presents documents in
sealed cover and the findings on the same are recorded as
if the offence is committed and the same is treated as
having a bearing for denial or grant of bail.
24. Having said so, in present circumstance we were
not very much inclined to open the sealed cover although
the materials in sealed cover was received from the
respondent. However, since the learned Single Judge of
Page 31 of 36
the High Court had perused the documents in sealed
cover and arrived at certain conclusion and since that
order is under challenge, it had become imperative for us
to also open the sealed cover and peruse the contents so
as to satisfy ourselves to that extent. On perusal we have
taken note that the statements of persons concerned have
been recorded and the details collected have been collated.
The recording of statements and the collation of material
is in the nature of allegation against one of the co-accused
Karti Chidambaram- son of appellant of opening shell
companies and also purchasing benami properties in the
name of relatives at various places in different countries.
Except for recording the same, we do not wish to advert to
the documents any further since ultimately, these are
allegations which would have to be established in the trial
wherein the accused/co-accused would have the
opportunity of putting forth their case, if any, and an
ultimate conclusion would be reached. Hence in our
opinion, the finding recorded by the learned Judge of the
High Court based on the material in sealed cover is not
justified.
Page 32 of 36
25. Therefore, at this stage while considering the bail
application of the appellant herein what is to be taken
note is that, at a stage when the appellant was before this
Court in an application seeking for interim
protection/anticipatory bail, this Court while considering
the matter in Criminal Appeal No.1340/2019 had in that
regard held that in a matter of present nature wherein
grave economic offence is alleged, custodial interrogation
as contended would be necessary and in that
circumstance the anticipatory bail was rejected.
Subsequently the appellant has been taken into custody
and has been interrogated and for the said purpose the
appellant was available in custody in this case from
16.10.2019 onwards. It is, however, contended on behalf
of the respondent that the witnesses will have to be
confronted and as such custody is required for that
purpose. As noted, the appellant has not been named as
one of the accused in the ECIR but the allegation while
being made against the co-accused it is indicated the
appellant who was the Finance Minister at that point, has
aided the illegal transactions since one of the co-accused
Page 33 of 36
is the son of the appellant. In this context even if the
statements on record and materials gathered are taken
note, the complicity of the appellant will have to be
established in the trial and if convicted, the appellant will
undergo sentence. For the present, as taken note the
anticipatory bail had been declined earlier and the
appellant was available for custodial interrogation for
more than 45 days. In addition to the custodial
interrogation if further investigation is to be made, the
appellant would be bound to participate in such
investigation as is required by the respondent. Further it
is noticed that one of the co-accused has been granted bail
by the High Court while the other co-accused is enjoying
interim protection from arrest. The appellant is aged
about 74 years and as noted by the High Court itself in its
order, the appellant has already suffered two bouts of
illness during incarceration and was put on antibiotics
and has been advised to take steroids of maximum
strength. In that circumstance, the availability of the
appellant for further investigation, interrogation and
facing trial is not jeopardized and he is already held to be
Page 34 of 36
not a ‘flight risk’ and there is no possibility of tampering
the evidence or influencing\intimidating the witnesses.
Taking these and all other facts and circumstances
including the duration of custody into consideration the
appellant in our considered view is entitled to be granted
bail. It is made clear that the observations contained
touching upon the merits either in the order of the High
Court or in this order shall not be construed as an opinion
expressed on merits and all contentions are left open to be
considered during the course of trial.
26. For the reasons stated above, we pass the
following order:
i) The instant appeal is allowed and the judgment
dated 15.11.2019 passed by the High Court of Delhi in
Bail Application No.2718 of 2019 impugned herein is set
aside;
ii) The appellant is ordered to be released on bail if he
is not required in any other case, subject to executing bail
bonds for a sum of Rs.2 lakhs with two sureties of the like
sum produced to the satisfaction of the learned Special
Judge;
iii) The passport ordered to be deposited by this Court
in the CBI case shall remain in deposit and the appellant
Page 35 of 36
shall not leave the country without specific orders to be
passed by the learned Special Judge.
iv) The appellant shall make himself available for
interrogation in the course of further investigation as and
when required by the respondent.
v) The appellant shall not tamper with the evidence or
attempt to intimidate or influence the witnesses;
vi) The appellant shall not give any press interviews nor
make any public comment in connection with this case
qua him or other co-accused.
vii) There shall be no order as to costs.
….…………………….….J.
(R. BANUMATHI)
..….……………………….J.
(A.S. BOPANNA)
…..……………………….J.
(HRISHIKESH ROY)
New Delhi,
December 04, 2019
Page 36 of 36
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.1831/2019
(Arising out of S.L.P.(Criminal) No.10493 of 2019 )
P. Chidambaram ….Appellant (s)
Versus
Directorate of Enforcement …. Respondent(s)
O R D E R
After pronouncement of the Judgment in the above
mentioned matter, Mr. Tushar Mehta, learned Solicitor
General appearing for the respondent-Directorate of
Enforcement, has submitted that the findings in the
Judgment may not have a bearing qua the other accused.
Considering the above submission, we make it
clear that the findings in the Judgment, as above,
shall not have any bearing qua the other accused in
the case and the same shall be considered
independently on its own merits.
….…………………….….J.
(R. BANUMATHI)
..….……………………….J.
(A.S. BOPANNA)
…..……………………….J.
(HRISHIKESH ROY)
New Delhi,
December 04, 2019
Sealed cover
While the learned Judge was empowered to look at the materials produced in a sealed cover to satisfy his judicial conscience, the learned Judge ought not to have recorded finding based on the materials produced in a sealed cover. Further while deciding the same case of the appellant in Crl. Appeal No.1340 of 2019, after holding so, this Court had consciously refrained from opening the sealed cover and perusing the documents lest some observations are made thereon after perusal of the same, which would prejudice the accused pre-trial. In that circumstance though it is held that it would be open for the Court to peruse the documents, it would be against the concept of fair trial if in every case the prosecution presents documents in sealed cover and the findings on the same are recorded as if the offence is committed and the same is treated as having a bearing for denial or grant of bail.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
(CRIMINAL APPEAL NO.1831/2019)
(Arising out of S.L.P.(Criminal) No.10493 of 2019 )
P. Chidambaram ….Appellant (s)
Versus
Directorate of Enforcement …. Respondent(s)
J U D G M E N T
A.S. Bopanna,J.
Leave granted.
2. The instant appeal has been filed by the appellant
assailing the final order dated 15.11.2019 passed by the
High Court of Delhi at New Delhi in Bail Application No.
2718 of 2019 whereby the High Court declined to grant
regular bail to the appellant.
3. The genesis of the case in question lies in FIR No.
RC2202017-E0011 dated 15.5.2017, registered by the CBI
under section 120-B r/w 420 IPC and sections 8 and 13
Page 1 of 36
(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
Page 2 of 36
Media Pvt. Ltd. deliberately and in violation of conditions
of approval, made a downstream investment to the extent
of 26% capital of INX News and also generated more than
Rs. 305 crores FDI in INX Media (P) Ltd. against the
approved foreign inflow of Rs. 4.62 crores is the allegation.
A complaint is stated to have been received by the
investigation wing of the Income Tax department which
sought clarifications from the FIPB Unit of Ministry of
Finance. The FIPB Unit vide letter dated 26.5.2008,
sought clarifications from M/s INX Media Limited. It was
further alleged in the FIR that upon receipt of this letter,
M/s INX Media in order to avoid punitive action entered
into criminal conspiracy with Mr. Karti Chidambaram
(accused no. 3 in the FIR who is the son of the appellant).
Mr. Karti Chidambaram is alleged to have exercised his
influence over the officials of FIPB unit which led to the
said officials showing undue favour to M/s INX News (P)
Ltd. Thereafter by deliberately concealing the investment
received in INX Media (P) Ltd., M/s INX News (P) Ltd. again
approached the FIPB Unit and sought permission for the
downstream investment. This proposal was favourably
Page 3 of 36
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.
Page 4 of 36
5. On 23.7.2018, apprehending his arrest by the
Respondent, the appellant filed an application before the
High Court of Delhi seeking grant of anticipatory bail in
the aforementioned ECIR case. The High Court extended
interim protection to the appellant until 20.8.2019, when
the appellant’s application seeking anticipatory bail was
dismissed.
