REPORTABLE

  IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

(CRIMINAL APPEAL NO.1831/2019)  (Arising out of  S.L.P.(Criminal) No.10493 of 2019 )

P. Chidambaram        ….Appellant (s)

Versus

Directorate of Enforcement   ….  Respondent(s)

J U D G M E N T

 A.S. Bopanna,J.         

Leave granted.        2. The instant appeal has been filed by the appellant

assailing the final order dated 15.11.2019 passed by the

High Court of Delhi at New Delhi in Bail Application No.

2718 of 2019 whereby the High Court declined 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/w 420 IPC and sections 8 and 13

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(2)  r/w  13  (1)  (d)  of  PC  Act  against  some  known  and

unknown suspects with allegations that M/s INX Media

Private Limited (accused no. 1 in the FIR) sought approval

of  Foreign  Investment  Promotion  Board  (FIPB)  for

permission  to  issue  by  way  of  preferential  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.  The  company  had  also

sought  approval  to  make  a  downstream  financial

investment  to  the  extent  of  26%  of  the  issued  and

outstanding equity share capital of M/s INX News Private

Limited (accused no. 2). The FIPB Board recommended the

proposal of INX Media for consideration and approval of

the Finance Minister. However, the Board did not approve

the downstream investment by INX Media (P) Ltd. in INX

News  (P)  Ltd.  Further,  in  the  press  release  dated

30.5.2007 issued by the  FIPB Unit  indicating details  of

proposals  approved  in  the  FIPB  meeting,  quantum  of

FDI/NRI inflow against M/s INX media was shown as Rs.

4.62 crores.  Contrary to the approval  of  FIPB, M/s INX

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Media Pvt. Ltd. deliberately and in violation of conditions

of approval, made a downstream investment to the extent

of 26% capital of INX News and also generated more than

Rs.  305  crores  FDI  in  INX  Media  (P)  Ltd.  against  the

approved foreign inflow of Rs. 4.62 crores is the allegation.

A  complaint  is  stated  to  have  been  received  by  the

investigation wing of  the  Income Tax department  which

sought  clarifications  from  the  FIPB  Unit  of  Ministry  of

Finance.  The  FIPB  Unit  vide  letter  dated  26.5.2008,

sought clarifications from M/s INX Media Limited. It was

further alleged in the FIR that upon receipt of this letter,

M/s INX Media in order to avoid punitive action entered

into  criminal  conspiracy  with  Mr.  Karti  Chidambaram

(accused no. 3 in the FIR who is the son of the appellant).

Mr. Karti  Chidambaram is alleged to have exercised his

influence over the officials of FIPB unit which led to the

said officials showing undue favour to M/s INX News (P)

Ltd. Thereafter by deliberately concealing the investment

received in INX Media (P) Ltd., M/s INX News (P) Ltd. again

approached the FIPB Unit and sought permission for the

downstream  investment.  This  proposal  was  favourably

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considered  by  the  officials  of  ministry  of  finance  and

approved by the then Finance Minister. It was also stated

in the FIR that Mr. Karti Chidambaram, in lieu of services

rendered to M/s INX Group, received consideration in the

form of payments. Information disclosed that invoices for

approximately Rs. 3.5 crores were got raised in favour of

M/s INX Group in the name of companies in which Mr.

Karti  Chidambaram  was  having  sustainable  interests

either directly or indirectly. The appellant herein, who was

the then Union Finance Minister, was not however named

in the said FIR.

4. On  the  basis  of  the  aforementioned  FIR,  the

Respondent Directorate of Enforcement registered a case

ECIR/07/HIU/2017 (hereinafter referred to as ECIR case)

under section 3 of  Prevention of Money Laundering Act,

2002 (hereinafter  PMLA),  punishable  under  section 4 of

the said Act against the accused mentioned in the FIR.

The allegations in the said ECIR case were the same as

those in the aforementioned FIR. The appellant was not

named an accused in this case as well.

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5. On  23.7.2018,  apprehending  his  arrest  by  the

Respondent, the appellant filed an application before the

High Court of Delhi seeking grant of anticipatory bail in

the aforementioned ECIR case. The High Court extended

interim protection to the appellant until 20.8.2019, when

the appellant’s  application seeking anticipatory bail  was

dismissed.

6. The appellant then approached this court by filing

Criminal Appeal No. 1340 of 2019 (arising out of SLP (Crl.)

No. 7523 of 2019) wherein while dismissing the appeal of

the  appellant,  the  court  concluded  that  in  the  instant

case,  grant  of  anticipatory  bail  to  the  appellant  will

hamper the investigation and that this is not a fit case for

exercise of discretion to grant anticipatory bail. This court

applied  the  following  rationale  for  coming  to  the  said

conclusion:  there  are  sufficient  safeguards enshrined in

the  PMLA to  ensure  proper  exercise  of  power  of  arrest;

grant of anticipatory bail is not to be done as a matter of

rule,  especially  in  matters  of  economic  offences  which

constitute a class apart. Regard must be had to the fact

that grant of anticipatory bail at the stage of investigation

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may frustrate the investigating agency in interrogating the

accused  and  in  collecting  useful  information  and  also

materials which might have been concealed.

7. In the meanwhile, on 21.8.2019, the appellant was

arrested  in  the  CBI  case  (arising  out  of  the

above-mentioned FIR). Since then he has been in custody.

In the ECIR case, he was arrested on 16.10.2019 on the

grounds that payment of approx. Rs. 3 crores was made at

the appellant’s instance to the companies controlled by his

son on account of FIPB work done for INX Group. Further

it was stated in the grounds of arrest that the investigation

is not fruitful due to the appellant’s non-cooperation; the

appellant  has  withheld  relevant  information  which  is

within  his  exclusive  knowledge  and  thus  his  custodial

interrogation is necessary.

8. After  dismissal  of  his  application  seeking

anticipatory  bail  by  this  court,  the  appellant  moved  an

application dated 5.9.2019 praying to surrender before the

Trial Court (Court of Special Judge (PC Act), CBI) in the

ECIR case. This application was rejected on 13.9.2019 in

view  of  the  submission  on  behalf  of  the  respondent

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Directorate that it was not willing to arrest the appellant

at  that  particular  stage  since  it  was  completing

investigation  pertaining  to  some  aspect  of  the  money

laundering and only on this background investigation was

completed,  the  interrogation  of  the  appellant  would  be

meaningful.  Thereafter,  on  11.10.2019,  the  Respondent

Directorate moved an application u/s 267 CrPC seeking

issuance of production warrant against the appellant for

the purpose of arrest and remand. The allegations which

were levelled against the appellant in this application are

that in lieu of granting FIPB approval to INX Media Pvt.

Ltd., he and his son received a sum of approx. Rs. 3 crores

through  companies  controlled  by  the  son  of  the

Appellant/accused  Karti  P.  Chidambaram.  Though  INX

media in its application did not mention the total amount

of FDI inflow which they intended to bring, the appellant

without ascertaining their competency, granted approval.

Further  the  appellant  became  fully  aware  about  the

violations  made  by  INX  Group  when  the  matter  was

highlighted  by  the  Income  Tax  Department  and  a

complaint  was  also  received  by  him  regarding  the

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investment by M/s INX Media into M/s INX News without

due approval. Despite this knowledge, the appellant again

approved the downstream proposal of INX Group treating

it as a fresh approval. Further investigation has revealed

that there were at least 17 overseas bank accounts opened

by  the  appellant  and  co-conspirators.  In  this  regard,

summons  was  issued  to  11  persons  and  statements  of

some of these persons revealed that the overseas assets

were acquired in the name of various shell companies on

the  instructions  of  appellant’s  son.  Thus,  it  was  stated

that  a  need  arises  to  confront  the  appellant  with  the

material  gathered.  This  application  was  allowed  by  the

Trial  Court  vide  order  dated  11.10.2019.  Thereafter  on

14.10.2019,  the  Respondent  inter  alia  moved  an

application seeking permission to arrest the appellant. The

Trial Court treated this application as an application for

interrogation  of  the  appellant  and  allowed  it.

Subsequently, on 16.10.2019, the appellant was arrested

for  the  grounds  stated  supra.  Vide  order  dated

17.10.2019, the Trial Court remanded the appellant to the

custody of the Respondent for a period of 7 days.

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9. After  his  arrest,  on  23.10.2019,  the  appellant

moved  a  regular  bail  application  (Bail  Application  No.

2718  of  2019)  before  the  High  Court  u/s  439 of  CrPC

averring that he is a law abiding citizen having deep roots

in the society; he is not a flight risk and is willing to abide

by all conditions as may be imposed by the court while

granting bail. It was also submitted that the instant case

is a documentary case and being a respectable citizen and

former Union Minister, he cannot and will not tamper with

the  documentary  record  of  the  instant  case  which  is

currently  in  the  safe  and  secure  possession  of  the

incumbent government or the Trial  Court.  On merits,  it

was  stated  by  the  Appellant  that  he  merely  accorded

approval to the unanimous recommendation made by the

FIPB  which  was  chaired  by  the  Secretary,  Economic

Affairs  and  included  5  other  secretaries  who  were  all

among the senior most IAS officers (one among them was

a  senior  IFS  officer)  and  had  a  long  and  distinguished

record of service. Anyone familiar with the working of the

FIPB would know that no single officer can take a decision

on any  proposal.  Therefore,  it  is  preposterous  to  allege

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that any person could have influenced any official of FIPB,

including  all  6  senior  secretaries  to  the  Government  of

India. Moreover, the ECIR case is a verbatim copy of the

FIR  dated  15.5.2017  and  allegations  registered  therein

and thus the Special Judge  erred in granting remand of

the appellant in the ECIR case since the offences allegedly

committed  in  both  the  cases  arise  out  of  the  same

occurrence and have been committed in the course of the

same transaction. Further the Special Court committed an

error  in  not  accepting  the  surrender  application  of  the

appellant  which  was  an  application  limited  to

surrendering  before  the  Trial  Court.  The  Special  Court

proceeded  on  an  erroneous  basis  that  the  desire  of  an

accused is contingent upon the desire of the investigating

agency to arrest the accused and that arrest is a condition

precedent for surrendering before the Court.

