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2019 (9) TMI 286

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..... perusing the materials/note produced by the Enforcement Directorate/CBI, Single Judge could have satisfied his conscience to hold that it is not a fit case for grant of anticipatory bail. On the other hand, Single Judge has verbatim quoted the note produced by the respondent- Enforcement Directorate. Single Judge, was not right in extracting the note produced by the Enforcement Directorate/CBI which in our view, is not a correct approach for consideration of grant/refusal of anticipatory bail. But such incorrect approach of the learned Single Judge, in our view, does not affect the correctness of the conclusion in refusing to grant of anticipatory bail to the appellant in view of all other aspects considered herein. Since the interrogation of the accused and the questions put to the accused and the answers given by the accused are part of the investigation which is purely within the domain of the investigation officer, unless satisfied that the police officer has improperly and illegally exercised his investigating powers in breach of any statutory provision, the court cannot interfere. In the present case, no direction could be issued to the respondent to produce the transcr .....

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..... panna, JJ. JUDGMENT R. BANUMATHI, J. Leave granted. 2. This appeal relates to the alleged irregularities in Foreign Investment Promotion Board (FIPB) clearance given to the INX Media for receiving foreign investment to the tune of ₹ 305 crores against approved inflow of ₹ 4.62 crores. The High Court of Delhi rejected the appellant s plea for anticipatory bail in the case registered by Central Bureau of Investigation (CBI) being RC No.220/2017-E-0011 under Section 120B IPC read with Section 420 IPC, Section 8 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. By the impugned order dated 20.08.2019, the High Court also refused to grant anticipatory bail in the case registered by the Enforcement Directorate in ECIR No.07/HIU/2017 punishable under Sections 3 and 4 of the Prevention of Money-Laundering Act, 2002. 3. Grievance of the appellant is that against the impugned order of the High Court, the appellant tried to get the matter listed in the Supreme Court on 21.08.2019; but the appellant could not get an urgent hearing in the Supreme Court seeking stay .....

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..... downstream investment to the extent of 26% in the capital of INX News Ltd. without specific approval of FIPB which included indirect foreign investment by the same Foreign Investors; (ii) generated more than ₹ 305 crores FDI in INX Media which is in clear violation of the approved foreign flow of ₹ 4.62 crores by issuing shares to the foreign investors at a premium of more than ₹ 800/- per share. 6. Upon receipt of a complaint on the basis of a cheque for an amount of ₹ 10,00,000/- made in favour of M/s Advantage Strategic Consulting Private Limited (ASCPL) by INX Media, the investigation wing of the Income Tax Department proceeded to investigate the matter and the relevant information was sought from the FIPB, which in turn, vide its letter dated 26.05.2008 sought clarification from the INX Media which justified its action saying that the downstream investment has been authorised and that the same was made in accordance with the approval of FIPB. It is alleged by the prosecution that in order to get out of the situation without any penal provision, INX Media entered into a criminal conspiracy with Sh. Karti Chidambaram, Promoter Director, Ch .....

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..... registration of the cases in 2017, there were various proceedings seeking bail and number of other proceedings pending filed by Sh. Karti Chidambaram and other accused. Finally, the Delhi High Court granted bail to Sh. Karti Chidambaram in INX Media case filed by CBI on 23.03.2018. Thereafter, the appellant moved Delhi High Court seeking anticipatory bail both in CBI case and also in money-laundering case filed by Enforcement Directorate. On 25.07.2018, the Delhi High Court granted the appellant interim protection from arrest in both the cases and the same was extended till 20.08.2019 the date on which the High Court dismissed the appellant s petition refusing to grant anticipatory bail. 9. The High Court dismissed the application refusing to grant anticipatory bail to the appellant by holding that it is a classic case of money-laundering . The High Court observed that it is a clear case of money-laundering . The learned Single Judge dismissed the application for anticipatory bail by holding that the alleged irregularities committed by the appellant makes out a prima facie case for refusing pre-arrest bail to the appellant . The learned Single Judge also held .....

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..... s; whereas neither the Board members of FIPB nor the officials of FIPB have stated anything about the appellant s son Sh. Karti Chidambaram that he approached and influenced them for ex-post facto approval. The learned Senior counsel contended that the entire case alleges about money paid to ASCPL and Sh. Karti Chidambaram is neither the share-holder nor a Director in the said ASCPL; but the Enforcement Directorate has falsely alleged that Sh. Karti Chidambaram has been controlling the company9 ASCPL. It was submitted that the appellant has nothing to do with the said ASCPL to whom money has been paid by INX Media. 12. Taking us through the impugned judgment and the note said to have been submitted by the Enforcement Directorate before the High Court, the learned Senior counsel submitted that the learned Single Judge has copied and pasted paragraphs after paragraphs of the note given by the respondent in the court. It was urged that there was no basis for the allegations contained in the said note to substantiate the alleged transactions/transfer of money as stated in the tabular column given in the impugned order. 13. So far as the sealed cover co .....

