73-year-old Chidambaram, who was arrested on Wednesday after day-long high drama and spent a quiet night at the agency guest house in suite number 5 on the ground floor of its headquarters, was produced in the special court which "justified" CBI's demand for his custodial interrogation.
The court made it clear that "the investigating agency will ensure that the personal dignity of the accused is not violated in any manner".
Allegations of payment made to Chidambaram in 2007-08 and 2008-09 are "specific and categorical" and the "trail of this money", if so paid, is to be ascertained, the court said.
The enormity of money allegedly involved in this case and the persons who are accused necessitate an in depth investigation, it added.
There were intensive arguments for over 90 minutes from both the CBI and Chidambaram's side before the court sent him to the custody till 26 August.
"The investigation needs to be brought to a logical end and for that purpose, the custodial interrogation is sometime found useful and fruitful. The apprehension of accused of any coercive action can be addressed by the court to safeguard his right as a citizen of the country," it said.
"Considering all the facts and circumstances of the case as brought to the notice of the court, I am of the view that police custody remand of accused P Chidambaram is justified and accordingly, the accused is remanded to police custody till August 26," said Special Judge Ajay Kumar Kuhar.
He allowed Chidambaram to make brief submission in which he stated that on June 6, 2018, he had answered the questions and there is nothing new they are asking now.
"I have already given details of all my bank accounts (to CBI)," Chidambaram, whose wife Nalini and son Karti were present in the packed courtroom, told the judge.
The order, pronounced 90 minutes after being reserved, noted CBI's submission that Chidambaram's custodial interrogation was necessary to reach to some documents which may be in his possession.
The court said that to a large extent, it is a case based on documentary evidence and those documents need to be traced and their value and worth for the purpose of the investigation in the case is to be ascertained.
It said the submission of Chidambaram's counsel that gravity of an offence is gauged only by the quantum of punishment which can be awarded is not apt in the given facts and circumstances of the case.
It also said the investigating agency not calling the accused for probe after June 6, 2018 cannot be a ground to deny it an opportunity to conduct an effective probe now.
In the 10-page order, the court said Chidambaram is to be medically examined after every 48 hours and produced again on August 26, after medical examination, and his family members and counsel will be at liberty to meet him for half an hour daily.
Solicitor General Tushar Mehta said there was a need to unearth a larger conspiracy and to go to the root of the case which was opposed by senior advocates Kapil Sibal and A M Singhvi, who argued that all the other accused, including Chidambaram's son Karti, have already been granted bail in the matter.
Chidambaram, who was Union home minister as also finance minister during the UPA rule from 2004 to 2014, was arrested Wednesday night after he failed to get protection from the Supreme Court, which did not list for an urgent hearing his appeal against the Delhi High Court verdict dismissing his anticipatory bail plea on Tuesday.
The CBI had registered an FIR on May 15, 2017, alleging irregularities in the FIPB clearance granted to the INX Media group for receiving overseas funds of ₹305 crore in 2007 during Chidambaram's tenure as the finance minister. Thereafter, money laundering case was lodged.
Chidambaram was produced in the court amidst tight security and Sibal argued that the first arrest in the case was of Bhaskar Raman, chartered accountant of Karti, who is presently out on bail.
Besides that, Peter and Indrani Mukherjea, also accused in the case, are out on default bail as they are in jail in connection with another matter, Sibal said, adding that the FIPB approval was given by senior officials, who were not arrested and contended that grant of bail was a rule and the issue before the court was of personal liberty.
However, Mehta said CBI has to interrogate Chidambaram in custody as he was non-cooperative and evasive in replies in the corruption case of monumental magnitude and the agency was not extorting his confession but it a serious case involving involving intelligent people.
He said Chidambaram has tremendous potential of not cooperating in probe since he is highly intelligent and certain facts about the case cannot be narrated in the open court.
Singhvi said his client was "not a flight risk" and the CBI case was based on the statement of Indrani, now turned approver in the case.
Mehta said Chidambaram was arrested following a non bailable warrant against him and his custody was necessary to unearth the "quid pro quo and larger conspiracy" for which he has to be confronted with documents.
Sibal contended that what the agency said be not taken as "gospel truth" as 12 questions were asked to him of which he had answered six previously.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.