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The Delhi High Court today dismissed the regular bail plea filed by former Union Minister P Chidambaram in the INX Media case.
The order was reserved by a Single Judge Bench of Justice Suresh Kumar Kait.
The INX Media case pertains to the alleged irregularities in the Foreign Investment Promotion Board clearance to INX Media at the time when P Chidambaram was the Finance Minister.
It is the case of the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) that P Chidambaram and his son Karti Chidambaram received illegal gratification from INX Media owners Peter and Indrani Mukherjea for the clearance.
CBI had arrested P Chidambaram on August 21 after his anticipatory bail plea in the case was rejected by the High Court.
Special CBI Judge Ajay Kumar Kuhar had then remanded Chidambaram to judicial custody on September 5 after the expiry of the maximum time period for police custody of an accused. Subsequently, his judicial custody was extended by the CBI Court till October 3.
In his bail plea before the High Court, Chidambaram had argued that the CBI was “acting at behest of the Central Government” which wanted to “malign the untainted and (his) unimpeachable reputation”. It was also argued that his arrest by the CBI was illegal and an abuse of the process of law.
Emphasizing on concerns of liberty, Chidambaram had further argued that mere apprehensions and presumptions by the investigating agency that the investigation would be hampered because of his status and position – without any material on record to show the same – could not be a ground to refuse him bail.
In its response to the bail plea, CBI had submitted that granting bail to P Chidambaram would be against the “zero-tolerance policy in corruption” and would set a very wrong precedent.
The agency also stated that Chidamabaram posed a serious flight risk and that the possibility of him evading the process of law could not be ruled out. It was further argued that there was a real and imminent danger of Chidambaram influencing the witnesses and tampering the evidence as he is a very powerful and influential person.
To arrive at its decision, the Court not only heard the counsel at length but also perused the material submitted to it a sealed cover by the CBI and interacted with the Investigating Officer, R Parthasarathy,
The Court observed that while dealing with bail applications, three factors have to be seen viz. flight risk, tampering with evidence and influencing witnesses.
The Court agreed with Chidambaram’s contentions that he was not a flight risk and there was no chance of tampering due to the documentary nature of evidence.
“.. Regarding the flight risk, if the court put conditions viz. i) passport to be surrendered, ii) look out notice to be issued, iii) the accused shall not leave the country without permission of the Court (even via Nepal and Bhutan etc.), iv) if the order passed by the Court is transmitted to all the airports and concerned authorities in India and abroad, including INTERPOL, in my considered view, the flight risk can be secured. Moreover, there is no evidence on record that the petitioner tried to flee from India. The situation of ‘Flight-Risk’ is possible only if no look out notice is issued or an accused is not of so popular and can leave country based upon forged passport in the name of other persons..
.. it is not in dispute that the documents relating to the present case is in the custody of the prosecuting agency, government of India and the Court. Moreover, the petitioner is not in power except he is a member of parliament. Therefore, in my considered view, there is no chance of the petitioner tampering with the evidence..”
The Court, however, opined that given the status and standing of P Chidambaram, the possibility of witnesses being influenced could not be ruled out.
“As argued by learned Solicitor General, (which is part of ‘Sealed Cover’, two material witnesses (accused) have been approached for not to disclose any information regarding the petitioner and his son (co-accused). This Court cannot dispute the fact that petitioner has been a strong Finance Minister and Home Minister and presently, Member of Indian Parliament. He is respectable member of the Bar Association of Supreme Court of India. He has long standing in BAR as a Senior Advocate. He has deep root in the Indian Society and may be some connection in abroad. But, the fact that he will not influence the witnesses directly or indirectly, cannot be ruled out..”
The Court also made certain observations with respect to the merits of the INX Media case. Rejecting the claim that the approval was granted as per the existing policy framework, the Court said,
“From the material it seems that FIPB Unit prepared a proposal for FDI of ₹4.62 Crores i.e. 46.21% of the Equity and the same is passed granting approval to INX Media, FDI of ₹4.62 Crores being 46.21% of equity. Instead of 4.62 Crore, INX Media brought a FDI of ₹403 Crores without their being any approval for the same.”
It added that Chidambaram’s reliance upon Press Note No. 7 of 1999, which listed conditions when prior approval of FIPB/government was not required, to justify the “unapproved investment” was “contrary to the material on record”.
The Court noted that the Press Note did not apply to the case at hand as it applied either to joint venture companies which sought an increase in the amount of non-resident equity within the approved percentage of non-resident equity or to wholly-owned subsidiary or holding companies of foreign companies in India, which sought enhancement of paid-up capital through infusion of additional funds as equity by the foreign companies without bringing any change in the percentage of equity.
The Court also recorded that as per the record produced by the CBI in the sealed cover, complaints regarding “excess FDI and the investments” in INX Media’s downstream company, INX News Private Ltd., were received by Chidamabaram personally and were also sent to different agencies under his Ministry for probe.
However, none of the FIPB Board members were informed about these complaints except for the Revenue Secretary who chose not to attend FIPB meeting in which “fresh proposal” was decided to be granted. His representative, in that meeting, gave a dissent note, the Court added.
The Court further noted that “large sums of monies” came into the companies owned and/or controlled by Karti P Chidambaram during the relevant period when no services were rendered by these companies.
In view of the above, the Court remarked that if the case is proved against Chidambaram, the offence would be “on the society, economy, financial stability and integrity of the country”.
The Court, therefore, opined that since the investigation was at an advanced stage, it was not inclined to grant bail.
Senior Advocates Kapil Sibal, Abhishek Manu Singhvi and Dayan Krishnan represented Chidambaram.
Solicitor General Tushar Mehta represented the CBI.
Read the Judgement: