P. Chidambaram v. Central Bureau of Investigation

14. It is also submitted that from a bare perusal of the order dated 20.08.2019, whereby this Court dismissed the Petitioner's anticipatory bail application, it is evident that:

(i) no arguments were advanced by the CBI even alleging that the

(ii) draft chargesheet had already been prepared for the purposes of seeking sanction of prosecution against the Petitioner and therefore, it is clear that the investigation was already completed back in January 2019. In any event, post the custodial interrogation of the Petitioner herein for a maximum period of 15 days, the investigation qua the Petitioner has admittedly come to an end.

15. Learned Senior Counsel further submitted that in the subject FIR, all the other accused persons have already been enlarged on regular bail or anticipatory bail or statutory bail. Therefore, there is no reason to deny bail to the Petitioner in terms of the parameters laid down by the Hon'ble Apex Court as well as by the High Courts in a catena of judgments.

16. To strengthen the arguments above, learned Senior Counsel relied upon ‘Manubhai Ratilal Patel vs. State of Gujarat, reported in (2013) 1 SCC 314’ and submitted that if police custody is not extended, judicial custody remand is not an automatic consequence. The Judge must apply his mind whether there is any justification for judicial remand or there is no need for any remand at all. The grounds on which an accused can be remanded to judicial custody are very different viz.

(i) flight risk; (ii) tampering with evidence; and (iii) influencing witnesses. None of the said grounds are made out against the Petitioner. Every day of judicial custody has to be justified by the prosecution. Every day in custody in an interference with the liberty of the citizen.

17. Regarding flight risk and cooperation with Investigation, learned Senior Counsel submitted that Petitioner was summoned only once on 06.06.2018 by CBI and the CBI has neither recovered nor elicited anything incriminating from the Petitioner so far, despite having undergone custodial interrogation for the maximum permissible period of 15 days. The Petitioner‟s residence in Chennai and New Delhi have been subjected to search and seizure operations by the Enforcement Directorate and the CBI on 16.05.2017 and 13.01.2018. No incriminating documents or materials were seized during these searches.

18. Regarding tampering and influencing witnesses, it is submitted that the alleged events in this relate to the year 2007-08 and the Petitioner was part of the dispensation in power for more than 6 years thereafter and there is not even an allegation that the Petitioner ever influenced any witness or tampered with any evidence. In any event, the material in this case is documentary in nature, in the form of three files of the Ministry of Finance, which are currently in the safe and secure possession of the incumbent Government or the Ld. Trial Court. As such, there arises no question of the Petitioner being able to tamper with the said documentary evidence. Further, the Petitioner has already been confronted with 5 officers of the Ministry of Finance who were involved in the processing of the FIPB proposal pertaining to INX Media and each of their statements have already been recorded by the respondent CBI. As such, there arises no question of influencing any witnesses.

19. Regarding allegation of influencing the Letters Rogatory (LR‟s), learned counsel for the Petitioner submitted that wielding his alleged influential position has so far ensured that the Investigating Agency does not get the details sought in the Letters Rogatory sent to concerned countries is, on the face of it, completely untenable and without any basis or material on record. This allegation is purely a presumption and while alleging so, the CBI has miserably failed to show as to and in what manner the Petitioner wielded his alleged “influential position” or has ensured that the Investigating Agency does not get the information sought in the aforesaid LR‟s from the Sovereign Governments. The material on record shows that the LR‟s were allegedly issued back in July, 2018. More than a year has elapsed since and, as per material on record, it appears that no replies have been received thus far. There is no material (such as SMS, Email, Letter, telephone call, etc.) of interference, as alleged or otherwise. It is preposterous to even allege that the Petitioner is capable of influencing foreign Sovereign Governments and/ or their institutions or investigating agencies from not sending their response to the LR sent by the Respondent CBI. Notwithstanding the above, CBI‟s apprehensions of influencing and tampering can be addressed by imposing necessary and sufficient conditions on the Petitioner. However, the refusal of bail on the basis of mere apprehensions of the CBI of tampering with evidence and influencing the witnesses would be unjustified.

