Author: Yashika Pandya, Shri Vaishnav Vidyapeeth Vishwavidyalaya, Indore (M.P.)
To the Point
The case originated from alleged irregularities in approval process of FIPB (Foreign Investment Promotion Board) during P. Chidambaram’s tenure as Union Finance Minister in 2007. The controversy began when Indrani Mukherjea and her husband Peter Mukherjea established a media venture known as “INX Media.” They sought and obtained FIPB approval for Foreign Direct Investment (FDI) to the tune of Rs. 4.62 Crore. However, they collected sum over the prescribed limit by FIPB and also made 26% downstream investment in another firm known as “INX News”, without obtaining prior approval from FIPB.
The central accused were P. Chidambaram and his son Karti Chidambaram. As Karti Chidambaram through his company, Advanced Strategic Consulting Limited received illicit financial benefits from INX Media in exchange for facilitating irregularities in FIPB clearances and ensuring that authorities did not flag regulatory violations. So, Karti Chidambaram with the help of his father P. Chidambaram, who held the position of “Union Finance Minister” at that time influenced the whole approval process and became central to this money laundry case.
Use of Legal Jargon
The INX media case is a textbook example of white-collar crimes interconnected with complex statutory violations. It involved several serious violations described under:
“IPC Section 120 B: Describes punishment for criminal conspiracy.”
“IPC Section 420: Describes cheating and dishonestly inducing delivery of property.”
“Prevention of Corruption Act, Section 8: Offence relating to bribing of a public servant.”
“Prevention of Corruption Act, Section 13 (1)(d): Public servant abusing their position for obtaining any valuable thing or pecuniary advantage.”
“Prevention of Corruption Act, Section 13(2): Provides the punishment for criminal misconduct committed by a public servant.”
“Prevention of Money Laundering Act, Section 3: Defines offence of money laundering.”
“Prevention of Money Laundering Act, Section 4: Provides punishment for offence of money laundering.”
The Proof
The Mukherjeas sought permission from FIPB to raise investment from foreign companies via FDI. The FIPB approved their proposal on two conditions:
The maximum permitted FDI to be collected was Rs. 4.62 Crore; and
The amount collected cannot be invested as downstream investment.
However, the Mukherjeas violated both the conditions by collecting Rs. 305 crores—far exceeding the approved limit and investing 26% of the amount in one of their subsidiaries known as “INX News Private Limited.”
Income Tax department flagged these violations, prompting a CBI investigation. To influence the outcome, the couple then engaged “Chess Management Service Limited,” where Karti Chidambaram, son of then serving Finance Minister P. Chidambaram, was the director. The couple deliberately approached Karti Chidambaram to get into inner political circle and quash the serious accusations made against them. Eventually, they succeeded as the FIPB accepted the clarification submitted by INX media and ignoring clear statutory breaches. FIPB advised them to apply for a fresh proposal in which they approved the provision of downstream investment. It is noteworthy that, although the proposal received approval, it was retroactive in nature, meaning that the violations done by the pair prior to the approval of downstream investment, they should have been punished for it but no actions were taken, all according to the instructions of P. Chidambaram. Finance Ministry, under P. Chidambaram’s instructions not only facilitated this but also declined the request made by revenue department to probe into allegations.
In May 2017, Enforcement Directorate initiated proceedings under Prevention of Money Laundering Act against Karti Chidambaram, INX media and its directors, in due course CBI also initiated proceedings against Karti Chidambaram. Both authorities conducted several search and seizures in Karti’s premises and, he was interrogated multiple times. Fearing that he might move his funds from overseas accounts, a lookout order was issued to prevent his international travel.
Karti Chidambaram was taken into custody at Chennai Airport in January 2019 and was later transferred to Delhi by investigating authorities, where CBI held him in custody for five days, followed by 12 days of judicial remand. He was released on bail on March 23, 2018.”
Meanwhile, P. Chidambaram filed anticipatory bail several times, but Delhi High Court denied the plea, citing potential obstruction of justice. He was arrested by CBI on August 21, 2019, and was in judicial custody till September 19, when he was granted bail after extended custodial interrogation.
In crucial development in August 2019, Indrani Mukherjea gave confessional statement about bribing Karti Chidambaram, the court took cognizance and directed her to appear before a magistrate and formally record the confession.
Current Scenario
In May 2021, the Delhi High Court issued summons to Chidambarams in relation to the INX media proceedings; however, on a motion filed by their counsel pointing out that both were engaged in election campaigning in Tamil Nadu, the court exempted their personal appearance. Justice Suresh Kumar Kait also sought responses regarding the CBI’s challenge to the trial court’s order requesting submission of certain documents. The matter was subsequently adjourned until later in May 2021.
Although the case first emerged in 2008, and despite multiple investigations and brief periods of judicial custody, no formal punishment or conviction has been delivered as of 2025.
Abstract
The INX media case exposed the shady intersection of political influence, foreign investment, and alleged financial misconduct in Indian’s regulatory system. The case was a quintessential example of white-collar crimes highlighting several significant allegations of money laundering, cheating, criminal conspiracy, and misuse of positions by government officials. The prime offenders in the case were Peter and Indrani Mukherjea, founders of INX media and Karti Chidambaram and his father, P. Chidambaram, who held the position of “Union Finance Minister” at that time. The investigation was led by CBI and Enforcement Directorate (ED) and violated several provisions under “Prevention of Corruption Act, Indian Penal Code, and Prevention of Money Laundering Act.” The case not only highlights regulatory loopholes but also questions the executive accountability and procedural due process.
Case Laws
“P. Chidambaram v. Directorate of Enforcement (2019)”
Delhi High Court denied bail to P. Chidambaram citing the gravity of the offence committed under “Prevention of Money Laundering Act.” However, Supreme Court later overturned it.
“P. Chidambaram v. Central Bureau of Investigation (2019)”
This is the landmark judgement where Supreme Court granted bail to P. Chidambaram I the CBI’s corruption case elating to INX media. The court considered economic offences as grave btu held that bail cannot be denied solely on gravity of offence unless there is risk of flight, tampering of evidence or non-cooperation.
Conclusion
INX media case played a significant role in highlighting the executive accountability, financial irregularities in India’s regulatory system. It was a prominent example of how financial misconduct can intertwine with political influence and regulatory oversight.
FAQs
What is the subject matter of INX media case?
The INX media case primarily involved violations of FIPB clearance granted in 2007 to INX media for receipt of FDI, alongside subsequent allegations of money laundering.
Who were the primary offenders in the INX media case?
The primary offenders were Peter Mukherjea and his wife, Indrani Mukherjea, who were founders of INX media. Karti Chidambaram and his father, P. Chidambaram, who held position of Finance Minister at that time.
Who investigated the INX media case?
CBI and Enforcement Directorate investigated the INX media case.
Under which laws were the charges made?
Section 120 B, 420 of IPC; Section 8,13(1)(d), 13(2) of Prevention of corruption act; Section 3 and 4 of prevention of money laundering act.
What accusations were made against the founders of INX media?
They were accused of collecting amount Rs. 305 Crores which is more than approved limit i.e., Rs. 4.62 crore and investing 26% as downstream investment, even when they were clearly restricted to do
