P. Chidambaram vs Directorate Of Enforcement

4.62 crores. Contrary to the approval of FIPB, M/s INX Page 2 of 36 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 Page 3 of 36 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.

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 Page 6 of 36 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 Page 7 of 36 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 co-conspirators. 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 appellant’s 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 days. Page 8 of 36

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

Considering the above submission, we make it clear that the findings in the Judgment, as above, shall not have any bearing qua the other accused in the case and the same shall be considered independently on its own merits.