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..... n of transcripts i.e. questions put to the appellant and the answers which would show whether the appellant has properly responded to the questions or not. Placing reliance upon Additional District Magistrate, Jabalpur v. Shivakant Shukla (1976) 2 SCC 521, the learned Senior counsel submitted that the respondent cannot rely upon the documents without furnishing those documents to the appellant or without questioning the appellant about the materials collected during the investigation. Reiterating the submission of Mr. Sibal, Mr. Singhvi contended that the High Court has denied anticipatory bail to the appellant on the basis of materials produced by the respondent in the cover before the court which were never shown to the appellant nor was the appellant confronted with the same. The learned Senior counsel submitted that the alleged occurrence was of the year 2007-08 and Sections 420 IPC and 120B IPC and Section 13 of the Prevention of Corruption Act were not part of the scheduled offence of Prevention of Money-Laundering Act in 2008 and were introduced by a notification dated 01.06.2009 and in view of the protection given under Article 20(1) of the Constitution of India, there ca .....

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..... 19. Learned Solicitor General submitted that under Section 19 of PMLA, specified officers, on the basis of material in possession, having reason to believe which is to be recorded in writing that the person has been guilty of the offence under the Act, have power to arrest. It was urged that the power to arrest and necessary safeguards are enshrined under Section 19 of the Act. It was submitted that since respondent has collected cogent materials to show that it is a case of money-laundering and the Enforcement Directorate has issued Letter rogatory and if the Court intervenes by granting anticipatory bail, the authority cannot exercise the statutory right of arrest and interrogate the appellant. 20. The learned Solicitor General submitted that they have obtained specific inputs from overseas banks and also about the companies and properties and it is a clear case of money-laundering. The learned Solicitor General submitted that the Court has power to look into the materials so collected by the Enforcement Directorate and the same cannot be shared with the appellant at this initial stage when the Court is considering the matter for grant of pre-arrest bail. Relying .....

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..... he United Nations General Assembly held in June 1998, calling upon the Member States to adopt national money-laundering legislation and programme, primarily with a view to meet out the serious threat posed by money laundering to the financial system of the countries and to their integrity and sovereignty. 24. Statement of Objects and Reasons to the Prevention of Moneylaundering Act, 2002 recognises that money laundering poses a serious threat not only to the financial systems of the countries but also to their integrity and sovereignty. PMLA is a special enactment containing the provisions with adequate safeguards with a view to prevent moneylaundering. The Preamble to the Prevention of Money-Laundering Act, 2002 states that An Act to prevent money-laundering and to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto. 25. Chapter II of PMLA contains provisions relating to the offences of money-laundering. Section 2(1)(p) of PMLA defines money-laundering that it has the same meaning assigned to it in Section 3. Section 2(1)(ra) of PMLA defines offence of cro .....

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..... 13, Section 4 provided punishment with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and the fine which may extend to ₹ 5,00,000/-. By Amendment Act 2 of 2013, Section 4 is amended w.e.f. 15.02.2013 vide S.O. 343(E) dated 08.02.2013. Now, the punishment prescribed under Section 4 of PMLA to the offender is rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and the offender is also liable to pay fine. The limit of fine has been done away with and now after the amendment, appropriate fine even above ₹ 5,00,000/- can be imposed against the offender. 28. Section 5 of PMLA which provides for attachment of property involved in money laundering, states that where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this Section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely to be concealed, trans .....

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..... The provisions of the PMLA and the Rules also provide for manner of forwarding a copy of the order of provisional attachment of property along with material under sub-section (2) of Section 5 of PMLA to the Adjudicating Authority. 31. In order to ensure the safeguards, in exercise of power under Section 73 of PMLA, the Central Government has framed The Prevention of Money-Laundering (The Manner of Forwarding a Copy of the Order of Provisional Attachment of Property along with the Material, and Copy of the Reasons along with the Material in respect of Survey, to the Adjudicating Authority and its period of Retention) Rules, 2005 . Rule 3 of the said Rules provides for manner of forwarding a copy of the order of provisional attachment of property along with the material under sub-section (2) of Section 5 of the Act to the Adjudicating Authority. Rule 3 stipulates various safeguards as to the confidentiality of the sealed envelope sent to the Adjudicating Authority. 32. Section 17 of PMLA deals with the search and seizure. Section 17 which deals with search and seizure states that where the Director or any other officer not below the rank of Deputy Dir .....

