P. CHIDAMBARAM versus DIRECTORATE OF ENFORCEMENT

[2019] 14 S.C.R. 450

[2019] 14 S.C.R.

P. CHIDAMBARAM

DIRECTORATE OF ENFORCEMENT

(Criminal Appeal No. 1831 of 2019)

BDECEMBER 04, 2019

[R. BANUMATHI, A. S. BOPANNA ANDHRISHIKESH ROY, JJ.]

Code of Criminal Procedure, 1973: s.439 – Bail – Grant of,in economic offence – In the instant case, CBI registered case ofCcorruption against some known and unknown suspects includingthe son of the appellant – Appellant was the then Union FinanceMinister – He was however not named in the said FIR – Based onthe said FIR, respondent directorate registered ECIR case for moneylaundering against the accused named in the FIR – Allegations inDthe said ECIR case were the same as those in the FIR – Appellantwas not named in this case as well – Apprehending his arrest,appellant applied for anticipatory bail which was rejected –Appellant was arrested in CBI case and since then he had been incustody – In ECIR case, appellant was arrested on the grounds that

payment of Rs.3 crores was made at the appellant’s instance to theEcompanies controlled by his son on account of FIPB work done forINX Group and that due to non-co-operation of appellant,investigation was not fruitful and certain relevant information whichwas within his exclusive knowledge was withheld by him and thushis custodial investigation was necessary – After his arrest, appellantFmoved regular bail application before High Court – By impugnedorder, High Court held test of flight risk, tampering of evidenceand influencing of the witnesses in favour of appellant, howeverdeclined the bail on the ground that prima facie the allegationswere serious in nature and the appellant played key and active rolein the case – On appeal, held: Appellant was declined anticipatoryGbail earlier and was available for custodial interrogation for morethan 45 days – In addition to the custodial interrogation, in casefurther investigation is made, the appellant would be bound toparticipate in such investigation as is required by the respondent –Further one of the co-accused has been granted bail by the HighH

Court while the other co-accused is enjoying interim protection fromarrest – Appellant is aged about 74 years and as noted by the HighCourt itself in its order, the appellant has already suffered two boutsof illness during incarceration and was put on antibiotics andadvised to take steroids of maximum strength – In that circumstance,the availability of the appellant for further investigation,interrogation and facing trial is not jeopardized – In view of allfacts and circumstances, the appellant is granted bail.

Code of Criminal Procedure, 1973: s.439 – Bail –Consideration of bail application in economic offence – Held: Eveneconomic offences fall under the category of “grave offence”, inview of the consequences that would befall on the society in casesof financial irregularities, and in such circumstance whileconsidering the application for bail in such matters, the Court hasto deal with the same, being sensitive to the nature of allegationmade against the accused – One of the circumstances to considerthe gravity of the offence is the term of sentence that is prescribedfor the offence the accused is alleged to have committed – Suchconsideration with regard to the gravity of offence is factor whichis in addition to the triple test or the tripod test that would be normallyapplied – However, it is not rule that bail should be denied inevery case of economic offence since there is no such bar createdin the relevant enactment passed by the legislature nor does thebail jurisprudence provides so – The consideration will have to beon case to case basis on the facts involved therein and securing thepresence of the accused to stand trial.

Allowing the appeal, the Court

HELD: 1. Perusal of the order dated 15.11.2019 impugnedindicates that the Single Judge having taken note of the rivalcontentions in so far as the triple test or the tripod test to beapplied while considering an application for grant of regular bailunder Sec. 439 Cr.PC, has answered the same in paragraphs 50to 53 of the order, in favour of the appellant. The Solicitor General,however, contended that the finding on likelihood of tamperingand influencing witness has not been considered in its correctperspective. The finding in that regard has not been assailed andin such event, the appellant cannot be taken by surprise. Even

Aotherwise as rightly observed by the Single Judge, the evidenceand material stated to have been collected is already availablewith the Investigating agency. In the present situation, theappellant is not in political power nor is he holding any post inthe Government of the day so as to be in position to interfere.In that view, such allegation cannot be accepted on its face value.BWith regard to the witness having written that he is not preparedto be confronted as he is from the same State, the appellant cannotbe held responsible for the same when there is no material toindicate that the appellant or anyone on his behalf had restrainedor threatened the concerned witness who refused to beCconfronted with the appellant in custody. [Para 16][465-B-F]

2. The basic jurisprudence relating to bail remains the sameinasmuch as the grant of bail is the rule and refusal is the exceptionso as to ensure that the accused has the opportunity of securingfair trial. However, while considering the same, the gravity of theDoffence is an aspect which is required to be kept in view by theCourt. The gravity for the said purpose will have to be gatheredfrom the facts and circumstances arising in each case. Keepingin view the consequences that would befall on the society in casesof financial irregularities, even economic offences would fall underthe category of “grave offence” and in such circumstance whileEconsidering the application for bail in such matters, the Courtwill have to deal with the same, being sensitive to the nature ofallegation made against the accused. One of the circumstancesto consider the gravity of the offence is also the term of sentencethat is prescribed for the offence the accused is alleged to haveFcommitted. Such consideration with regard to the gravity ofoffence is factor which is in addition to the triple test or thetripod test that would be normally applied. In that regard, what isalso to be kept in perspective is that even if the allegation is oneof grave economic offence, it is not rule that bail should be

denied in every case since there is no such bar created in theGrelevant enactment passed by the legislature nor does the bailjurisprudence provides so. Therefore, the underlining conclusionis that irrespective of the nature and gravity of charge, theprecedent of another case alone will not be the basis for eithergrant or refusal of bail though it may have bearing on principle.H

But ultimately the consideration will have to be on case to casebasis on the facts involved therein and securing the presence ofthe accused to stand trial. In the circumstance, it would be clearthat even after concluding the triple test in favour of the appellant,the Judge of the High Court was certainly justified in advertingto the issue relating to the gravity of the offence. However, themanner in which the conclusions are recorded in paragraphs 57to 62 are disapproved wherein the observations are reflected tobe in the nature of finding relating to the alleged offence.[Paras 21, 22][468-E-H; 469-A-D]

Shri Gurbaksh Singh Sibbia vs. State of Punjab, (1980)2 SCC 565 : [1980] 3 SCR 383 – followed.