20. Learned counsel further submitted that since it was within the power of the officials of FIPB to grant post facto approval for any downstream investment, and the approval having rightly been given, the question of proceeding against the officials of FIPB and consequently, the then Finance Minister (i.e. the Petitioner) does not arise. Accordingly, even the arrest of the Petitioner is mala fide. Thus, the Petitioner is entitled for bail in view of the judgment of the Hon‟ble Supreme Court in Dataram Singh vs. State of Uttar Pradesh & Anr., reported in (2018) 3 SCC 22, whereby it was held that “Bail is the rule, jail is the exception”.

21. In addition, the material on record shows that the investigation was over as far back as January, 2019 when sanction was sought against the Petitioner. The Petitioner has already spent 15 days in CBI custody, wherein he was confronted with 5 officers of the Ministry of Finance (namely, Under Secretary-Sh. R. Prasad, OSD-Sh. P.K. Bagga, Director-Sh. Prabodh Saxena, Joint Secretary-Sh. Anup Pujari and Additional Secretary-Ms. Sidhushree Khullar), who were involved in processing the file relating to FIPB approval for INX Media and each of them has stated during the course of investigation that:

(i) They were never advised or directed or in any way influenced by the Petitioner, in any manner whatsoever, to grant the FIPB approval to INX Media:

(ii) The approvals granted in INX Media were within the policy and legal framework and nothing contrary to norms was done. The investment of ₹305 Crores is squarely covered by Press Note NO. 7, 1999 series dated 01.04.1999.

22. In addition, there is no allegation in the whole FIR that the decision of the FIPB Unit and the FIPB Board, approved by the Finance Minister was contrary to any policy or was beyond the scope or power of the FIPB Board or that the same could not be granted. In the absence of such an allegation of loss of public funds or of misuse of power to cause benefit, there can never be a prosecution under Section 13(1)(d) of PC Act. There is no allegation of demand of any monies from any person by the Petitioner for granting of FIPB approvals. Since proof of „demand‟ is a sine qua non for prosecution under Section 13 of the PC Act, the offence under Section 13 of the PC Act is not made out qua the Petitioner. In this regard, learned counsel for the Petitioner has relied upon the cases of (i) Krishan Chander vs. State of Delhi, (2016) 3 SCC 108, (ii) P. Satyanarayana Murthy vs. State of A.P., (2015) 10 SCC 152 and, (iii) B. Jayaraj vs. State of A.P., (2014) 13 SCC

55.

23. It is further submitted that the only alleged overt act is payment and receipt of alleged illegal gratification of ₹10 lakhs. It has not even been alleged by the CBI that any other illegal gratification was actually paid or any such payments have been discovered. Pertinently, even as per the CBI‟s allegations, the said alleged payment of ₹10 lakhs has been made to one M/s Advantage Strategic Consulting Private Limited and not to the Petitioner. There is no loss to the public exchequer in this case. No public funds were involved in this case and it is also not a case of bank fraud or taking money out of the country or defrauding depositors or stealing money from a company. It is submitted that the instant case is not even an economic offence, so far as the CBI is concerned. On the contrary, ₹305 Crores has come into INX Media (i.e. the investee company) as FDI, well within the approval percentage of 46.216% of equity. The allegation is that ₹26 Crores was invested in INX News by INX Media. However, the date of allocation of share pursuant to the said alleged investment is not reflected anywhere in the material on record. As per normal procedure, the FDI proposal of INX Media was processed by several officers in the FIPB Unit. Thereafter, it was put up to the FIPB (comprising of 6 Secretaries), which after due consideration, made its recommendation to the Ministry of Finance. In the Ministry, the case was once again examined by several officers (from the Under Secretary all the way up to the Additional Secretary) of the Department of Economic Affairs (DEA). Thereafter, the case was put up to the Secretary, DEA (who had previously considered and recommended the case as Chairman of the FIPB) who once again signed the file and put it to the competent authority (Finance Minister) on 28.05.2007. The Petitioner approved the file on the same day. Similarly, the downstream approval was processed, examined and recommended by all the above officers and put up to the competent authority (Finance Minister) on 30.10.2008. The Petitioner approved the file on the same day. From the above, it is evident no single officer can take a decision on any proposal. It is collective decision of 6 Secretaries, assisted by several officers in the FIPB Unit and the DEA, respectively. Therefore, it is preposterous to allege that any person could have influenced any official of the FIPB, including all 6 (Six) Senior Secretaries to the Government of India. During the entire interrogation of the Petitioner for 15 days, the Petitioner has not even been confronted with any documents or material concerning the alleged “Foreign Accounts” or the alleged “properties owned by the Petitioner in abroad” or the alleged “Shell Companies”. There is not an iota of evidence against the Petitioner. Neither the CBI nor the ED have found even an iota of evidence of any payment by INX Media or INX News to the Petitioner. Further, not even an iota of evidence of any undisclosed bank account, or undisclosed property, or undisclosed shell company being owned/ held by the Petitioner. The Petitioner could not have been in conspiracy with INX Media or INX News and could also not have granted them a favour in April, 2007 or July- October, 2008 in as much as three complaints had been received by petitioner against the said companies in February-April, 2008, all of which were marked by him to the then Revenue Secretary, who in turn marked them to various authorities for enquiry. Further, a complaint from the then Secretary, Ministry of Information and Broadcasting was referred by the then Revenue Secretary to the Minister of Corporate Affairs. Eventually, all the aforesaid four complaints/ references reached the Serious Fraud Investigation Office (SFIO) and culminated in an SFIO Report. The CBI is deliberately withholding the file in which the complaints were referred to the Ministry of Company Affairs and to SFIO. In any event, the offences are yet to be tested (even prima facie) and therefore, remanding the Petitioner to any further judicial custody would amount to pre-trial conviction and punishment. The Petitioner has no criminal antecedents. The Petitioner has been falsely named in the proceedings arising out of the FIR being RC NO. 22(A)-2011-CBI, ACB and ECIR/05/DZ/2012 (i.e. both relating to the Aircel-Maxis Case) pending before the Ld. Special Judge (2G Spectrum Cases), Rouse Avenue Courts, New Delhi. In the said cases, the Petitioner has been granted anticipatory bail vide order dated 05.09.2019 passed by the Ld. Special Judge. The Petitioner is 74 years old and has age related issues such as Krohns, Dyslipidemia, hypertension, etc. The Petitioner has an unimpeachable record of service and integrity throughout 40 years of public life. Thus, the present petition deserves to be allowed.