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..... tion of Money-Laundering (The Forms and the Manner of Forwarding a Copy of Order of Arrest of a Person along with the Material to the Adjudicating Authority and its Period of Retention) Rules, 2005 . Rule 3 of the said Rules requires the arresting officer to forward a copy of order of arrest and the material to the Adjudicating Authority in a sealed cover marked confidential and Rule 3 provides for the manner in maintaining the confidentiality of the contents. 34. As rightly submitted by Mr. Tushar Mehta, the procedure under PMLA for arrest ensures sufficient safeguards viz.:- (i) only the specified officers are authorised to arrest; (ii) based on reasons to believe that an offence punishable under the Act has been committed; (iii) the reasons for such belief to be recorded in writing; (iv) evidence and the material submitted to the Adjudicating Authority in sealed envelope in the manner as may be prescribed ensuring the safeguards in maintaining the confidentiality; and (v) every person arrested under PMLA to be produced before the Judicial Magistrate or Metropolitan Magistrate within 24 hours. Section 19 of PMLA provides for the power to arrest to the specifie .....

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..... ted with accused of an offence under this Act .. . Section 45 prior to Nikesh Tarachand and post Nikesh Tarachand reads as under:- Section 45 - Prior to Nikesh Tarachand Shah Section 45. Offence to be cognizable and nonbailable. (1) Notwithstanding contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail or on his own bond unless- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail; Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs: Section 45 - Post Nikesh Tarachand Shah Section 45. Offences to be cogni .....

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..... ption Act is not attracted against the appellant as there are no allegations in the FIR that the appellant accepted or agreed to accept any gratification as a motive or reward for inducing any public servant and hence, the accusation under Section 8 of the Prevention of Corruption Act does not apply to the appellant. It was further submitted that even assuming Section 8 of the Prevention of Corruption Act is made out, the amount allegedly paid to ASCPL was only ₹ 10,00,000/- whereas, ₹ 30,00,000/- was the amount then stipulated to attract Section 8 to be the Scheduled offence under Part A of the Schedule to the Act and therefore, there was no basis for offence against the appellant and in such view of the matter, the appellant is entitled for anticipatory bail. 39. Section 45 of the PMLA makes the offence of money laundering cognizable and non-bailable and no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail unless the twin conditions thereon are satisfied. Section 120-B IPC Criminal Conspiracy and Section 420 IPC - Cheating and dishonestly inducing deliver .....

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..... offence as per law then in existence. The merits of the contention that Section 8 of the Prevention of Corruption Act cannot be the predicate offence qua the appellant, cannot be gone into at this stage when this Court is only considering the prayer for anticipatory bail. 42. Yet another contention advanced on behalf of the appellant is that minimum threshold for the Enforcement Directorate to acquire jurisdiction at the relevant time was ₹ 30 lakhs whereas, in the present case, there is no material to show any payment apart from the sum of ₹ 10 lakhs (approximately) allegedly paid by INX Media to ASCPL with which the appellant is said to be having no connection whatsoever. The merits of the contention that Section 8 of the Prevention of Corruption Act (then included in Schedule A of the PMLA in 2007-08) whether attracted or not and whether the Enforcement Directorate had the threshold to acquire jurisdiction under PMLA cannot be considered at this stage while this Court is considering only the prayer for anticipatory bail. 43. In terms of Section 4 of the PMLA, the offence of money-laundering is punishable with rigorous imprisonment for .....

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..... cannot randomly place the documents in the court behind the back of the accused to seek custody of the accused; (ii) the materials so collected by Enforcement Directorate during investigation cannot be placed before the court unless the accused has been confronted with such materials. 47. Mr. Kapil Sibal, learned Senior counsel submitted that the statements recorded under Section 161 Cr.P.C. are part of the case diary and the case diary must reflect day to day movement of the investigation based on which the investigating agency came to the conclusion that the crime has been committed so that a final report can be filed before the court. The learned Senior counsel submitted that during the course of such investigation, the investigating officer may discover several documents which may have a bearing on the crime committed; however the documents themselves can never be the part of the case diary and the documents would be a piece of documentary evidence during trial which would be required to be proved in accordance with the provisions of the Evidence Act before such documents can be relied upon for the purpose of supporting the case of prosecution. Enforcement Dire .....

