P. Chidambaram v. Directorate of Enforcement - (Supreme Court) (05 Sep 2019)

Anticipatory bail cannot be granted in economic offence cases as it hampers effective investigation

MANU/SC/1209/2019

Criminal

Present 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 Rs.305 crores against approved inflow of Rs.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) under Section 120B read with Section 420 of Indian Penal Code, 1860 (IPC), Section 8 and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988.

By the impugned order, the High Court also refused to grant anticipatory bail in the case registered by the Enforcement Directorate punishable under Sections 3 and 4 of the Prevention of Money-Laundering Act, 2002.

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, the Supreme Court held that, the right of anticipatory bail is not a part of Article 21 of the Constitution of India, 1950.

Power under Section 438 of Code of Criminal Procedure, 1973 (CrPC) being an extraordinary remedy, has to be exercised sparingly; more so, in cases of economic offences. Economic offences stand as a different class as they affect the economic fabric of the society. In Directorate of Enforcement v. Ashok Kumar Jain, it was held that in economic offences, the accused is not entitled to anticipatory bail.

Grant of anticipatory bail at the stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting the useful information and also the materials which might have been concealed. Success in such interrogation would elude, if the accused knows that he is protected by the order of the court. Grant of anticipatory bail, particularly in economic offences would definitely hamper the effective investigation. Supreme Court is of view that, present is not a fit case to grant anticipatory bail.

In a case of money-laundering where it involves many stages of “placement”, “layering i.e. funds moved to other institutions to conceal origin” and “interrogation i.e. funds used to acquire various assets”, it requires systematic and analysed investigation which would be of great advantage. Section 438 of CrPC is to be invoked only in exceptional cases where the case alleged is frivolous or groundless. In the case in hand, there are allegations of laundering the proceeds of the crime. The Enforcement Directorate claims to have certain specific inputs from various sources, including overseas banks.

In view of nature of allegations and the stage of the investigation, the investigating agency has to be given sufficient freedom in the process of investigation. Grant of anticipatory bail to the Appellant will hamper the investigation and this is not a fit case for exercise of discretion to grant anticipatory bail to the appellant. The appeal is dismissed.

Tags : ANTICIPATORY BAIL GRANT DISCRETION