Supreme Court Grants Bail in the P. Chidambaram Cases — Some Thoughts

[This is a long post discussing both the CBI and the ED Bail Orders]

Readers may recall that at the end of August 2019, the Delhi High Court dismissed the petitions of P. Chidambaram for anticipatory bail in connection with what has become popularly known as the "INX Media Scam", which was the subject matter of investigations being conducted by the Central Bureau of Investigation ["CBI"] as well as the Enforcement Directorate ["ED"]. Mr. Chidambaram was arrested by the CBI almost immediately after this order, and so he moved the Supreme Court for anticipatory bail in the ED case. The petition in the ED case was also dismissed on 05.09.2019, since the Supreme Court agreed that necessary custodial interrogation would suffer if bail were granted.

Mr. Chidambaram's bail pleas in the CBI case made their way to the Supreme Court, and around two months after his initial arrest, the Supreme Court held in his favour, directing that he be released on bail in the CBI Case [Crl. Appeal No. 1603/2019, decided on 22.10.2019]. However this did not lead to his release since, around a week before the order, the ED had sought, and was granted, permission to arrest Mr. Chidambaram [Note that the ED had not made any efforts to secure his custody, let alone arrest Mr. Chidambaram, till 11.10.2019]. This triggered another set of bail petitions, which resulted in the order passed today in P. Chidambaram v. Enforcement Directorate granting him bail in the ED case [Crl. Appeal 1831 of 2019, decided on 04.12.2019].

The slew of orders passed by courts in Mr. Chidambaram's petitions has made distinct contributions to the law in this field — some desirable, others not so. Having discussed previous orders at the stage of anticipatory bail, this post discusses the two orders of October [Crl. A. 1603/2019] and December [Crl. A. 1831/2019]. I first discuss their contributions to the law, and then make some observations on the proceedings at large to highlight the seriousness of certain issues that are given criminally negligible attention by courts while considering the grant or refusal of bail.

P. Chidambaram v. CBI — Focusing on the Particulars       

The posture of proceedings before the Supreme Court in this case was slightly peculiar: The High Court had held that there was no basis to apprehend that Mr. Chidambaram would tamper with evidence, or that he was a "flight risk". Nevertheless, it rejected his bail plea, considering the probability that he could influence other witnesses. Both parties filed cross-appeals in the Supreme Court where the accused sought bail, and the CBI sought to challenge the High Court's observations that Mr. Chidambaram was not a flight risk.

In a pleasantly short order, the Supreme Court held that bail ought to be granted. Besides helpfully culling out five relevant principles for considering bail pleas for future courts [(i) Gravity, (ii) Threat of Tampering with Evidence, (iii) Threat of Absconding, (iv) Status / Personal factors of the Accused, and (v) Public / State interest (See Paragraph 22)], the Court also repeatedly insisted that the specifics of each case be looked at and, in doing so, chided the State for asking the Court to treat the "flight risk of economic offenders [as] a national phenomenon".

How is a Court to consider the above factors, then? The Supreme Court did not approve of a full-blown analysis of the merits of the prosecution. Instead, it advocated an approach that focused on the identified factors primarily, along with a minimal consideration of the prosecution's case itself. Judicial analysis of these bail factors had to be rigorous — something apparent in how the CBI submissions were rejected for being vague, generic, and totally unsupported by the actual facts of the case [Paragraphs 27 ("Flight Risk"); Paragraphs 28—31 ("Tampering")]. Thus, as the Court points out: 

Mere averments that the appellant approached the witnesses and the assertion that the appellant would further pressurize the witnesses, without any material basis cannot be the reason to deny regular bail to the appellant; more so, when the appellant has been in custody for nearly two months, co-operated with the investigating agency and the charge sheet is also filed. [Paragraph 31. Emphasis supplied]

I suspect that the Paragraph extracted above might end up being cited in subsequent bail petitions and judicial orders. But the real takeaway is the judicial approach on display here: The Court's refusal to be cowed by rhetoric and hyperbole while remaining keenly focused on an appreciation of the facts as they are relevant to the issue of bail. This is something that merits emulation, especially in cases where public glare is the harshest.

