NAME: VAVILLA HARIBABU RAJAMOULY

ROLL NO: 50

SUBJECT : FOUNDATION COURSE IV

TOPIC: INX MEDIA CASE

 INTRODUCTION

The INX Media case refers to an ongoing high-profile money laundering investigation in

India. It involves allegation of irregularities in foreign exchange clearances given to INX
Media group for receiving overseas investment in 2007. P. Chidambaram was union
finance minister at the time. His son Karti Chidambaram has been implicated by the
investigating agencies.
IXM Media founded by media entrepreneurs Indrani Mukerjea along with husband Peter
Mukerjea, allegedly violated foreign investment laws. INX Media had permission to source
foreign investments to the tune of ₹4.62 crore but it has allegedly received funds worth ₹305
crore. The FIPB approved the proposal for FDI inflow which should not go beyond 46.20
percent of shareholding in INX media, but did not approve the downstream investment.
However, according to the CBI, the company "deliberately and in violations of the conditions
and approval", carried out the downstream investment. Moreover, it generated FDI exceeding
Rs. 305 crore "by issuing shares to foreign investors at a premium of more than Rs 800 per
share".
In March 2007, INX Media had approached the Chairman of Foreign Investment
Promotion Board (FIPB), for permission for foreign direct investment (FDI) from three non-
resident investors based in Mauritius. This money was sought for creating and operating a
number of television channels under the banner of INX Media. The application to the FIPB
mentioned its intention to "make a downstream financial investment to the extent of 26 per
cent of the issued and outstanding equity share capital of INX News Private Limited".
When the Income Tax Department sought clarifications on the matter in February 2008,
INX Media allegedly sought to evade the investigation by approaching Karti
Chidambaram to leverage his family name. The CBI alleged that Karti Chidambaram
received kickbacks to the tune of ₹10 lakh for his assistance, via his consulting firm
Advantage Strategic Consulting Ltd.

HOW IT ALL STARTED

The CBI first Registered its case on May 15, 2017, alleging irregularities in an FIPB
clearance granted to the INX Media group for receiving overseas funds of Rs 305 crore in
2007, during Chidambaram's tenure as finance minister.
On February 16, 2018, ED lodged the money laundering case.
Chidambaram moved Delhi High Court seeking anticipatory bail in both CBI and ED cases
separately and was only granted interim protection in July 2018 from arrest by the two
agencies.
The High Court dismissed his bail pleas on August 20, 2019, naming him the ‘KINGPIN’ in
the INX Media case and declined his request to stay the order for three days to enable him to
move an appeal in the top court. But he moved the apex court and failing to get an immediate
hearing, went missing from his house.
After a high-pitched drama, he appeared the next day at a press briefing while the CBI
reached his residence, climbed the walls to get inside and later arrested him.
Then, Chidambaram was sent to four-day CBI custody, which was periodically extended till
September 5, 2019.
On September 5 2017, the Supreme Court dismissed his plea in ED case challenging the
high court order that denied him pre-arrest bail. Chidambaram unconditionally withdrew a
petition challenging a non-bailable warrant issued by the trial court and subsequent CBI
custody. Afterwards, he was produced in a special court, which sent him to Tihar jail for
14-day judicial custody.
The CBI October 18 filed the charge sheet against him and 13 others in the corruption
case. The investigation agency said Indrani Mukerjea claimed to have paid a bribe of $5
million to Chidambaram and his son Karti through offshore payments.
On October 22, the Supreme Court granted bail to Chidambaram in the INX Media for
corruption case.
 CHARACTER INCLUDE IN THE INX MEDIA CASE

1. P. Chidambaram:

2.Karti Chidambaram :
 3.Peter Mukerjea & Indrani Mukerjea

WHY THE SUPREME COURT DECIDED TO GIVE

P.CHIDAMBARAM BAIL IN THE ED’s CASE ???
In granting bail to former finance minister P. Chidambaram in the controversial INX Media
case, the Supreme Court has now twice set aside separate Delhi high court judgements that
denied the same to the senior Congress leader.
The INX Media case has resulted in two investigations: one by the Central Bureau of
Investigation (CBI) and the other by the Enforcement Directorate (ED).
The question of bail in the CBI’s case against Chidambaram revolved around the ‘triple
test’ issue – namely whether there were worries that the accused could abscond, tamper
with evidence or influence witnesses.
In the ED’s case, which also argued that the senior Congress leader shouldn’t be granted
bail, the courts had to determine whether the “gravity of the offence” should be a factor in
denying an accused his right to bail.  
While granting bail to Chidambaram in the ED’s case, a three-judge-bench comprising
Justices R. Banumathi, A.S. Bopanna, and Hrishikesh Roy made some crucial observations
with regard to the order passed by Justice Suresh Kumar Kait of the Delhi high court last
month, in which the former finance minister’s plea was dismissed.
While Justice Kait ruled that Chidambaram’s plea satisfied the triple test for bail, it was
nevertheless turned down due to the gravity of the offence in the INX Media case.
That is, the Delhi high court felt that allegations of government favouritism, corruption
and money laundering were alarming enough to deny bail .
The Supreme Court has noted while the gravity of an alleged offence can be considered as
one factor, it cannot be a legal principle in and of itself and must be looked at on a case-
by-case basis.
The judge noted “even if the allegation is one of grave economic offence, it is not a rule
that bail should be denied in every case since there is no such bar created in the relevant
enactment passed by the legislature nor does the bail jurisprudence provides so. Therefore,
the underlining conclusion is that irrespective of the nature and gravity of charge, the
precedent of another case alone will not be the basis for either grant or refusal of bail
though it may have a bearing on principle,” 

