TMI Blog2019 (10) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... ce is on the society, economy, financial stability and integrity of the country. The economic offences constitute a class apart and a class by itself, as it cuts the very root of probity and purity of public administration and results in eroding the public confidence which it reposes on the Government elected by it. It is fact that the entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book as such offences affects the very fabric of democratic governance and probity in public life. A murder may be committed in the heat of moment upon passing being aroused. However, an economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest . as observed by the Hon ble Supreme Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive, redeemable preference shares of ₹ 10 each collectively representing approximately 46.216% of the issued equity share capital of INX Media. It was also mentioned therein that INX Media, subject to provisions of the applicable law, has an intention to make a downstream financial investment to the extent of 26% of the issued and outstanding equity share capital of INX Media. However, this matter was not placed before the FIPB. On 18.05.2007, meeting of FIPB (comprising of 6 Secretaries to the Government of India) was held. FIPB recommended the proposal of INX Media in respect of the proposed issue of shares up to 46.216% of the issued equity. 2. The allegations against the Petitioner is that contrary to the approval of FIPB, INX Media deliberately and in violation of the conditions of the approval: (a) made downstream investment to the extent of 26% in the capital of INX News without specific approval of FIPB which included foreign investment by the same foreign investors; and (b) brought in ₹ 305 Crores FDI in INX Media by issuing shares to the foreign investors at a premium of more than ₹ 800/- per share. 3. Accordingly, from February to April ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012-2014) and Union Minister of Home Affairs (2008-2012). He is a member of the Indian National Congress, which is the principal Opposition party in Parliament. The Petitioner is also a senior spokesperson of the Congress party as well as a prominent and widely-read columnist. Thus, he has deep roots in the society. 7. At the outset, it is submitted that the Petitioner is neither named as an accused nor as a suspect in the subject FIR. There is no allegation against the Petitioner in the body of the subject FIR. Further, the allegations in the subject FIR pertain to the grant of an FIPB approval in 2007-08, for which the subject FIR came to be registered after a period of almost 10 years based on alleged oral source information. After more than a year of the registration of the subject FIR and despite the fact that the Petitioner was not named as an accused, the CBI issued a notice dated 28.05.2018 bearing no. 01/4406 under Section 41A of the Cr.P.C. directing the Petitioner to appear before the CBI on 31.05.2018 at 11.00 hours. Apprehending his arrest, the Petitioner was constrained to prefer a petition (being B.A. No. 1316/2018) before this Court under Section 438 Cr.P.C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I am instructed to state that your notice fails to mention the provision of law under which my Client has been issued a notice at midnight calling upon him to appear at a short notice of 2 (Two) hours. Furthermore, kindly note that my client is exercising the rights available to him in law and had approached the Hon ble Supreme Court on 20.08.2019 seeking urgent reliefs in respect of the Order dated 20.08.2019 dismissing his anticipatory bail application no.1316/2018 in the captioned FIR. [ } I therefore request you to not take any coercive action against my Client till then. 9. On 21.08.2019, the Petitioner approached the Hon ble Supreme Court vide SLP (Crl.) No. 7525/2019 impugning the order dated 20.08.2019 passed by this Court dismissing the Petitioner s anticipatory bail application, which upon urgent mentioning, was directed to be listed before the Hon ble Chief Justice of India for urgent hearing. Despite the above, on 21.08.2019, the CBI, without any notice to the Petitioner, approached the Ld. Trial Court for issuance of Non-Bailable Warrants against the Petitioner and the Ld. Trial Court was pleased to direct the issuance of the NBW s. Pertinently, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce and Home Affairs, the Petitioner 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 Ld. Trial Court. 12. It is further submitted that it is evident from the past conduct of the Petitioner that he has always cooperated with the investigation and will continue to do so in the future, as and when called upon by the Investigating Agency or the Ld. Trial Court. The Petitioner does not have the propensity to evade the process of law, the Petitioner has throughout been available during the period of investigation and that the Petitioner has cooperated in every manner possible with the Investigating Agency. 