Former finance minister P Chidambaram faced imminent arrest on Tuesday after the Delhi High Court rejected his anticipatory bail petition in the INX Media corruption and money laundering cases saying prima facie he appeared to be “kingpin” of the alleged scam.
Teams of the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) reached the senior Congress leader’s residence in the evening but he remained unavailable, according to people aware of the matter.
While the high court declined to grant Chidambaram interim protection from arrest for approaching the Supreme Court in the case, the apex court permitted the senior Congress leader’s counsel, Kapil Sibal, to mention his plea before Justice NV Ramana on Wednesday morning.
The case pertains to alleged irregularities in granting the Foreign Investment Promotion Board (FIPB) clearance to INX Media for receiving Rs 305 crore from abroad in 2007 during Chidambaram’s tenure as finance minister.
When contacted, senior lawyer Abhishek Manu Singhvi told ET: “Mr Chidambaram was on bail for 15 months. Today’s order was delivered after 7 months. We have been asked to approach the seniormost judge (available) in SC, which we will.”
Singhvi further said, “Where is the question of tampering with evidence. The only time Mr Chidambaram was called by CBI was on June 6, 2018. He has willingly gone to the ED office for questioning nearly ten times and fully cooperated with the investigation.”
Shot in the Arm for Probe Agencies
The CBI had registered a first information report (FIR) in May 2017 alleging irregularities in the FIPB clearance and the ED lodged a money laundering case in this regard the next year. The agencies alleged that the money was transferred to companies controlled by Chidambaram’s son Karti and that the FIPB clearance was granted on Karti’s intervention.
Chidambaram had applied for bail last year and kept getting interim protection from arrest. The high court reserved its order in the case in January this year.
On Tuesday, in a scathing order, Justice Sunil Gaur of the Delhi High Court termed the INX Media a “classic case of money laundering” and said that it was “preposterous” to say that Chidambaram’s prosecution was “baseless, politically motivated and an act of vendetta”.
Justice Gaur cited the “gravity of offence and evasive replies of the petitioner to questions put to him while he was under protective cover” as factors behind rejecting the anticipatory bail plea. “The facts persuade me to decline pre arrest bail to petitioner while refraining to comment on merits of the case,” he said.
The court said that “it cannot be forgotten that the petitioner was the finance minister at the relevant time and he had given FDI (foreign direct investment) clearances to INX Media group for receiving overseas funds to the tune of Rs 305 crore”. “Simply because he is an MP would not justify grant of pre arrest bail to him,” it said.
The order further said that economic offences constitute a class apart and need to be visited with a different approach in matter of bail. Taking note of “huge magnitude of conspiracy angle qua petitioner”, it would be premature to jump to a conclusion that provisions of PMLA (Prevention of Money Laundering Act) would not apply, it said.
The order comes as a shot in the arm for the investigating agencies, as the court said that law enforcing agencies cannot be made ineffective through legal obstacles. “It was pertinently observed that the economic crimes of such mammoth scale are craftly planned and executed. This grant of bail in cases like instant one will send a wrong message to the society,” it said.
After the pronouncement of the order, senior advocate Dayan Krishnan, appearing for Chidambaram, sought a stay on the operation of the order for three days. The high court, however, turned down the request, leaving the senior Congress leader with no option but to turn to the Supreme Court.
Chidambaram, with senior Congress leaders and Supreme Court advocates Kapil Sibal and Salman Khurshid by his side, filed a petition with the apex court within an hour of the high court delivering its order. He first mentioned the case before the court registrar who conveyed to him after consultations with the CJI that he could mention his plea on Wednesday morning.
Sibal will mention the plea before Justice Ramana, who is the third most senior apex court judge after the CJI and Justice SA Bobde, who is next in line to be CJI. Both the CJI and Justice Bobde are busy in a Constitution bench hearing the Ayodhya land title suit.
Separately, the ED is probing Chidambaram’s role in the alleged Air India aircraft purchase scam, for which it has summoned him for questioning on August 23.
Opposing Chidambaram’s anticipatory bail in the INX Media case, the CBI and ED had alleged that he remained evasive during the questioning and misused the office of finance minister.
The other accused in the case include the then INX Media director Indrani Mukerjea and then news director Peter Mukerjea. Indrani Mukerjea was recently allowed to turn an approver in the case.
In its FIR, the CBI had alleged that Karti Chidambaram used his influence with officials of the finance ministry to manage a cover-up of illegal foreign investments made by INX Media.
According to the FIR, the officials allowed INX Media to seek fresh approval for foreign investment that had already been pocketed by INX Media, owned by Indrani and Peter Mukerjea, co-accused in the murder of Sheena Bora.
INX Media was granted approval for investment of Rs 4.62 crore by the FIPB in May 2007, according to the CBI. The agency held that for “downstream investment” in the company, separate approval would be required.
Downstream investment is indirect foreign investment by one Indian company into another by way of subscription or acquisition of shares. The company allegedly made a downstream investment and generated more than Rs 305 crore of foreign direct investment in INX Media against the approved inflow of Rs 4.62 crore.
Acting on a complaint, the investigation wing of the income tax department had sought clarifications from FIPB, promoting the latter to seek explanations from INX Media.
To escape punitive action, the company entered into a “criminal conspiracy” with Karti to get “issues resolved amicably by influencing public servants of FIPB”, CBI said. This, the FIR stated, was by “virtue of his relationship with the then finance minister”.
The CBI said that officials “advised” INX Media to apply afresh for FIPB approval for the downstream investment that had already been made by the company. Its FIR said that officials “ignored” the request of the department of revenue to investigate the matter. Acting on the “advice” of the officials, INX Media sought fresh permission for downstream investment from the board, it said.