24. On the other hand, Mr.Tushar Mehta, learned Solicitor General of India, appearing on behalf of respondent CBI submits that INX Media Pvt. Ltd. (an Indian Company) enters into a share subscription agreement with three foreign entities. The share-holding agreement is dated 26.02.2007. On 09.03.2007, Indrani Mukherjee and Pratim but known as Peter Mukherjee along with some third person met the petitioner in his office. On investigation, the visitors‟ register is stated to be destroyed because of lapse of time. However, the contemporaneous evidence is collected from Hotel Oberoi which corroborates the statements of Indrani Mukherjee, that she and Peter Mukherjee were staying in Hotel Oberoi, New Delhi between 06.03.2007 and 09.03.2007 and they having used the Hotel vehicle for internal travel on 09.03.2007, which was used for travelling to the petitioner‟s office where the meeting was held. After the meeting dated 09.03.2007, the INX Media applied for FIPB approval vide application dated 13.03.2007 requesting for the following approval for FDI in the form of: (a) Allotment of 14,98,995/- Equity shares of ₹10 each. (b)Allotment of 31,22,605/- convertible preference shares of ₹10/- each.

25. Learned Solicitor General further submits that despite an already existing share subscription agreement for bringing ₹403 crores, deliberately an application was made showing FDI of ₹4.62 crores. The reason for this concealment have emerged during investigation and have been placed for perusal of this Court in the sealed cover. FIPB Unit prepared a proposal for FDI of ₹4.62 crores i.e. 46.216% of the equity (as per the amount and percentage stated in the application) and the same is passed granting approval to INX Media Pvt. Ltd. to bring FDI of ₹4.62 crores being 46.216% of its equity. Instead of ₹4.62 crores, INX Media Pvt. Ltd. brings an FDI of ₹403 Crores without there being any approval for the same. This is how foreign direct investment of ₹403 crores came to India from three companies whose credentials are found during investigation. The said unapproved investment was surreptitiously sought to be justified by placing reliance upon Press Note No.7 of 1999. The said reliance is wholly untenable as it applies only to contingencies mentioned therein which is not in existence/were attracted to the present case.

26. He further submits that a part of this amount came to be invested by INX Media Pvt. Ltd. into INX News Pvt. Ltd. by way of down-stream investment. This excess FDI and the investments in INX News Pvt. Ltd. triggered various written complaints being made to the Finance Minister, which were received by him personally, and were sent to different agencies under his ministry for probing.

