P Chidambaram vs Central Bureau Of Investigation

3. This appeal relates to the alleged irregularities in Foreign Investment Promotion Board (FIPB) clearance given to the INX Media for receiving foreign investment to the tune of Rs.305 crores against approved inflow of Rs.4.62 crores. Briefly stated case of the prosecution as per the FIR is as under:- In 2007, INX Media Pvt. Ltd. approached Foreign Investment Promotion Board (FIPB) seeking approval for FDI upto 46.216 per cent of the issued equity capital. While sending the proposal by INX Media to be placed before the FIPB, INX Media had clearly mentioned in it the inflow of FDI to the extent of Rs.4,62,16,000/- taking the proposed issue at its face value. The FIPB in its meeting held on 18.05.2007 recommended the proposal of INX Media subject to the approval of the Finance Minister-the appellant. In the meeting, the Board did not approve the downstream investment by INX Media in INX News. INX Media committed violation of the recommendation of FIPB and the conditions of the approval as:- (i) INX Media deliberately made a downstream investment to the extent of 26% in the capital of INX News Ltd. without specific approval of FIPB which included indirect foreign investment by the same Foreign Investors; (ii) generated 2 more than Rs.305 crores FDI in INX Media which is in clear violation of the approved foreign flow of Rs.4.62 crores by issuing shares to the foreign investors at a premium of more than Rs.800/- per share.

4. Upon receipt of a complaint on the basis of a cheque for an amount of Rs.10,00,000/- made in favour of M/s Advantage Strategic Consulting Private Limited (ASCPL) by INX Media, the investigation wing of the Income Tax Department proceeded to investigate the matter and the relevant information was sought from the FIPB, which in turn, vide its letter dated 26.05.2008 sought clarification from the INX Media which justified its action saying that the downstream investment has been approved and that the same was made in accordance with the approval of FIPB. It is alleged by the prosecution that in order to get out of the situation without any penal provision, INX Media entered into a criminal conspiracy with Sh. Karti Chidambaram, Promoter Director, Chess Management Services Pvt. Ltd. and the appellant-the then Finance Minister of India. INX Media through the letter dated 26.06.2008 tried to justify their action stating that the downstream investment has been approved and the same was made in accordance with approval.

5. It is alleged that INX Media Group in its record has clearly mentioned the purpose of payment of Rs.10,00,000/- to ASCPL as 3 towards “management consultancy charges towards FIPB notification and clarification”. The FIR further alleges that for the services rendered by Sh. Karti Chidambaram to INX Media through Chess Management Services in getting the issues scuttled by influencing the public servants of FIPB unit of the Ministry of Finance, consideration in the form of payments were received against invoices raised on INX Media by ASCPL. It is further alleged that the very reason for getting the invoices raised in the name of ASCPL for the services rendered by Chess Management Services was with a view to conceal the identity of Sh. Karti Chidambaram. It is stated that Sh. Karti Chidambaram was the Promoter, Director of Chess Management Services whereas ASCPL was being controlled by him indirectly. It is alleged that the invoices approximately for an amount of Rs.3.50 crores were falsely got raised in favour of INX Media in the name of other companies in which Sh. Karti Chidambaram was having sustainable interest either directly or indirectly. It is alleged that such invoices were falsely got raised for creation of acquisition of media content, consultancy in respect of market research, acquisition of content of various genre of Audio-Video etc. Alleging that the above acts of omission and commission prima facie disclose commission of offence, on 15.05.2017, CBI registered FIR in RC No.220/2017-E-0011 under 4 Section 120B IPC read with Section 420 IPC, Section 8 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 against the accused viz. (i) INX Media through its Director Indrani Mukherjea; (ii) INX News through its Director Sh. Pratim Mukherjea @ Peter Mukherjea and others; (iii) Sh. Karti P. Chidambaram; (iv) Chess Management Services through its Director Sh. Karti P. Chidambaram and others; (v) Advantage Strategic Consulting through its Director Ms. Padma Vishwanathan @ Padma Bhaskararaman and others; (vi) unknown officers/officials of Ministry of Finance, Govt. of India; and (vii) other unknown persons for the alleged irregularities in giving FIPB’s clearance to INX Media to receive overseas funds of Rs.305 crores against approved Foreign Direct Investment (FDI) of Rs.4.62 crores.

