It is really astonishing to learn that the former Finance Minister of India who is also an eminent and senior Supreme Court lawyer – P Chidambaram has been refused anticipatory bail by the Delhi High Court just recently in INX Media Scam Case pertaining to corruption and money laundering. What is even more astonishing is that this has happened notwithstanding that P Chidambaram was represented by a battery of senior and eminent lawyers led by stalwarts like Kapil Sibal and Abhishek Manu Singhvi.

What is most astonishing is that Justice Sunil Gaur who authored the latest judgment delivered by the Delhi High Court in the case titled P Chidambaram Vs Central Bureau Of Investigation in Bail Appln. 1316/2018 & Cri. M.A. 10976/2018 And Bail Appln. 1713/2018 & Cri. M.(B) 1163/2018 in P Chidambaram Vs Directorate Of Enforcement, Delhi has minced just no words to observe that this was a classic case of money laundering. He also said point blank that facts of the case reveal that the petitioner is the king pin or the key conspirator.

To start with, it is first and foremost observed in para 1 of this latest judgment by Delhi High Court that, In the above captioned first application [Bail Appln. 1316/2018], petitioner seeks pre-arrest bail in FIR No. RC 220-2017-E-0011, under Section 120B read with Section 420 of IPC and Sections 8 and 13(2) r/w Section 13(1)(d) of The Prevention of Corruption Act, 1988 (henceforth referred to as the 'PC Act'), whereas in the above captioned second application [Bail Appln. 1713/2018], petitioner seeks pre-arrest bail in ECIR/07/HIU/2017, registered under the provisions of The Prevention of Money-Laundering Act, 2002 (henceforth referred to as the 'PMLA'). Para 2 then states that, With the consent of learned counsel representing both the sides, these applications have been heard together and are being disposed of by the common order.

To recapitulate, it is then brought out in para 3 that, It is the case of petitioner that M/s INX Media Pvt. Ltd. Sought approval for FDI in a proposed TV channel upto 46.216 percent of the issued equity capital. The policy allowed investment upto 74 percent of equity. Foreign Investment Promotion Board (FIPB) Unit examined the proposal, found it to be in order and submitted the case to the Finance Minister. FIPB consisted of six secretaries to the Government of India and was chaired by the Secretary, Economic Affairs.

FIPB unanimously recommended the proposal and placed it before the Finance Minister for his approval, along with several other proposals. In May 2007, the Finance Minister (i.e. the petitioner herein) granted his approval in the normal course of official business.

While elaborating further, para 4 then brings out that, According to learned senior counsel for petitioner ten years later, based on alleged 'oral source of information', Central Bureau of Investigation (CBI) recorded an FIR on 15th May, 2017 against four companies, Karti P. Chidambaram (i.e. petitioner's son), unknown officers/officials of the Ministry of Finance and other unknown persons under Section 120B r/w Section 420 of IPC and Section 8 and Section 13(1)(d) r/w Section 13(2) of the PC Act.

The petitioner was not named as an accused or suspect; there is no allegation against the petitioner in the body of the FIR. The allegation in the FIR was that M/s INX Media Pvt. Ltd. had made down-stream investment without obtaining prior approval of the FIPB and in order to regularize that investment, had approached the petitioner's son and made a payment of Rs 10 Lakh to another company allegedly associated with petitioner's son. It is submitted that petitioner learnt that it is the case of the said company that it had received the said payment towards consultancy work and further, the petitioner's son was never a shareholder or Director of the said company. It is further submitted by petitioner's counsel that ECIR/67/HIU/2017 is baseless, politically motivated and an act of vendetta against petitioner and his son, because petitioner is a vocal critic and opponent of the present Central Government both inside Parliament and outside. It is also submitted that petitioner is a sitting member of Rajya Sabha.

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

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

Going ahead, it is then further brought out in para 7 that, Learned senior counsel for petitioner vehemently argued that there is no averment or allegation in the FIR that the petitioner accepted or agreed to accept any gratification as a motive or reward for inducing any public servant and hence, prima facie the accusation under Section 8 of PC Act does not apply to the case of petitioner. It is further submitted that since offence under Section 8 of PC Act is not made out, therefore, the ED cannot lodge money laundering case against petitioner.