State of Bihar & Anr. v. Amit Kumar (2017) 13 SCC751 : [2017] 4 SCR 503; Nimmagadda Prasad v. CBI(2013) 7 SCC 466; CBI v. Ramendu Chattopadhyay,Crl Appeal.No. 1711 of 2019; Seniors FraudInvestigation Office v. Nittin Johari & Anr. (2019) 9SCC 165; Y.S. Jagan Mohan Reddy v. CBI (2013) 7SCC 439; State of Gujarat v. Mohanlal Jitamalji Porwal(1987) 2 SCC 364 : [1987] 2 SCR 677 – relied on

3. The question as to whether the Court could look intothe documents while considering an application for bail had arisenfor consideration in the very case between the parties in CriminalAppeal No.130/2019 wherein through the judgment dated05.09.2019 while considering the matter relating to the orderdated 20.08.2019 whereby the High Court had rejected the bail,this Court had held that it would be open for the Court to receivethe materials/documents collected during the investigation andperuse the same to satisfy its conscience that the investigationis proceeding in the right lines and for the purpose ofconsideration of grant of bail/anticipatory bail etc. At the sametime, this Court, had disapproved the manner in which the Judgeof the High Court in the said case had verbatim quoted noteproduced by the respondent. If that be the position, in the instantcase, the Judge while adverting to the materials, ought not haverecorded finding based on the materials produced before him.While the Judge was empowered to look at the materialsproduced in sealed cover to satisfy his judicial conscience, the

AJudge ought not to have recorded finding based on the materialsproduced in sealed cover. Further while deciding the same caseof the appellant in Crl. Appeal No.1340 of 2019, after holding so,this Court had consciously refrained from opening the sealedcover and perusing the documents lest some observations aremade thereon after perusal of the same, which would prejudiceBthe accused pre-trial. In that circumstance though it is held thatit would be open for the Court to peruse the documents, it wouldbe against the concept of fair trial if in every case the prosecutionpresents documents in sealed cover and the findings on the sameare recorded as if the offence is committed and the same is treatedas having bearing for denial or grant of bail. However, sinceCthe Single Judge of the High Court had perused the documentsin sealed cover and arrived at certain conclusion and since thatorder is under challenge, it had become imperative for this Courtto also open the sealed cover and peruse the contents so as tosatisfy ourselves to that extent. perusal showed that thestatements of persons concerned have been recorded and theDdetails collected have been collated. The recording of statementsand the collation of material is in the nature of allegation againstone of the co-accused son of appellant of opening shell companiesand also purchasing benami properties in the name of relativesat various places in different countries. Except for recording

the same, documents are not adverted to any further sinceEultimately, these allegations would have to be established in thetrial wherein the accused/co-accused would have the opportunityof putting forth their case, if any, and an ultimate conclusion wouldbe reached. Hence, the finding recorded by the Judge of the HighCourt based on the material in sealed cover is not justified. [ParasF23, 24][469-F-H; 470-A-H]

4. The appellant has not been named as one of the accusedin the ECIR but the allegation while being made against the co-accused, it was indicated the appellant who was the FinanceMinister at that point, has aided the illegal transactions sinceone of the co-accused is the son of the appellant. In this context,Geven if the statements on record and materials gathered are takennote, the complicity of the appellant will have to be establishedin the trial and if convicted, the appellant will undergo sentence.As taken note the anticipatory bail had been declined earlier andthe appellant was available for custodial interrogation for morethan 45 days. In addition to the custodial interrogation, if furtherHinvestigation is to be made, the appellant would be bound to

participate in such investigation as is required by the respondent.AFurther, one of the co-accused has been granted bail by the HighCourt while the other co-accused is enjoying interim protectionfrom arrest. The appellant is aged about 74 years and as noted bythe High Court itself in its order, the appellant has already sufferedtwo bouts of illness during incarceration and was put on antibioticsand has been advised to take steroids of maximum strength. InBthat circumstance, the availability of the appellant for furtherinvestigation, interrogation and facing trial is not jeopardized andhe is already held to be not ‘flight risk’ and there is no possibilityof tampering the evidence or influencing/intimidating thewitnesses. Taking these and all other facts and circumstancesincluding the duration of custody into consideration the appellantCis entitled to be granted bail. [Para 25] [471-C-G]

Rohit Tandon vs. Directorate of Enforcement (2018) 11SCC 46; P. Chidambaram v. CBI (Crl. Appeal No.1603/2019); Sanjay Chandra v. CBI, (2012) 1 SCC 40:[2011] 13 SCR 309; Sanjay Chandra v. CBI, (2012) 1SCC 40 : [2011] 13 SCR 309 – referred to.

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.1831 of 2019.

From the Judgment and Order dated 15.11.2019 of the High Courtof Delhi at New Delhi in Bail Application No. 2718 of 2019.

Kapil Sibal, Abhishek Manu Singhvi, Sr. Advs., Arshdeep SinghKhurana, Kunal Vajani, Amit Bhandari, Hitesh Rai, Akshat Gupta, AyushAgarwal, Aman Brar, Savya Baweja, Jayant Mohan, Advs. for theHAppellant.

ATushar Mehta, SG, K.M. Nataraj, ASG, Ms. Sonia Mathur,Sr. Adv., Amit Mahajan, Rajat Nair, Kanu Agrawal, Shantanu Sharma,Bhuvan Kapoor, Sushil Kumar Dubey, Ms. Divya Nair, Puneet Pathak,Anuj Aggarwal, B. Krishna Prasad, Advs. for the Respondent.