10. Vide the impugned order, the High Court observed

that  it  has  not  even  been  alleged  by  the  Respondent

Enforcement Directorate in its counter affidavit that the

appellant is a flight risk.  Regarding tampering of evidence

also the court observed that it is neither argued nor any

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material  is available on record in this regard. Moreover,

there is no chance to tamper the material on record as the

same  is  with  the  investigating  agencies,  central

government or courts. Regarding influencing of witnesses,

the court noted that three witnesses have stated in their

statements  that  the  appellant  and  his  family  members

have  pressurised  them  and  asked  them  not  to  appear

before the Enforcement Directorate. However, since their

statements have already been recorded, at this stage when

the complaint is almost ready to be filed, the Court held

that there is no chance to influence any witness. The High

Court  also took notice  of  the fact  that  co-accused have

been granted bail. The Court was cognizant of the fact that

the appellant has been suffering from illness but the Court

opined that the Court has already issued directions to the

Jail  Superintendent  in  this  regard  and  therefore  this

ground is no longer available to the appellant at this stage.

The  Court  noted  that  during  investigation,  it  has  been

revealed that there has been layering of proceeds of crime

by  use  of  shell  companies,  most  of  which  are  only  on

paper, and opined that there is cogent evidence collected

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so  far  that  these  shell  companies  are  incorporated  by

persons who can be shown to be close and connected with

the appellant. Next, the Court held that the material in the

present  case  is  completely  distinct,  different  and

independent from the material which was collected by the

CBI in the predicate  offence.  Even the witnesses in the

PMLA  investigation  are  different  from  the  investigation

conducted  by  the  CBI.  The  High  Court  concluded  that

prima  facie,  allegations  are  serious  in  nature  and  the

appellant has played key and active role in the present

case.  On  the  basis  of  all  these  observations,  the  High

Court dismissed the bail application.

11. It is the contention of the learned senior counsel

Shri Kapil Sibal and Dr. Abhishek Manu Singhvi on behalf

of the appellant before us that the High Court ought to

have granted regular bail to the appellant after holding the

triple  test  of  flight  risk,  tampering  with  evidence  and

influencing  of  witnesses  in  favour  of  the  appellant.  The

Impugned  Order  deserves  to  be  set  aside  only  on  the

ground that the allegations of a completely unrelated case

(Rohit  Tandon vs.  Directorate of  Enforcement  (2018)

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11 SCC 46) have been considered by the High Court as

allegations  relating  to  the  instant  case  and findings  on

merits against the appellant have been rendered based on

such unrelated allegations. Next, it has been contended by

the appellant that the High Court erred in law in going

into and rendering findings on merits of the case in order

to deny bail to the appellant despite the settled position of

law that merits of a case ought not to be gone into at the

time of adjudication of a bail application. This Court in the

appellant’s  own  case  seeking  regular  bail  in  the  case

registered by CBI against him titled P. Chidambaram vs.

CBI (Crl.  Appeal  No.  1603/2019)  has  held  that  “at  the

stage  of  granting  bail,  an  elaborate  examination  of

evidence and detailed reasons touching upon the merit of

the  case,  which  may  prejudice  the  accused,  should  be

avoided.”  It  has  also  been contended on behalf  of   the

appellant that the High Court erred in accepting at face

value the allegations made on merits of  the case in the

counter  affidavit  filed by the respondent and converting

such allegations verbatim into findings by the Court and

declining to grant bail to the appellant solely on the basis

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of said findings. On merits, the appellant has submitted

that  he  is  neither  a  shareholder  nor  director  of  any

allegedly  connected  company  nor  does  he  have  any

connection  with  any  of  these  companies.  No  material

linking the appellant directly or indirectly with the alleged

offence of  money laundering has either been put to the

appellant so far or been placed on record before the High

Court.  Further,  the  12  officers  who  signed  the  file

pertaining  to  the  approval  of  the  FDI  proposal  of  INX

Media  were  not  even  arrested.  Only  the  appellant,  who

was the 13th signatory has been arrested and denied bail.

