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P. Chidambaram Vs. Directorate of Enforcement. [04/12/19]


P. Chidambaram Vs. Directorate of Enforcement

[Criminal Appeal No. 1831/2019 arising out of SLP Criminal No. 10493 of 2019]

A.S. Bopanna,J.

1. Leave granted.

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

3. The genesis of the case in question lies in FIR No.
RC2202017E0011 dated 15.5.2017, registered by the CBI under section 120B r/w 420 IPC and sections 8 and 13 (2) r/w 13
(1) (d) of PC Act against some known and unknown suspects with allegations that M/s INX Media Private
Limited (accused no. 1 in the FIR) sought approval of Foreign Investment Promotion Board (FIPB) for permission to
issue by way of preferential allotment, certain equity and convertible,
noncumulative, redeemable preference shares for engaging in the business of
creating, operating, managing and broadcasting of bouquet of television
channels. The company had also sought approval to make a downstream financial
investment to the extent of 26% of the issued and outstanding equity share
capital of M/s INX News Private Limited (accused no. 2).

The FIPB Board recommended the proposal of INX Media for
consideration and approval of the Finance Minister. However, the Board did not
approve the downstream investment by INX Media (P) Ltd. in INX News (P) Ltd.
Further, in the press release dated 30.5.2007 issued by the FIPB Unit indicating
details of proposals approved in the FIPB meeting, quantum of FDI/NRI inflow
against M/s INX media was shown as Rs. 4.62 crores. Contrary to the approval of
FIPB, M/s INX Media Pvt. Ltd. deliberately and in violation of conditions of
approval, made a downstream investment to the extent of 26% capital of INX News
and also generated more than Rs. 305 crores FDI in INX Media (P) Ltd. against
the approved foreign inflow of Rs. 4.62 crores is the allegation.

A complaint is stated to have been received by the investigation
wing of the Income Tax department which sought clarifications from the FIPB
Unit of Ministry of Finance. The FIPB Unit vide letter dated 26.5.2008, sought
clarifications from M/s INX Media Limited. It was further alleged in the FIR
that upon receipt of this letter, M/s INX Media in order to avoid punitive
action entered into criminal conspiracy with Mr. Karti Chidambaram (accused no.
3 in the FIR who is the son of the appellant). Mr. Karti Chidambaram is alleged
to have exercised his influence over the officials of FIPB unit which led to
the said officials showing undue favour to M/s INX News (P) Ltd. Thereafter by
deliberately concealing the investment received in INX Media (P) Ltd., M/s INX
News (P) Ltd. Again approached the FIPB Unit and sought permission for the
downstream investment.

This proposal was favourably considered by the officials of
ministry of finance and approved by the then Finance Minister. It was also
stated in the FIR that Mr. Karti Chidambaram, in lieu of services rendered to
M/s INX Group, received consideration in the form of payments. Information
disclosed that invoices for approximately Rs. 3.5 crores were got raised in
favour of M/s INX Group in the name of companies in which Mr. Karti Chidambaram
was having sustainable interests either directly or indirectly. The appellant
herein, who was the then Union Finance Minister, was not however named in the
said FIR.

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

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

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

7. In the meanwhile, on 21.8.2019, the appellant was arrested in
the CBI case (arising out of the abovementioned 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 appellants 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 appellants
noncooperation; the appellant has withheld relevant information which is within
his exclusive knowledge and thus his custodial interrogation is necessary.