27. He further submits that an Application is made by INX News Pvt. Ltd. for “fresh approval” of downstream investment and not for post facto approval (as suggested by the petitioner). The Board was not informed about the complaints received by Finance Minister and sent only to the Revenue Secretary. The Revenue Secretary who is Member of the FIPB chose not to attend FIPB meeting in which this “fresh proposal” was decided to be granted and his representative remained present and gave a dissent note.

28. It is submitted that sufficient evidence has come on record which has been placed before this Court in a sealed cover that Indrani Mukherjee and Peter Mukherjee met the petitioner even before the filing of the Application before FIPB Unit during which the petitioner assured them regarding the FIPB approval. However, in lieu thereof the petitioner directed that the „business interest‟ of his son should be taken care of and certain overseas transactions should be made in his favour. It has come on record that illegal gratification has been paid by and through other companies by Indrani Mukherjee and Peter Mukherjee to the companies controlled and owned by the co-conspirator and co-accused Karti P. Chidambaram viz. son of the petitioner. It has come on record that large sums of money has come into the companies owned and/or controlled by the co-conspirator Karti P. Chidambaram during the relevant period for the favours shown by the petitioner to INX Media. Sufficient evidence to prove that some of the payments were illegal gratification and for rest, investigation is in progress. It has also come on record that no services were rendered by these companies owned and controlled by the petitioner and Karti P. Chidambaram to the companies from where the huge sums of money is received. Investigation has also revealed that contemporaneously large number of emails were exchanged between the representatives of INX Media and the company controlled by petitioner and Karti P. Chidambaram which pertained to grant of FIPB approval to INX Media.

29. He further submitted that in cases of conspiracy, it is well settled that there cannot be a direct evidence and conspiracy has to be seen from the surrounding circumstances during the trial.

30. To strengthen his arguments, learned counsel has placed reliance to the judgment of Hon‟ble Supreme Court in case of Manohar Joshi v. State of Maharashtra: (2012) 3 SCCD 619 held as under:

183. The facts of the present case are stronger than those in Shivajirao Nilangekar case28. Here also a relationship is established. The basic order dated 21.8.1996 in this matter granting no objection to an illegal action is signed by the then Chief Minister himself. That was after personally calling for the file containing the report dated 17.4.1996 sent by the Municipal Commissioner much earlier. The entire narration shows that the then Chief Minister had clear knowledge about this particular file all throughout, and the orders were issued only because the developer was his son-in-law, and he wanted to favour him. Ultimately, one has to draw the inference on the basis of probabilities. The test is not one of being proved guilty beyond reasonable doubt, but one of preponderance of probabilities.”

31. He further placed reliance on the case of Rajiv Kumar v. State of U.P., (2017) 8 SCC 791, where the Hon‟ble Supreme Court has held as under:-

32. He also placed reliance on State of M.P. v. Sheetla Sahai, (2009) 8 SCC 617 where Hon‟ble Supreme Court has held as under: “38. A criminal conspiracy must be put to action inasmuch as so long a crime is generated in the mind of an accused, it does not become punishable. What is necessary is not thoughts, which may even be criminal in character, often involuntary, but offence would be said to have been committed thereunder only when that take concrete shape of an agreement to do or cause to be done an illegal act which although not illegal by illegal means and then if nothing further is done the agreement would give rise to a criminal conspiracy. Its ingredients are:

(i) an agreement between two or more persons;

(ii) an agreement must relate to doing or causing to be done either (a) an illegal act; or (b) an act which is not illegal in itself but is done by illegal means.

39. what is, therefore, necessary is to show meeting of minds of two or more persons for doing or causing to be done an illegal act or an act by illegal means. While saying so, we are not oblivious of the fact that often conspiracy is hatched in secrecy and for proving the said offence substantial direct evidence may not be possible to be obtained. An offence of criminal conspiracy can also be proved by circumstantial evidence.”

33. Learned Solicitor further submits that there is overwhelming surrounding contemporaneous evidence that FIPB approval was granted by the petitioner in pursuance of a criminal conspiracy with other accused including his son where illegal gratification was received by him on his behalf through the companies operated by his son.

34. Furthermore, sufficient evidence has also come on record that the petitioner has been using his might and his position to influence the witnesses of the present case. The two crucial witnesses have given statement detailing the manner in which they are being influenced.