P. Chidambaram v. ED — Of Triple Tripods and Gravity of Offences

The Delhi High Court had denied bail in the ED case primarily due to the seriousness of allegations while holding that there was no threat of Mr. Chidambaram either absconding or tampering with evidence. Its order had attracted a stream of press coverage for reportedly copying portions of the State's submissions as part of its "findings", as well as discussing the facts of an entirely unrelated case as being related to the case against Mr. Chidambaram [Paragraph 11].

The Court relied upon its own earlier orders from October in Crl. Appeal No. 1603/2019 to outline the factors relevant for deciding a bail petition. But, curiously, the Court completely failed to mention that this was a case where, besides Section 439 of the Criminal Procedure Code 1973 ["Cr.P.C."], the provisions of Section 45 of the Prevention of Money Laundering Act 2002 ["PMLA"] would also have to be considered. 

That provision itself had been struck down as unconstitutional in 2017. But since then, there was an amendment to the PMLA in 2018, which sought to cure the defects in the provision and render it constitutional. In fact, the legal effect of the changes to Section 45 through the 2018 amendments has been the subject of judicial scrutiny before some High Courts but it is an issue that hasn't yet been considered by the Supreme Court. Given this position, I find it extremely peculiar that the judgment completely fails to mention Section 45, and wonder if this fact may form a valid ground for review.

After the Supreme Court simply assumed that the legal considerations for bail in a PMLA case would be the same as in any other case [Paragraphs 15—17], it also impliedly rejected the submission made by Dr. Singhvi, appearing for the appellant, that the gravity of an offence needn't be a factor for consideration at the stage of bail and the only relevant factor was the "Triple Test" of evasion, tampering, and influencing witnesses (or "Triple Tripod" as the order notes at one place) [Paragraphs 15—17, 21]. 

Having said so, the Apex Court disapproved of the manner in which the High Court had gone about considering the merits of the prosecution case for assessing the gravity of allegations. This criticism was of a threefold, and partly contradictory, nature: (i) the extensive nature of scrutiny, (ii) the apparently uncritical assessment of facts (by copying the State's submissions), and (iii) relying upon the material supplied in sealed covers to arrive at a conclusion [Paragraphs 23—24]. Considering the ubiquity of sealed covers in the practice of law today, it was refreshing to read the Court refraining from opening the sealed cover [Paragraph 24] and observing that: 

In that circumstance though it is held that it would be open for the Court to peruse the documents, it would be against the concept of fair trial if in every case the prosecution presents documents in sealed cover and the findings on the same are recorded as if the offence is committed and the same is treated as having a bearing for denial or grant of bail. [Paragraph 23. Emphasis supplied]

The Supreme Court did not agree with the finding that the seriousness of allegations was a sufficient reason to deny Mr. Chidambaram bail. In arriving at this conclusion it also strongly rejected the State's claim that his custody was required to confront him with witnesses, recalling that the ED had  had several months to do so since the rejection of Anticipatory Bail on 05.09.2019, and that Mr. Chidambaram's cooperation with the investigation could be secured through appropriate bail conditions. One of these, which is bound to attract some controversy in the coming days, is a condition prohibiting him from speaking publicly in "connection with this case" [which may or may not extend to the CBI case].   

The Chidambaram Cases, Arrests, and Custody — Unexplored Issues

The legal aspects of the Chidambaram cases have thus been explored. But it would be naive to think that these cases were all about the law — far from it. This is why it becomes important to consider some of the other issues that remain unexplored in these orders. Foremost among these issues is the need for greater scrutiny while evaluating the State's perceived need for a person's custody and alleged non-cooperation by an accused person with the investigation.

While discussing the 05.09.2019 order rejecting Mr. Chidambaram's plea for anticipatory bail in the ED case, this Blog had criticised the "hands-off" approach of the Supreme Court in engaging with the arguments about the lack of cooperation by the accused. The order reflected a complete refusal to test the claims by ED of the need for Mr. Chidambaram's custodial interrogation, uncritically accepting the submission about there being a "qualitative" difference in the kind of questioning that might be conducted with a person on bail. The bail order of 04.12.2019 does narrate the failure of the ED in conducting any significant interrogation or confrontation with witnesses, but it sorely missed an opportunity to revisit this critical issue which crops up in almost every other bail hearing. 