8. After dismissal of his application seeking anticipatory bail
by this court, the appellant moved an application dated 5.9.2019 praying to
surrender before the Trial Court (Court of Special Judge (PC Act), CBI) in the ECIR
case. This application was rejected on 13.9.2019 in view of the submission on
behalf of the respondent Directorate that it was not willing to arrest the
appellant at that particular stage since it was completing investigation
pertaining to some aspect of the money laundering and only on this background
investigation was completed, the interrogation of the appellant would be meaningful.
Thereafter, on 11.10.2019, the Respondent Directorate moved an application u/s
267 CrPC seeking issuance of production warrant against the appellant for the
purpose of arrest and remand. The allegations which were levelled against the
appellant in this application are that in lieu of granting FIPB approval to INX
Media Pvt. Ltd., he and his son received a sum of approx. Rs. 3 crores through
companies controlled by the son of the Appellant/accused Karti P. Chidambaram.
Though INX media in its application did not mention the total amount of FDI
inflow which they intended to bring, the appellant without ascertaining their
competency, granted approval. Further the appellant became fully aware about
the violations made by INX Group when the matter was highlighted by the Income Tax Department and a complaint was
also received by him regarding the investment by M/s INX Media into M/s INX
News without due approval.

Despite this knowledge, the appellant again approved the
downstream proposal of INX Group treating it as a fresh approval. Further
investigation has revealed that there were at least 17 overseas bank accounts
opened by the appellant and coconspirators. 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 appellants 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

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

Anyone familiar with the working of the FIPB would know that no single officer can take a decision on any proposal. Therefore, it is preposterous to
allege that any person could have influenced any official of FIPB, including
all 6 senior secretaries to the Government of India. Moreover, the ECIR case is
a verbatim copy of the FIR dated 15.5.2017 and allegations registered therein and
thus the Special Judge erred in granting remand of the appellant in the ECIR
case since the offences allegedly committed in both the cases arise out of the
same occurrence and have been committed in the course of the same transaction.
Further the Special Court committed an error in not accepting the surrender
application of the appellant which was an application limited to surrendering
before the Trial Court. The Special Court proceeded on an erroneous basis that
the desire of an accused is contingent upon the desire of the investigating agency
to arrest the accused and that arrest is a condition precedent for surrendering
before the Court.

10. Vide the impugned order, the High Court observed that it has
not even been alleged by the Respondent Enforcement Directorate in its counter affidavit that the appellant
is a flight risk. Regarding tampering of evidence also the court observed that it is neither argued nor any material
is available on record in this regard. Moreover, there is no chance to tamper the material on record as the same
is with the investigating agencies, central Government or courts. Regarding influencing of witnesses, the
court noted that three witnesses have stated in their statements that the appellant and his family members have
pressurised them and asked them not to appear before the Enforcement Directorate.
However, since their statements have already been recorded, at this stage when the complaint is almost ready to be filed, the Court held that there is no chance to influence any witness. The HighCourt also took notice of the fact that coaccused have been
granted bail.

The Court was cognizant of the fact that the appellant has been
suffering from illness but the Court opined that the Court has already issued
directions to the Jail Superintendent in this regard and therefore this ground
is no longer available to the appellant at this stage. The Court noted that
during investigation, it has been revealed that there has been layering of
proceeds of crime by use of shell companies, most of which are only on paper,
and opined that there is cogent evidence collected so far that these shell
companies are incorporated by persons who can be shown to be close and
connected with the appellant. Next, the Court held that the material in the present
case is completely distinct, different and independent from the material which
was collected by the CBI in the predicate offence. Even the witnesses in the PMLA
investigation are different from the investigation conducted by the CBI. The
High Court concluded that prima facie, allegations are serious in nature and the
appellant has played key and active role in the present case. On the basis of
all these observations, the High Court dismissed the bail application.

11. It is the contention of the learned senior counsel Shri
Kapil Sibal and Dr. Abhishek Manu Singhvi on behalf of the appellant before us that the High Court ought to have
granted regular bail to the appellant after holding the triple test of flight risk, tampering with evidence and influencing
of witnesses in favour of the appellant. The Impugned Order deserves to be set
aside only on the ground that the allegations of a completely unrelated case Rohit
Tandon vs. Directorate of Enforcement(2018) 11 SCC 46) have been
considered by the High Court as allegations relating to the instant case and findings on merits
against the appellant have been rendered based on such unrelated allegations. Next, it has been contended by the
appellant that the High Court erred in law in going into and rendering findings on merits of the case in order to
deny bail to the appellant despite the settled position of law that merits of a case ought not to be gone into at the time
of adjudication of a bail application.

