Congress leader P Chidambaram suffered a major setback Tuesday as the Delhi High Court dismissed his anticipatory bail in the INX Media scam, paving way for the investigating agencies, CBI and ED, to arrest him.

The High Court held that he was "prima facie the kingpin" in the INX Media corruption and money laundering cases and "simply because he is a Member of Parliament would not justify grant of pre arrest bail to him".

Holding that the former Union minister's custodial interrogation was required for an effective investigation, the High Court said, "granting bail in cases like the instant one will send a wrong message to the society".

Justice Sunil Gaur, who is due to retire on Thursday, said this court cannot permit the prosecution in this "sensitive case to end up in smoke like it has happened in some other high profile cases".

"Facts of the case prima facie reveal that petitioner is the kingpin, that is, the key conspirator in this case. Law enforcing agencies cannot be made ineffective by putting legal obstacles in offences in question," the judge said.

The High Court said this was a "classic case of money laundering" and the twin facts which have weighed to deny pre-arrest bail to him are "gravity" of the offence and "evasive" replies given by him to questions put to him while he was under protective cover extended to him by this court.

CBI had registered an FIR on May 15, 2017 alleging irregularities in the Foreign Investment Promotion Board (FIPB) clearance granted to the INX Media group for receiving overseas funds of Rs 305 crore in 2007 during Chidambaram's tenure as finance minister.

Thereafter, the ED in 2018 lodged the money laundering case in this regard.

The court, which had reserved its order on January 25 on the anticipatory bail pleas of Chidambaram in both CBI and ED cases, also declined interim protection from arrest to him for approaching the Supreme Court in the case.

The high court had on July 25, 2018 granted interim protection from arrest to Chidambaram in both the cases and it had been extended from time to time.

After the high court denied any relief to him, Chidambaram approached the Supreme Court from where he failed to get any immediate relief and was asked to mention the plea Wednesday morning.

The high court said: "It cannot be forgotten that the petitioner (Chidambaram) was the Finance Minister at the relevant time and he had given FDI clearances to INX Media Group for receiving overseas funds to the tune of Rs 305 crore."

Justice Gaur said: "Simply because he is a Member of Parliament would not justify grant of pre arrest bail to him. The magnitude of the offence dissuades this court to grant bail to the petitioner.

"It is preposterous to say that prosecution of the petitioner is baseless, politically motivated and an act of vendetta... The offenders must be exposed, no matter what their status is."

This court is of the prima facie opinion that custodial interrogation of petitioner is required for an effective investigation, he said.

The 24-page judgement said the gravity of offence committed in this case amply justifies denial of pre arrest bail and it was of the prima facie opinion that it was not a fit case for granting the relief to him.

It said: "Economic offences constitute a class apart and need to be visited with a different approach in the matters of bail.

"Taking note of huge magnitude of conspiracy angle qua the petitioner, it would be pre mature to jump to a conclusion that the provision of Prevention of Money Laundering Act (PMLA) would not apply to the instant case, as it cannot be said that the amount involved is below Rs 30 lakh. Rather money laundering involved in this INX Media scam is Rs 305 crore and Aircel-Maxis scandal is Rs 3,500 crore."

The court observed that the economic crimes of such "mammoth scale are craftily planned and executed".

"In this case, in view of the enormous material placed on record in respect of distinguished entities, various transactions etc, this court unhesitatingly opines that bail plea is not acceptable," it said.

Chidambaram's role had come under the scanner of various investigating agencies in the Rs 3,500-crore Aircel-Maxis deal and the INX Media case involving Rs 305 crore.

It was during his tenure as finance minister in the UPA-I government that clearances from the Foreign Investment Promotion Board (FIPB) were given to the two ventures.

Chidambaram's petition had said that though no summons had ever been served on him by the ED in this case, he had an apprehension of arrest in view of the summons issued to him by the CBI.