Moreover,  all  the  other  co-accused  in  the  instant  ECIR

case  have  also  been  granted  bail  or  have  not  been

arrested. The High Court also failed to appreciate that the

appellant  has  already been granted regular  bail  by this

Court  in  the  predicate  offence  FIR  vide  its  order  dated

22.10.2019. The High Court erred in denying bail to the

appellant on the specious ground that allegations are of a

serious nature. It is the submission of the learned senior

counsel for the appellant that the gravity of an offence is

to  be  determined  from  the  severity  of  the  prescribed

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punishment.  In  the  instant  case,  the  alleged  offence  of

money  laundering  is  punishable  by  imprisonment  for  a

term which shall not exceed 7 years. Thus, the offence is

not  ‘grave’  or  ‘serious’  in terms of  the judgment  of  this

Court in Sanjay Chandra vs. CBI, (2012) 1 SCC 40. The

High Court should also have considered that the appellant

is a 74 year old person whose health is fragile and while

being  lodged  in  judicial  custody  of  the  Respondent

Enforcement  Directorate  between  16.10.2019  and

30.10.2019 and thereafter being lodged in judicial custody

between 30.10.2019 till  date,  the appellant has suffered

multiple  bouts  of  chronic  and  persistent  pain  in  his

abdomen, for which he was taken to AIIMS 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)  for  consultation,  diagnosis  and  tests.  The

appellant’s  health continues to deteriorate  and with the

onset of the cold weather, the appellant will become more

vulnerable.

12. Between  05.09.2019  and  16.10.2019  though  the

appellant was available in custody the respondent did not

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choose to interrogate but remand period was sought on

17.10.2019  and  24.10.2019,  while  the  third  remand

sought  was rejected and accordingly  the  remand period

expired  on  30.10.2019.   No  witness  was  confronted

despite seeking remand for that purpose.  It is contended

that the very manner in which the whole process is being

conducted  is  only  to  see  that  the  appellant  remains  in

custody.  It is contended that the liberty of the appellant

cannot be denied in such manner by adopting an unfair

procedure.  Though much is sought to be made out as if

the  offence  committed  is  grave  there  is  absolutely  no

material to indicate that the appellant is involved and even

otherwise it is a matter of trial wherein the charge is to be

established.   The  gravity  can  only  beget  the  length  of

sentence provided in law and by asserting that the offence

is  grave,  the  grant  of  bail  cannot  be  thwarted.   The

respondent  cannot  contend  as  if  the  appellant  should

remain in custody till the trial is over.

13.       Shri Tushar Mehta, learned Solicitor General while

seeking to oppose the petition has made reference to the

counter affidavit filed on behalf of the respondent.  It is

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contended that though the High Court has held that there

is no possibility  of  tampering the evidence and has not

influenced any witnesses and has ultimately  denied the

bail, such conclusion is not justified.  It is contended that

the appellant having held a very high position and also

due to his status is likely to influence the witnesses and

one of the witness had already indicated that he hails from

the same State to which the appellant belongs and is not

in  a  position  to  appear  for  the  purpose  of  being

confronted.  Hence even in that regard it should be held

against the appellant.  It is further contended that even

otherwise despite holding the triple test in favour of the

appellant the gravity of the offence can be considered as a

stand-alone  aspect  as  the  gravity  of  the  offence  in  a

particular case is also important while considering bail.  In

that circumstance, the three aspects to be taken note is

the manner in which the offence has taken place, gravity

of the offence and also the contemporaneous documents

to show that the accused either in custody or otherwise,

wields influence over the witnesses.  Hence, he contends

that the finding of the High Court insofar as saying that

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the appellant has not tampered is factually incorrect.  The

learned  Solicitor  General  further  contends  that  the

economic  offences  are  graver  offences  which  affect  the

society  and the  community  suffers.   The  common man

loses confidence in the establishment.  It is contended that

the  Investigating  Agency  has  collected  documentary

evidence  such  as  emails  exchanged  between  the

co-conspirators on behalf of the appellant and documents

to  indicate  investment  of  laundered  money  in  benami

properties whose beneficial  owners can be traced to the

appellant and his family members.  The respondent has

also recorded the statement of material witnesses who are

the  part  of  process  of  money  laundering.   It  is  his

contention that the appellant has knowledge of all these

aspects  and  the  material  will  show  the  share  holding

pattern of the 16 companies.  It is further contended that

the learned Judge of the High Court has referred to the

documents produced in a sealed cover and in that light

has arrived at the conclusion to deny bail.  The High Court

has, however, not properly considered while recording that

a complaint is ready to be filed and therefore, he would

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not influence the witnesses.  Even if the complaint/charge

sheet is filed in 60 days it is only to avoid default and the

investigation which is  not  complete would continue.   In

that light it is contended that when economic offences are

premeditated  it  would  require  detailed  investigation  to

unearth  material  and,  in  such circumstances,  if  bail  is

granted it would defeat the case of the prosecution. The

learned Solicitor General has also referred to the decisions

which would be taken note at the appropriate stage.

14.  The learned senior  counsel  for  the  appellant  in

reply  to  the  submissions  contended  that  not  a  single

document  is  available  to  indicate  that  the  appellant  is

involved in the offence.   The allegation of  the appellant

tampering  the  evidence  or  influencing  the  witnesses  as

sought to be made out on behalf of the respondent cannot

be accepted for the reason that the alleged offence is of the

year 2007-08 and though the proceedings were initiated in

the year 2017, the appellant was arrested only in the year

2019.   In  such  event  when  the  appellant  has  not

influenced any person while he was at large, the allegation

of  tempering  while  in  custody  is  not  acceptable.   The

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statement of the alleged witnesses is stated to have been

recorded in the year 2018 and the case of the respondent

that they are seeking to confront the witnesses is being

put forth at this stage only 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,  the

mere allegation against the alleged co-conspirators cannot

be the basis to 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.   