This Court in the appellants own case seeking regular bail in
the case registered by CBI against him titled P.
Chidambaram vs. CBI(Crl. Appeal No. 1603/2019) has held that at
the stage of granting bail, an elaborate examination of evidence and detailed
reasons touching upon the merit of the case, which may prejudice the accused,
should be avoided.” It has also been contended on behalf of the appellant that
the High Court erred in accepting at face value the allegations made on merits
of the case in the counter affidavit filed by the respondent and converting such
allegations verbatim into findings by the Court and declining to grant bail to
the appellant solely on the basis of said findings. On merits, the appellant
has submitted that he is neither a shareholder nor director of any allegedly
connected company nor does he have any connection with any of these companies.
No material linking the appellant directly or indirectly with the alleged offence
of money laundering has either been put to the appellant so far or been placed
on record before the High Court. Further, the 12 officers who signed the file pertaining
to the approval of the FDI proposal of INX Media were not even arrested. Only
the appellant, who was the 13th signatory has been arrested and denied bail.

Moreover, all the other coaccused in the instant ECIR case have
also been granted bail or have not been arrested. The High Court also failed to
appreciate that the appellant has already been granted regular bail by this Court
in the predicate offence FIR vide its order dated 22.10.2019. The High Court
erred in denying bail to the appellant on the specious ground that allegations
are of a serious nature. It is the submission of the learned senior counsel for
the appellant that the gravity of an offence is to be determined from the
severity of the prescribed punishment. In the instant case, the alleged offence
of money laundering is punishable by imprisonment for a term which shall not
exceed 7 years. Thus, the offence is not grave or serious in terms of the
judgment of this Court in Sanjay Chandra vs. CBI, (2012) 1
SCC 40.

The High Court should also have considered that the appellant is
a 74 year old person whose health is fragile and while being lodged in judicial
custody of the Respondent Enforcement Directorate between 16.10.2019 and 30.10.2019
and thereafter being lodged in judicial custody between 30.10.2019 till date,
the appellant has suffered multiple bouts of chronic and persistent pain in his
abdomen, for which he was taken to AIIMS and Dr. Ram Manohar Lohia Hospital on
various occasions (viz. On23.10.2019, 26.10.2019, 28.10.2019, 30.10.2019 and 1.11.2019)
for consultation, diagnosis and tests. The appellants health continues to
deteriorate and with the onset of the cold weather, the appellant will become
more vulnerable.

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

13. Shri Tushar Mehta, learned Solicitor General while seeking
to oppose the petition has made reference to the counter affidavit filed on behalf of the respondent. It is contended
that though the High Court has held that there is no possibility of tampering the evidence and has not influenced
any witnesses and has ultimately denied the bail, such conclusion is not justified. It is contended that the
appellant having held a very high position and also due to his status is likely to influence the witnesses and one of
the witness had already indicated that he hails from the same State to which the appellant belongs and is not in a
position to appear for the purpose of being confronted. Hence even in that
regard it should be held against the appellant. It is further contended that
even otherwise despite holding the triple test in favour of the appellant the
gravity of the offence can be considered as a standalone aspect as the gravity of the offence in a particular
case is also important while considering bail. In that circumstance, the three aspects to be taken note is the
manner in which the offence has taken place, gravity of the offence and also the contemporaneous documents to show
that the accused either in custody or otherwise, wields influence over the witnesses.

Hence, he contends that the finding of the High Court insofar as
saying that the appellant has not tampered is factually incorrect. The learned
Solicitor General further contends that the economic offences are graver
offences which affect the society and the community suffers. The common man loses
confidence in the establishment. It is contended that the Investigating Agency
has collected documentary evidence such as emails exchanged between the
coconspirators on behalf of the appellant and documents to indicate investment
of laundered money in benami properties whose beneficial owners can be traced to the appellant
and his family members. The respondent has also recorded the statement of material witnesses who are the
part of process of money laundering. It is his contention that the appellant has knowledge of all these aspects
and the material will show the share holding pattern of the 16 companies.