The Judgment and Order of the Court were delivered/passed byBA. S. BOPANNA, J.

1. Leave granted.

2. The instant appeal has been filed by the appellant assailing thefinal order dated 15.11.2019 passed by the High Court of Delhi at NewCDelhi in Bail Application No. 2718 of 2019 whereby the High Courtdeclined to grant regular bail to the appellant.

3. The genesis of the case in question lies in FIR No. RC2202017-E0011 dated 15.5.2017, registered by the CBI under section 120-B r/w420 IPC and sections 8 and 13 (2) r/w 13 (1) (d) of PC Act against someDknown and unknown suspects with allegations that M/s INX MediaPrivate Limited (accused no. 1 in the FIR) sought approval of ForeignInvestment Promotion Board (FIPB) for permission to issue by way ofpreferential allotment, certain equity and convertible, non-cumulative,redeemable preference shares for engaging in the business of creating,operating, managing and broadcasting of bouquet of television channels.EThe company had also sought approval to make downstream financialinvestment to the extent of 26% of the issued and outstanding equityshare capital of M/s INX News Private Limited (accused no. 2). TheFIPB Board recommended the proposal of INX Media for considerationand approval of the Finance Minister. However, the Board did not approveFthe downstream investment by INX Media (P) Ltd. in INX News (P)Ltd. Further, in the press release dated 30.5.2007 issued by the FIPBUnit indicating details of proposals approved in the FIPB meeting, quantumof FDI/NRI inflow against M/s INX media was shown as Rs. 4.62crores. Contrary to the approval of FIPB, M/s INX Media Pvt. Ltd.deliberately and in violation of conditions of approval, made downstreamGinvestment to the extent of 26% capital of INX News and also generatedmore than Rs. 305 crores FDI in INX Media (P) Ltd. against the approvedforeign inflow of Rs. 4.62 crores is the allegation. complaint is statedto have been received by the investigation wing of the Income Taxdepartment which sought clarifications from the FIPB Unit of Ministryof Finance. The FIPB Unit vide letter dated 26.5.2008, soughtH

clarifications from M/s INX Media Limited. It was further alleged in theFIR that upon receipt of this letter, M/s INX Media in order to avoidpunitive action entered into criminal conspiracy with Mr. KartiChidambaram (accused no. 3 in the FIR who is the son of the appellant).Mr. Karti Chidambaram is alleged to have exercised his influence overthe officials of FIPB unit which led to the said officials showing unduefavour to M/s INX News (P) Ltd. Thereafter by deliberately concealingthe investment received in INX Media (P) Ltd., M/s INX News (P)Ltd. again approached the FIPB Unit and sought permission for thedownstream investment. This proposal was favourably considered bythe officials of ministry of finance and approved by the then FinanceMinister. It was also stated in the FIR that Mr. Karti Chidambaram, inlieu of services rendered to M/s INX Group, received consideration inthe form of payments. Information disclosed that invoices forapproximately Rs. 3.5 crores were got raised in favour of M/s INXGroup in the name of companies in which Mr. Karti Chidambaram washaving sustainable interests either directly or indirectly. The appellantherein, who was the then Union Finance Minister, was not howevernamed in the said FIR.

4. On the basis of the aforementioned FIR, the RespondentDirectorate of Enforcement registered case ECIR/07/HIU/2017(hereinafter referred to as ECIR case) under section 3 of Prevention ofMoney Laundering Act, 2002 (hereinafter PMLA), punishable undersection 4 of the said Act against the accused mentioned in the FIR. Theallegations in the said ECIR case were the same as those in theaforementioned FIR. The appellant was not named an accused in thiscase as well.

5. On 23.7.2018, apprehending his arrest by the Respondent, theappellant filed an application before the High Court of Delhi seekinggrant of anticipatory bail in the aforementioned ECIR case. The HighCourt extended interim protection to the appellant until 20.8.2019, whenthe appellant’s application seeking anticipatory bail was dismissed.

6. The appellant then approached this court by filing CriminalAppeal No. 1340 of 2019 (arising out of SLP (Crl.) No. 7523 of 2019)wherein while dismissing the appeal of the appellant, the court concludedthat in the instant case, grant of anticipatory bail to the appellant willhamper the investigation and that this is not fit case for exercise ofdiscretion to grant anticipatory bail. This court applied the following

Arationale for coming to the said conclusion: there are sufficient safeguardsenshrined in the PMLA to ensure proper exercise of power of arrest;grant of anticipatory bail is not to be done as matter of rule, especiallyin matters of economic offences which constitute class apart. Regardmust be had to the fact that grant of anticipatory bail at the stage ofinvestigation may frustrate the investigating agency in interrogating theBaccused and in collecting useful information and also materials whichmight have been concealed.

7. In the meanwhile, on 21.8.2019, the appellant was arrested inthe CBI case (arising out of the above-mentioned FIR). Since then hehas been in custody. In the ECIR case, he was arrested on 16.10.2019Con the grounds that payment of approx. Rs. 3 crores was made at theappellant’s instance to the companies controlled by his son on accountof FIPB work done for INX Group. Further it was stated in the groundsof arrest that the investigation is not fruitful due to the appellant’s non-cooperation; the appellant has withheld relevant information which isDwithin his exclusive knowledge and thus his custodial interrogation isnecessary.