Learned senior counsel for petitioner vehemently submits that offences under Sections 420/120B IPC and under the PC Act were not Scheduled Offences under the PMLA and so petitioner cannot be prosecuted under the provisions of PMLA. It is pointed out by learned senior counsel for petitioner that minimum threshold for ED to acquire jurisdiction at the relevant time was Rs 30 Lakh and in the instant case, there is no averment of any payment apart from Rs. 10 Lakh approximately, which was allegedly paid by M/s INX Media Pvt. Ltd. to M/s Advantage Strategic Consulting Pvt. Ltd., with which petitioner is not concerned whatsoever in any manner.

The precise argument of learned senior counsel for petitioner is that if any of the offences are applied qua petitioner, it would amount to giving retrospective application to the provisions of the PMLA which would be violative of petitioner's fundamental rights enshrined under Article 20(3) of the Constitution of India, 1950. To submit so, reliance is placed upon decision in Arun Kumar Mishra Vs. Directorate of Enforcement 2015 SCC OnLine Del 8658.

Furthermore, para 8 states that, It was pointed out by learned senior counsel for petitioner that in the case of co-accused Karti Chidambaram, this Court had stayed the arrest of petitioner in proceedings under the PMLA and so petitioner is also entitled to similar relief. Learned senior counsel for petitioner submits that there are no allegations of petitioner tampering with the evidence and nothing is to be recovered from petitioner and that co-accused of petitioner are already on anticipatory bail or statutory bail and thus, petitioner deserves to be granted pre-arrest bail, as his antecedents are impeccable.

Not stopping here, it is then enunciated in para 9 that, It was also pointed out that petitioner is a sitting member of Rajya Sabha and there are no chances of his fleeing from justice. According to learned senior counsel for petitioner, offence of money laundering is a non-cognizable offence and investigation of ED is in violation of petitioner's fundamental rights. It is further submitted by learned senior counsel for petitioner that amendment made in the year 2018 in the PMLA does not restore Sub-Clause II of Section 45(1) of PMLA.

So, it is submitted that petitioner deserves the concession of pre-arrest bail. In support of above submissions, reliance is placed upon Supreme Court's decisions in Central Bureau of Investigation Vs. Ashok Kumar Aggarwal 2014 (14) SCC 295; Arun Kumar Mishra Vs. Directorate of Enforcement 2015 SCC OnLine Del 8658; Bhadresh Bipinbhai Sheth Vs. State of Gujarat and another (2016) 1 SCC 152; Nikesh Tarachand Shah Vs. Union of India and another (2018) 11 SCC 1 and decisions of High Court of Andhra Pradesh in W.P. 17525/2014 titled as Tech Mahindra Limited Vs. Directorate of Enforcement: CRLRC No. 3222/2016 titled as Ashok Kumar Jain Vs. Asst. Director, Hyderabad; W.P. No. 37487/2012 titled as M/S Satyam Computer Services Ltd. Vs. Directorate of Enforcement and decision of High Court of Mumbai in Bail Appl. No. 286/2018 titled as Sameer M Bhujbal Vs. Assistant Director, Directorate of Enforcement & Ors. and decision of High Court of Madhya Pradesh in M.Cr.C.No. 34201/2018, titled as Vinod Bhandari Vs. Assistant Director, Directorate of Enforcement.

On the contrary, we then see that it is envisaged in para 10 that, On behalf of respondents, it is submitted that Section 19 of PMLA empowers the ED to arrest petitioner on the basis of material collected so far and respondents have reason to believe that petitioner is guilty of offences of money laundering, cheating etc. and some of the proceeds of crime have been already identified and have been attached vide provision of attachment order of 10th October, 2018 and that petitioner's custodial interrogation is necessary in order to trace out further proceeds of the crime.