13. Mr. Sibal submitted that in short reply dated 03.07.2019 filed by the CBI before this Court in the Petitioner s anticipatory bail application (being B.A. No. 1316 of 2018), the CBI did not even allege that the Petitioner is a flight risk or is likely to tamper with the evidence or is likely to influence witnesses, even though the same are relevant considerations for grant or refusal of anticipatory bail. The only reason stated in the said short reply for opposin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner so far, despite having undergone custodial interrogation for the maximum permissible period of 15 days. The Petitioner s residence in Chennai and New Delhi have been subjected to search and seizure operations by the Enforcement Directorate and the CBI on 16.05.2017 and 13.01.2018. No incriminating documents or materials were seized during these searches. 18. Regarding tampering and influencing witnesses, it is submitted that the alleged events in this relate to the year 2007-08 and the Petitioner was part of the dispensation in power for more than 6 years thereafter and there is not even an allegation that the Petitioner ever influenced any witness or tampered with any evidence. In any event, the material in this case is documentary in nature, in the form of three files of the Ministry of Finance, which are currently in the safe and secure possession of the incumbent Government or the Ld. Trial Court. As such, there arises no question of the Petitioner being able to tamper with the said documentary evidence. Further, the Petitioner has already been confronted with 5 officers of the Ministry of Finance who were involved in the processing of the FIPB proposal pertaining to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material on record shows that the investigation was over as far back as January, 2019 when sanction was sought against the Petitioner. The Petitioner has already spent 15 days in CBI custody, wherein he was confronted with 5 officers of the Ministry of Finance (namely, Under Secretary-Sh. R. Prasad, OSD-Sh. P.K. Bagga, Director-Sh. Prabodh Saxena, Joint Secretary-Sh. Anup Pujari and Additional Secretary-Ms. Sidhushree Khullar), who were involved in processing the file relating to FIPB approval for INX Media and each of them has stated during the course of investigation that: (i) They were never advised or directed or in any way influenced by the Petitioner, in any manner whatsoever, to grant the FIPB approval to INX Media: (ii) The approvals granted in INX Media were within the policy and legal framework and nothing contrary to norms was done. The investment of ₹ 305 Crores is squarely covered by Press Note No. 7, 1999 series dated 01.04.1999. 22. In addition, there is no allegation in the whole FIR that the decision of the FIPB Unit and the FIPB Board, approved by the Finance Minister was contrary to any policy or was beyond the scope or power of the FIPB Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eafter, the case was put up to the Secretary, DEA (who had previously considered and recommended the case as Chairman of the FIPB) who once again signed the file and put it to the competent authority (Finance Minister) on 28.05.2007. The Petitioner approved the file on the same day. Similarly, the downstream approval was processed, examined and recommended by all the above officers and put up to the competent authority (Finance Minister) on 30.10.2008. The Petitioner approved the file on the same day. From the above, it is evident no single officer can take a decision on any proposal. It is collective decision of 6 Secretaries, assisted by several officers in the FIPB Unit and the DEA, respectively. Therefore, it is preposterous to allege that any person could have influenced any official of the FIPB, including all 6 (Six) Senior Secretaries to the Government of India. During the entire interrogation of the Petitioner for 15 days, the Petitioner has not even been confronted with any documents or material concerning the alleged Foreign Accounts or the alleged properties owned by the Petitioner in abroad or the alleged Shell Companies . There is not an iota of evidence against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e along with some third person met the petitioner in his office. On investigation, the visitors register is stated to be destroyed because of lapse of time. However, the contemporaneous evidence is collected from Hotel Oberoi which corroborates the statements of Indrani Mukherjee, that she and Peter Mukherjee were staying in Hotel Oberoi, New Delhi between 06.03.2007 and 09.03.2007 and they having used the Hotel vehicle for internal travel on 09.03.2007, which was used for travelling to the petitioner s office where the meeting was held. After the meeting dated 09.03.2007, the INX Media applied for FIPB approval vide application dated 13.03.2007 requesting for the following approval for FDI in the form of: (a) Allotment of 14,98,995/- Equity shares of ₹ 10 each. (b) Allotment of 31,22,605/- convertible preference shares of ₹ 10/- each. 25. Learned Solicitor General further submits that despite an already existing share subscription agreement for bringing ₹ 403 crores, deliberately an application was made showing FDI of ₹ 4.62 crores. The reason for this concealment have emerged during investigation and have been placed for perusal of this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies controlled and owned by the co-conspirator and co-accused Karti P. Chidambaram viz. son of the petitioner. It has come on record that large sums of money has come into the companies owned and/or controlled by the co-conspirator Karti P. Chidambaram during the relevant period for the favours shown by the petitioner to INX Media. Sufficient evidence to prove that some of the payments were illegal gratification and for rest, investigation is in progress. It has also come on record that no services were rendered by these companies owned and controlled by the petitioner and Karti P. Chidambaram to the companies from where the huge sums of money is received. Investigation has also revealed that contemporaneously large number of emails were exchanged between the representatives of INX Media and the company controlled by petitioner and Karti P. Chidambaram which pertained to grant of FIPB approval to INX Media. 