It is further contended that the
learned Judge of the High Court has referred to the documents produced in a sealed cover and in that light has
arrived at the conclusion to deny bail. The High Court has, however, not properly considered while recording that a
complaint is ready to be filed and therefore, he would not influence the witnesses. Even if the complaint/charge sheet
is filed in 60 days it is only to avoid default and the investigation which is not complete would continue. In that
light it is contended that when economic offences are premeditated it would require detailed investigation to unearth
material and, in such circumstances, if bail is granted it would defeat the case of the prosecution. The learned
Solicitor General has also referred to the decisions which would be taken note at the appropriate stage.

14. The learned senior counsel for the appellant in reply to the
submissions contended that not a single document is available to indicate that
the appellant is involved in the offence. The allegation of the appellant tampering
the evidence or influencing the witnesses as sought to be made out on behalf of
the respondent cannot be accepted for the reason that the alleged offence is of
the year 200708 and though the proceedings were initiated in the year 2017, the
appellant was arrested only in the year 2019. In such event when the appellant
has not influenced any person while he was at large, the allegation of
tempering while in custody is not acceptable. The statement of the alleged
witnesses is stated to have been recorded in the year 2018 and the case of the
respondent that they are seeking to confront the witnesses is being put forth
at this stage only to indicate as if the custody of the appellant is still
required by them. When there is no document to indicate that the appellant is
involved, the mere allegation against the alleged coconspirators cannot be the
basis to indicate that an economic offence has been committed by the appellant.
In that light it is contended that the prayer made in the petition be accepted.

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

(ii) reasonable apprehension of tampering with the witnesses or
apprehension of threat to the complainant or the witnesses;

(iii) reasonable possibility of securing the presence of the
accused at the time of trial or the likelihood of his abscondence;

(iv)character behaviour and standing of the accused and the
circumstances which are peculiar to the accused;

(v)larger interest of the public or the State and similar other
considerations (vide Prahlad Singh Bhati v. NCT, Delhi and another (2001)
4 SCC 280. There is no hard and fast rule regarding grant or refusal to
grant bail. Each case has to be considered on the facts and circumstances of each case and on its own merits. The discretion
of the court has to be exercised judiciously and not in an arbitrary manner.”

16. In the above background, perusal of the order dated 15.11.2019 impugned herein indicates that the learned Single Judge having taken note of
the rival contentions in so far as the triple test or the tripod test to be
applied while considering an application for grant of regular bail under Sec.
439 Cr.PC, has answered the same in paragraphs 50 to 53 of the order, in favour
of the appellant herein. The learned Solicitor General has however sought to
contend that though there is not much grievance with regard to the conclusion
on flight risk, the finding on likelihood of tampering and influencing
witness has not been considered in its correct perspective. The finding in that
regard has not been assailed and in such event, the appellant in our opinion
cannot be taken by surprise. Even otherwise as rightly observed by the learned
Single Judge the evidence and material stated to have been collected is already
available with the Investigating agency.

Learned Solicitor General would however
contend that still further materials are to be collected and letter rogatory has
been issued and as such tampering cannot be ruled out. In the present situation
the appellant is not in political power nor is he holding any post in the
Government of the day so as to be in a position to interfere. In that view such
allegation cannot be accepted on its face value. With regard to the witness having
written that he is not prepared to be confronted as he is from the same state,
the appellant cannot be held responsible for the same when there is no material
to indicate that the appellant or anyone on his behalf had restrained or
threatened the concerned witness who refused to be confronted with the
appellant in custody.

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

18. While opposing the contention put forth by the learned
Senior Counsel for the appellant that the learned Judge of the High Court ought
not to have travelled beyond the consideration on the triple test and holding
it in favour of the appellant, the learned Solicitor General would contend that
the gravity of the offence and the role played by the accused should also be a
part of consideration in the matter of bail. It is contended by the learned
Solicitor General that the economic offences is a class apart and the gravity
is an extremely relevant factor while considering bail. In order to contend
that this aspect has been judicially recognised, the decisions in the case of State
of Bihar Anr. vs. Amit Kumar, (2017) 13 SCC 751; Nimmagadda
Prasad vs. CBI,(2013) 7 SCC 466; CBI vs. Ramendu
Chattopadhyay, Crl Appeal.No.1711 of 2019; Seniors
Fraud Investigation ffice 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 deeprooted conspiracies and effect on the community
as a whole is also to be kept in view, while consideration for bail is made.

