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Delhi HC ought not have recorded finding based on materials in sealed cover: Supreme Court in P Chidambaram bail order

Delhi HC ought not have recorded finding based on materials in sealed cover: Supreme Court in P Chidambaram bail order

Aditya AK

After spending 105 days in custody, former Union Minister P Chidambaram was finally granted bail by the Supreme Court in the INX Media money laundering case.

While granting bail to P Chidambaram in the Enforcement Directorate’s case, the Bench of the Justices R Banumathi, AS Bopanna, and Hrishikesh Roy made some important observations with regard to the order passed by the Delhi High Court last month, by which Chidambaram’s bail plea was dismissed.

The main question to be determined by the Supreme Court in the present appeal was whether the High Court was justified in denying bail to Chidambaram despite ruling that the requirements of the triple test were fulfilled.

At the outset, the Court noted that the gravity of an offence is a factor that ought to be considered in addition to the triple test for bail. The gravity of an offence would have to be ascertained from the facts and circumstances of the case, the Court held.

However, while noting that economic offences are of a grave nature, the Court reiterated that the legal position is that bail is the rule and refusal of bail is the exception.

In that context, it was held,

“…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.”

Having made these observations, the Court proceeded to discuss the propriety of the Delhi High Court’s order refusing bail to P Chidambaram.

The Bench opined that the High Court was certainly justified in adverting to gravity of the offence as a factor. However, it took a dim view of the conclusions recorded in paragraphs 57 to 62 of the order, which are in the nature of findings relating to the alleged offence.

Though the High Court was justified in perusing the documents submitted by the ED in a sealed cover, it ought not have recorded its findings on the same, the Court held.

“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.”

It also made a reference to the Supreme Court’s order granting bail to P Chidambaram in the CBI case, observing,

“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.”

On the issue of courts making observations based on evidence in sealed covers, the Bench went on to hold,

“…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.”

Thus, the Court held that the observations of the Delhi High Court based on the contents of the sealed cover were not justified.

The Bench further states that though it was not inclined to do so, it would have to open the sealed cover and peruse its contents, since the Delhi High Court had arrived at a certain conclusion after doing the same.

The Court goes on to reveal the contents of the sealed cover documents:

“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.”

Apart from this, the Court also rejected Solicitor General Tushar Mehta’s argument that further materials are to be collected, and that evidence tampering and influencing of witnesses on Chidambaram’s part could not be ruled out. The Bench observed,

“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.”

With these observations, the Court ultimately granted bail to Chidambaram, subject to certain stipulations.

[Read the judgment]