6. The appellant then approached this court by filing
Criminal Appeal No. 1340 of 2019 (arising out of SLP (Crl.)
No. 7523 of 2019) wherein while dismissing the appeal of
the appellant, the court concluded that in the instant
case, grant of anticipatory bail to the appellant will
hamper the investigation and that this is not a fit case for
exercise of discretion to grant anticipatory bail. This court
applied the following rationale for coming to the said
conclusion: there are sufficient safeguards enshrined in
the PMLA to ensure proper exercise of power of arrest;
grant of anticipatory bail is not to be done as a matter of
rule, especially in matters of economic offences which
constitute a class apart. Regard must be had to the fact
that grant of anticipatory bail at the stage of investigation
Page 5 of 36
may frustrate the investigating agency in interrogating the
accused and in collecting useful information and also
materials which might have been concealed.
7. In the meanwhile, on 21.8.2019, the appellant was
arrested in the CBI case (arising out of the
above-mentioned FIR). Since then he has been in custody.
In the ECIR case, he was arrested on 16.10.2019 on the
grounds that payment of approx. Rs. 3 crores was made at
the appellant’s instance to the companies controlled by his
son on account of FIPB work done for INX Group. Further
it was stated in the grounds of arrest that the investigation
is not fruitful due to the appellant’s non-cooperation; the
appellant has withheld relevant information which is
within his exclusive knowledge and thus his custodial
interrogation is necessary.
8. After dismissal of his application seeking
anticipatory bail by this court, the appellant moved an
application dated 5.9.2019 praying to surrender before the
Trial Court (Court of Special Judge (PC Act), CBI) in the
ECIR case. This application was rejected on 13.9.2019 in
view of the submission on behalf of the respondent
Page 6 of 36
Directorate that it was not willing to arrest the appellant
at that particular stage since it was completing
investigation pertaining to some aspect of the money
laundering and only on this background investigation was
completed, the interrogation of the appellant would be
meaningful. Thereafter, on 11.10.2019, the Respondent
Directorate moved an application u/s 267 CrPC seeking
issuance of production warrant against the appellant for
the purpose of arrest and remand. The allegations which
were levelled against the appellant in this application are
that in lieu of granting FIPB approval to INX Media Pvt.
Ltd., he and his son received a sum of approx. Rs. 3 crores
through companies controlled by the son of the
Appellant/accused Karti P. Chidambaram. Though INX
media in its application did not mention the total amount
of FDI inflow which they intended to bring, the appellant
without ascertaining their competency, granted approval.
Further the appellant became fully aware about the
violations made by INX Group when the matter was
highlighted by the Income Tax Department and a
complaint was also received by him regarding the
Page 7 of 36
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.
Page 8 of 36
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
Page 9 of 36
that any person could have influenced any official of FIPB,
including all 6 senior secretaries to the Government of
India. Moreover, the ECIR case is a verbatim copy of the
FIR dated 15.5.2017 and allegations registered therein
and thus the Special Judge erred in granting remand of
the appellant in the ECIR case since the offences allegedly
committed in both the cases arise out of the same
occurrence and have been committed in the course of the
same transaction. Further the Special Court committed an
error in not accepting the surrender application of the
appellant which was an application limited to
surrendering before the Trial Court. The Special Court
proceeded on an erroneous basis that the desire of an
accused is contingent upon the desire of the investigating
agency to arrest the accused and that arrest is a condition
precedent for surrendering before the Court.
10. Vide the impugned order, the High Court observed
that it has not even been alleged by the Respondent
Enforcement Directorate in its counter affidavit that the
appellant is a flight risk. Regarding tampering of evidence
also the court observed that it is neither argued nor any
Page 10 of 36
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
Page 11 of 36
so far that these shell companies are incorporated by
persons who can be shown to be close and connected with
the appellant. Next, the Court held that the material in the
present case is completely distinct, different and
independent from the material which was collected by the
CBI in the predicate offence. Even the witnesses in the
PMLA investigation are different from the investigation
conducted by the CBI. The High Court concluded that
prima facie, allegations are serious in nature and the
appellant has played key and active role in the present
case. On the basis of all these observations, the High
Court dismissed the bail application.
11. It is the contention of the learned senior counsel
Shri Kapil Sibal and Dr. Abhishek Manu Singhvi on behalf
of the appellant before us that the High Court ought to
have granted regular bail to the appellant after holding the
triple test of flight risk, tampering with evidence and
influencing of witnesses in favour of the appellant. The
Impugned Order deserves to be set aside only on the
ground that the allegations of a completely unrelated case
(Rohit Tandon vs. Directorate of Enforcement (2018)
Page 12 of 36
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
Page 13 of 36
of said findings. On merits, the appellant has submitted
that he is neither a shareholder nor director of any
allegedly connected company nor does he have any
connection with any of these companies. No material
linking the appellant directly or indirectly with the alleged
offence of money laundering has either been put to the
appellant so far or been placed on record before the High
Court. Further, the 12 officers who signed the file
pertaining to the approval of the FDI proposal of INX
Media were not even arrested. Only the appellant, who
was the 13th signatory has been arrested and denied bail.
Moreover, all the other co-accused in the instant ECIR
case have also been granted bail or have not been
arrested. The High Court also failed to appreciate that the
appellant has already been granted regular bail by this
Court in the predicate offence FIR vide its order dated
22.10.2019. The High Court erred in denying bail to the
appellant on the specious ground that allegations are of a
serious nature. It is the submission of the learned senior
counsel for the appellant that the gravity of an offence is
to be determined from the severity of the prescribed
Page 14 of 36
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
Page 15 of 36
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
Page 16 of 36
contended that though the High Court has held that there
is no possibility of tampering the evidence and has not
influenced any witnesses and has ultimately denied the
bail, such conclusion is not justified. It is contended that
the appellant having held a very high position and also
due to his status is likely to influence the witnesses and
one of the witness had already indicated that he hails from
the same State to which the appellant belongs and is not
in a position to appear for the purpose of being
confronted. Hence even in that regard it should be held
against the appellant. It is further contended that even
otherwise despite holding the triple test in favour of the
appellant the gravity of the offence can be considered as a
stand-alone aspect as the gravity of the offence in a
particular case is also important while considering bail. In
that circumstance, the three aspects to be taken note is
the manner in which the offence has taken place, gravity
of the offence and also the contemporaneous documents
to show that the accused either in custody or otherwise,
wields influence over the witnesses. Hence, he contends
that the finding of the High Court insofar as saying that
Page 17 of 36
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
Page 18 of 36
not influence the witnesses. Even if the complaint/charge
sheet is filed in 60 days it is only to avoid default and the
investigation which is not complete would continue. In
that light it is contended that when economic offences are
premeditated it would require detailed investigation to
unearth material and, in such circumstances, if bail is
granted it would defeat the case of the prosecution. The
learned Solicitor General has also referred to the decisions
which would be taken note at the appropriate stage.
14. The learned senior counsel for the appellant in
reply to the submissions contended that not a single
document is available to indicate that the appellant is
involved in the offence. The allegation of the appellant
tampering the evidence or influencing the witnesses as
sought to be made out on behalf of the respondent cannot
be accepted for the reason that the alleged offence is of the
year 2007-08 and though the proceedings were initiated in
the year 2017, the appellant was arrested only in the year
2019. In such event when the appellant has not
influenced any person while he was at large, the allegation
of tempering while in custody is not acceptable. The
Page 19 of 36
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;
Page 20 of 36
“The jurisdiction to grant bail has to be exercised on the
basis of the well-settled principles having regard to the
facts and circumstances of each case. The following
factors are to be taken into consideration while
considering an application for bail:- (i) the nature of
accusation and the severity of the punishment in the
case of conviction and the nature of materials relied
upon by the prosecution; (ii) reasonable apprehension of
tampering with the witnesses or apprehension of threat
to the complainant or the witnesses; (iii) reasonable
possibility of securing the presence of the accused at the
time of trial or the likelihood of his abscondence; (iv)
character behaviour and standing of the accused and
the circumstances which are peculiar to the accused; (v)
larger interest of the public or the State and similar
other considerations (vide Prahlad Singh Bhati v. NCT,
Delhi and another (2001) 4 SCC 280. There is no hard
and fast rule regarding grant or refusal to grant bail.