35. In regard to the non participation of the accused during interrogation while he was under the protective cover of the pre-arrest bail order, Mr. Tushar Mehta further submits that the argument of the petitioner that he was called only once i.e. on 06.06.2018 for interrogation and therefore his subsequent arrest after a year and a half was not justified is completely untenable and misleading. It is submitted that the petitioner was issued a Notice under Section 41-A of Cr.P.C. on 28.05.2018 for his appearance on 31.05.2018. However, the petitioner instead of joining the investigation approached this Court seeking anticipatory bail. In the said bail application, this Court was pleased to pass an interim order protecting the petitioner from arrest. Pursuant thereto when the petitioner was called for interrogation on 06.06.2018, from his conduct the investigating agency came to a bonafide conclusion that the interrogation of the petitioner under the protective umbrella of a pre-arrest bail order was reducing the said interrogation into a mere ritual and farce. As such the investigating agency took a bonafide decision, in the interest of the investigation, to contest the said anticipatory bail application for custodial interrogation of the petitioner. The said fact/reason has been duly pleaded and considered by this Court as well as the Hon‟ble Supreme Court in the judgments dated 20.08.2019 passed in Bail Appl. No. 1316 of 2018 and judgment dated 05.09.2019 passed by the Hon‟ble Supreme Court in SLP (Crl.) No. 7618 of 2019, which the petitioner craves leave to refer to and rely upon.

36. Learned Solicitor General further submits that the contention of the petitioner that the remand order were bad in law and he ought to have been released is also untenable in law. It is well settled that pursuant to arrest, the petitioner can only be sent to either police custody or judicial custody. In law he can only be released on bail provided that a bail application is moved by him and the Magistrate is satisfied that there are no grounds to remand the petitioner either to police custody or judicial custody. It is submitted that the law does not confer power upon a Magistrate to release an accused without there being an application of bail. In the present case it is matter of record that no bail application was ever moved by the petitioner before the learned Special Judge. The only application which was moved by the petitioner was the application for grant of interim bail which was also subsequently withdrawn by him. As such the contention of the petitioner that the learned Special Judge ought to have released him is completely unsustainable in law.

37. To strengthen his arguments, he placed reliance on the case of CBI V. Anupam K. Kulkarni: 1992 (3) SCC 41 whereby the Hon‟ble Supreme Court has held as under: “7……These observations make it clear that if an accused is detained in police custody the maximum period during which he can be kept in such custody is only fifteen days either pursuant to a single order or more than one when such orders are for lesser number of days but on the whole such custody cannot be beyond fifteen days and the further remand to facilitate the investigation can only be by detention of the accused in judicial custody.

8. Having regard to the words "in such custody as such Magistrate thinks fit a term not exceeding fifteen days in the whole" occurring in Sub-section (2) of Section 167 now the question is whether it can be construed that the police custody, if any, should be within this period of first fifteen days and not later or alternatively in a case if such remand had not been obtained or the number of days of police custody in the first fifteen days are less whether the police can ask subsequently for police custody for full period of fifteen days not availed earlier or for the remaining days during the rest of the periods of ninety days or sixty days covered by the proviso. The decisions mentioned above do not deal with this question precisely except the judgment of the Delhi High Court in Dharam Pal's case. Taking the plain language into consideration particularly the words "otherwise than in the custody of the police beyond the period of fifteen days" in the proviso it has to be held that the custody after the expiry of the first fifteen days can only be judicial custody during the rest of the periods of ninety days or sixty days and that police custody if found necessary of fifteen days. To this extent the view taken in Dharam Pal's case is correct.

10. ………… However, taking into account the difficulties which may arise in completion of the investigation of cases of serious nature the legislature added the proviso providing for further detention of the accused for a period of ninety days but in clear terms it is mentioned in the proviso that such detention could only be in the judicial custody.