8. After dismissal of his application seeking anticipatory bail bythis court, the appellant moved an application dated 5.9.2019 praying tosurrender before the Trial Court (Court of Special Judge (PC Act), CBI)Ein the ECIR case. This application was rejected on 13.9.2019 in view ofthe submission on behalf of the respondent Directorate that it was notwilling to arrest the appellant at that particular stage since it wascompleting investigation pertaining to some aspect of the money launderingand only on this background investigation was completed, the interrogationof the appellant would be meaningful. Thereafter, on 11.10.2019, theFRespondent Directorate moved an application u/s 267 CrPC seekingissuance of production warrant against the appellant for the purpose ofarrest and remand. The allegations which were levelled against theappellant in this application are that in lieu of granting FIPB approval toINX Media Pvt. Ltd., he and his son received sum of approx. Rs. 3Gcrores through companies controlled by the son of the Appellant/accusedKarti P. Chidambaram. Though INX media in its application did notmention the total amount of FDI inflow which they intended to bring, theappellant without ascertaining their competency, granted approval. Furtherthe appellant became fully aware about the violations made by INXGroup when the matter was highlighted by the Income Tax DepartmentHand complaint was also received by him regarding the investment byM/s INX Media into M/s INX News without due approval. Despite thisknowledge, the appellant again approved the downstream proposal ofINX Group treating it as fresh approval. Further investigation hasrevealed that there were at least 17 overseas bank accounts opened bythe appellant and co-conspirators. In this regard, summons was issuedto 11 persons and statements of some of these persons revealed that theoverseas assets were acquired in the name of various shell companieson the instructions of appellant’s son. Thus, it was stated that needarises to confront the appellant with the material gathered. Thisapplication was allowed by the Trial Court vide order dated 11.10.2019.Thereafter on 14.10.2019, the Respondent inter alia moved an applicationseeking permission to arrest the appellant. The Trial Court treated thisapplication as an application for interrogation of the appellant and allowedit. Subsequently, on 16.10.2019, the appellant was arrested for the groundsstated supra. Vide order dated 17.10.2019, the Trial Court remanded theappellant to the custody of the Respondent for period of 7 days.

9. After his arrest, on 23.10.2019, the appellant moved regularbail application (Bail Application No. 2718 of 2019) before the HighCourt u/s 439 of CrPC averring that he is law abiding citizen havingdeep roots in the society; he is not flight risk and is willing to abide byall conditions as may be imposed by the court while granting bail. It wasalso submitted that the instant case is documentary case and being arespectable citizen and former Union Minister, he cannot and will nottamper with the documentary record of the instant case which is currentlyin the safe and secure possession of the incumbent government or theTrial Court. On merits, it was stated by the Appellant that he merelyaccorded approval to the unanimous recommendation made by the FIPBwhich was chaired by the Secretary, Economic Affairs and included 5other secretaries who were all among the senior most IAS officers (oneamong them was senior IFS officer) and had long and distinguishedrecord of service. Anyone familiar with the working of the FIPB would

know that no single officer can take decision on any proposal.Therefore, it is preposterous to allege that any person could haveinfluenced any official of FIPB, including all 6 senior secretaries to theGovernment of India. Moreover, the ECIR case is verbatim copy ofthe FIR dated 15.5.2017 and allegations registered therein and thus theSpecial Judge erred in granting remand of the appellant in the ECIRcase since the offences allegedly committed in both the cases arise out

Aof the same occurrence and have been committed in the course of thesame transaction. Further the Special Court committed an error in notaccepting the surrender application of the appellant which was anapplication limited to surrendering before the Trial Court. The SpecialCourt proceeded on an erroneous basis that the desire of an accused iscontingent upon the desire of the investigating agency to arrest theBaccused and that arrest is condition precedent for surrendering beforethe Court.

10. Vide the impugned order, the High Court observed that it hasnot even been alleged by the Respondent Enforcement Directorate in itscounter affidavit that the appellant is flight risk. Regarding tamperingCof evidence also the court observed that it is neither argued nor anymaterial is available on record in this regard. Moreover, there is no chanceto tamper the material on record as the same is with the investigatingagencies, central government or courts. Regarding influencing ofwitnesses, the court noted that three witnesses have stated in theirDstatements that the appellant and his family members have pressurisedthem and asked them not to appear before the Enforcement Directorate.However, since their statements have already been recorded, at thisstage when the complaint is almost ready to be filed, the Court held thatthere is no chance to influence any witness. The High Court also tooknotice of the fact that co-accused have been granted bail. The CourtEwas cognizant of the fact that the appellant has been suffering fromillness but the Court opined that the Court has already issued directionsto the Jail Superintendent in this regard and therefore this ground is nolonger available to the appellant at this stage. The Court noted that duringinvestigation, it has been revealed that there has been layering of proceedsFof crime by use of shell companies, most of which are only on paper, andopined that there is cogent evidence collected so far that these shellcompanies are incorporated by persons who can be shown to be closeand connected with the appellant. Next, the Court held that the materialin the present case is completely distinct, different and independent fromthe material which was collected by the CBI in the predicate offence.GEven the witnesses in the PMLA investigation are different from theinvestigation conducted by the CBI. The High Court concluded that primafacie, allegations are serious in nature and the appellant has played keyand active role in the present case. On the basis of all these observations,the High Court dismissed the bail application.H11. It is the contention of the learned senior counsel Shri KapilSibal and Dr. Abhishek Manu Singhvi on behalf of the appellant beforeus that the High Court ought to have granted regular bail to the appellantafter holding the triple test of flight risk, tampering with evidence andinfluencing of witnesses in favour of the appellant. The Impugned Orderdeserves to be set aside only on the ground that the allegations of acompletely unrelated case (Rohit Tandon vs. Directorate ofEnforcement (2018) 11 SCC 46) have been considered by the HighCourt as allegations relating to the instant case and findings on meritsagainst the appellant have been rendered based on such unrelatedallegations. Next, it has been contended by the appellant that the HighCourt erred in law in going into and rendering findings on merits of thecase in order to deny bail to the appellant despite the settled position oflaw that merits of case ought not to be gone into at the time of adjudicationof bail application. This Court in the appellant’s own case seekingregular bail in the case registered by CBI against him titledP. Chidambaram vs. CBI (Crl. Appeal No. 1603/2019) has held that“at the stage of granting bail, an elaborate examination of evidence anddetailed reasons touching upon the merit of the case, which may prejudicethe accused, should be avoided.” It has also been contended on behalfof the appellant that the High Court erred in accepting at face value theallegations made on merits of the case in the counter affidavit filed bythe respondent and converting such allegations verbatim into findings bythe Court and declining to grant bail to the appellant solely on the basisof said findings. On merits, the appellant has submitted that he is neithera shareholder nor director of any allegedly connected company nor doeshe have any connection with any of these companies. No material linkingthe appellant directly or indirectly with the alleged offence of moneylaundering has either been put to the appellant so far or been placed onrecord before the High Court. Further, the 12 officers who signed thefile pertaining to the approval of the FDI proposal of INX Media werenot even arrested. Only the appellant, who was the 13th signatory hasbeen arrested and denied bail. Moreover, all the other co-accused in theinstant ECIR case have also been granted bail or have not been arrested.The High Court also failed to appreciate that the appellant has alreadybeen granted regular bail by this Court in the predicate offence FIR videits order dated 22.10.2019. The High Court erred in denying bail to theappellant on the specious ground that allegations are of serious nature.