15. Though we have heard the matter elaborately and

also have narrated the contention of both sides in great

detail including those which were urged on the merits of

the matter we are conscious of the fact that in the instant

appeal the consideration is limited to the aspect of regular

bail sought by the appellant under Section 439 of Cr.PC.

While stating so, in order to put the matter in perspective

it  would be appropriate  to  take note  of  the observation

made by us in the case of this very appellant vs. CBI, in

Criminal  Appeal  No.  1603/2019  which  reads  as

hereunder;

Page 20 of 36

“The jurisdiction to grant bail has to be exercised on the basis of the well-settled principles having regard to the facts  and circumstances  of  each case.   The following factors  are  to  be  taken  into  consideration  while considering  an  application  for  bail:-  (i)  the  nature  of accusation and the severity of  the punishment in the case  of  conviction  and  the  nature  of  materials  relied upon by the prosecution; (ii) reasonable apprehension of tampering with the witnesses or apprehension of threat to  the  complainant  or  the  witnesses;  (iii)  reasonable possibility of securing the presence of the accused at the time of  trial  or  the likelihood of  his abscondence;  (iv) character  behaviour and standing of  the accused and the circumstances which are peculiar to the accused; (v) larger  interest  of  the  public  or  the  State  and similar other considerations (vide Prahlad Singh Bhati v. NCT, Delhi and another (2001) 4 SCC 280.  There is no hard and fast rule regarding grant or refusal to grant bail. Each  case  has  to  be  considered  on  the  facts  and circumstances of each case and on its own merits.  The discretion of the court has to be exercised judiciously and not in an arbitrary manner.”

16. In  the  above  background,   perusal  of  the  order

dated  15.11.2019  impugned  herein  indicates  that  the

learned  Single  Judge  having  taken  note  of  the  rival

contentions in so far as the triple test or the tripod test to

be applied while considering an application for  grant of

regular bail under Sec. 439 Cr.PC, has answered the same

in paragraphs 50 to  53 of  the  order,   in  favour  of  the

appellant  herein.   The  learned  Solicitor  General  has

however sought to contend that though there is not much

grievance with regard to the conclusion on ‘flight risk’, the

finding on likelihood of tampering and influencing witness

Page 21 of 36

has not been considered in its correct perspective.  The

finding in that regard has not been assailed and in such

event,  the appellant  in  our opinion cannot  be taken by

surprise.   Even  otherwise  as  rightly  observed  by  the

learned Single Judge the evidence and material stated to

have  been  collected  is  already  available  with  the

Investigating  agency.   Learned  Solicitor  General  would

however  contend  that  still  further  materials  are  to  be

collected and letter rogatory has been issued and as such

tampering cannot be ruled out.  In the present situation

the appellant is not in political power nor is he holding

any post in the Government of the day so as to be in a

position to interfere.  In that view such allegation cannot

be accepted on its face value. With regard to the witness

having written that he is not prepared to be confronted as

he is from the same state, the appellant cannot be held

responsible  for  the  same  when  there  is  no  material  to

indicate that the appellant or anyone on his behalf  had

restrained  or  threatened  the  concerned  witness  who

refused to be confronted with the appellant in custody.  

Page 22 of 36

17. The only other aspect therefore for consideration is

as  to  whether  the  further  consideration  made  by  the

learned Judge of the High Court, despite holding the triple

test in appellant’s favour was justified and if consideration

is permissible, whether the learned Judge was justified in

his conclusion.

18.  While  opposing  the  contention put  forth by  the

learned Senior Counsel for the appellant that the learned

Judge  of  the  High  Court  ought  not  to  have  travelled

beyond the consideration on the triple test and holding it

in favour of  the appellant,  the learned Solicitor  General

would contend that the gravity of the offence and the role

played  by  the  accused  should  also  be  a  part  of

consideration in the matter of bail.  It is contended by the

learned Solicitor General that the economic offences is a

class apart and the gravity is an extremely relevant factor

while  considering  bail.   In  order  to  contend  that  this

aspect has been judicially recognised, the decisions in the

case of  State of Bihar & Anr. vs. Amit Kumar, (2017)

13 SCC 751; Nimmagadda Prasad vs. CBI, (2013) 7 SCC

466;  CBI  vs.  Ramendu  Chattopadhyay,  Crl

Page 23 of 36

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;  State

of Gujarat vs. Mohanlal Jitamalji Porwal, (1987) 2 SCC

364 are relied upon.  Perusal of the cited decisions would

indicate that this Court has held that economic offences

are also of grave nature, being a class apart which arises

out  of  deep-rooted  conspiracies  and  effect  on  the

community as a whole is also to be kept in view, while

consideration for bail is made.