38. He also placed reliance on State (Delhi Administration) vs. Dharam Pal: 1981 SCC OnLine Del 368, whereby the Hon‟ble Supreme Court has held as under: “We are concerned with the first part of this sub-section which authorises the detention of the accused in such custody as such Magistrate thinks fit. The provision shows, as indeed it must, that the Magistrate has a choice for determining the type of custody in which the accused person should be detained. As already pointed out, this provision contains the procedure for depriving a person of his liberty. It is a protection for the citizen or the accused person. The rule of law requires that a person should not be detained by an executive fiat. After the first 24 hours he can only be detained or kept in custody under the orders of a Judicial Magistrate who is a person quite independent from the police. It is this Magistrate who has to determine the period of the custody and the nature of the custody. It is an important safeguard regarding the liberty of a person. The safeguard is further apparent from the fact that the whole period of detention cannot exceed 15 days on the whole and can be altered from time to time. There is no mention in the provision of either police custody or judicial custody. Conceivably, the Magistrate would have to determine the nature of the custody according to the circumstances of the case. It might be the police or it might be the tail or it might be a mental asylum or it might be a children's home or the Nari Niketan or some other institution. The nature of the custody would vary according to the type of person that the accused might be. Different considerations would arise if the person is a child or a woman or a minor or an apparent lunatic. Therefore, a discretion is given to the Magistrate to determine the nature of the custody.”

39. He further relied upon the case of Manubhai Ratilal Patel vs. State of Gujarat: (2013) 1 SCC 314, whereby the Hon‟ble Supreme Court has held as under:

40. In CBI vs. Anupam J. Kulkarni: 1992 (3) SCC 41, it has been stated that:

Thus, the exercise of jurisdiction clearly shows that the Magistrate performs a judicial act.

41. It is further submitted that contrary to what has been stated by the counsel of the accused/petitioner, it is a settled position of law that the gravity of the offence has nothing to do with the punishment provided for the same. The gravity is to be judged by the impact, the offence has, on the society, economy, financial stability and integrity of the country. It is further well settled that the economic offences constitute a class apart and a class by itself, as it cuts the very root of probity and purity of public administration and results in eroding the public confidence which it reposes on the government elected by it.

42. It is stated that the gravity of the offence is also to be seen in view of the impunity with which a High Public Office has been abused for personal gains. In the present case, the petitioner accused who held a very high and influential office of the Finance Minister of the Country, used the same for personal gains, personally, as well as in connivance with his co-conspirators. The said fact itself makes the present case grave enough to deny bail to the petitioner.

43. In this context, it is respectfully submitted that it is well settled by catena of judgments that economic offences in itself are considered to be gravest offence against the society at large and hence are required to be treated differently in the matter of bail. The Hon‟ble Courts have successively held that “the entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book as such offences affects the very fabric of democratic governance and probity in public life. A murder may be committed in the heat of moment upon passing being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest….” As observed in State of Gujarat vs. Mohanlal Jitamalji Porwal: (1987) 2 SCC 364].

44. Reliance in this regard has also placed to the cases of P. Chidambaram vs. Enforcement of Directorate in Criminal Appeal No.1340/2019 decided on 05.09.2019; Y.S. Jagan Mohan Reddy vs. Central Bureau of Investigation: (2013) 7 SCC 439; State of Gujarat vs. Mohanlal Jitamalji Porwal: (1987) 2 SCC 364; State of Bihar & Anr. Vs. Amit Kumar alias Bachcha Rai: (2017) 13 SCC 751; Gautam Kundu vs. Directorate of Enforcement: (2015) 16 SCC 1; Sunil Dahiya vs. State (Govt. of NCT of Delhi): (2016) SCC Online Del 5566; Suresh Thimiri vs. The State of Maharashtra: (2016) SCC Online Bom 2602; and Chhagan Chandrakant Bhujbal vs. Union of India: (2016) SCC Online Bom 9938.

45. Accordingly, learned Solicitor submits that in view of above material on record and settled position of law, the petitioner is not entitled for bail.

46. Heard learned counsel for the parties in length and perused the material produced before the Court and material in „Sealed Cover‟. Moreover, to understand the material on record, this Court interacted wth Shri. R Parthasarathy, Dy. S.P./EOU-IV. Also gone through the material in „sealed cover‟.

47. While dealing with the bail application, it is not in dispute that three factors have to be seen viz. i) flight risk, ii) tampering evidence iii) influencing witnesses.

48. 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. Therefore, I agree with the contentions argued by Mr. Abhishek Singhvi, learned Sr. Advocate and not in agreement with the contentions raised by the learned solicitor general on the aforesaid issue.

49. Regarding the tampering with evidence, 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 as argued by Mr. Kapil Sibal and Mr. Abhishek Singhvi, learned Sr. Advocates.