AIt is the submission of the learned senior counsel for the appellant thatthe gravity of an offence is to be determined from the severity of theprescribed punishment. In the instant case, the alleged offence of moneylaundering is punishable by imprisonment for term which shall notexceed 7 years. Thus, the offence is not ‘grave’ or ‘serious’ in terms ofBthe judgment of this Court in Sanjay Chandra vs. CBI, (2012) 1 SCC40. The High Court should also have considered that the appellant is a74 year old person whose health is fragile and while being lodged injudicial custody of the Respondent Enforcement Directorate between16.10.2019 and 30.10.2019 and thereafter being lodged in judicial custodybetween 30.10.2019 till date, the appellant has suffered multiple bouts ofCchronic and persistent pain in his abdomen, for which he was taken toAIIMS and Dr. Ram Manohar Lohia Hospital on various occasions (viz.On 23.10.2019, 26.10.2019, 28.10.2019, 30.10.2019 and 1.11.2019) forconsultation, diagnosis and tests. The appellant’s health continues todeteriorate and with the onset of the cold weather, the appellant willDbecome more vulnerable.12. Between 05.09.2019 and 16.10.2019 though the appellant wasavailable in custody the respondent did not choose to interrogate butremand period was sought on 17.10.2019 and 24.10.2019, while the thirdremand sought was rejected and accordingly the remand period expiredEon 30.10.2019. No witness was confronted despite seeking remand forthat purpose. It is contended that the very manner in which the wholeprocess is being conducted is only to see that the appellant remains incustody. It is contended that the liberty of the appellant cannot be deniedin such manner by adopting an unfair procedure. Though much is soughtto be made out as if the offence committed is grave there is absolutelyFno material to indicate that the appellant is involved and even otherwiseit is matter of trial wherein the charge is to be established. The gravitycan only beget the length of sentence provided in law and by assertingthat the offence is grave, the grant of bail cannot be thwarted. Therespondent cannot contend as if the appellant should remain in custodyGtill the trial is over.

13. Shri Tushar Mehta, learned Solicitor General while seeking tooppose the petition has made reference to the counter affidavit filed onbehalf of the respondent. It is contended that though the High Court hasheld that there is no possibility of tampering the evidence and has notHinfluenced any witnesses and has ultimately denied the bail, such

conclusion is not justified. It is contended that the appellant having helda very high position and also due to his status is likely to influence thewitnesses and one of the witness had already indicated that he hailsfrom the same State to which the appellant belongs and is not in positionto appear for the purpose of being confronted. Hence even in that regardit should be held against the appellant. It is further contended that evenotherwise despite holding the triple test in favour of the appellant thegravity of the offence can be considered as stand-alone aspect as thegravity of the offence in particular case is also important whileconsidering bail. In that circumstance, the three aspects to be taken noteis the manner in which the offence has taken place, gravity of the offenceand also the contemporaneous documents to show that the accused eitherin custody or otherwise, wields influence over the witnesses. Hence, hecontends that the finding of the High Court insofar as saying that theappellant has not tampered is factually incorrect. The learned SolicitorGeneral further contends that the economic offences are graver offenceswhich affect the society and the community suffers. The common manloses confidence in the establishment. It is contended that the InvestigatingAgency has collected documentary evidence such as emails exchangedbetween the co-conspirators on behalf of the appellant and documentsto indicate investment of laundered money in benami properties whosebeneficial owners can be traced to the appellant and his family members.The respondent has also recorded the statement of material witnesseswho are the part of process of money laundering. It is his contention thatthe appellant has knowledge of all these aspects and the material willshow the share holding pattern of the 16 companies. It is furthercontended that the learned Judge of the High Court has referred to thedocuments produced in sealed cover and in that light has arrived at theconclusion to deny bail. The High Court has, however, not properlyconsidered while recording that complaint is ready to be filed andtherefore, he would not influence the witnesses. Even if the complaint/charge sheet is filed in 60 days it is only to avoid default and theinvestigation which is not complete would continue. In that light it iscontended that when economic offences are premeditated it would requiredetailed investigation to unearth material and, in such circumstances, ifbail is granted it would defeat the case of the prosecution. The learnedSolicitor General has also referred to the decisions which would be takennote at the appropriate stage.