19.     On the consideration as made in the above noted

cases  and  the  enunciation  in  that  regard  having  been

noted,  the  decisions  relied  upon  by  the  learned  senior

counsel for the appellant and the principles laid down for

consideration  of  application  for  bail  will  require  our

consideration.   The  learned  senior  counsel  for  the

appellant has relied upon the decision of the Constitution

Bench of this Court in the case of Shri Gurbaksh Singh

Sibbia  vs.  State  of  Punjab,  (1980)  2  SCC  565  with

reference to paragraph 27 which reads as hereunder:

   “ It is not necessary to refer to decisions which deal with the right to ordinary bail because that

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right does not furnish an exact parallel to the right to anticipatory bail. It is, however, interesting that as long back as in 1924 it was held by the High Court  of  Calcutta in Nagendra v. King-Emperor [AIR  1924  Cal  476, 479, 480 : 25 Cri LJ 732] that the object of bail is to secure the attendance of the accused at the trial,  that  the  proper  test  to  be  applied  in  the solution of  the question whether bail  should  be granted or refused is whether it is probable that the party will appear to take his trial and that it is indisputable that bail  is not to be withheld as a punishment.  In  two  other  cases  which, significantly,  are  the  ‘Meerut  Conspiracy  cases’ observations are to be found regarding the right to bail  which deserve a 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 present Section 439 of the Code, that it conferred upon the Sessions Judge or the High Court wide powers to grant bail which were not handicapped by the restrictions in the preceding Section 497 which corresponds to the present Section 437. It was observed by the court that there was no hard and fast rule and no inflexible principle governing the exercise of the discretion conferred by Section 498 and that the only principle which was established was that the discretion  should  be  exercised  judiciously. In Emperor v. Hutchinson [AIR 1931 All 356, 358 : 32 Cri LJ 1271] it was said that it was very unwise to make an attempt to lay down any particular rules  which  will  bind  the  High  Court,  having regard to the fact that the legislature itself left the discretion  of  the  court  unfettered.  According  to the  High  Court,  the  variety  of  cases  that  may arise from time to time cannot be safely classified and it is dangerous to make an attempt to classify the cases and to say that in particular classes a bail  may be granted but not in other classes. It was  observed  that  the  principle  to  be  deduced from  the  various  sections  in  the  Criminal Procedure Code was that grant of bail is the rule and refusal is the exception. An accused person who enjoys freedom is in a much better position to  look  after  his  case  and  to  properly  defend himself  than  if  he  were  in  custody.  As  a presumably  innocent  person  he  is  therefore entitled  to  freedom and  every  opportunity  look

Page 25 of 36

after his own case. A presumably innocent person must have his freedom to enable him to establish his innocence.”

We have taken note of the said decision since even though

the consideration therein was made in the situation where

an application for anticipatory bail under Section 438 was

considered, the entire conspectus of the matter relating to

bail has been noted by the Constitution Bench.

20. The learned senior counsel  for  the appellant  has

also placed reliance on the decision on the decision in the

case of  Sanjay Chandra vs. CBI, (2012) 1 SCC 40 with

specific  reference  to  paragraph  39  which  reads  as

hereunder:

“ Coming  back  to  the  facts  of  the  present  case, both the courts have refused the request for grant of bail on two grounds: the primary 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  secondary  ground  is  that  of  the possibility of the accused persons tampering with the witnesses. In the present case, the charge is that of cheating and dishonestly inducing delivery of property and forgery for the purpose of cheating using  as  genuine  a  forged  document.  The punishment for the offence is imprisonment for a term which may extend to seven years. It  is,  no doubt, true that the nature of the charge may be relevant, but at the same time, the punishment to which the party may be liable,  if  convicted,  also bears  upon  the  issue.  Therefore,  in  determining whether to grant bail, both the seriousness of the

Page 26 of 36

charge and the severity of the punishment should be taken into consideration.”

The said case was a case of financial irregularities and in

the said circumstance this Court in addition to taking note

of the deep-rooted planning in causing huge financial loss,

the scope of consideration relating to bail has been taken

into  consideration  in  the  background  of  the  term  of

sentence being seven years if convicted and in that regard

it has been held that in determining the grant or otherwise

of bail, the seriousness of the charge and severity of the

punishment should be taken into consideration.

21. Thus  from  cumulative  perusal  of  the  judgments

cited  on  either  side  including  the  one  rendered  by  the

Constitution Bench of  this  Court,   it  could  be  deduced

that the basic jurisprudence relating to bail remains the

same inasmuch as the grant of bail is the rule and refusal

is the exception so as to ensure that the accused has the

opportunity  of  securing  fair  trial.   However,  while

considering  the  same  the  gravity  of  the  offence  is  an

aspect which is required to be kept in view by the Court.

The gravity for the said purpose will have to be gathered

Page 27 of 36

from the  facts  and circumstances  arising  in  each case.