P. CHIDAMBARAM ARRESTED FOR 100 DAYS AND COUNTING.

YET WHAT HAS BEEN PROVEN????
The apex court also made sharp observations on the manner in which the Delhi high court
order appears to have recorded conclusions on the ED’s findings in the INX media case .
In particular, it believes the high court judge should not have recorded findings based on
evidence given by the ED in a “sealed cover”, even if it was entitled to examine those
materials . 
“While the learned Judge was empowered to look at the materials produced in a sealed
cover to satisfy his judicial conscience, the learned Judge ought not to have recorded
finding based on the materials produced in a sealed cover.”

While making a reference to the apex court’s earlier order in the CBI case, it noted :
“At the same time, this Court, had disapproved the manner in which the learned Judge of
the High Court in the said case had verbatim quoted a note produced by the respondent. If
that be the position, in the instant case, the learned Judge while adverting to the materials,
ought not have recorded a finding based on the materials produced before him.”

On the issue of courts making observations based on evidence given by the government in
sealed covers, the three-judge-bench went on to hold:

“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.”

Therefore, the Supreme Court notes that the observations of the high court based on the
contents of the sealed cover were not justified.

THE ED, CBI IS UNSUPRISING IN BAIL DENIALTO

P.CHIDAMBARAM , NOT SO TO THE COURTS.

Finally, the bench also dealt with Solicitor General Tushar Mehta’s argument that more
evidence is yet to be collected by ED and thus it cannot be ruled out that Chidambaram
would influence future witnesses.
“In the present situation the appellant is not in political power nor is he holding any post in
the Government of the day so as to be in a position to interfere. In that view such
allegation cannot be accepted on its face value. With regard to the witness having written
that he is not prepared to be confronted as he is from the same state, the appellant cannot
be held responsible for the same when there is no material to indicate that the appellant or
anyone on his behalf had restrained or threatened the concerned witness who refused to be
confronted with the appellant in custody,” the apex court .

How does the future course look?

While the allegations are serious and deserves a thorough probe, whether securing Mr.
Karti’s custody is needed is debatable.
Notably, there also seems to be no apprehension of Mr. Karti fleeing abroad to escape
prosecution.
Additionally, considering the case outlay, the evidence seems to be largely documentary in
nature – making evidence tampering a remote possibility.
The case against Mr. Karti will add up to something only if CBI is able to furnish specific
details to establish his involvement in the conspiracy.
Failure to do so will hence give greater credibility to those who dismiss the case against Mr.
Karti as political vendetta.

How did the case get exposed?

Indirani Mukerjea was the former director of the INX Media.

She is currently facing CBI prosecution along with her husband Peter Mukerjea for the
murder of her daughter Sheena Bora.
In one of her statements to the CBI, she is said to have claimed that the company had bribed
Mr. Karti, to quash the possible FIPB probe.
Ms. Indirani’s statement also got recorded before a magistrate, which hence becomes
admissible as evidence to prosecute Mr. Karti.
An FIR was then registered in May 2017 against Mr. Karti, his previous company “Chess
Management Services” and another alleged collaborator firm
Consequently, Mr. Karti was recently arrested by the CBI in Chennai and was produced in
front of a metropolitan magistrate in Delhi.
While the agency is thought to be seeking extension of custody, Mr. Karti has stated that the
charges against him are politically motivated.
Timeline: Case against Chidambaram

May 15, 2017: CBI files FIR, alleging irregularities in FIPB clearance to INX Media for
receiving overseas funds to the tune of Rs 305 crore in 2007 when Karti Chidambaram’s
father P Chidambaram was Union Finance Minister.
June 16, 2017: Foreigner Regional Registration Officer (FRRO) and Bureau of Immigration,
under Union Home Ministry, issues look-out circular (LOC) against Karti.