In fact, the Chidambaram cases confirm how agencies often seek custody without ever having any intent to conduct thorough questioning, and repeatedly seek further extensions of custody by promising that a very important phase of questioning is on the horizon. Thus, while the Supreme Court did well to call out the ED on its bluff of future questioning in the 04.12.2019 order, it still remains possible for state agencies to merely claim that an accused person is not cooperating with the probe without ever having to substantiate this allegation to a reasonable degree of scrutiny. Surely this cannot be the position of law in a constitutional republic that claims to be very protective of a person's right to life and personal liberty. 

The unrelated, and more thorny issue, is the role played by the "gravity" of an offence. This was one of the main grounds for critiquing the Delhi High Court's initial orders of August 2019. Again, it is unfortunate that the Supreme Court did not make some attempts at clarifying the legal position through the multiple orders it passed in the Chidambaram cases. 

To recap, the problems with considering the gravity of the offence as a factor for deciding bail petitions are twofold. The first problem is a lack of nuance while considering the issue: Simply looking at the maximum possible sentence and the best case of the police is too uncritical an approach, especially in offences where criminality is inferred from neutral facts [fraud, corruption] and is not apparent as in cases of bodily harm [murder, dacoity]. 

But there is also a second, related problem with treating gravity as a factor for deciding bail petitions. Considering the fact that a case is at its infancy when a bail petition is being heard, courts have consistently held that there mustn't be an in-depth examination of the merits, which is something reserved for the trial. At the same time, there must be some examination of the merits to determine the gravity of allegations, since a court cannot blindly accept every averment that the police makes. Drawing this fine line between what is too little and what is too much scrutiny of the facts is the problem, and we saw how the High Court's approach was criticised in both the CBI and ED cases as having gone too far in its analysis. But this criticism was hardly scientific, and the arbitrariness of this line-drawing is apparent upon a random sampling of bail orders and on reading the submissions made before courts. 

Considering that the Supreme Court specifically rejected Dr. Singhvi's submissions on the factors for deciding bail, and unequivocally held that "gravity" must be seen as a factor for determining the bail petition [Paragraph 21 of the 04.12.2019 order], it is singularly unfortunate that while it criticised the Delhi High Court's analysis, it did so without offering any guidance for courts which undertake this difficult line-drawing exercise on a daily basis. Greater certainty in this realm would not only help reduce the arbitrariness that plagues bail hearings at present, but would also arguably make them proceed faster, with everyone having a clearer picture of what is relevant and what isn't.      

The Supreme Court Order in P. Chidambaram v. ED: Some Thoughts

A Two Justices' Bench of the Supreme Court has decided the appeal filed by P. Chidambaram against an order of the Delhi High Court dismissing his plea for Anticipatory Bail in an ongoing investigation being conducted into what is being labelled as the "INX Media Scam" [Crl. Appeal 1340 of 2019, decided on 05.09.2019. ("Chidambaram")]. The main difference between the two sets of proceedings was that while the High Court order considered bail pleas in two parallel investigations being conducted by the Central Bureau of Investigation [CBI] and the Directorate of Enforcement [ED], the Supreme Court hearings were only concerning the ED case. This is because, as many will already know, the CBI arrested Mr. Chidambaram the same night that his bail plea was dismissed by the High Court.

The Gravity and Uniqueness of Economic Crime

I had discussed the High Court order here, and had flagged three issues which I thought were not only central to the hearings but also to the practice of deciding bail applications more generally within the sphere of economic offences. The High Court order had stressed upon the gravity of economic offences and had taken it so seriously that it considered it appropriate to recommend that anticipatory bail be taken away as a possible remedy in any such case. I did not think it was possible but the Supreme Court somehow managed to amp this rhetoric up several notches. 