Keeping in view the consequences that would befall on the

society in cases of financial irregularities, it has been held

that even economic offences would fall under the category

of  “grave  offence”  and  in  such  circumstance  while

considering the application for bail in such matters,  the

Court will have  to deal with the same, being sensitive to

the nature of allegation made against the accused.  One of

the circumstances to consider the gravity of the offence is

also the term of sentence that is prescribed for the offence

the  accused  is  alleged  to  have  committed.   Such

consideration  with  regard  to  the  gravity  of  offence  is  a

factor which is in addition to the triple test or the tripod

test that would be normally applied.  In that regard what

is  also  to  be  kept  in  perspective  is  that  even  if  the

allegation is one of grave economic offence, it is not a rule

that bail should be denied in every case  since there is no

such bar created in the relevant enactment passed by the

legislature  nor  does  the  bail  jurisprudence  provides  so.

Therefore, the underlining conclusion is that irrespective

of  the  nature  and  gravity  of  charge,  the  precedent  of

Page 28 of 36

another case alone will not be the basis for either grant or

refusal of bail though it may have a bearing on principle.

But ultimately the consideration will have to be on case to

case basis on the facts involved therein and securing the

presence of the accused to stand trial.

22.  In the above circumstance it would be clear that

even  after  concluding  the  triple  test  in  favour  of  the

appellant  the  learned  Judge  of  the  High  Court  was

certainly justified in adverting to the issue relating to the

gravity of the offence. However, we disapprove the manner

in which the conclusions are recorded in paragraphs 57 to

62  wherein  the  observations  are  reflected  to  be  in  the

nature  of  finding  relating  to  the  alleged  offence.   The

learned  senior  counsel  for  the  appellant  with  specific

reference to certain observations contained in the above

noted  paragraphs  has  pointed  out  that  the  very

contentions to that effect as contained in paragraphs 17,

20 and 24 of the counter affidavit has been incorporated

as if, it is the findings of the Court.  The learned Solicitor

General while seeking to controvert such contention would

however contend that in addition to the counter affidavit

Page 29 of 36

the  respondent  had also  furnished  the  documents  in  a

sealed cover which was taken note by the learned Judge

and conclusion has been reached.  

23. The question as to whether the Court could look

into the documents while considering an application for

bail had arisen for consideration in the very case between

the  parties  herein  in  Criminal  Appeal  No.130/2019

wherein  through  the  judgment  dated  05.09.2019  while

considering  the  matter  relating  to  the  order  dated

20.08.2019 whereby the High Court had rejected the bail,

this Court had held that it would be open for the Court to

receive  the  materials/documents  collected  during  the

investigation and peruse the same to satisfy its conscience

that the investigation is  proceeding in the right lines and

for  the  purpose  of  consideration  of  grant  of

bail/anticipatory bail etc.  At the same time, this Court,

had disapproved the manner in which the learned Judge

of the High Court in the said case had verbatim quoted a

note produced by the respondent.  If that be the position,

in the instant case, the learned Judge while adverting to

the materials, ought not have recorded a finding based on

Page 30 of 36

the  materials  produced  before  him.   While  the  learned

Judge was empowered to look at the materials produced in

a  sealed  cover  to  satisfy  his  judicial  conscience,  the

learned Judge ought not to have recorded finding based on

the materials produced in a sealed cover.  Further while

deciding  the  same case  of  the  appellant  in  Crl.  Appeal

No.1340  of  2019,  after  holding  so,  this  Court  had

consciously refrained from opening the sealed cover and

perusing the documents lest some observations are made

thereon after perusal of the same, which would prejudice

the accused pre-trial.  In that circumstance though it is

held that  it  would be open for  the Court  to peruse the

documents, it would be against the concept of fair trial if

in  every  case  the  prosecution  presents   documents  in

sealed cover and the findings on the same are recorded as

if  the  offence  is  committed  and the  same is  treated  as

having a bearing for denial or grant of bail.   

24. Having said so, in present circumstance we were

not very much inclined to open the sealed cover although

the  materials  in  sealed  cover  was  received  from  the

respondent.  However, since the learned Single Judge of

Page 31 of 36

the  High  Court  had  perused  the  documents  in  sealed

cover  and  arrived  at  certain  conclusion  and  since  that

order is under challenge, it had become imperative for us

to also open the sealed cover and peruse the contents so

as to satisfy ourselves to that extent.  On perusal we have

taken note that the statements of persons concerned have

been recorded and the details collected have been collated.

The recording of statements and the collation of material

is in the nature of allegation against one of the co-accused

Karti  Chidambaram-  son  of  appellant  of  opening  shell

companies and also purchasing benami properties in the

name of relatives at various places in different countries.

Except for recording the same, we do not wish to advert to

the  documents  any  further  since  ultimately,  these  are

allegations which would have to be established in the trial

wherein  the  accused/co-accused  would  have  the

opportunity  of  putting  forth  their  case,  if  any,  and  an

ultimate  conclusion  would  be  reached.   Hence  in  our

opinion, the finding recorded by the learned Judge of the

High Court based on the material in sealed cover is not

justified.