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..... ear that the denial of right to the accused to inspect the case diary cannot be characterised as unreasonable or arbitrary. The confidentiality is always kept in the matter of investigation and it is not desirable to make available the police diary to the accused on his demand. 50. Reiterating the same principles in Sidharth and others v. State of Bihar (2005) 12 SCC 545, the Supreme Court held as under:- 27. Lastly, we may point out that in the present case, we have noticed that the entire case diary maintained by the police was made available to the accused. Under Section 172 of the Criminal Procedure Code, every police officer making an investigation has to record his proceedings in a diary setting forth the time at which the information reached him, the time at which he began and closed his investigation, the place or places visited by him and a statement of the circumstances ascertained through his investigation. It is specifically provided in sub-clause (3) of Section 172 that neither the accused nor his agents shall be entitled to call for such diaries nor shall he or they be entitled to see them merely because they are referred to by the .....

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..... 172 Cr.P.C. and perused the case diary to satisfy itself that the investigation has revealed that the company thereon has funded the organisation (ULFA) and that the appellants thereon had a role to play in it. While considering the question of arrest of five well known human rights activists, journalists, advocates and political workers, in Romila Thapar and Others v. Union of India and Others (2018) 10 SCC 753, this Court perused the registers containing relevant documents and the case diary produced by the State of Maharashtra. However, the court avoided to dilate on the factual position emerging therefrom on the ground that any observation made thereon might cause prejudice to the accused or to the prosecution in any manner. Upholding the validity of Section 172(3) Crl.P.C. and observing that there can be no better custodian or guardian of the interest of justice than the court trying the case , in Mukund Lal v. Union of India and another 1989 Supp. (1) SCC 622, the Supreme Court held as under:- 3. .. So far as the other parts are concerned, the accused need not necessarily have a right of access to them because in a criminal trial or enqu .....

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..... ction (3) of Section 172, neither the accused nor his agent is entitled to call for such case diaries and also not entitled to see them during the course of enquiry or trial. The case diaries can be used for refreshing memory by the investigating officer and court can use it for the purpose of contradicting such police officer as per provisions of Section 161 or Section 145 of the Indian Evidence Act. Unless the investigating officer or the court so uses the case diary either to refresh the memory or for contradicting the investigating officer as previous statement under Section 161, after drawing his attention under Section 145, the entries in case diary cannot be used by the accused as evidence (vide Section 172(3) Cr.P.C.). 53. It is well-settled that the court can peruse the case diary/materials collected during investigation by the prosecution even before the commencement of the trial inter-alia in circumstances like:- (i) to satisfy its conscience as to whether the investigation is proceeding in the right direction; (ii) to satisfy itself that the investigation has been conducted in the right lines and that there is no misuse or abuse of process in the investi .....

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..... y, which we deem appropriate to accept the submission of the respondent for the limited purpose of refusing pre-arrest bail to the appellant. 55. Of course, while considering the request for anticipatory bail and while perusing the materials/note produced by the Enforcement Directorate/CBI, the learned Single Judge could have satisfied his conscience to hold that it is not a fit case for grant of anticipatory bail. On the other hand, the learned Single Judge has verbatim quoted the note produced by the respondent- Enforcement Directorate. The learned Single Judge, was not right in extracting the note produced by the Enforcement Directorate/CBI which in our view, is not a correct approach for consideration of grant/refusal of anticipatory bail. But such incorrect approach of the learned Single Judge, in our view, does not affect the correctness of the conclusion in refusing to grant of anticipatory bail to the appellant in view of all other aspects considered herein. Re: Contention:- The appellant should have been confronted with the materials collected by the Enforcement Directorate earlier, before being produced to the court. 56. .....

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..... igation like interrogation of the accused and the answers elicited from the accused and to find out whether the answers given by the accused are evasive or whether they are satisfactory or not. This could have never been the intention of the legislature either under PMLA or any other statute. 59. Interrogation of the accused and the answers elicited from the accused and the opinion whether the answers given by the accused are satisfactory or evasive , is purely within the domain of the investigating agency and the court cannot substitute its views by conducting mini trial at various stages of the investigation. 60. The investigation of a cognizable offence and the various stages thereon including the interrogation of the accused is exclusively reserved for the investigating agency whose powers are unfettered so long as the investigating officer exercises his investigating powers well within the provisions of the law and the legal bounds. In exercise of its inherent power under Section 482 Cr.P.C., the court can interfere and issue appropriate direction only when the court is convinced that the power of the investigating officer is exercised ma .....