ABCDEFG

A14. The learned senior counsel for the appellant in reply to thesubmissions contended that not single document is available to indicatethat the appellant is involved in the offence. The allegation of the appellanttampering the evidence or influencing the witnesses as sought to bemade out on behalf of the respondent cannot be accepted for the reasonthat the alleged offence is of the year 2007-08 and though the proceedingsBwere initiated in the year 2017, the appellant was arrested only in theyear 2019. In such event when the appellant has not influenced anyperson while he was at large, the allegation of tempering while in custodyis not acceptable. The statement of the alleged witnesses is stated tohave been recorded in the year 2018 and the case of the respondent thatCthey are seeking to confront the witnesses is being put forth at this stageonly to indicate as if the custody of the appellant is still required by them.When there is no document to indicate that the appellant is involved, themere allegation against the alleged co-conspirators cannot be the basisto indicate that an economic offence has been committed by the appellant.In that light it is contended that the prayer made in the petition be accepted.D

15. Though we have heard the matter elaborately and also havenarrated the contention of both sides in great detail including those whichwere urged on the merits of the matter we are conscious of the fact thatin the instant appeal the consideration is limited to the aspect of regularbail sought by the appellant under Section 439 of Cr.PC. While statingEso, in order to put the matter in perspective it would be appropriate totake note of the observation made by us in the case of this very appellantvs. CBI, in Criminal Appeal No. 1603/2019 which reads as hereunder;

“The jurisdiction to grant bail has to be exercised on the basis ofthe well-settled principles having regard to the facts andFcircumstances of each case. The following factors are to be takeninto consideration while considering an application for bail:- (i) thenature of accusation and the severity of the punishment in thecase of conviction and the nature of materials relied upon by theprosecution; (ii) reasonable apprehension of tampering with theGwitnesses or apprehension of threat to the complainant or thewitnesses; (iii) reasonable possibility of securing the presence ofthe accused at the time of trial or the likelihood of his abscondence;(iv) character behaviour and standing of the accused and thecircumstances which are peculiar to the accused; (v) larger interestof the public or the State and similar other considerations (vide

Prahlad Singh Bhati v. NCT, Delhi and another (2001) 4 SCC280. There is no hard and fast rule regarding grant or refusal togrant bail. Each case has to be considered on the facts andcircumstances of each case and on its own merits. The discretionof the court has to be exercised judiciously and not in an arbitrarymanner.”

16. In the above background, perusal of the order dated 15.11.2019impugned herein indicates that the learned Single Judge having takennote of the rival contentions in so far as the triple test or the tripod test tobe applied while considering an application for grant of regular bail underSec. 439 Cr.PC, has answered the same in paragraphs 50 to 53 of theorder, in favour of the appellant herein. The learned Solicitor Generalhas however sought to contend that though there is not much grievancewith regard to the conclusion on ‘flight risk’, the finding on likelihood oftampering and influencing witness has not been considered in its correctperspective. The finding in that regard has not been assailed and in suchevent, the appellant in our opinion cannot be taken by surprise. Evenotherwise as rightly observed by the learned Single Judge the evidenceand material stated to have been collected is already available with theInvestigating agency. Learned Solicitor General would however contendthat still further materials are to be collected and letter rogatory hasbeen issued and as such tampering cannot be ruled out. In the presentsituation the appellant is not in political power nor is he holding any postin the Government of the day so as to be in position to interfere. In thatview such allegation cannot be accepted on its face value. With regardto the witness having written that he is not prepared to be confronted ashe is from the same state, the appellant cannot be held responsible forthe same when there is no material to indicate that the appellant oranyone on his behalf had restrained or threatened the concerned witnesswho refused to be confronted with the appellant in custody.

17. The only other aspect therefore for consideration is as towhether the further consideration made by the learned Judge of theHigh Court, despite holding the triple test in appellant’s favour was justifiedand if consideration is permissible, whether the learned Judge was justifiedin his conclusion.

18. While opposing the contention put forth by the learned SeniorCounsel for the appellant that the learned Judge of the High Court oughtnot to have travelled beyond the consideration on the triple test and

Aholding it in favour of the appellant, the learned Solicitor General wouldcontend that the gravity of the offence and the role played by the accusedshould also be part of consideration in the matter of bail. It is contendedby the learned Solicitor General that the economic offences is classapart and the gravity is an extremely relevant factor while consideringbail. In order to contend that this aspect has been judicially recognised,Bthe decisions in the case of State of Bihar & Anr. vs. Amit Kumar,(2017) 13 SCC 751; Nimmagadda Prasad vs. CBI, (2013) 7 SCC466; CBI vs. Ramendu Chattopadhyay, Crl Appeal.No.1711 of 2019;Seniors Fraud Investigation Office vs. Nittin Johari & Anr.; (2019)9 SCC 165; Y.S. Jagan Mohan Reddy vs. CBI, (2013) 7 SCC 439;CState of Gujarat vs. Mohanlal Jitamalji Porwal, (1987) 2 SCC 364are relied upon. Perusal of the cited decisions would indicate that thisCourt has held that economic offences are also of grave nature, being aclass apart which arises out of deep-rooted conspiracies and effect onthe community as whole is also to be kept in view, while considerationfor bail is made.D19. On the consideration as made in the above noted cases andthe enunciation in that regard having been noted, the decisions reliedupon by the learned senior counsel for the appellant and the principleslaid down for consideration of application for bail will require ourconsideration. The learned senior counsel for the appellant has reliedEupon the decision of the Constitution Bench of this Court in the case ofShri Gurbaksh Singh Sibbia vs. State of Punjab, (1980) 2 SCC 565with reference to paragraph 27 which reads as hereunder:

