Breather for Karti from HC in money laundering case

Karti Chidambaram, the son of senior Congress leader P Chidambaram, got a breather in a money laundering case today, with the Delhi High Court restraining the Enforcement Directorate (ED) from arresting him till March 20.
However, a CBI court extended his custody in the INX media case for three days.
Karti was produced before the CBI court after the expiry of his three-day remand before special judge Sunil Rana, who posted the hearing on his bail plea on March 15.
Following HC's order, Karti cannot be arrested by the ED if the CBI court grants him bail on March 15.

The interim protection from arrest in the case, arising from the INX Media corruption case, came while he was being produced in a special CBI court on expiry of his three-day custody for interrogation.
A bench of Justices S Muralidhar and I S Mehta, which heard the matter in a packed courtroom for close to three hours, also made it clear that if the special court grants Karti bail in the corruption case registered by the CBI against him, the ED will not arrest him till the next hearing by the high court.

"If the CBI court grants bail to the petitioner in the CBI case, no coercive steps shall be exercised against the petitioner by the ED under section 19 (Power to arrest) of the Prevention of Money Laundering Act (PMLA)," the bench said.

P Chidambaram was present in the courtroom through the hearing.
The bench also issued notice and sought response of the ED and the Centre on Karti's plea seeking quashing of summons and challenging the proceedings in the money laundering case. It impleaded the Centre as a necessary party in the case as in the original plea Karti had only made ED a party.
The bench said if the trial court decides to grant bail to Karti in the CBI case, it shall impose conditions such as the accused shall appear before the ED as and when called by the investigating officer and cooperate in the probe.

He shall also be directed not to leave the country and surrender his passport, it said.
The court said it was persuaded to pass the order for interim protection after Additional Solicitor General Tushar Mehta, appearing for the ED, sought time to satisfy the court on the issue of its power to arrest an accused.
The ASG said the matter was at a crucial stage of probe, and a separate CBI investigation was going on in which he is already in CBI custody.
He said Karti should not be granted any interim relief as there was "cogent, substantial, reliable and unimpeachable material" against him.

"We need his custodial interrogation. Karti's bail in the CBI case is also pending. Any relief from the high court will also affect the case pending before the trial court. It is not witch-hunting. Please remove this from you mind," the law officer argued.
He said a strong case of money laundering was made out against Karti, and voluminous records have been recovered by the ED. He said Karti needed to be confronted with the documents.
Mehta, assisted by ED counsel Amit Mahajan, said it was a "very, very dangerous" situation that the accused was giving a complete go by to section 438 (direction for grant of bail to person apprehending arrest) of the CrPC, and directly moving the writ court.

Senior advocate Kapil Sibal, appearing for Karti, said havens are not going to fall if he is protected from arrest and the ED was free to interrogate him without arresting him.
He said certain documents were shown to the court but not put to Karti and this violates his fundamental right to protection of life and personal liberty.
"They had these documents prior to my interrogation in January and February this year. How can the ED place the documents before the court without putting it to me? Is it a fair procedure of investigation?" Sibal argued.
Karti has sought the court's direction to strike down the powers of arrest of the ED under Section 19 of the Prevention of Money Laundering Act (PMLA) as unconstitutional and in violation of Article 14 and 21 of the Constitution dealing with rights of people for equality before law and protection of personal liberty.

He also sought striking down the presumption codified in Section 24 of the PMLA which says that when a person is accused of having committed an offence under section 3 (money laundering), the burden of proving that proceeds of crime are untainted property shall be on the accused, as unconstitutional.
The plea sought quashing of the enforcement case information report (ECIR) and probe by the ED for the offences under the PMLA.
It sought quashing of the probe by the ED, alleging that it was contrary to the procedure established by law and violates Karti's fundamental rights.
The court was informed by Sibal that Karti had appeared before the ED twice on January 18 and February 15 this year and no summons were issued to him thereafter.

He contended that the allegations against Karti date back to 2007, and the case was lodged by the CBI and the ED after 10 years.
Senior advocate Abhishek Manu Singhvi, who also represented Karti, said the ED must show the need and necessity to arrest him, and claimed there was no money trail.
When the senior counsel said how can the investigating agencies rely on the statement of Indrani Mukherjea, former director of INX Media, who is in jail in connection with the murder of her daughter Sheena Bora, the court asked him to stop.
"Don't go into all this," the bench said.

Mehta said it was embarrassing as a counsel to argue like this, and even he was not taking names.
The ED had registered a case against Karti Chidambaram and others in May last year. It had registered an ECIR, the ED's equivalent of an FIR, against the accused named in the CBI complaint. These accused included Karti Chidambaram, INX Media and its directors, Peter and Indrani Mukerjea.