Each case has to be considered on the facts and
circumstances of each case and on its own merits. The
discretion of the court has to be exercised judiciously
and not in an arbitrary manner.”
16. In the above background, perusal of the order
dated 15.11.2019 impugned herein indicates that the
learned Single Judge having taken note of the rival
contentions in so far as the triple test or the tripod test to
be applied while considering an application for grant of
regular bail under Sec. 439 Cr.PC, has answered the same
in paragraphs 50 to 53 of the order, in favour of the
appellant herein. The learned Solicitor General has
however sought to contend that though there is not much
grievance with regard to the conclusion on ‘flight risk’, the
finding on likelihood of tampering and influencing witness
Page 21 of 36
has not been considered in its correct perspective. The
finding in that regard has not been assailed and in such
event, the appellant in our opinion cannot be taken by
surprise. Even otherwise as rightly observed by the
learned Single Judge the evidence and material stated to
have been collected is already available with the
Investigating agency. Learned Solicitor General would
however contend that still further materials are to be
collected and letter rogatory has been issued and as such
tampering cannot be ruled out. In the present situation
the appellant is not in political power nor is he holding
any post in the Government of the day so as to be in a
position to interfere. In that view such allegation cannot
be accepted on its face value. With regard to the witness
having written that he is not prepared to be confronted as
he is from the same state, the appellant cannot be held
responsible for the same when there is no material to
indicate that the appellant or anyone on his behalf had
restrained or threatened the concerned witness who
refused to be confronted with the appellant in custody.
Page 22 of 36
17. The only other aspect therefore for consideration is
as to whether the further consideration made by the
learned Judge of the High Court, despite holding the triple
test in appellant’s favour was justified and if consideration
is permissible, whether the learned Judge was justified in
his conclusion.
18. While opposing the contention put forth by the
learned Senior Counsel for the appellant that the learned
Judge of the High Court ought not to have travelled
beyond the consideration on the triple test and holding it
in favour of the appellant, the learned Solicitor General
would contend that the gravity of the offence and the role
played by the accused should also be a part of
consideration in the matter of bail. It is contended by the
learned Solicitor General that the economic offences is a
class apart and the gravity is an extremely relevant factor
while considering bail. In order to contend that this
aspect has been judicially recognised, the decisions in the
case of State of Bihar & Anr. vs. Amit Kumar, (2017)
13 SCC 751; Nimmagadda Prasad vs. CBI, (2013) 7 SCC
466; CBI vs. Ramendu Chattopadhyay, Crl
Page 23 of 36
Appeal.No.1711 of 2019; Seniors Fraud Investigation
Office vs. Nittin Johari & Anr.; (2019) 9 SCC 165; Y.S.
Jagan Mohan Reddy vs. CBI, (2013) 7 SCC 439; State
of Gujarat vs. Mohanlal Jitamalji Porwal, (1987) 2 SCC
364 are relied upon. Perusal of the cited decisions would
indicate that this Court has held that economic offences
are also of grave nature, being a class apart which arises
out of deep-rooted conspiracies and effect on the
community as a whole is also to be kept in view, while
consideration for bail is made.
19. On the consideration as made in the above noted
cases and the enunciation in that regard having been
noted, the decisions relied upon by the learned senior
counsel for the appellant and the principles laid down for
consideration of application for bail will require our
consideration. The learned senior counsel for the
appellant has relied upon the decision of the Constitution
Bench of this Court in the case of Shri Gurbaksh Singh
Sibbia vs. State of Punjab, (1980) 2 SCC 565 with
reference to paragraph 27 which reads as hereunder:
“ It is not necessary to refer to decisions which
deal with the right to ordinary bail because that
Page 24 of 36
right does not furnish an exact parallel to the right
to anticipatory bail. It is, however, interesting that
as long back as in 1924 it was held by the High
Court of Calcutta
in Nagendra v. King-Emperor [AIR 1924 Cal 476,
479, 480 : 25 Cri LJ 732] that the object of bail is
to secure the attendance of the accused at the
trial, that the proper test to be applied in the
solution of the question whether bail should be
granted or refused is whether it is probable that
the party will appear to take his trial and that it is
indisputable that bail is not to be withheld as a
punishment. In two other cases which,
significantly, are the ‘Meerut Conspiracy cases’
observations are to be found regarding the right
to bail which deserve a special mention. In K.N.