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..... rime and if an offence is alleged to have been committed it is its bounded duty to investigate into the offence and bring the offender to book. Once it investigates and finds an offence having been committed it is its duty to collect evidence for the purpose of proving the offence. Once that is completed and the investigating officer submits report to the court requesting the court to take cognizance of the offence under Section 190 of the Code its duty comes to an end. On a cognizance of the offence being taken by the court the police function of investigation comes to an end subject to the provision contained in Section 173(8), there commences the adjudicatory function of the judiciary to determine whether an offence has been committed and if so, whether by the person or persons charged with the crime by the police in its report to the court, and to award adequate punishment according to law for the offence proved to the satisfaction of the court. There is thus a well defined and well demarcated function in the field of crime detection and its subsequent adjudication between the police and the Magistrate. This had been recognised way back in King Emperor v. Khwaja Nazir Ahmad AIR .....

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..... one thing to say that if the power of investigation has been exercised by an investigating officer mala fide or non-compliance of the provisions of the Criminal Procedure Code in the conduct of the investigation, it is open to the court to quash the proceedings where there is a clear case of abuse of power. It is a different matter that the High Court in exercise of its inherent power under Section 482 Cr.P.C., the court can always issue appropriate direction at the instance of an aggrieved person if the High Court is convinced that the power of investigation has been exercised by the investigating officer mala fide and not in accordance with the provisions of the Criminal Procedure Code. However, as pointed out earlier that power is to be exercised in rare cases where there is a clear abuse of power and non-compliance of the provisions falling under Chapter-XII of the Code of Criminal Procedure requiring the interference of the High Court. In the initial stages of investigation where the court is considering the question of grant of regular bail or pre-arrest bail, it is not for the court to enter into the demarcated function of the investigation and collection of evidence/materia .....

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..... 68. On behalf of the appellant, much arguments were advanced contending that anticipatory bail is a facet of Article 21 of the Constitution of India. It was contended that unless custodial interrogation is warranted, in the facts and circumstances of the case, denial of anticipatory bail would amount to denial of the right conferred upon the appellant under Article 21 of the Constitution of India. 69. Article 21 of the Constitution of India states that no person shall be deprived of his life or personal liberty except according to procedure prescribed by law. However, the power conferred by Article 21 of the Constitution of India is not unfettered and is qualified by the later part of the Article i.e. except according to a procedure prescribed by law. In State of M.P. and another v. Ram Kishna Balothia and another (1995) 3 SCC 221, the Supreme Court held that the right of anticipatory bail is not a part of Article 21 of the Constitution of India and held as under:- 7. We find it difficult to accept the contention that Section 438 of the Code of Criminal Procedure is an integral part of Article 21. In the first place, there was no pr .....

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..... ed reliance upon State Rep. By The CBI v. Anil Sharma (1997) 7 SCC 187; Sudhir v. State of Maharashtra and Another (2016) 1 SCC 146; and Assistant Director, Directorate of Enforcement v. Hassan Ali Khan (2011) 12 SCC 684. 72. Ordinarily, arrest is a part of the process of the investigation intended to secure several purposes. There may be circumstances in which the accused may provide information leading to discovery of material facts and relevant information. Grant of anticipatory bail may hamper the investigation. Pre-arrest bail is to strike a balance between the individual s right to personal freedom and the right of the investigating agency to interrogate the accused as to the material so far collected and to collect more information which may lead to recovery of relevant information. In State Rep. By The CBI v. Anil Sharma (1997) 7 SCC 187, the Supreme Court held as under:- 6. We find force in the submission of the CBI that custodial interrogation is qualitatively more elicitation-oriented than questioning a suspect who is well ensconced with a favourable order under Section 438 of the Code. In a case like this effective interrogation of a su .....

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..... 438 of the Code. 74. In Siddharam Satlingappa Mhetre v. State of Maharashtra and Others (2011) 1 SCC 694, the Supreme Court laid down the factors and parameters to be considered while dealing with anticipatory bail. It was held that the nature and the gravity of the accusation and the exact role of the accused must be properly comprehended before arrest is made and that the court must evaluate the available material against the accused very carefully. It was also held that the court should also consider whether the accusations have been made only with the object of injuring or humiliating the applicant by arresting him or her. 75. After referring to Siddharam Satlingappa Mhetre and other judgments and observing that anticipatory bail can be granted only in exceptional circumstances, in Jai Prakash Singh v. State of Bihar and another (2012) 4 SCC 379, the Supreme Court held as under:- 19. Parameters for grant of anticipatory bail in a serious offence are required to be satisfied and further while granting such relief, the court must record the reasons therefor. Anticipatory bail can be granted only in exceptional circumstances wher .....

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..... 79. Observing that economic offences constitute a class apart and need to be visited with different approach in the matter of bail, in Y.S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 439, the Supreme Court held as under:- 34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. 35. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations. [underlining added] 80. Referring to Duk .....

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