“ It is not necessary to refer to decisions which deal with the rightto ordinary bail because that right does not furnish an exact parallelFto the right to anticipatory bail. It is, however, interesting that aslong back as in 1924 it was held by the High Court of Calcutta inNagendra v. King-Emperor [AIR 1924 Cal 476, 479, 480 : 25Cri LJ 732] that the object of bail is to secure the attendance ofthe accused at the trial, that the proper test to be applied in theGsolution of the question whether bail should be granted or refusedis whether it is probable that the party will appear to take his trialand that it is indisputable that bail is not to be withheld as apunishment. In two other cases which, significantly, are the‘Meerut Conspiracy cases’ observations are to be found regardingthe right to bail which deserve special mention. In K.N. Joglekar

v. Emperor [AIR 1931 All 504 : 33 Cri LJ 94] it was observed,while dealing with Section 498 which corresponds to the presentSection 439 of the Code, that it conferred upon the Sessions Judgeor the High Court wide powers to grant bail which were nothandicapped by the restrictions in the preceding Section 497 whichcorresponds to the present Section 437. It was observed by thecourt that there was no hard and fast rule and no inflexible principlegoverning the exercise of the discretion conferred by Section 498and that the only principle which was established was that thediscretion should be exercised judiciously. In Emperor v.Hutchinson [AIR 1931 All 356, 358 : 32 Cri LJ 1271] it was saidthat it was very unwise to make an attempt to lay down anyparticular rules which will bind the High Court, having regard tothe fact that the legislature itself left the discretion of the courtunfettered. According to the High Court, the variety of cases thatmay arise from time to time cannot be safely classified and it isdangerous to make an attempt to classify the cases and to saythat in particular classes bail may be granted but not in otherclasses. It was observed that the principle to be deduced from thevarious sections in the Criminal Procedure Code was that grantof bail is the rule and refusal is the exception. An accused personwho enjoys freedom is in much better position to look after hiscase and to properly defend himself than if he were in custody.As presumably innocent person he is therefore entitled tofreedom and every opportunity look after his own case. Apresumably innocent person must have his freedom to enable himto establish his innocence.”

We have taken note of the said decision since even though theconsideration therein was made in the situation where an application foranticipatory bail under Section 438 was considered, the entire conspectusof the matter relating to bail has been noted by the Constitution Bench.

20. The learned senior counsel for the appellant has also placedreliance on the decision on the decision in the case of Sanjay Chandravs. CBI, (2012) 1 SCC 40 with specific reference to paragraph 39 whichreads as hereunder:

“ Coming back to the facts of the present case, both the courtshave refused the request for grant of bail on two grounds: theprimary ground is that the offence alleged against the accused

persons is very serious involving deep-rooted planning in which,huge financial loss is caused to the State exchequer; the secondaryground is that of the possibility of the accused persons tamperingwith the witnesses. In the present case, the charge is that ofcheating and dishonestly inducing delivery of property and forgeryfor the purpose of cheating using as genuine forged document.The punishment for the offence is imprisonment for term whichmay extend to seven years. It is, no doubt, true that the nature ofthe charge may be relevant, but at the same time, the punishmentto which the party may be liable, if convicted, also bears upon theissue. Therefore, in determining whether to grant bail, both theseriousness of the charge and the severity of the punishment shouldbe taken into consideration.”

The said case was case of financial irregularities and in the saidcircumstance this Court in addition to taking note of the deep-rootedplanning in causing huge financial loss, the scope of consideration relatingDto bail has been taken into consideration in the background of the termof sentence being seven years if convicted and in that regard it has beenheld that in determining the grant or otherwise of bail, the seriousness ofthe charge and severity of the punishment should be taken intoconsideration.

E21. Thus from cumulative perusal of the judgments cited on eitherside including the one rendered by the Constitution Bench of this Court,it could be deduced that the basic jurisprudence relating to bail remainsthe same inasmuch as the grant of bail is the rule and refusal is theexception so as to ensure that the accused has the opportunity of securingfair trial. However, while considering the same the gravity of the offenceFis an aspect which is required to be kept in view by the Court. Thegravity for the said purpose will have to be gathered from the facts andcircumstances arising in each case. Keeping in view the consequencesthat would befall on the society in cases of financial irregularities, it hasbeen held that even economic offences would fall under the category ofG“grave offence” and in such circumstance while considering theapplication for bail in such matters, the Court will have to deal with thesame, being sensitive to the nature of allegation made against the accused.One of the circumstances to consider the gravity of the offence is alsothe term of sentence that is prescribed for the offence the accused isalleged to have committed. Such consideration with regard to the gravity

of offence is factor which is in addition to the triple test or the tripodtest that would be normally applied. In that regard what is also to be keptin perspective is that even if the allegation is one of grave economicoffence, it is not rule that bail should be denied in every case sincethere is no such bar created in the relevant enactment passed by thelegislature nor does the bail jurisprudence provides so. Therefore, theunderlining conclusion is that irrespective of the nature and gravity ofcharge, the precedent of another case alone will not be the basis foreither grant or refusal of bail though it may have bearing on principle.But ultimately the consideration will have to be on case to case basis onthe facts involved therein and securing the presence of the accused tostand trial.22. In the above circumstance it would be clear that even afterconcluding the triple test in favour of the appellant the learned Judge ofthe High Court was certainly justified in adverting to the issue relating tothe gravity of the offence. However, we disapprove the manner in whichthe conclusions are recorded in paragraphs 57 to 62 wherein theobservations are reflected to be in the nature of finding relating to thealleged offence. The learned senior counsel for the appellant with specificreference to certain observations contained in the above noted paragraphshas pointed out that the very contentions to that effect as contained inparagraphs 17, 20 and 24 of the counter affidavit has been incorporatedas if, it is the findings of the Court. The learned Solicitor General whileseeking to controvert such contention would however contend that inaddition to the counter affidavit the respondent had also furnished thedocuments in sealed cover which was taken note by the learned Judgeand conclusion has been reached.