Joglekar v. Emperor [AIR 1931 All 504 : 33 Cri LJ
94] it was observed, while dealing with Section
498 which corresponds to the present Section 439
of the Code, that it conferred upon the Sessions
Judge or the High Court wide powers to grant bail
which were not handicapped by the restrictions in
the preceding Section 497 which corresponds to
the present Section 437. It was observed by the
court that there was no hard and fast rule and no
inflexible principle governing the exercise of the
discretion conferred by Section 498 and that the
only principle which was established was that the
discretion should be exercised judiciously.
In Emperor v. Hutchinson [AIR 1931 All 356, 358 :
32 Cri LJ 1271] it was said that it was very unwise
to make an attempt to lay down any particular
rules which will bind the High Court, having
regard to the fact that the legislature itself left the
discretion of the court unfettered. According to
the High Court, the variety of cases that may
arise from time to time cannot be safely classified
and it is dangerous to make an attempt to classify
the cases and to say that in particular classes a
bail may be granted but not in other classes. It
was observed that the principle to be deduced
from the various sections in the Criminal
Procedure Code was that grant of bail is the rule
and refusal is the exception. An accused person
who enjoys freedom is in a much better position
to look after his case and to properly defend
himself than if he were in custody. As a
presumably innocent person he is therefore
entitled to freedom and every opportunity look
Page 25 of 36
after his own case. A presumably innocent person
must have his freedom to enable him to establish
his innocence.”
We have taken note of the said decision since even though
the consideration therein was made in the situation where
an application for anticipatory bail under Section 438 was
considered, the entire conspectus of the matter relating to
bail has been noted by the Constitution Bench.
20. The learned senior counsel for the appellant has
also placed reliance on the decision on the decision in the
case of Sanjay Chandra vs. CBI, (2012) 1 SCC 40 with
specific reference to paragraph 39 which reads as
hereunder:
“ Coming back to the facts of the present case,
both the courts have refused the request for grant
of bail on two grounds: the primary ground is that
the offence alleged against the accused persons is
very serious involving deep-rooted planning in
which, huge financial loss is caused to the State
exchequer; the secondary ground is that of the
possibility of the accused persons tampering with
the witnesses. In the present case, the charge is
that of cheating and dishonestly inducing delivery
of property and forgery for the purpose of cheating
using as genuine a forged document. The
punishment for the offence is imprisonment for a
term which may extend to seven years. It is, no
doubt, true that the nature of the charge may be
relevant, but at the same time, the punishment to
which the party may be liable, if convicted, also
bears upon the issue. Therefore, in determining
whether to grant bail, both the seriousness of the
Page 26 of 36
charge and the severity of the punishment should
be taken into consideration.”
The said case was a case of financial irregularities and in
the said circumstance this Court in addition to taking note
of the deep-rooted planning in causing huge financial loss,
the scope of consideration relating to bail has been taken
into consideration in the background of the term of
sentence being seven years if convicted and in that regard
it has been held that in determining the grant or otherwise
of bail, the seriousness of the charge and severity of the
punishment should be taken into consideration.
21. Thus from cumulative perusal of the judgments
cited on either side including the one rendered by the
Constitution Bench of this Court, it could be deduced
that the basic jurisprudence relating to bail remains the
same inasmuch as the grant of bail is the rule and refusal
is the exception so as to ensure that the accused has the
opportunity of securing fair trial. However, while
considering the same the gravity of the offence is an
aspect which is required to be kept in view by the Court.
The gravity for the said purpose will have to be gathered
Page 27 of 36
from the facts and circumstances arising in each case.