50. Regarding influencing the witness, I will discuss later on.

51. Regarding merits of the case, though not necessary since charge-sheet has not been filed, and the present petition is for bail, however, argued and learned counsel for the petitioner has heavily relied upon Press Note No. 7, 1999 series dated 01.04.1999. But, it is clearly mentioned therein that as per the existing provisions, the foreign collaboration approvals are subject to the conditions at the total non-resident shareholding including foreign holding or in the Indian company should not exceed the amount as well as the percentage specified in the approval letter. For any proposal increase in the amount as also the percentage of non-resident shareholding, prior approval of the government is necessary.

52. It is pertinent to mention here that as per Press Note No.7, 1999 abovementioned, the proposals received by the Government for financial restricting in the following manner: (a) in the case of joint venture companies, proposals for increase in the amount of non-resident equity within the approved percentage of non-resident equity. (b) In case of wholly owned subsidiary or holding companies of foreign companies in India, proposals relating to enhancement of paid up capital. The government keeping in view the desirability of infusion additional funds as equity by the foreign companies, leading to increased investment inflows as reviewed existing provisions for obtaining prior approval of the government for increase in the amount of foreign equity without change in the percentage of equity in the above type of cases and decided that henceforth there would be no need for obtaining prior approval of FIPB/government for increase in the amount for equity within the percentage of foreign equity already approved in all cases in which the original approached cost upto ₹600 crores. If, this Court agree with the contention of Mr. Sibal that only percentage to be seen, but not the amount, then maximum cap of ₹600 crores has no meaning and which is beyond the power of the Finance Minister. In that eventuality, only Cabinet of Ministers has power of approval, not the Board.

53. However, it is clarified that above procedure will not apply in cases of increase in the percentage of foreign equity as also where initial approval was granted by CCFI. As such, the case shall require prior approval of the FIPB/government as per the existing procedure.

54. In my considered view, INX Media Ltd (an Indian company) does not come under the aforementioned (a) & (b) category. Had INX Media Pvt. Ltd was in that category, there was no occasion for the said company to seek approval of FIPB/Government of India.

55. Regarding clarification dated 02.09.2008 of Ms. Sidhushree Khullar, the then additional Secretary,, department of economic affairs, Ministry of Finance, Government of India, in reference to D.O. letter no. 291/5/2008/IT (Inv.I) dated 29.07.2008 from Ms. Sunita Kalia, Member, CBDT and exofficio, Additional Secretary to the Government of India had clarified that FIPB‟s approval was not for a specific amount in terms of money but for a specific number of shares, both equity and non-cumulative redeemable preference shares. The FDI received by the company include par value of the shares plus the premium. While the par value is always known, premium may or may not be known in advanced. The present policy is to permit companies to issue equity and preference shares and premium at par the accorded valuation and in compliance of SEBI/RBI guidelines.

56. Ms. Khullar further mentioned in communication dated 02.09.2008 that said the position was explained to Sh. Roopak Kumar, Deputy Director, Income Tax, Intelligence (II) on 07.08.2008. While the approved percentage is 46.216%, the company has allotted only 43.92 percent. Therefore, it is clearly within the permission accorded by FIPB. She further clarified while referring Press Note 7 of 1999, the prior approval of FIPB or government would not be needed for increasing amount of foreign equity as long as the percentage is within the approval obtained.

57. Regarding the second point which was about the downstream investment by Inx Media, Ms. Khullar stated that recently FIPB had received an application by the company which is under consideration.

58. It is not in dispute that FDI approval was granted by FIPB therefore, the reply to the D.O, letter dated 29.07.2008 of above named member, CPDT was to be decided by the FIPB. Moreover, Ms. Khullar was neither revenue secretary nor finance secretary in the ministry of finance, government of India, therefore, there was no occasion to clarify pursuant to D.O. letter dated 29.01.2008 vide her communication dated 02.09.2008. Thus it seems the aforementioned communication dated 02.09.2008 was without jurisdiction and has no relevance.

59. Admittedly, INX Pvt. Media Ltd. is an Indian company entered into a shareholding subscription agreement with three foreign entities vide shareholding agreement dated 26.02.2007.

60. After the meeting dated 09.03.2007, INX Media applied for FIPB approval vide application dated 13.03.2007, requesting for approval for FDI in the form of: (a) allotment of 14,98,995/- Equity Shares of ₹10/- each (b)allotment of 31,22,605/- convertible preference shares of ₹10/- each.