23. The question as to whether the Court could look into thedocuments while considering an application for bail had arisen forconsideration in the very case between the parties herein in CriminalAppeal No.130/2019 wherein through the judgment dated 05.09.2019while considering the matter relating to the order dated 20.08.2019whereby the High Court had rejected the bail, this Court had held that itwould be open for the Court to receive the materials/documents collectedduring the investigation and peruse the same to satisfy its consciencethat the investigation is proceeding in the right lines and for the purposeof consideration of grant of bail/anticipatory bail etc. At the same time,this Court, had disapproved the manner in which the learned Judge of

Athe High Court in the said case had verbatim quoted note produced bythe respondent. If that be the position, in the instant case, the learnedJudge while adverting to the materials, ought not have recorded findingbased on the materials produced before him. While the learned Judgewas empowered to look at the materials produced in sealed cover toBsatisfy his judicial conscience, the learned Judge ought not to haverecorded finding based on the materials produced in sealed cover.Further while deciding the same case of the appellant in Crl. AppealNo.1340 of 2019, after holding so, this Court had consciously refrainedfrom opening the sealed cover and perusing the documents lest someobservations are made thereon after perusal of the same, which wouldCprejudice the accused pre-trial. In that circumstance though it is heldthat it would be open for the Court to peruse the documents, it would beagainst the concept of fair trial if in every case the prosecution presentsdocuments in sealed cover and the findings on the same are recorded asif the offence is committed and the same is treated as having bearingDfor denial or grant of bail.24. Having said so, in present circumstance we were not verymuch inclined to open the sealed cover although the materials in sealedcover was received from the respondent. However, since the learnedSingle Judge of the High Court had perused the documents in sealedEcover and arrived at certain conclusion and since that order is underchallenge, it had become imperative for us to also open the sealed coverand peruse the contents so as to satisfy ourselves to that extent. Onperusal we have taken note that the statements of persons concernedhave been recorded and the details collected have been collated. Therecording of statements and the collation of material is in the nature ofFallegation against one of the co-accused Karti Chidambaram- son ofappellant of opening shell companies and also purchasing benamiproperties in the name of relatives at various places in different countries.Except for recording the same, we do not wish to advert to the documentsany further since ultimately, these are allegations which would have toGbe established in the trial wherein the accused/co-accused would havethe opportunity of putting forth their case, if any, and an ultimate conclusionwould be reached. Hence in our opinion, the finding recorded by thelearned Judge of the High Court based on the material in sealed cover isnot justified.

25. Therefore, at this stage while considering the bail applicationof the appellant herein what is to be taken note is that, at stage whenthe appellant was before this Court in an application seeking for interimprotection/anticipatory bail, this Court while considering the matter inCriminal Appeal No.1340/2019 had in that regard held that in matter ofpresent nature wherein grave economic offence is alleged, custodialinterrogation as contended would be necessary and in that circumstancethe anticipatory bail was rejected. Subsequently the appellant has beentaken into custody and has been interrogated and for the said purposethe appellant was available in custody in this case from 16.10.2019onwards. It is, however, contended on behalf of the respondent that thewitnesses will have to be confronted and as such custody is required forthat purpose. As noted, the appellant has not been named as one of theaccused in the ECIR but the allegation while being made against the co-accused it is indicated the appellant who was the Finance Minister atthat point, has aided the illegal transactions since one of the co-accusedis the son of the appellant. In this context even if the statements onrecord and materials gathered are taken note, the complicity of theappellant will have to be established in the trial and if convicted, theappellant will undergo sentence. For the present, as taken note theanticipatory bail had been declined earlier and the appellant was availablefor custodial interrogation for more than 45 days. In addition to thecustodial interrogation if further investigation is to be made, the appellantwould be bound to participate in such investigation as is required by therespondent. Further it is noticed that one of the co-accused has beengranted bail by the High Court while the other co-accused is enjoyinginterim protection from arrest. The appellant is aged about 74 years andas noted by the High Court itself in its order, the appellant has alreadysuffered two bouts of illness during incarceration and was put onantibiotics and has been advised to take steroids of maximum strength.In that circumstance, the availability of the appellant for furtherinvestigation, interrogation and facing trial is not jeopardized and he isalready held to be not ‘flight risk’ and there is no possibility of tamperingthe evidence or influencing\intimidating the witnesses. Taking these andall other facts and circumstances including the duration of custody intoconsideration the appellant in our considered view is entitled to be grantedbail. It is made clear that the observations contained touching upon themerits either in the order of the High Court or in this order shall not beconstrued as an opinion expressed on merits and all contentions are leftopen to be considered during the course of trial.

EFG

A26. For the reasons stated above, we pass the following order:

i) The instant appeal is allowed and the judgment dated 15.11.2019passed by the High Court of Delhi in Bail Application No.2718 of 2019impugned herein is set aside;

ii) The appellant is ordered to be released on bail if he is notrequired in any other case, subject to executing bail bonds for sum ofRs.2 lakhs with two sureties of the like sum produced to the satisfactionof the learned Special Judge;

iii) The passport ordered to be deposited by this Court in the CBIcase shall remain in deposit and the appellant shall not leave the countryCwithout specific orders to be passed by the learned Special Judge.

iv) The appellant shall make himself available for interrogation inthe course of further investigation as and when required by the respondent.

v) The appellant shall not tamper with the evidence or attempt tointimidate or influence the witnesses;D

vi) The appellant shall not give any press interviews nor makeany public comment in connection with this case qua him or other co-accused.

vii) There shall be no order as to costs.

After pronouncement of the Judgment in the above mentionedmatter, Mr. Tushar Mehta, learned Solicitor General appearing for therespondent-Directorate of Enforcement, has submitted that the findingsin the Judgment may not have bearing qua the other accused.

Considering the above submission, we make it clear that the findingsin the Judgment, as above, shall not have any bearing qua the otheraccused in the case and the same shall be considered independently onits own merits.

Devika Gujral

Appeal allowed.