According to respondents, petitioner's son Karti Chidambaram is involved in INX Media case which is being currently investigated by CBI and ED and that petitioner's son has committed offences under the IPC and PMLA at the behest of petitioner. According to learned Attorney General of India, material on record manifestly indicates that petitioner was personally involved in the act of money laundering and he is also found to be a beneficiary of the Proceeds of Crime and to unearth the money trail, custodial interrogation of petitioner is essential. Learned Attorney General of India has sought to rely upon the diary of proceedings of investigation in a sealed cover to the Court for perusal while seeking to maintain confidentiality in respect of these case diaries.

Highlighting the non-cooperation in investigation by petitioner, learned Attorney General of India had vehemently submitted that in the absence of custodial interrogation of petitioner, investigation in this case cannot be taken to its logical conclusion and in view of nature of gravity of offence, custodial investigation of petitioner be granted. It is submitted that petitioner is giving evasive replies and is not cooperating in the investigation while he is under the protective umbrella of interim orders.

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

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

For the sake of brevity, let us see what para 12 mainly states. It is held that, After having heard both the sides at length and on perusal of the FIR of this case, short reply of respondent-CBI, material on record and the decisions cited, I find that from the material collected by the Investigating Agency, it prima facie appears that Rs 3 Crores approximately has come into the account of M/s Advantage Strategic Consulting Pvt. Ltd. (ASCPL) and other concerns during the tenure of the petitioner as the Finance Minister.

More significantly, para 21 then minces no words in sending most seriously the following unmistakable message to one and all that, This Court is conscious of the fact that personal liberty of a citizen is sacrosanct, but no one is above the law. Law makers cannot be allowed to turn into law breakers with impunity, particularly in cases of this magnitude. What is so far to be seen is the tip of the iceberg. Pre-arrest is not meant for high profile economic offenders.

Time has come to recommend to the Parliament to suitably amend the Law to restrict the provisions of pre-arrest bail and make it inapplicable to economic offenders of high profile cases like the instant one. It is need of the hour. The law must come down upon economic offenders with a heavy hand. It is often seen that when economic offenders are on pre-arrest bail, then the investigation conducted is at a superficial level, like in the instant case. This not only weakens mega scam cases but it actually stiffs the prosecution.

This Court cannot permit the prosecution in this sensitive case to end up in smoke like it has happened in some other high profile cases. Tendering of charge-sheet after obtaining sanction for prosecution of petitioner cannot dilute the gravity of the offence in question. Both the sides have cited legal precedents but the facts of instant case prima facie reveal that petitioner is the king pin i.e. the key conspirator in this case. Law enforcing agencies cannot be made ineffective by putting legal obstacles of offences in question being Scheduled or not Scheduled, as these legal pleas are sub-judice before Supreme Court and cannot persuade this Court to grant pre-arrest bail, as the gravity of offence committed by petitioner is quite evident from case diaries etc. produced by the Investigating Agencies. The gravity of offence committed by petitioner demands denial of pre-arrest bail to him.

No doubt, it also cannot be lost on us that it is then pointed out in para 22 that, Economic offences constitute a class part and need to be visited with a different approach in matters of bail. Taking note of huge magnitude of conspiracy angle cua petitioner, it would be premature to jump to a conclusion that provisions of PMLA would not apply to the instant case, as it cannot be said that the amount involved is below Rs 30 Lakhs. Rather, money laundering involved in the INX Media Scam and Aircel Maxis deal scandal is of Rs 3,500 Crores.

