Court Can Peruse Case Diary And Materials Collected During Investigation While Considering Bail Applications : SC [Read Judgment]

In its judgment dismissing the plea of pre-arrest bail sought by former Finance Minister P. Chidambaram, the Supreme Court has made some important observations vis-a-vis application of Prevention of Money-Laundering Act and the scope of power under Section 438 CrPC to grant anticipatory bail.

Importantly, the bench held that the court can receive the materials/documents collected during the investigation and peruse the same to satisfy its conscience that the investigation is proceeding in the right lines and for the purpose of consideration of grant of bail/anticipatory bail etc. 

The bench comprising of Justice R. Banumathi and AS Bopanna though disapproved the approach of the High Court Judge in extracting the note produced by the Enforcement Directorate, agreed with his conclusion that it is not a case fit to grant anticipatory bail.

Single Judge Approach Of Extracting ED Note Incorrect

The court said that, in the initial stages of investigation, the Court may not extract or verbatim refer to the materials which the Court has perused (as has been done in this case by the learned Single Judge) and make observations which might cause serious prejudice to the accused in trial and other proceedings resulting in miscarriage of justice. The bench observed:

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. 

Registration Of FIR Against Chidambaram Under PMLA Maintainable

The main contention urged in this case was that the very registration of the FIR against Chidambaram under PMLA is not maintainable. It was contended that the minimum threshold for the Enforcement Directorate to acquire jurisdiction at the relevant time was Rs.30 lakhs whereas, in the present case, there is no material to show any payment apart from the sum of Rs.10 lakhs (approximately) allegedly paid by INX Media to ASCPL with which the accused is said to be having no connection whatsoever. Rejecting the said contention, the bench said:

In terms of Section 4 of the PMLA, the offence of money-laundering is punishable with rigorous imprisonment for a term not less than three years extending to seven years and with fine. The Second Schedule to the Criminal Procedure Code relates to classification of offences against other laws and in terms of the Second Schedule of the Code, an offence which is punishable with imprisonment for three years and upward but not more than seven years is a cognizable and non-bailable offence. Thus, Section 4 of the Act read with the Second Schedule of the Code makes it clear that the offences under the PMLA are cognizable offences. As pointed out earlier, Section 8 of the Prevention of Corruption Act was then found a mention in Part 'A' of the Schedule (Paragraph 8). Section 8 of the Prevention of Corruption Act is punishable for a term extending to seven years. Thus, the essential requirement of Section 45 of PMLA "accused of an offence punishable for a term of imprisonment of more than three years under Part 'A' of the Schedule" is satisfied making the offence under PMLA.

Court has the powers, to receive the case diary/materials collected during the investigation

The issues considered by the Court was (i) whether the court can/cannot look into the documents/materials produced before the court unless the accused was earlier confronted with those documents/materials?; and (ii) whether the court is called upon to hold a mini inquiry during the intermediary stages of investigation by examining whether the questions put to the accused are 'satisfactory' or 'evasive', etc.?

In this regard, the bench, referring to earlier judgments on the subject, observed 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 investigation; (iii) whether regular or anticipatory bail is to be granted to the accused or not; (iv) whether any further custody of the accused is required for the prosecution; (v) to satisfy itself as to the correctness of the decision of the High Court/trial court which is under challenge. It further added:

The above instances are only illustrative and not exhaustive. Where the interest of justice requires, the court has the powers, to receive the case diary/materials collected during the investigation. As held in Mukund Lal, ultimately there can be no better custodian or guardian of the interest of justice than the court trying the case. Needless to point out that when the Court has received and perused the documents/materials, it is only for the purpose of satisfaction of court's conscience. 

Confronting Accused With Materials Collected By ED Would Lead To Devastating Consequences

One of the contentions advanced on behalf of Chidambaram was that the materials produced by the Enforcement Directorate could have never been relied upon for the purpose of consideration of anticipatory bail unless the appellant was earlier confronted with those documents/materials. In this regard, the bench said:

• If the accused are to be confronted with the materials which were collected by the Prosecution/Enforcement Directorate with huge efforts, it would lead to devastating consequences and would defeat the very purpose of the investigation into crimes, in particular, white collar offences. If the contention of the appellant is to be accepted, the investigating agency will have to question each and every accused such materials collected during investigation and in this process, the investigating agency would be exposing the evidence collected by them with huge efforts using their men and resources and this would give a chance to the accused to tamper with the evidence and to destroy the money trail apart from paving the way for the accused to influence the witnesses.

• If the contention of the appellant is to be accepted that the accused will have to be questioned with the materials and the investigating agency has to satisfy the court that the accused was "evasive" during interrogation, the court will have to undertake a "mini trial" of scrutinizing the matter at intermediary stages of investigation 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.
• 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

• 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 mala fide or where there is abuse of power and non-compliance of the provisions of Code of Criminal Procedure. However, this power of invoking inherent jurisdiction to issue direction and interfering with the investigation is exercised only in rare cases where there is abuse of process or non-compliance of the provisions of Criminal Procedure Code.

Refusal to grant anticipatory bail did not amount to denial of fundamental rights

On behalf of Chidambaram, it was also contended that unless custodial interrogation is warranted, denial of anticipatory bail would amount to denial of the right conferred upon the appellant under Article 21 of the Constitution of India. Addressing this aspect, the bench said:

We are conscious of the fact that the legislative intent behind the introduction of Section 438 Cr.P.C. is to safeguard the individual's personal liberty and to protect him from the possibility of being humiliated and from being subjected to unnecessary police custody. However, the court must also keep in view that a criminal offence is not just an offence against an individual, rather the larger societal interest is at stake. Therefore, a delicate balance is required to be established between the two rights - safeguarding the personal liberty of an individual and the societal interest. It cannot be said that refusal to grant anticipatory bail would amount to denial of the rights conferred upon the appellant under Article 21 of the Constitution of India.

The court further observed:

Ordinarily, arrest is a part of procedure of the investigation to secure not only the presence of the accused but several other purposes. Power 48 under Section 438 Cr.P.C. is an extraordinary power and the same has to be exercised sparingly. The privilege of the pre-arrest bail should be granted only in exceptional cases. The judicial discretion conferred upon the court has to be properly exercised after application of mind as to the nature and gravity of the accusation; possibility of applicant fleeing justice and other factors to decide whether it is a fit case for grant of anticipatory bail. Grant of anticipatory bail to some extent interferes in the sphere of investigation of an offence and hence, the court must be circumspect while exercising such power for grant of anticipatory bail. Anticipatory bail is not to be granted as a matter of rule and it has to be granted only when the court is convinced that exceptional circumstances exist to resort to that extraordinary remedy.

Section 438 CrPC To Be Exercised Sparingly In Cases Of Economic Offences

The court also added that the power under Section 438 Cr.P.C. being an extraordinary remedy, has to be exercised sparingly; more so, in cases of economic offence, as it stand as a different class as they affect the economic fabric of the society.

"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."

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