While the Supreme Court does not expressly recommend removal of anticipatory bail as a relief, it went 9/10ths of the way [See Paragraphs 67 to 82], and almost reached that projected finish line in the specific context of money laundering cases. At the end of Paragraph 34, the Court went so far as to note that "In cases of PMLA, in exercising the power to grant anticipatory bail would be to scuttle the statutory power of the specified officers to arrest which is enshrined in the statute with sufficient safeguards."

The Supreme Court develops the logic adopted by the High Court, and links the rhetoric of economic offences being very grave with the idea that they are also very complex to investigate, and thus, uniquely in need of custodial interrogation [See Paragraphs 76 to 81]. Therefore, the Supreme Court concludes, that "Grant of anticipatory bail, particularly in economic offences would definitely hamper the effective investigation." [Paragraph 81] 

Pause here to see just how lazy this reasoning is. What are "economic offences"? Theft and cheating are economic offences — but are you telling me that they are so complex to investigate that you require custodial interrogation to get to the bottom of them? Of course not, which is why I implored the Court to try and come down from the high altar of principle and delve into the specifics and help give some clarity so that the lowly magistracy can go about applying the law with greater certitude. But this wasn't to be.

The laziness is also on display in terms of the Court unquestioningly accepting this position of cases involving economic offences being so complex as to almost justify custodial interrogation and denial of bail. Granted, some cases can be very complex — for instance, laundering through hawala channels where there were no real paper trails created. But surely this principled stance cannot apply to all cases, and this is why we needed the Court to get messy with detail. Moreover, why should the Court trump up custodial interrogation? What about how this can reduce incentives for independent investigations? This is hardly a novel thought — James Fitzjames Stephen retained the ban on confessions in the Indian Evidence Act because, as a civil servant told him, it made sure that the officers don't sit in the shade all day while rubbing chilli in the eyes of some poor sod trying to get him to confess to a crime, rather than go out and investigate a case.    

A Carte Blanche to the Police? 

Moving on, we find that the Supreme Court marries this discussion about the position of economic offences with a more general level of argument when it engages with the issue of what to do in situations where an accused denies she is being "evasive". Here, to remind readers, the accused asked the Court to call for transcripts of his questioning as he challenged the assertion that he had not been cooperating with the probe.

The Court refused these requests by turning to the principle that courts and police operate in separate spheres. This forestalls any court from qualitatively assessing the investigation, and so where an agency asserts that an accused is "not cooperating" or "being evasive", a court is supposed to accept these assertions without question. Doing otherwise would sully the principle of separation between the police and the judiciary. 

Alas, the Court forgot about its own prior judgment in Sakiri Vasu, where a different bench had actively authorised magistrates to entertain applications from persons aggrieved by the manner in which police ran an investigation. Or did it? In the section of the judgment which justifies why sealed covers are alright, the Supreme Court notes that looking at confidential material (without showing it to the accused) has always been accepted as long as it is done by a court "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" [Paragraph 53]. 

So then, how can the Court go ahead and refuse to test the police officer's assertion that an accused was "not cooperating" or "being evasive" in questioning? If a court is going to be deprived of the ability to question police on their stand in such situations, then aren't we effectively condemning a person to custody and surrendering her liberty to the mercy of the executive? The doublespeak on display is astounding, and deeply concerning. 

Conclusion: A Recipe for Disaster

Talk to anyone in the profession and they will tell you that the money laundering law has given wide powers upon executive officers that are capable of being abused. After all, money laundering is not a crime like theft or cheating, but a crime which depends entirely upon creating a narrative about what someone did with the fruits of that previous theft or cheating. The scope for imagination is wide, and in our system of slow-moving justice, the result of this imaginative exercise often results in an unfair onslaught upon the civil liberties of an individual for a significant time of her life.

Rather than take a scalpel and forensically examine allegations in some detail during bail hearings in order to make sure that an innocent person is not ensnared by police agencies on frivolous grounds, and to ensure that custodial interrogations do not become a principle of first resort for investigators, with its decision in Chidambaram, the Supreme Court has taken a leap towards a world where all of this becomes more than possible. It was once said that a draconian law is not only made on text, but also in how it is applied. With this verdict, perhaps the same might soon be said of the money laundering statute. Of course, if it wasn't already the case.