29. He further submitted that in cases of conspiracy, it is well settled that there cannot be a direct evidence and conspiracy has to be seen from the surrounding circumstances during the trial. 30. To strengthen his arguments, learned counsel has placed reliance to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot illegal in itself but is done by illegal means. It is, therefore, plain that meeting of kinds of two or more persons for doing or causing to be done an illegal act or an act by illegal means is sine quo non of criminal conspiracy. It is extremely difficult to adduce direct evidence to prove conspiracy. Existence of conspiracy and its objective can be inferred from the surrounding circumstances and the conduct of the accused. In some cases, indulgence in the illegal act or legal act by illegal means may be inferred from the knowledge itself. 46. After referring to Yash Pal Mittal v. State of Punjab (1977) 4 SCC 540 and Ajay Aggarwal v. Union of India (1993) 3 SCC 609) in State of Maharashtra v. Som Nath Thapa (1996) 54 SCC 659) in para 24, it was held as under : (Som Nath Thapa case . 24. The aforesaid decisions, weighty as they are, lead us to conclude that to establish a charge of conspiracy, knowledge about indulgence in either an illegal act or a legal act by illegal means is necessary. On some cases, intent of unlawful use being made of the goods or services in question may be inferred from the knowledge itself. This apart, the prosecution has not to establish that a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner has been using his might and his position to influence the witnesses of the present case. The two crucial witnesses have given statement detailing the manner in which they are being influenced. 35. In regard to the non participation of the accused during interrogation while he was under the protective cover of the pre-arrest bail order, Mr. Tushar Mehta further submits that the argument of the petitioner that he was called only once i.e. on 06.06.2018 for interrogation and therefore his subsequent arrest after a year and a half was not justified is completely untenable and misleading. It is submitted that the petitioner was issued a Notice under Section 41-A of Cr.P.C. on 28.05.2018 for his appearance on 31.05.2018. However, the petitioner instead of joining the investigation approached this Court seeking anticipatory bail. In the said bail application, this Court was pleased to pass an interim order protecting the petitioner from arrest. Pursuant thereto when the petitioner was called for interrogation on 06.06.2018, from his conduct the investigating agency came to a bonafide conclusion that the interrogation of the petitioner under the protective umbrella of a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s fit a term not exceeding fifteen days in the whole occurring in Sub-section (2) of Section 167 now the question is whether it can be construed that the police custody, if any, should be within this period of first fifteen days and not later or alternatively in a case if such remand had not been obtained or the number of days of police custody in the first fifteen days are less whether the police can ask subsequently for police custody for full period of fifteen days not availed earlier or for the remaining days during the rest of the periods of ninety days or sixty days covered by the proviso. The decisions mentioned above do not deal with this question precisely except the judgment of the Delhi High Court in Dharam Pal s case. Taking the plain language into consideration particularly the words otherwise than in the custody of the police beyond the period of fifteen days in the proviso it has to be held that the custody after the expiry of the first fifteen days can only be judicial custody during the rest of the periods of ninety days or sixty days and that police custody if found necessary of fifteen days. To this extent the view taken in Dharam Pal s case is correct. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid concepts with regard to the writ of habeas corpus, especially pertaining to an order passed by the learned Magistrate at the time of production of the accused, it is necessary to advert to the schematic postulates under the Code relating to remand. There are two provisions in the Code which provide for remand, i.e., Sections 167 and 309. The Magistrate has the authority under Section 167(2) of the Code to direct for detention of the accused in such custody, i.e., police or judicial, if he thinks that further detention is necessary. 24. The act of directing remand of an accused is fundamentally a judicial function. The Magistrate does not act in executive capacity while ordering the detention of an accused. While exercising this judicial act, it is obligatory on the part of the Magistrate to satisfy himself whether the materials placed before him justify such a remand or, to put it differently, whether there exist reasonable grounds to commit the accused to custody and extend his remand. The purpose of remand as postulated under Section 167 is that investigation cannot be completed within 24 hours. It enables the Magistrate to see that the remand is really necessary. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gravest offence against the society at large and hence are required to be treated differently in the matter of bail. The Hon ble Courts have successively held that the entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book as such offences affects the very fabric of democratic governance and probity in public life. A murder may be committed in the heat of moment upon passing being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest . As observed in State of Gujarat vs. Mohanlal Jitamalji Porwal: (1987) 2 SCC 364]. 44. Reliance in this regard has also placed to the cases of P. Chidambaram vs. Enforcement of Directorate in Criminal Appeal No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arliament. Therefore, in my considered view, there is no chance of the petitioner tampering with the evidence as argued by Mr. Kapil Sibal and Mr. Abhishek Singhvi, learned Sr. Advocates. 50. Regarding influencing the witness, I will discuss later on. 51. Regarding merits of the case, though not necessary since charge-sheet has not been filed, and the present petition is for bail, however, argued and learned counsel for the petitioner has heavily relied upon Press Note No. 7, 1999 series dated 01.04.1999. But, it is clearly mentioned therein that as per the existing provisions, the foreign collaboration approvals are subject to the conditions at the total non-resident shareholding including foreign holding or in the Indian company should not exceed the amount as well as the percentage specified in the approval letter. For any proposal increase in the amount as also the percentage of non-resident shareholding, prior approval of the government is necessary. 52. It is pertinent to mention here that as per Press Note No.7, 1999 above-mentioned, the proposals received by the Government for financial restricting in the following manner: (a) in the case of joint venture compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be known in advanced. The present policy is to permit companies to issue equity and preference shares and premium at par the accorded valuation and in compliance of SEBI/RBI guidelines. 56. Ms. Khullar further mentioned in communication dated 02.09.2008 that said the position was explained to Sh. Roopak Kumar, Deputy Director, Income Tax, Intelligence (II) on 07.08.2008. While the approved percentage is 46.216%, the company has allotted only 43.92 percent. Therefore, it is clearly within the permission accorded by FIPB. She further clarified while referring Press Note 7 of 1999, the prior approval of FIPB or government would not be needed for increasing amount of foreign equity as long as the percentage is within the approval obtained. 57. Regarding the second point which was about the downstream investment by Inx Media, Ms. Khullar stated that recently FIPB had received an application by the company which is under consideration. 58. It is not in dispute that FDI approval was granted by FIPB therefore, the reply to the D.O, letter dated 29.07.2008 of above named member, CPDT was to be decided by the FIPB. Moreover, Ms. Khullar was neither revenue secretary nor finance secr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65. It is also important to note that the Board was not informed about the complaints received by the petitioner, the then Finance Minister and sent only to the Revenue Secretary. The Revenue Secretary who was Member of the FIPB chose not to attend FIPB meeting in which fresh proposal was decided to be granted and his representative remained present and gave a dissent note. 66. During investigation, as per Sealed Cover it is revealed that Indrani Mukherjee and Petter Mukherjee (accused) met the petitioner even before the filing of application before FIPB Unit during which the petitioner assured them regarding the FIPB approval and in lieu thereof, directed that the business interest of his son Karti Chidambaram, who is also an accused, should be taken care of and certain overseas transactions should made in his favour. It is also on the record that illegal gratification has been paid by and through other companies by Indrani and Peter Mukherjee controlled and owned by the co-conspirator and co-accused Karti P. Chidambaram viz. son of the petitioner. 67. It is also on record that large sums of monies has come into the companies owned and / or controlled by the co-con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest . as observed by the Hon ble Supreme Court in the State of Gujarat vs. Mohanlal Jitamalji Porwal (Supra). 71. Thus, order of remand, for judicial custody, of the Trial Court is justified. 72. As argued by learned Solicitor General, (which is part of Sealed Cover , two material witnesses (accused) have been approached for not to disclose any information regarding the petitioner and his son (co-accused). This Court cannot dispute the fact that petitioner has been a strong Finance Minister and Home Minister and presently, Member of Indian Parliament. He is respectable member of the Bar Association of Supreme Court of India. He has long standing in BAR as a Senior Advocate. He has deep root in the Indian Society and may be some connection in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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