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The INX Media case is back in the limelight with the recent arrest of senior Congress leader P. Chidambaram by CBI and ED. This arrest came after the declaration of the Hon’ble Delhi High Court that the INX media case is a “classic case of money laundering” and when the court was of clear opinion that Chidambaram’s arrest was a necessity for interrogation regarding efficient and effective investigation of the case.
Mr. Chidambaram is being questioned about the alleged irregularities on his behalf in the Foreign Investment Promotion Board (FIPB) clearances to the media group for getting overseas funds amounting to approximately Rs. 305 crores by both the investigation agencies. This act was supposedly committed by him when he was the finance minister under the UPA-I government (2004-9).
What is the background of this case?
In the year 2007, businessman Peter Mukherjee and his wife Indrani Mukherjee co-founded a media group with the name of INX Media. On 31st of May 2007, FIPB allowed INX media to get a foreign investment of Rs. 4.62 crores contrary to which the INX Media received rather a sum of Rs. 305.36 crores in violations of the rules laid down by the FIPB.
Also, INX media started pumping a downstream investment of approx. 26% in the INX News without any approval from FIPB. In January 2010, the Financial Intelligence Unit of the Finance Ministry found some kind of anomaly in money flow from three Mauritius based firms into INX Media. And that is when this came under the scanner of ED. ED registered a case for alleged violation of Foreign Exchange Management Act against INX Media.
In the year 2017, this case again garnered some spotlight when in May the CBI filed an FIR alleging some irregularities in FIPB’s clearance to INX Media to receive overseas funds of Rs. 305 crores in 2007 when Mr. P. Chidambaram was the finance minister.
Between 2017 and 2018, a lot happened in this case where Madras HC issued an order which got overturned by the Hon’ble SC. CBI came into picture when it claimed that it had furnished details on possible transactions in foreign countries and other alleged offshore properties of Karti Chidambaram (son of P. Chidambaram). Karti moved to SC challenging the summon issued by CBI.
Then in 2018, in the month of February, Karti Chidambaram got arrested by CBI at the Chennai Airport. Delhi HC sent him to one day police custody in the INX Media case. In 2019, already jailed Indrani Mukherjee decided to become an approver in the case. In August 2019, a bail application of Mr. P. Chidambaram got rejected by the Delhi HC. And finally, the recent incident of CBI detaining Chidambaram and taking him to headquarters for interrogation took place on 21st August 2019.
What are the various legal issues involved?
There are certain significant legal issues involved in the case of INX Media. It has already been declared by the Delhi HC that this case is clear example of a money launderig. The legal issues involved in the case are:
- Allegations of bribery by the company’s promoters.
- Conditions laid down by the FIPB for the grant of FDI to be received by INX Media to be 4.62 crores was violated severely.
- Allegations have been made against the company to have been indulged in a criminal conspiracy with Karti Chidambaram to get the issue addressed amicably by influencing public servants in FIPB.
Probable future course…
After the arrest of Mr. Chidambaram in the INX Media case, the probable future course in front of him and his legal team seems a bit complex. As Mr. Chidambaram is a Rajya Sabha member, the rules of procedure and conduct of business of the Rajya Sabha state that if a member is arrested or sentenced to imprisonment, the executive authority has to “immediately intimate” the chairman of the House.
As the arrest has already happened and Mr. Chidambaram has already been sent to 5 days’ custody, the anticipatory bail plea becomes infructuous. Thus, the lawyers of Mr. Chidambaram will have to file immediately for bail which will first be mentioned before a magistrate. If rejected, it will be appealed in the Delhi High Court and in case it gets rejected there as well, the order can then be challenged in the Hon’ble Supreme Court. Even in case that the bail is granted, the CBI can also challenge that order in higher court.
–This article is brought to you in collaboration with Aprajita Jha from National Law University and Judicial Academy, Assam.