Decoding the INX Media Case


“Decoding the INX Media Case: A Commingled Approach to Economic & Criminal Offences.” : By Rishabh Taneja & Shreya Seth, students of B.Com & B.A. LLB (Final Year) at Lovely Professional University

“Greed is a bottomless pit which exhausts the person in an endless effort to satisfy the need without ever reaching satisfaction.”
—Erich Fromm


Economic and criminal offences have been shape-shifting themselves into various contours and as a dire ramification, the economic stakeholders are the first class to suffer.  The scope of a quiescent criminal intent behind an economic offence cannot be ruled out and this tends to be an emerging crime trend. The INX Media case is a classic example where reliance is placed on both economic and criminal mediums of law; with a very refined exchange of arguments with reference to the point that whether the economic offences can be termed as “grave” in nature or not.


1. On 15.05.2017, an FIR was registered against a company namely M/s INX Media Pvt. Ltd. (Accused No. 1) under Sections 120-B and 420 of the Indian Penal Code as well as Sections 8 and 13(2) read with Section 13(1) (d) of the Prevention of Corruption Act, 1988.

2. The allegations were made on the basis that M/s INX Media Pvt. Ltd. sought the approval of the Foreign Investment Promotion Board (FIPB), (now replaced by Foreign Investment Facilitation Portal)[1] , which was a body under the Department of Economic Affairs supervised by the Ministry of Finance. As per the FIR, the M/s INX Media Pvt. Ltd. applied for the permission of the FIPB, to issue certain shares by the way of preferential allotment ( only made to a selective group of investors) for the purpose of “creating”, “operating” and “broadcasting” a bouquet of television channels as it wanted to raise money by the issue of these shares for starting these channels.

3. The company also sought approval for making a downstream financial investment i.e. an investment made by an Indian entity which has total foreign investment in it or an Investment Vehicle in the capital instruments or the capital, as the case may be, of another Indian entity[2]; to the extent of 26 percent of the issued and the outstanding equity share capital of M/s INX News Pvt. Ltd. (Accused No. 2). Therefore, in toto, two approvals were sought i.e. issue of shares and approval of downstream investment from the issued and outstanding capital of the second company.

4. At that time, if the amount of the Foreign Direct Investment used to exceed Rs. 3,000 Crores, it was imperative to be approved by the Finance Minister primarily and by the Cabinet Committee of Economic Affairs subsequently.[3] So, this proposal was referred by the FIPB for consideration by the Finance Minister, Mr. P. Chidambaram. However, there was a flat refusal by the Board to permit the downstream financial investment from the first company to the second one.

5. On 30.05.2007, a press note was released by the Board; which mentioned the approval of the quantum of FDI inflow against M/s INX Media Pvt. Ltd. as Rs. 4.62 Crores. In other words, the company could only invest Rs. 4.62 Crores as a downstream financial investment against the 26 per cent proposed percentage.

6. But, the M/s INX Media Pvt. Ltd., in complete violation of this press note and contrary to the approval of the FIPB induced the downstream investment of 26% of capital to the INX News and raised proceeds amounting to Rs. 305 Crores against the approval of Rs. 4.62 Crores. On this allegation, a complaint was received by the investigating wing of the Income Tax Department which demanded an explanation from the FIPB; who in a communication letter further sought clarifications from the INX Media Pvt. Ltd.

7. The FIR mentioned, that on the receipt of the letter by the M/s INX Media Pvt. Ltd., who was engrossed in fear to avoid punitive action, entered into a criminal conspiracy with Karti Chidambaram (son of Mr. P Chidambaram/ Accused No. 3), who was alleged to have influenced the FIPB officials for  “unduly” favoring the company.

8. It was alleged that after concealing the investment, both the companies re-approached the FIPB unit and this time; the proposal was positively considered and approved by Mr. P. Chidambaram. The FIR stated that in lieu of these services, Karti Chidambaram received considerations in the form of payments. It was alleged that invoices amounting to approximately 3.5 crore rupees were issued in the favour of INX Media group; by those companies in which Karti Chidambaram was having a direct or indirect interest. A case was also registered, based on same allegations by, the Directorate of Enforcement under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002.

9.  Apprehending his arrest by the Directorate of Enforcement, Mr. P Chidambaram sought anticipatory bail from the Delhi High Court; which initially accorded him interim protection; but was dismissed later on. Mr. P Chidambaram then filed the appeal in the Hon’ble Supreme Court; which was dismissed on the following grounds:

a) Grant of anticipatory bail has not to be done as a “matter of rule”, especially in economic offences which constitute “class apart.”

b) Grant of anticipatory bail at the stage of investigation may frustrate the process of interrogation and collecting useful information and evidence.

c) The Prevention of Money Laundering Act was having sufficient safeguards enshrined in itself to ensure proper exercise of power of arrest.