Keeping in view the consequences that would befall on the
society in cases of financial irregularities, it has been held
that even economic offences would fall under the category
of “grave offence” and in such circumstance while
considering the application for bail in such matters, the
Court will have to deal with the same, being sensitive to
the nature of allegation made against the accused. One of
the circumstances to consider the gravity of the offence is
also the term of sentence that is prescribed for the offence
the accused is alleged to have committed. Such
consideration with regard to the gravity of offence is a
factor which is in addition to the triple test or the tripod
test that would be normally applied. In that regard what
is also to be kept in perspective is that even if the
allegation is one of grave economic offence, it is not a rule
that bail should be denied in every case since there is no
such bar created in the relevant enactment passed by the
legislature nor does the bail jurisprudence provides so.
Therefore, the underlining conclusion is that irrespective
of the nature and gravity of charge, the precedent of
Page 28 of 36
another case alone will not be the basis for either grant or
refusal of bail though it may have a bearing on principle.
But ultimately the consideration will have to be on case to
case basis on the facts involved therein and securing the
presence of the accused to stand trial.
22. In the above circumstance it would be clear that
even after concluding the triple test in favour of the
appellant the learned Judge of the High Court was
certainly justified in adverting to the issue relating to the
gravity of the offence. However, we disapprove the manner
in which the conclusions are recorded in paragraphs 57 to
62 wherein the observations are reflected to be in the
nature of finding relating to the alleged offence. The
learned senior counsel for the appellant with specific
reference to certain observations contained in the above
noted paragraphs has pointed out that the very
contentions to that effect as contained in paragraphs 17,
20 and 24 of the counter affidavit has been incorporated
as if, it is the findings of the Court. The learned Solicitor
General while seeking to controvert such contention would
however contend that in addition to the counter affidavit
Page 29 of 36
the respondent had also furnished the documents in a
sealed cover which was taken note by the learned Judge
and conclusion has been reached.
23. The question as to whether the Court could look
into the documents while considering an application for
bail had arisen for consideration in the very case between
the parties herein in Criminal Appeal No.130/2019
wherein through the judgment dated 05.09.2019 while
considering the matter relating to the order dated
20.08.2019 whereby the High Court had rejected the bail,
this Court had held that it would be open for the Court to
receive the materials/documents collected during the
investigation and peruse the same to satisfy its conscience
that the investigation is proceeding in the right lines and
for the purpose of consideration of grant of
bail/anticipatory bail etc. At the same time, this Court,
had disapproved the manner in which the learned Judge
of the High Court in the said case had verbatim quoted a
note produced by the respondent. If that be the position,
in the instant case, the learned Judge while adverting to
the materials, ought not have recorded a finding based on
Page 30 of 36
the materials produced before him. While the learned
Judge was empowered to look at the materials produced in
a sealed cover to satisfy his judicial conscience, the
learned Judge ought not to have recorded finding based on
the materials produced in a sealed cover. Further while
deciding the same case of the appellant in Crl. Appeal
No.1340 of 2019, after holding so, this Court had
consciously refrained from opening the sealed cover and
perusing the documents lest some observations are made
thereon after perusal of the same, which would prejudice
the accused pre-trial. In that circumstance though it is
held that it would be open for the Court to peruse the
documents, it would be against the concept of fair trial if
in every case the prosecution presents documents in
sealed cover and the findings on the same are recorded as
if the offence is committed and the same is treated as
having a bearing for denial or grant of bail.
24. Having said so, in present circumstance we were
not very much inclined to open the sealed cover although
the materials in sealed cover was received from the
respondent. However, since the learned Single Judge of
Page 31 of 36
the High Court had perused the documents in sealed
cover and arrived at certain conclusion and since that
order is under challenge, it had become imperative for us
to also open the sealed cover and peruse the contents so
as to satisfy ourselves to that extent. On perusal we have
taken note that the statements of persons concerned have
been recorded and the details collected have been collated.
The recording of statements and the collation of material
is in the nature of allegation against one of the co-accused
Karti Chidambaram- son of appellant of opening shell
companies and also purchasing benami properties in the
name of relatives at various places in different countries.
Except for recording the same, we do not wish to advert to
the documents any further since ultimately, these are
allegations which would have to be established in the trial
wherein the accused/co-accused would have the
opportunity of putting forth their case, if any, and an
ultimate conclusion would be reached. Hence in our
opinion, the finding recorded by the learned Judge of the
High Court based on the material in sealed cover is not
justified.
