The ED said allowing Karti Chidambaram, son of senior Congress leader P Chidambaram, to approach the high court in the money laundering case arising out of the INX Media graft case, would set a "bad precedent" for others.
During a nearly two-hour hearing before a bench headed by Chief Justice Dipak Misra, Additional Solicitor General Tushar Mehta, appearing for the ED and Karti's senior counsel Kapil Sibal, traded a volley of charges.
However, the bench, also comprising justices AM Khanwilkar and DY Chandrachud, acceded to Karti Chidambaram's plea and asked the acting chief justice of the high court to allocate it before an appropriate bench for hearing tomorrow.
Hours after the top court order, Karti Chidambaram's lawyers -- Dayan Krishnan and Mohit Mathur -- approached the high court where Justice S Ravindra Bhat dealt with the petition in his chamber and posted the matter for hearing tomorrow.
Karti Chidambaram, who is in the custody of the Central Bureau of Investigation in the INX Media bribery case, will be produced before a trial court tomorrow on expiry of his three-day custodial interrogation.
He has been in CBI custody since his arrest on February 28. The agency can seek his police custody for six more days under the law in addition to nine days already granted.
Special Judge Sunil Rana will also hear the bail plea of Karti Chidambaram and the CBI's application to conduct a narco-analysis test on him.
The agency, during previous hearings, alleged that he was not cooperating in the probe and was evasive in responding even to routine questions by parroting that the case against him was politically motivated to target his father during whose tenure as the Union finance minister, the Foreign Investment Promotion Board (FIPB) clearance was granted to the INX Media group.
The ED opposed Mr Sibal's contention that Karti Chidambaram should be allowed to withdraw the petition and approach the high court.
Mr Sibal also sought one week's interim protection from arrest by the ED in the case.
However, Mr Mehta opposed Mr Sibal's submission, saying by "allowing the petitioner to withdraw and approach the high court by the Supreme Court will send a wrong signal to all those who are facing money laundering cases. There will be 50 petitions next day. What message we will be sending to others".
He said it will set a bad precedent for others who would first approach the top court by way of petitions seeking interim protection and then seek permission to move high court.
The bench asked Mr Mehta "What if Karti is arrested by the ED as soon as he is released by the CBI from its custody?"
"He himself says he is not a 'common criminal'. But I ask myself what do common criminals do when released in one case and fear arrest in the other case. They apply for anticipatory bail. It is his constitutional right," Mr Mehta said, adding that the court may quash the proceedings if it so wished, but it should not allow him to withdraw the petition.
The bench said it will pass orders directing the high court to entertain the petition of Karti Chidambaram and pass the interim order once a proper application was moved.
"Now is this what the Supreme Court is going to do? Would it be appropriate for the Supreme Court to direct the high court to entertain the petition and pass the orders. It's like the high court does not know what to do. Let it be open for the high court. It will decide according to the law," Mr Mehta argued.
Mr Sibal objected to the statements of Mr Mehta asking "will now law officers dictate the court as to what order it should pass..."
"What is this going on. This is the chief justice's court. This is a constitutional court and no one should be allowed to be dictated," Mr Sibal, along with other senior lawyer AM Singhvi, said.
Mr Mehta retorted, "This statement of my learned friend (Sibal) was in bad taste and should not have been made. The court should not entertain this type of petition. The law officers are responsible persons and we know our responsibilities".
The CJI intervened and said, "Both of you (Sibal and Mehta) are today at a different level. A lot of statements are being made which are not according to the law. Nobody can dictate to the court what to do and what not to do."
Mr Sibal later apologised for his remarks but said he was not happy with the way things were going.
He said the ED case was out of "political vendetta" and "witch hunting". So far, Karti Chidambaram has not been given the enforcement case information report (ECIR) giving details of the case, he said.
Mr Mehta said the ECIR was an internal document and need not be necessarily given to the accused but if the court insists, then he can give it.
"If he is to seek anticipatory bail under section 438 CrPC, then he has to first approach the high court or the special court, but he can't seek remedy under Article 32 before Supreme Court or Article 226 from high court," Mr Mehta said.
Karti Chidambaram had approached the apex court seeking direction to declare that the ED had no jurisdiction to conduct any investigation unrelated to the allegations in the FIR lodged by the CBI on May 15, 2017.