Be it noted, it is then disclosed in para 23 that, Supreme Court in YS Jagan Mohan Reddy (Supra) while dealing with a money laundering case, has reiterated as under:-

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

Do note, it is then further stated in para 24 that, The pertinent observations made by Supreme Court in Gautam Kundu Vs. Directorate of Enforcement (Prevention of Money-Laundering Act (2015) 16 SCC 1, which apply to the instant case, are as under:-

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

More crucially, it is then underscored in para 25 that, Applying the afore-noted dictum to the instant case, this Court finds that not naming of petitioner in FIR, is inconsequential, as petitioner has been projected to be the main accused on whose dictates the offence of this magnitude could be committed. Petitioner cannot claim parity with co-accused who are on bail. It cannot be forgotten that petitioner was the Finance Minister at the relevant time and he had given FDI clearances to INX Media Group for receiving overseas funds to the tune of Rs 305 Crores. The alleged irregularities committed by petitioner makes out a case for refusing pre-arrest bail to petitioner. Simply because petitioner is a sitting member of Parliament would not justify grant of pre-arrest bail to petitioner in this sensitive case. Offenders must be exposed, no matter what their status is. Petitioner is member of legal fraternity too.

But this by itself does not and cannot justify concession of pre-arrest bail to him. Discretion to grant or deny pre-arrest bail cannot be exercised de hors the gravity of offence. It would be preposterous to say that prosecution of petitioner is baseless, politically motivated and act of vendetta as on the basis of material collected so far, it can be safely said that prima facie case is made out against petitioner, thereby, justifying denial of pre-arrest bail to him. The magnitude of this case dissuades this Court to grant pre-arrest bail to petitioner.

To be sure, it is then held in para 26 that, The pertinent observations of the Supreme Court in CBI Vs. Anil Sharma (Supra) which aptly apply to the instant case, are as follows:-

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

Needless to say, it is then pointed out in para 27 that, Supreme Court in Y.S. Jagan Mohan Reddy (Supra), while dealing with multiple investigations involving multiple conspirators has reiterated that the approach to be followed while dealing with bail plea in cases involving criminal conspiracy to commit economic offences of huge magnitude relating to public money ought to be strict as fraudulent transactions affect the economic system to the detriment of the country. It was pertinently observed that economic crimes of such mammoth scale are craftily planned and executed. Thus, grant of bail in cases like instant one will send a wrong message to the society.

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

Most importantly, it is then held clearly, convincingly and categorically in para 29 that, This is a classic case of money laundering. The twin factors which have weighed to deny pre-arrest bail to petitioner are: (i) Gravity of offence and (ii) evasive replies given by petitioner to the questions put to him while he was under protective cover extended to him by this Court. The parameters governing pre-arrest bail and regular bail are altogether different. I have pondered over this matter for long and after weighing the pros and cons, I am of the considered view that the gravity of the offence committed in the instant case amply justifies denial of pre-arrest bail to petitioner. Grant of pre-arrest bail in a serious matter like instant one to an accused simply on the ground that investigation is complete and charge sheet has been filed, would defeat the ends of justice. In bail matters, gravity of the offence is of utmost consideration which weighs with the Court in granting or refusing pre-arrest bail or regular bail. The facts of this case persuades me to decline pre-arrest bail to petitioner while refraining to comment on the merits of the case.

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

In conclusion, it may well be said that it is a big setback for P Chidambaram as Delhi High Court has not just declined his bail plea but also has not hesitated in bluntly saying that facts of the case prima facie reveal that the petitioner is the king pin or the key conspirator. It is because of this adverse order that CBI proceeded ahead to arrest him from his house. Not just this, even the Special CBI Court after hearing both the sides gave the custody of P Chidambaram to CBI for four days till August 26. But P Chidambaram who has also appealed in the Supreme Court is still hoping to get some respite from it. Let's wait and see what happens finally.

But one thing is for sure: P Chidambaram who is a former Finance Minister as also former Home Minister has handled many important portfolios in the UPA regime is facing troubled waters which he has never faced before but he is also determined to not give up so easily. Many top and eminent lawyers of the Supreme Court like Kapil Sibal, Abhishek Manu Singhvi and others are defending him with full gusto and he himself is a senior lawyer of Supreme Court and certainly he won't allow his legal acumen to not be fully utilized in his own case. This is certainly the toughest challenge of his high-profile life that he has faced till now.

Sanjeev Sirohi, Advocate,
s/o Col BPS Sirohi, A 82, Defence Enclave,
Sardhana Road, Kankerkhera, Meerut – 250001, Uttar Pradesh