New Delhi: The Delhi High Court has stayed trial proceedings against senior Congress leader and former Union minister P. Chidambaram in the Aircel-Maxis money laundering case.
The Enforcement Directorate’s case accused Chidambaram of giving his nod to foreign investment of an amount beyond the limits he was empowered to approve in 2006 when he was the finance minister.
Temporarily putting the brakes on the proceedings against Chidambaram Wednesday, a single-judge bench of Justice Manoj Kumar Ohri said that at the present stage, “it is deemed apposite to direct that till the next date of hearing, the proceedings before the trial court qua the present petitioner shall remain stayed”.
Additionally, the court issued a notice to the ED, listing the matter for hearing on January 22, next year.
What the case is
The Delhi HC was dealing with Chidambaran’s challenge to a 2021 order passed by the Rouse Avenue Court, New Delhi, in the ED’s case against the senior Congress leader and his son Karti, among other accused. The order had come taking cognisance of an offence under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002.
The ED’s case against Chidambaram stemmed from a deal between Maxis and Aircel in 2006 when the former acquired a 74% stake in the latter in exchange for Rs 3,500 crore, with the Malaysian telecom firm then gaining control over the Indian network operator.
In 2011, Aircel founder Chinnakannan Sivasankaran filed a complaint with the Central Bureau of Investigation (CBI), saying there was pressure on him to sell a majority of Aircel’s stake to Maxis, resulting in the CBI filing a case against Chidambaram and his son Karti.
The CBI named the duo in its July 2018 chargesheet. In a chargesheet filed earlier against ex-telecom minister Dayanidhi Maran and his brother Kalanithi Maran, it alleged Chidambaram granted Foreign Investment Promotion Board (FIPB) approval to Mauritius-based Global Communication Services Holdings Limited, a subsidiary of Maxis, in March 2006.
The CBI and, later, the ED alleged that Chidambaram, as finance minister, approved the Aircel-Maxis deal going “beyond his capacity”, benefiting certain persons and receiving kickbacks, according to news agency PTI.
Taking cognisance of the chargesheets in the case, the trial court, on 27 November 2021, summoned Chidambaram and his son on a later date, saying it had enough evidence to summon them in the corruption and money-laundering cases filed by the CBI and the ED, respectively.
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Chidambaram’s challenge
Before the Delhi HC, senior advocate N. Hariharan argued on behalf of P. Chidambaram that according to the Supreme Court’s 6 November decision in the ED vs Bibhu Prasad Acharya case, the continuation of proceedings before the trial court is illegal in the absence of a prior sanction by the central or state government.
With the November ruling, a two-judge SC bench of Justices Abhay S. Oka and Augustine George Masih quashed a criminal case registered against an IAS, considering there was no prior sanction to prosecute him under Section 197(1) of the Criminal Procedure Code (CrPC).
Section 197 states, “When any person who is or was a judge or magistrate or a public servant not removable from his officer save by or with the sanction of the government, is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no court shall take cognisance of such offence, except with the previous sanction.”
Simply put, this provision states that no person who is or was a public servant, such as a judge, minister, or bureaucrat, can be removed from office for an offence committed by him while discharging his official duties without government sanction. Such an offence could also not be taken cognisance of by a court without the government’s permission.
Adding that in the case of public servants, securing prior sanction under Section 197(1) CrPC is mandatory, and the trial court acted against this settled legal position, Chidambaram’s lawyer argued that such an issue could be raised at any stage in the case since it is significant to the continuation of a trial.
The top court endorsed such a view in its 2001 and 2007 rulings in the Parkash Singh Badal vs Punjab state and the P.K. Pradhan vs Sikkim state cases.
Prosecution’s argument
On the other hand, the prosecution said the allegation against Chidambaram is that he violated the rules and guidelines for approving foreign investment for an amount beyond the limits authorised for him.
Chidambaram committed a scheduled offence while discharging his official duties, the prosecution said, adding that the CBI, while investigating the allegations against him, obtained prior government sanction for his prosecution under Section 197(1) of CrPC and Section 19 of the Prevention of Corruption Act (PCA), 1988. Prosecution of a public servant under the PCA also requires prior government sanction.
Section 30 of the PMLA 2002 contains the scheduled or predicate offences. Their significance is that any offence has to have links with one of them to bring money laundering charges under PMLA 2002 against whoever has committed the offence. Simply put, the list of scheduled offences is the basis for prosecution in PMLA cases.
Delhi HC’s pronouncement
The main issue under consideration for the Delhi HC was whether courts can take cognisance of an offence under Sections 3 and 4 of the PMLA against a public servant accused of money laundering without a prior sanction by the central or state government. The court relied on the 2024 Bibhu Prasad case.
It said that in Prasad’s case, the top court examined the scheme of CrPC and PMLA and held that Section 197 of the CrPC applies to proceedings under PMLA and set aside the order, which took cognisance of the offence earlier.
Applying this principle, the HC said, “In the present case, the petitioner being a public servant and the commission of (the) offence by him while being a public servant not being in dispute, the challenge to the legality of order taking cognisance and continuation of proceedings for want of sanction in light of allegations levelled in prosecution complaint(s), would require further consideration.”
Considering the allegations concerned required further consideration, the court proceeded to stay them before the trial court. It also directed the parties to file their replies before the next hearing date.
(Edited by Madhurita Goswami)
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