6. Apprehending arrest, the appellant filed petition under Section 438 Cr.P.C. before the High Court seeking anticipatory bail. Vide order dated 31.05.2018, the High Court granted interim protection to the appellant and the said interim protection continued till 20.08.2019. By the order dated 20.08.2019, the High Court dismissed the application for anticipatory bail to the appellant. Challenging the order declining anticipatory bail to the appellant, SLP(Crl.) No.7525 of 2019 was preferred by the appellant before 5 the Supreme Court on 21.08.2019. In the meanwhile, the appellant was arrested by the CBI on the night of 21.08.2019 and the appellant has been in custody since then. Since the appellant was arrested in connection with CBI case, the appellant’s SLP being SLP(Crl.) No.7525 of 2019 was dismissed as infructuous. Insofar as the case registered by Enforcement Directorate, SLP(Crl.) No.7523 of 2019 was dismissed by this Court refusing to grant anticipatory bail to the appellant by a detailed order dated 05.09.2019. In the present case, we are concerned only with the case registered by the respondent-CBI in RC No.220/2017-E-0011.

7. The High Court by its impugned judgment dated 30.09.2019 refused to grant regular bail to the appellant and dismissed the bail application. Before the High Court, three contentions were raised by the respondent-CBI:- (i) flight risk; (ii) tampering with evidence; and

17. Expression of prima facie reasons for granting or refusing to grant bail is a requirement of law especially where such bail orders are appealable so as to indicate application of mind to the matter 13 under consideration and the reasons for conclusion. Recording of reasons is necessary since the accused/prosecution/victim has every right to know the reasons for grant or refusal to grant bail. This will also help the appellate court to appreciate and consider the reasonings for grant or refusal to grant bail. But giving reasons for exercise of discretion in granting or refusing to grant bail is different from discussing the merits or demerits of the case. 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. Observing that “at the stage of granting bail, detailed examination of evidence and elaborate documentation of the merits of the case should be avoided”, in Niranjan Singh, it was held as under:-

18. In the present case, in the impugned judgment, paras (51) to (70) relate to the findings on the merits of the prosecution case. As discussed earlier, at the stage of considering the application for bail, detailed examination of the merits of the prosecution case and the 14 merits or demerits of the materials relied upon by the prosecution, should be avoided. It is therefore, made clear that the findings of the High Court in paras (51) to (70) be construed as expression of opinion only for the purpose of refusal to grant bail and the same shall not in any way influence the trial or other proceedings.

32. The appellant is not a “flight risk” and in view of the conditions imposed, there is no possibility of his abscondence from the trial. Statement of the prosecution that the appellant has influenced the witnesses and there is likelihood of his further influencing the 25 witnesses cannot be the ground to deny bail to the appellant particularly, when there is no such whisper in the six remand applications filed by the prosecution. The charge sheet has been filed against the appellant and other co-accused on 18.10.2019. The appellant is in custody from 21.08.2019 for about two months. The co-accused were already granted bail. The appellant is said to be aged 74 years and is also said to be suffering from age related health problems. Considering the above factors and the facts and circumstances of the case, we are of the view that the appellant is entitled to be granted bail.

33. In the result, the impugned judgment dated 30.09.2019 passed by the High Court of Delhi in Bail Application No.2270 of 2019 is set aside and the appeal arising out of SLP(Crl.) No.9269 of 2019 is allowed. The appellant is ordered to be released on bail if not required in any other case, subject to the condition of his executing bail bonds for a sum of Rs.1,00,000/- with two sureties of like sum to the satisfaction of the Special Judge (PC Act), CBI-06, Patiala House Courts, New Delhi. The passport if already not deposited, shall be deposited with the Special Court and the appellant shall not leave the country without leave of the Special Court and subject to the order that may be passed by the Special 26 Judge from time to time. The appellant shall make himself available for interrogation as and when required. Consequently, the appeal arising out of SLP(Crl.) No.9445 of 2019 preferred by the CBI stands dismissed. Since the High Court, in the impugned judgment, has expressed its views on the merits of the matter, the findings of the High Court in the impugned judgment shall not have any bearing either in the trial or in any other proceedings. It is made clear that the findings in this judgment be construed as expression of opinion only for the limited purpose of considering the regular bail in CBI case and shall not have any bearing in any other proceedings.

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