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

It is not necessary to refer to decisions which deal with the
right to ordinary bail because that right does not furnish an exact parallel to
the right to anticipatory bail. It is, however, interesting that as long back
as in 1924 it was held by the High Court of Calcutta in Nagendra v. King- Emperor [AIR 1924 Cal 476,
479, 480 : 25 Cri LJ 732] that the object of bail is to secure the attendance
of the accused at the trial, that the proper test to be applied in the solution
of the question whether bail should be granted or refused is whether it is
probable that the party will appear to take his trial and that it is
indisputable that bail is not to be withheld as a punishment. In two other
cases which, significantly, are the Meerut Conspiracy cases observations are
to be found regarding the right to bail which deserve a special mention.

In K.N. Joglekar v. Emperor [AIR 1931 All 504 :
33 Cri LJ 94] it was observed, while dealing with Section 498 which corresponds
to the present Section 439 of the Code, that it conferred upon the
Sessions Judge or the High Court wide powers to grant bail which were not
handicapped by the restrictions in the preceding Section 497 which corresponds
to the present Section 437. It was observed by the court that there was no hard
and fast rule and no inflexible principle governing the exercise of the
discretion conferred by Section 498 and that the only principle which was established
was that the discretion should be exercised judiciously.

In Emperor v. Hutchinson [AIR 1931 All 356, 358 : 32 Cri LJ 1271] it was said that it was
very unwise to make an attempt to lay down any particular rules which will bind
the High Court, having regard to the fact that the legislature itself left the discretion
of the court unfettered. According to the High Court, the variety of cases that
may arise from time to time cannot be safely classified and it is dangerous to
make an attempt to classify the cases and to say that in particular classes a bail
may be granted but not in other classes. It was observed that the principle to
be deduced from the various sections in the Criminal Procedure Code was that
grant of bail is the rule and refusal is the exception. An accused person who
enjoys freedom is in a much better position to look after his case and to
properly defend himself than if he were in custody. As a presumably innocent
person he is therefore entitled to freedom and every opportunity look after his
own case. A presumably innocent person must have his freedom to enable him to
establish is 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 here under: 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 towhich the party may be liable, if convicted, also bears upon the
issue. Therefore, in determining whether to grant bail, both the seriousness of
the charge and the severity of the punishment should be taken into

The said case was a case of financial irregularities and in the
said circumstance this Court in addition to taking note of the deeprooted 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 in as much as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. However, while considering
the same the gravity of the offence is an aspect which is required to be kept
in view by the Court. The gravity for the said purpose will have to be gathered
from the facts and circumstances arising in each case. Keeping in view the
consequences that would befall on the society in cases of financial
irregularities, it has been held that even economic offences would fall under
the category of grave offence” and in such circumstance while considering the
application for bail in such matters, the Court will have to deal with the
same, being sensitive to the nature of allegation made against the accused. One
of the circumstances to consider the gravity of the offence is also the term of
sentence that is prescribed for the offence the accused is alleged to have committed.

Such consideration with regard to the gravity of offence is a factor
which is in addition to the triple test or the tripod test that would be normally applied. In that regard what is also
to be kept in perspective is that even if the allegation is one of grave
economic offence, it is not a rule that bail should be denied in every case
since there is no such bar created in the relevant enactment passed by the legislature
nor does the bail jurisprudence provides so.Therefore, the underlining
conclusion is that irrespective of the nature and gravity of charge, the
precedent of another case alone will not be the basis for either grant or refusal
of bail though it may have a bearing on principle. But ultimately the
consideration will have to be on case to case basis on the facts involved
therein and securing the presence of the accused to stand trial.

22. In the above circumstance it would be clear that even after
concluding the triple test in favour of the appellant the learned Judge of the
High Court was certainly justified in adverting to the issue relating to the gravity
of the offence. However, we disapprove the manner in which the conclusions are
recorded in paragraphs 57 to 62 wherein the observations are reflected to be in
the nature of finding relating to the alleged offence. The learned senior
counsel for the appellant with specific reference to certain observations
contained in the above noted paragraphs has pointed out that the very contentions
to that effect as contained in paragraphs 17, 20 and 24 of the counter
affidavit has been incorporated as if, it is the findings of the Court. The
learned Solicitor General while seeking to controvert such contention would however
contend that in addition to the counter affidavit the respondent had also
furnished the documents in a sealed cover which was taken note by the learned
Judge and conclusion has been reached.

23. The question as to whether the Court could look into the
documents while considering an application for bail had arisen for
consideration in the very case between the parties herein in Criminal Appeal No.130/2019
wherein through the judgment dated 05.09.2019 while considering the matter
relating to the order dated 20.08.2019 whereby the High Court had rejected the
bail, this Court had held that it would be open for the Court to receive the
materials/documents collected during the investigation and peruse the same to
satisfy its conscience that the investigation is proceeding in the right lines
and for the purpose of consideration of grant of bail/anticipatory bail etc. At
the same time, this Court, had disapproved the manner in which the learned
Judge of the High Court in the said case had verbatim quoted a note produced by
the respondent. If that be the position, in the instant case, the learned Judge
while adverting to the materials, ought not have recorded a finding based on the
materials produced before him.

While the learned Judge was empowered to look at
the materials produced in a sealed cover to satisfy his judicial conscience,
the learned Judge ought not to have recorded finding based on the materials
produced in a sealed cover. Further while deciding the same case of the
appellant in Crl. Appeal No.1340 of 2019, after holding so, this Court had consciously
refrained from opening the sealed cover and perusing the documents lest some
observations are made thereon after perusal of the same, which would prejudice the
accused pretrial. In that circumstance though it is held that it would be open for
the Court to peruse the documents, it would be against the concept of fair
trial if in every case the prosecution presents documents in sealed cover and
the findings on the same are recorded as if the offence is committed and the
same is treated as having a bearing for denial or grant of bail.

24. Having said so, in present circumstance we were not very much inclined to open the sealed cover although the materials in sealed cover was
received from the respondent. However, since the learned Single Judge of the High Court had perused the documents in sealed cover and arrived at certain conclusion and since that order is under challenge, it had become imperative for us to
also open the sealed cover and peruse the contents so as to satisfy ourselves to that extent. On perusal we have taken
note that the statements of persons concerned have been recorded and the
details collected have been collated. The recording of statements and the
collation of material is in the nature of allegation against one of the
coaccused Karti Chidambaramson 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/coaccused would have
the opportunity of putting forth their case, if any, and an ultimate conclusion
would be reached. Hence in our opinion, the finding recorded by the learned
Judge of the High Court based on the material in sealed cover is not justified.

25. Therefore, at this stage while considering the bail application of the appellant herein what is to be takennote 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.

noted, the appellant has not been named as one of the accused in the ECIR but
the allegation while being made against the coaccused it is indicated the appellant
who was the Finance Minister at that point, has aided the illegal transactions
since one of the coaccused 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 coaccused has been granted bail by the High Court while the other
coaccused is enjoying interim protection from arrest. The appellant is aged about
74 years and as noted by the High Court itself in its order, the appellant has
already suffered two bouts of illness during incarceration and was put on
antibiotics and has been advised to take steroids of maximum strength. In that
circumstance, the availability of the appellant for further investigation,
interrogation and facing trial is not jeopardized and he is already held to be not
a flight risk and there is no possibility of tampering the evidence or
influencingintimidating 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

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

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

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

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

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

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

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

vii) There shall be no order as to costs.

………………….J. (R. BANUMATHI)

………………….J. (A.S. BOPANNA)


New Delhi,

December 04, 2019

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