Aug 10, 2017: Madras HC stays LOCs issued against Karti and four others.
Aug 14, 2017: Supreme Court stays HC order.
Aug 18, 2017: SC asks Karti to appear before CBI on August 23.
Sept 11, 2017: CBI tells SC it has furnished details in a sealed cover on the probe about
“possible transactions” abroad and 25 alleged offshore properties of Karti.
Sept 22, 2017: CBI tells SC that Karti was prevented from traveling abroad as he was
allegedly closing foreign bank accounts.
Oct 9, 2017: Karti seeks SC’s nod to visit the UK to get his daughter admitted at Cambridge
University.
Oct 9, 2017: P Chidambaram tells SC that the BJP-led government has been carrying on a
“politically-motivated vendetta” against him and his son.
Nov 20, 2017: SC allows Karti to visit the UK for daughter’s admission.
Dec 8, 2017: Karti moves SC challenging summons issued by CBI against him in Aircel-
Maxis case.
Feb 28, 2018: Karti arrested by CBI at Chennai airport and brought to Delhi. Delhi court
sends him to one-day police custody.
March 5, 2018: Karti moves SC to challenge ED summons issued in money laundering case.
March 6, 2018: Special court sends Karti to 3-day CBI custody.
March 12, 2018: Court sends Karti to 12-day judicial custody. Karti moves Delhi HC
seeking bail in the corruption case.
March 15, 2018: SC gives interim protection to Karti from arrest by ED.
March 23, 2018: Delhi HC grants bail to Karti in INX Media corruption case.
May 30, 2018: Chidambaram moves Delhi HC seeking anticipatory bail plea in CBI
corruption case.
July 23, 2018: Cong leader moves Delhi HC for anticipatory bail in money laundering case
of ED.
July 25, 2018: HC grants him interim protection from arrest in both cases.
October 11, 2018: ED attaches 50% of Chidambaram’s Jor Bagh bungalow
July 11, 2019: Sheena Bora murder case accused and INX Media owner Indrani Mukherjea
turns approver
August 20, 2019: HC dismisses anticipatory bail pleas, declines Chidambaram’s request to
stay the order for 3 days to enable him to appeal in SC.
August 21, 2019: Supreme Court lists Chidambaram’s petition seeking stay of Delhi HC
order that dismissed his anticipatory bail plea.
On the same day, Chidambaram is arrested.
August 22, 2019: Chidambaram produced before Special CBI Court in Delhi and is
remanded to CBI custody till August 26. The court finds allegations against him in the INX
Media case “serious in nature” for which a “detailed and in-depth investigation is required”.
 SUMMARY

The Chidambaram-INX Media case-Smoke without a fire?

The matter involving P Chidambaram in the INX Media case concerns alleged irregularities
in the Foreign Investment Promotion Board’s (FIPB) clearance granted to INX Media, a
media venture owned by Peter Mukerjea and his wife Indrani, over a decade ago. In March
2007, INX Media had approached the chairman of FIPB, seeking permission for issuing
equity shares to three non-resident investors based in Mauritius through the foreign direct
investment (FDI) route. While the FIPB approved the request two months later, allowing INX
Media to receive foreign funds to the tune of Rs 4.62 crore, it rejected the venture’s other
request for downstream investment of foreign funds in its subsidiary, INX News Pvt Ltd.
Chidambaram was the Union Finance Minister in 2007. The investigating agencies wanted to
investigate his role in connection with the above FIPB clearance. The CBI later alleged that
instead of ordering investigation into the irregularities, the FIPB - under Chidambaram -
suggested to INX Media to simply apply for fresh approval for downstream investment of
overseas funds it had already received. However, the fact is it is P Chidambaram who
actually requested the Serious Fraud Investigation Office (SFIO) to look into the allegations
of financial impropriety in INX Media in 2008 when its employees lodged a complaint with
the Union I&B Ministry.

According to a report filed by the SFIO in April, 2013, IM Media, the majority stake holder
in INX News, was a front for Mukesh Ambani’s Reliance Industries Limited (RIL). As per
SFIO, Chhajlani’s Nai Dunia which bought INX Media was also indirectly owned by Mukesh
Ambani, thus making IM Media and Nai Dunia related companies. The SFIO report
recommended charges be filed for causing wrongful losses to the ordinary shareholders of
RIL under Indian Penal Code Sections 120B (conspiracy), 415 (cheating), 418 (cheating with
knowledge that wrongful loss may ensue to person whose interest offender is bound to
protect), and 420 (cheating and dishonestly inducing delivery of property. This was reported
by Outlook magazine. Why the CBI and the ED have neglected this part is anyone’s guess.

BIBLOGRAPHY
https://www.nationalheraldindia.com/india/the-chidambaram-inx-media-case-
smoke-without-a-fire.

https://www.scconline.com/blog/post/tag/inx-media/

https://indianexpress.com/article/explained/chidambaram-inx-media-scam-case-
explained-karti-5921402/

https://www.hindustantimes.com/india-news/ed-files-charge-sheet-against-pc-
karti-in-inx-media-case/story-hxdvW9w2kWiF99FKkUOS1M.html

https://indiankanoon.org/doc/182852774/

https://economictimes.indiatimes.com/news/politics-and-nation/inx-media-case-
ed-files-charge-sheet-against-former-finance-minister-p-chidambaram-and-son-
karti-chidambaram/articleshow/76163806.cms

https://thewire.in/law/inx-media-chidambaram-bail-supreme-court