Bail for Chidambaram: SC criticises Delhi HC over 'sealed cover' use

As it granted bail to former Union minister P. Chidambaram on Wednesday in a money-laundering case, the Supreme Court was critical of the Delhi High Court for making observations that were conclusive in nature with regard to the alleged offence. On November 15, the Delhi High Court had denied bail to the senior Congress leader in the case.

“... We disapprove the manner in which the conclusions are recorded in paragraphs 57 to 62, wherein the observations are reflected to be in the nature of finding relating to the alleged offence,” said a three-justice Supreme Court bench comprising Justices R. Banumathi, A.S. Bopanna and Hrishikesh Roy.

The Supreme Court was referring to the Delhi High Court's order passed on November 15, 2019, whereby it had declined to grant bail to Chidambaram in the INX Media money-laundering case, being investigated by the Enforcement Directorate.

The court noted that Chidambaram's legal defence had stated that the contentions the ED made in its counter-affidavit had been incorporated as if they were the findings of the Delhi High Court. Solicitor General Tushar Mehta had responded to this, saying that the ED, besides the counter-affidavit, had also furnished documents in a sealed cover, which was taken note of by the High Court justice and the conclusion was reached.

The Supreme Court found fault with the Delhi High Court for using verbatim a note produced by the Enforcement Directorate. “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,” the Supreme Court bench said.

The Supreme Court bench, led by Justice Banumathi, said it was not very much inclined to open the sealed cover, but it became imperative for it to do so since the single justice of the Delhi High Court had arrived at a certain conclusion based on the contents.

It said the sealed envelope contained recordings of statements and collation of material, which was in the nature of allegations against Karti Chidambaram, one of the co-accused. These pertained to opening shell companies and purchasing benami properties in the name of relatives in different countries.

“Except for recording the same, we do not wish to advert to the documents any further since ultimately, these are allegations which would have to be established in the trial,” the Supreme Court said.

It concluded that the findings recorded by the Delhi High Court justice based on the material in the sealed envelope were not justified.