Supreme Court Grants Bail in INX Media Case: P. Chidambaram vs. CBI (2019)

Date of the Judgment: October 22, 2019
Citation: 2019 INSC 1103
Judges: R. Banumathi, J., A.S. Bopanna, J., Hrishikesh Roy, J.
Can a court deny bail based on a mere apprehension that a person might influence witnesses, even when there’s no concrete evidence of such attempts? The Supreme Court of India addressed this critical question in a case involving alleged irregularities in Foreign Investment Promotion Board (FIPB) clearances. The court ultimately granted bail to the appellant, emphasizing that bail is the rule and jail is an exception. This judgment underscores the importance of concrete evidence over speculative concerns in bail decisions. The judgment was authored by Justice R. Banumathi, with Justices A.S. Bopanna and Hrishikesh Roy concurring.

Case Background

The case revolves around alleged irregularities in the Foreign Investment Promotion Board (FIPB) clearance granted to INX Media for receiving foreign investment. In 2007, INX Media sought approval for FDI up to 46.216% of its issued equity capital, amounting to ₹4.62 crores. The FIPB recommended the proposal, subject to the Finance Minister’s approval. However, INX Media allegedly violated the approval by making a downstream investment of 26% in INX News without specific FIPB approval and generating over ₹305 crores in FDI by issuing shares at a premium.

Following a complaint, the Income Tax Department investigated a payment of ₹10,00,000 by INX Media to M/s Advantage Strategic Consulting Private Limited (ASCPL). The prosecution alleges that INX Media conspired with Karti Chidambaram and the then Finance Minister (the appellant) to circumvent penal provisions. It is alleged that payments were made to ASCPL for services rendered by Chess Management Services, controlled by Karti Chidambaram, to influence public servants at the FIPB.

The Central Bureau of Investigation (CBI) registered an FIR on May 15, 2017, against INX Media, INX News, Karti Chidambaram, Chess Management Services, Advantage Strategic Consulting, and unknown officials for alleged offenses under Section 120B of the Indian Penal Code (IPC), Section 420 of the IPC, and Sections 8 and 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988.

Timeline

Course of Proceedings

The appellant filed a petition under Section 438 of the Code of Criminal Procedure (Cr.P.C.) before the High Court seeking anticipatory bail. The High Court granted interim protection on May 31, 2018, which continued until August 20, 2019, when the application for anticipatory bail was dismissed. The appellant then approached the Supreme Court, but was arrested by the CBI on August 21, 2019. The Supreme Court dismissed the SLP as infructuous after the arrest. The High Court refused to grant regular bail on September 30, 2019, leading to the current appeal before the Supreme Court.

Legal Framework

The case involves several key legal provisions:

• Section 120B of the Indian Penal Code (IPC): This section deals with the punishment for criminal conspiracy.
• Section 420 of the IPC: This section pertains to cheating and dishonestly inducing delivery of property.
• Sections 468 and 471 of the IPC: These sections deal with forgery and using forged documents.
• Section 8 of the Prevention of Corruption Act, 1988: This section addresses taking gratification by corrupt or illegal means to influence a public servant.
• Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988: These sections concern criminal misconduct by a public servant.

Arguments

Appellant’s Arguments:

• The High Court erred in dismissing the bail application based on a mere apprehension that the appellant might influence witnesses. There was no supporting material to substantiate this claim.
• The reference to two material witnesses being approached was not supported by any credible material and lacked specific details.
• The allegation of influencing witnesses was an afterthought, as it was not mentioned in previous remand applications.
• The appellant was interrogated by the CBI only once, despite being in custody for several days.
• Bail should be granted as a rule, and jail should be an exception.
• All other accused in the case were granted bail.
• The charge sheet did not include tampering with evidence or intimidating witnesses as a charge.
• The appellant had cooperated with the investigation and had not attempted to flee.
• The appellant, being a Member of Parliament and a Senior Member of the Bar, was not a flight risk.

Respondent’s (CBI) Arguments:

• The court should consider the gravity of the offense and the possibility of the accused fleeing the country.
• The appellant had the means and resources to flee the country.
• There was material to show that a witness was influenced, and the identity of the witness could not be shared to protect them.
• The possibility of influencing witnesses was not a mere apprehension but based on material evidence.
• The mere presence of the appellant would be sufficient to intimidate the witnesses.
• The investigation revealed that more companies were involved, and granting bail at this stage would affect the investigation.

Issues Framed by the Supreme Court

The main issue before the Supreme Court was:

1. Whether the High Court was justified in declining regular bail to the appellant on the apprehension that he might influence witnesses, when other factors like “flight risk” and “tampering with evidence” were held in favor of the appellant.