61. Despite an already existing, Share Subscription Agreement of bringing ₹403 Crores, an application was made showing FDI of ₹4.62 Crores, but not placed the agreement dated 26.02.2007, due to the reasons best known to them.

62. 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.

63. The said unapproved investment seems surreptitiously sought to be justified by placing reliance upon Press Note No. 7 of 1999. The reliance is contrary to the material on record. It applies only to the contingencies mentioned therein, which is not in existence attracted in case of INX Media.

64. It is further important to note that a part of the amount mentioned above came to be invested by INX Media into INX News Private Ltd. by way of down-stream investment. This excess FDI and the investments in INX News Private Ltd. triggered various routine complaints being made to the Finance Minister which were received by him personally (as per the record produced by the CBI in sealed cover) and were sent to different agencies under his Ministry for probing the complaints and the follow up action taken by the petitioner. As per the investigation, an application was made by INX News for fresh approval of downstream investment and not for “post facto” approval as argued by counsel for the petitioner.

65. It is also important to note that the Board was not informed about the complaints received by the petitioner, the then Finance Minister and sent only to the Revenue Secretary. The Revenue Secretary who was Member of the FIPB chose not to attend FIPB meeting in which “fresh proposal” was decided to be granted and his representative remained present and gave a dissent note.

66. During investigation, as per „Sealed Cover‟ it is revealed that Indrani Mukherjee and Petter Mukherjee (accused) met the petitioner even before the filing of application before FIPB Unit during which the petitioner assured them regarding the FIPB approval and in lieu thereof, directed that the „business interest‟ of his son Karti Chidambaram, who is also an accused, should be taken care of and certain overseas transactions should made in his favour. It is also on the record that illegal gratification has been paid by and through other companies by Indrani and Peter Mukherjee controlled and owned by the co-conspirator and co-accused Karti P. Chidambaram viz. son of the petitioner.

67. It is also on record that large sums of monies has come into the companies owned and / or controlled by the co-conspirator – Karti P. Chidambaram during the relevant period for the favours shown by the petitioner to INX Media. It is also on record that no services were rendered by these companies owned and controlled by the petitioner and Karti P. Chidambaram to the companies from where the huge sums of money is received. In addition to the above, investigation has also revealed that contemporaneously large number of emails were exchanged between the representatives of INX Media and the company controlled by petitioner and Karti P. Chidambaram which pertain to grant of FIPB approval to INX Media.

68. In view of above, in cases of conspiracy, it is well settled that there cannot be a direct evidence and conspiracy has to be seen from the surrounding circumstances even during the trial, as held in case of Manohar Joshi (Supra) and Rajiv Kumar (Supra). It is also on record that the petitioner was issued a notice under Section 41A of Cr.P.C. on 28.05.2018 for his appearance on 31.05.2018. However, the petitioner instead of joining the investigation approached this Court seeking anticipatory bail and this Court was pleased to pass an interim order protecting the petitioner from arrest. Pursuant thereto, when the petitioner was called for interrogation under the protective umbrella of a pre-arrest bail reducing the said interrogation into a mere ritual and farce, therefore, the investigation agency contested the said anticipatory bail application and same was considered by this Court as well as in the Hon‟ble Supreme Court in judgments dated 20.08.2019 and 05.09.2019, respectively.

69. It cannot be disputed that if case is proved against the petitioner, the offence is on the society, economy, financial stability and integrity of the country. The economic offences constitute a class apart and a class by itself, as it cuts the very root of probity and purity of public administration and results in eroding the public confidence which it reposes on the Government elected by it.

70. It is fact that the entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book as such offences affects the very fabric of democratic governance and probity in public life. A murder may be committed in the heat of moment upon passing being aroused. However, an economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest….” as observed by the Hon‟ble Supreme Court in the State of Gujarat vs. Mohanlal Jitamalji Porwal (Supra).

71. Thus, order of remand, for judicial custody, of the Trial Court is justified.

72. 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 in view of above facts. Moreover, the investigation is at advance stage, therefore, this Court is not inclined to grant bail.

73. The bail application is, accordingly, dismissed with no order as to costs.

74. Order dasti. CM APPL. No.36692/2019

75. In view of the order passed in the present writ petition, the application has been rendered infructuous and is accordingly, disposed of.

JUDGE SEPTEMBER 30, 2019 Pb/ab/ms/p