Page 32 of 36
25. Therefore, at this stage while considering the bail
application of the appellant herein what is to be taken
note is that, at a stage when the appellant was before this
Court in an application seeking for interim
protection/anticipatory bail, this Court while considering
the matter in Criminal Appeal No.1340/2019 had in that
regard held that in a matter of present nature wherein
grave economic offence is alleged, custodial interrogation
as contended would be necessary and in that
circumstance the anticipatory bail was rejected.
Subsequently the appellant has been taken into custody
and has been interrogated and for the said purpose the
appellant was available in custody in this case from
16.10.2019 onwards. It is, however, contended on behalf
of the respondent that the witnesses will have to be
confronted and as such custody is required for that
purpose. As noted, the appellant has not been named as
one of the accused in the ECIR but the allegation while
being made against the co-accused it is indicated the
appellant who was the Finance Minister at that point, has
aided the illegal transactions since one of the co-accused
Page 33 of 36
is the son of the appellant. In this context even if the
statements on record and materials gathered are taken
note, the complicity of the appellant will have to be
established in the trial and if convicted, the appellant will
undergo sentence. For the present, as taken note the
anticipatory bail had been declined earlier and the
appellant was available for custodial interrogation for
more than 45 days. In addition to the custodial
interrogation if further investigation is to be made, the
appellant would be bound to participate in such
investigation as is required by the respondent. Further it
is noticed that one of the co-accused has been granted bail
by the High Court while the other co-accused is enjoying
interim protection from arrest. The appellant is aged
about 74 years and as noted by the High Court itself in its
order, the appellant has already suffered two bouts of
illness during incarceration and was put on antibiotics
and has been advised to take steroids of maximum
strength. In that circumstance, the availability of the
appellant for further investigation, interrogation and
facing trial is not jeopardized and he is already held to be
Page 34 of 36
not a ‘flight risk’ and there is no possibility of tampering
the evidence or influencing\intimidating the witnesses.
Taking these and all other facts and circumstances
including the duration of custody into consideration the
appellant in our considered view is entitled to be granted
bail. It is made clear that the observations contained
touching upon the merits either in the order of the High
Court or in this order shall not be construed as an opinion
expressed on merits and all contentions are left open to be
considered during the course of trial.
26. For the reasons stated above, we pass the
following order:
i) The instant appeal is allowed and the judgment
dated 15.11.2019 passed by the High Court of Delhi in
Bail Application No.2718 of 2019 impugned herein is set
aside;
ii) The appellant is ordered to be released on bail if he
is not required in any other case, subject to executing bail
bonds for a sum of Rs.2 lakhs with two sureties of the like
sum produced to the satisfaction of the learned Special
Judge;
iii) The passport ordered to be deposited by this Court
in the CBI case shall remain in deposit and the appellant
Page 35 of 36
shall not leave the country without specific orders to be
passed by the learned Special Judge.
iv) The appellant shall make himself available for
interrogation in the course of further investigation as and
when required by the respondent.
v) The appellant shall not tamper with the evidence or
attempt to intimidate or influence the witnesses;
vi) The appellant shall not give any press interviews nor
make any public comment in connection with this case
qua him or other co-accused.
vii) There shall be no order as to costs.
….…………………….….J.
(R. BANUMATHI)
..….……………………….J.
(A.S. BOPANNA)
…..……………………….J.
(HRISHIKESH ROY)
New Delhi,
December 04, 2019
Page 36 of 36
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.1831/2019
(Arising out of S.L.P.(Criminal) No.10493 of 2019 )
P. Chidambaram ….Appellant (s)
Versus
Directorate of Enforcement …. Respondent(s)
O R D E R
After pronouncement of the Judgment in the above
mentioned matter, Mr. Tushar Mehta, learned Solicitor
General appearing for the respondent-Directorate of
Enforcement, has submitted that the findings in the
Judgment may not have a bearing qua the other accused.
Considering the above submission, we make it
clear that the findings in the Judgment, as above,
shall not have any bearing qua the other accused in
the case and the same shall be considered
independently on its own merits.
….…………………….….J.
(R. BANUMATHI)
..….……………………….J.
(A.S. BOPANNA)
…..……………………….J.
(HRISHIKESH ROY)
New Delhi,
December 04, 2019
