Madras HC Says Look-Out Circular Against Karti Chidambaram Was Issued In “Hot Haste”; Quashes It [Read Order]

The Madras High Court on Monday quashed a lookout circular (LOC) issued by the CBI against Karti Chidambaram, son of former Union Minister P. Chidambaram, in connection with the INX Media case.

A Bench comprising Chief Justice Indira Banerjee and Justice Abdul Quddhose opined that the LOC was issued in “hot haste”, and ruled, “In view of the finding of this Court that the conditions precedent for issuance of the impugned LOC were absent, and the impugned LOC is liable to set aside on that ground, we need not go into the questions of whether an LOC could have been issued without statutory sanction, or whether the respondents concerned had jurisdiction to issue the impugned LOC. However, in our view, the Look Out Circular was issued in hot haste when the conditions precedent for issuance of such Circular did not exist. The impugned Look Out Circular is, thus, liable to be set aside.”

Mr. Chidambaram is accused of receiving kickbacks amounting to 3.5 crore from a private company, the INX media, in exchange for allowing them to break a foreign investment. As per the allegations levelled by the CBI, INX Media had got an approval of receiving Rs. 4.62 crore investment from the Foreign Investment Promotion Board (FIPB). The Company, however, received Rs. 305 crore from two companies based in Mauritius, with the companies paying a premium of Rs. 800 per share. The CBI has alleged that the officials investigating the misappropriation were hushed up through “influence in the finance ministry” while his father, P. Chidambaram, was the Finance Minister.

The Court, however, noted that the FIR did not accuse Mr. Chidambaram of misappropriation, embezzlement, financial illegalities or any economic offences. It then opined that the LOC had been issued “prematurely, in haste”, noting that the same was issued a day after the issuance of a notice calling upon Mr. Chidambaram to appear before the Station House Officer (SHO)/ Investigation Officer (IO).

The Court thereafter asserted that as on the date of issuance of the LOC, there was no reason to suppose that Mr. Chidambaram would not appear before the SHO or the IO. It further observed, “Such LOCs cannot be issued as a matter of course, but when reasons exist, where an accused deliberately evades arrest or does not appear in the trial Court. The argument of the learned Additional Solicitor General that a request for Look Out Circular could have been made in view of the inherent power of the investigating authority to secure attendance and cooperation of an accused is contrary to the aforesaid circulars and thus, not sustainable.”

The Court therefore quashed the LOC, while clarifying that this would not affect the criminal proceedings initiated pursuant to the FIR or any other proceedings initiated against Mr. Chidambaram.