Page 32 of 36

25.      Therefore, at this stage while considering the bail

application of  the  appellant  herein  what  is  to  be  taken

note is that, at a stage when the appellant was before this

Court  in  an  application  seeking  for  interim

protection/anticipatory bail, this Court while considering

the matter in Criminal Appeal No.1340/2019 had in that

regard held that  in  a  matter  of  present  nature wherein

grave economic offence is alleged, custodial interrogation

as  contended  would  be  necessary  and  in  that

circumstance  the  anticipatory  bail  was  rejected.

Subsequently the appellant has been taken into custody

and has been interrogated and for the said purpose the

appellant  was  available  in  custody  in  this  case  from

16.10.2019 onwards.  It is, however, contended on behalf

of  the  respondent  that  the  witnesses  will  have  to  be

confronted  and  as  such  custody  is  required  for  that

purpose.    As noted, the appellant has not been named as

one of the accused in the ECIR but the allegation while

being  made  against  the  co-accused  it  is  indicated  the

appellant who was the Finance Minister at that point, has

aided the illegal transactions since one of the co-accused

Page 33 of 36

is  the son of  the appellant.   In this context even if  the

statements  on record  and  materials  gathered  are  taken

note,  the  complicity  of  the  appellant  will  have  to  be

established in the trial and if convicted, the appellant will

undergo  sentence.   For  the  present,  as  taken  note  the

anticipatory  bail  had  been  declined  earlier  and  the

appellant  was  available  for  custodial  interrogation  for

more  than  45  days.   In  addition  to  the  custodial

interrogation  if  further  investigation  is  to  be  made,  the

appellant  would  be  bound  to  participate  in  such

investigation as is required by the respondent.  Further it

is noticed that one of the co-accused has been granted bail

by the High Court while the other co-accused is enjoying

interim  protection  from  arrest.   The  appellant  is  aged

about 74 years and as noted by the High Court itself in its

order,  the  appellant  has  already  suffered  two  bouts  of

illness  during  incarceration  and  was  put  on  antibiotics

and  has  been  advised  to  take  steroids  of  maximum

strength.   In  that  circumstance,  the  availability  of  the

appellant  for  further  investigation,  interrogation  and

facing trial is not jeopardized and he is already held to be

Page 34 of 36

not a ‘flight risk’ and there is no possibility of tampering

the  evidence  or  influencing\intimidating  the  witnesses.

Taking  these  and  all  other  facts  and  circumstances

including the duration of custody into consideration the

appellant in our considered view  is entitled to be granted

bail.    It  is  made clear  that  the  observations contained

touching upon the merits either in the order of the High

Court or in this order shall not be construed as an opinion

expressed on merits and all contentions are left open to be

considered during the course of trial.

26.        For  the  reasons  stated  above,  we  pass  the

following order:

i) The  instant  appeal  is  allowed  and  the  judgment

dated 15.11.2019 passed by the High Court of  Delhi  in

Bail Application No.2718 of 2019 impugned herein is set

aside;

ii) The appellant is ordered to be released on bail if he

is not required in any other case, subject to executing bail

bonds for a sum of Rs.2 lakhs with two sureties of the like

sum produced to the satisfaction of  the learned Special

Judge;

iii) The passport ordered to be deposited by this Court

in the CBI case shall remain in deposit and the appellant

Page 35 of 36

shall not leave the country without specific orders to be

passed by the learned Special Judge.   

iv) The  appellant  shall  make  himself  available  for

interrogation in the course of further investigation as and

when required by the respondent.

v) The appellant shall not tamper with the evidence or

attempt to intimidate or influence the witnesses;

vi)      The appellant shall not give any press interviews nor

make any public comment in connection with this case

qua him or other co-accused.

vii) There shall be no order as to costs.

….…………………….….J. (R. BANUMATHI)

..….……………………….J.                                      (A.S. BOPANNA)

                                               …..……………………….J.                                             (HRISHIKESH ROY)

New Delhi, December 04, 2019

Page 36 of 36

  REPORTABLE

  IN THE SUPREME COURT OF INDIA  CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.1831/2019  (Arising out of  S.L.P.(Criminal) No.10493 of 2019 )

P. Chidambaram        ….Appellant (s) Versus

Directorate of Enforcement   ….  Respondent(s)

O R D E R

After pronouncement of the Judgment in the above

mentioned matter, Mr. Tushar Mehta, learned Solicitor

General  appearing  for  the  respondent-Directorate  of

Enforcement, has submitted that the findings in the

Judgment may not have a bearing qua the other accused.

Considering  the  above  submission,  we  make  it

clear that the findings in the Judgment, as above,

shall not have any bearing qua the other accused in

the  case  and  the  same  shall  be  considered

independently on its own merits.

….…………………….….J.         (R. BANUMATHI)

..….……………………….J.                                     (A.S. BOPANNA)

                                               …..……………………….J.                                            (HRISHIKESH ROY)

New Delhi, December 04, 2019