It is imperative to mention here that two cases were registered i.e. one by the Central Bureau of Investigation (CBI) and the other one by the Directorate of Enforcement (ED). On the three-pronged above grounds, the appeal was dismissed in the case which was registered by the CBI.  In October, 2019, Mr. P Chidambaram was arrested by the Directorate of Enforcement (ED); on the ground that an amount of Rs. 3 Crores was paid at the appellant’s instance to the companies controlled by his son Karti Chidambaram on account of “FIPB work done for INX Group.”

Also Read: Judicial Enforcement of a Political Promise: The Najma Judgment


In Rohit Tandon v. Directorate of Enforcement[4] (See Here, URL for the judgment)and stated that the Hon’ble Court resort to the “Triple Test” in granting bail to the appellant which happens to be as follows:

a) The probability that whether the accused is at the flight risk;

b) The probability of accused tampering with the evidence;

c) The probability of the accused to influence the witness in his favor.

It was argued and contended before the Court that the High Court erred in law by going into the merits of the case and rendering its findings. A contention was made that it is a settled proposition of law that merits of a case ought not to be gone into at the time of adjudication of a bail application. In the case of P. Chidambaram v. CBI(See here, URL for the judgment)[5], it was held by the Apex Court that at the stage of granting bail, an elaborate examination of evidence & detailed reasons touching upon the case merits may prejudice the accused & therefore it should be avoided.

An innovative contention was raised that the High Court was completely wrong in accepting the allegations on merits at the face value. The allegations which were made in the counter-affidavit filed by the Enforcement Directorate were converted into findings by the Court & as a result of the which, bail was declined to the appellant solely on the basis of such findings.

A technical contention was made which spoke that the appellant was the 13th signatory of the file pertaining to the approval of FDI proposal of INX Media. There were 12 other officers who were the signatory to the approval. Not even a single officer out of them was arrested and investigated; but the appellant on the other hand was arrested & even denied bail.

Lastly, it was contended that the liberty of the appellant cannot be denied by adopting an “unfair procedure”, owing to the fact that there has been no material on record which links the involvement of the appellant.

In Sanjay Chandra v. CBI[6], (See here URL for the judgment) the Apex Court while dealing with the grant of bail for economic offences of formidable magnitude, observed that the deprivation of liberty must be considered as a punishment unless it is required to ensure that the accused would stand the trial when called upon and the Courts owe more than verbal respect to the principle that punishment begins after conviction & that every man is deemed to be innocent until duly tried & found guilty.


The cumulative perusals of all the judgments clearly deduce that the grant f bail is the rule and the refusal of bail is an exception to such an extent that the accused has an opportunity of securing a fair trial. The appeal was allowed and the judgment of the Delhi High Court was set aside. Mr. P Chidambaram was ordered to be released on bail subject to the execution of bail bonds of Rs. 2,00000/- with two sureties of the like amount. He was ordered not to give press interviews or make any public comment.

All in all, it can be extrapolated that personal liberty every person is of paramount importance & going into the merits at the time of deciding the bail applications can be considered bad in law. Even the allegations cannot be converted into findings at the face value while deciding the bail application as it is preserved as a matter of trial.

[1] Hemant Singh, What is FIPB and why it is replaced by Foreign Investment Facilitation Portal (FIFP), available at: https://www.jagranjosh.com/general-knowledge/what-is-fipb-and-why-is-it-replaced-by-fifp-1566460443-1,  last seen on 29/05/2021.

[2] Reserve Bank of India, Frequently Asked Questions: Foreign Investments in India, available at: https://www.rbi.org.in/Scripts/FAQView.aspx?Id=26 , last seen on 29/05/2021.

[3]  Hemant Singh, What is FIPB and why it is replaced by Foreign Investment Facilitation Portal (FIFP), available at: https://www.jagranjosh.com/general-knowledge/what-is-fipb-and-why-is-it-replaced-by-fifp-1566460443-1,  last seen on 29/05/2021.

[4] (2018) 11 SCC 46

[5] (Crl. Appeal No. 1603/2019)

[6] (2012) 1 SCC 40


    • 2 years ago (Edit)

    […] Also Read: Decoding the INX Media Case                          […]

Leave feedback about this

  • Quality
  • Price
  • Service


Add Field


Add Field
Choose Image
Choose Video