Treatment of the Issue by the Court

The following table demonstrates how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

Cases:

• Niranjan Singh and another v. Prabhakar Rajaram Kharote and others (1980) 2 SCC 559 – This case was cited to emphasize that detailed examination of evidence and elaborate documentation of the merits should be avoided while passing orders on bail applications.
• Kalyan Chandra Sarkar v. Rajesh Ranjan and another (2004) 7 SCC 528 – This case was cited to highlight the factors to be considered while granting bail, including the nature of accusation, severity of punishment, and reasonable apprehension of tampering with witnesses.
• Puran v. Rambilas and another (2001) 6 SCC 338 – This case was cited to support the view that the court should indicate reasons for concluding why bail was granted or refused.
• Prahlad Singh Bhati v. NCT, Delhi and another (2001) 4 SCC 280 – This case was cited to highlight the factors to be considered while considering an application for bail.
• Jayendra Saraswathi Swamigal v. State of Tamil Nadu (2005) 2 SCC 13 – This case was cited to emphasize the considerations that weigh with the court in granting bail in non-bailable offenses.
• State of U.P. through CBI v. Amarmani Tripathi (2005) 8 SCC 21 – This case was cited to reiterate the matters to be considered in an application for bail.
• Mahender Chawla and others v. Union of India and others 2018 (15) SCALE 497 – This case was cited to argue that if the appellant had approached the witnesses, the prosecution could have sought protection for the witnesses as per the “witnesses protection scheme.”

Judgment

The Supreme Court set aside the High Court’s judgment and granted bail to the appellant. The Court held that the High Court’s apprehension about the appellant influencing witnesses was not substantiated by any concrete evidence. The Court noted that the appellant was not a flight risk, and there was no evidence of tampering with evidence. The Court emphasized that bail is the rule, and jail is an exception. The Court also noted that the charge sheet had been filed, and the appellant was in custody for two months and had cooperated with the investigation.

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Niranjan Singh and another v. Prabhakar Rajaram Kharote and others (1980) 2 SCC 559*: The Court used this case to emphasize that detailed examination of evidence is not required during bail hearings.
• Kalyan Chandra Sarkar v. Rajesh Ranjan and another (2004) 7 SCC 528*: The Court used this case to reiterate the factors to consider when granting bail, such as the nature of the accusation and the risk of witness tampering.
• Puran v. Rambilas and another (2001) 6 SCC 338*: The Court used this case to highlight the need for courts to provide reasons for granting or denying bail.
• Prahlad Singh Bhati v. NCT, Delhi and another (2001) 4 SCC 280*: The Court used this case to list the factors that need to be considered while deciding a bail application.
• Jayendra Saraswathi Swamigal v. State of Tamil Nadu (2005) 2 SCC 13*: The Court used this case to discuss the considerations for granting bail in non-bailable offenses.
• State of U.P. through CBI v. Amarmani Tripathi (2005) 8 SCC 21*: The Court cited this case to outline the matters to be considered in a bail application.
• Mahender Chawla and others v. Union of India and others 2018 (15) SCALE 497*: The Court used this case to point out that the prosecution could have sought witness protection if there was a genuine threat.

What weighed in the mind of the Court?

The Supreme Court was primarily influenced by the lack of concrete evidence supporting the apprehension that the appellant would influence witnesses. The Court emphasized that bail is a rule and jail is an exception, and that speculative concerns cannot be the basis for denying bail. The Court also considered that the appellant was not a flight risk, had cooperated with the investigation, and was already in custody for two months. The fact that the charge sheet had been filed and other co-accused were granted bail also weighed in the court’s decision.

The Court’s reasoning included:

• “Expression of prima facie reasons for granting or refusing to grant bail is a requirement of law especially where such bail orders are appealable so as to indicate application of mind to the matter under consideration and the reasons for conclusion.”
• “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.”
• “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 Court rejected the CBI’s argument that the appellant was a flight risk, stating that the appellant had surrendered his passport and a lookout notice had been issued. The Court also found that the CBI’s claim of witness tampering was not supported by sufficient evidence. The Court noted that the allegation of witness influencing was not mentioned in the remand applications and was brought up only at the time of opposing bail.

The Court also highlighted that the High Court had focused on the merits of the case instead of the well-settled principles for granting or refusing bail. The Court clarified that its findings were only for the purpose of considering the bail application and should not influence the trial or other proceedings.

Key Takeaways

• Bail is a rule, and jail is an exception. Courts should not deny bail based on mere apprehensions.
• Concrete evidence is required to support claims of witness tampering or influencing.
• The absence of a flight risk and cooperation with the investigation are important factors to consider when granting bail.
• Courts should avoid detailed examination of the merits of the case during bail hearings.

Directions

The Supreme Court directed that:

• The appellant be released on bail upon executing a bail bond of ₹1,00,000 with two sureties of like sum.
• The appellant’s passport be deposited with the Special Court.
• The appellant shall not leave the country without leave of the Special Court.
• The appellant shall make himself available for interrogation as and when required.

Development of Law

The ratio decidendi of this case is that bail cannot be denied based on mere apprehension of witness tampering without concrete evidence. This judgment reinforces the principle that bail is a rule and jail is an exception, emphasizing the importance of personal liberty. It also clarifies the factors that courts should consider when deciding bail applications, such as the absence of flight risk, cooperation with the investigation, and lack of evidence of witness tampering.

Conclusion

The Supreme Court’s decision to grant bail to the appellant in the INX Media case underscores the importance of concrete evidence over speculative concerns in bail decisions. The judgment reiterates the principle that bail is a rule and jail is an exception and that personal liberty should not be curtailed without sufficient justification. This case serves as a reminder to lower courts to adhere to well-settled principles when deciding bail applications and to avoid focusing on the merits of the case at this stage.