The Supreme Court dismissed the bail request of former Delhi Deputy Chief Minister Manish Sisodia on Monday, stating that there is “material and evidence” that “tentatively” supports one of the charges under the Prevention of Money Laundering Act (PMLA), which states that 14 wholesale spirits distributors made “excess profit” of Rs 338 crore in approximately 10 months during the now-cancelled excise policy. After being detained by the CBI on February 26, Sisodia was taken into custody by the Enforcement Directorate (ED) on March 9 of this year.
Due to purported inconsistencies in the formulation and execution of a now-repeated spirits policy in the nation’s capital, the head of the Aam Aadmi Party (AAP) is being charged with money laundering and corruption. He has been detained since February of this year, and the Directorate of Enforcement (ED) and the Central Bureau of Investigation (CBI) are both looking into him.
A bench of Justices Sanjiv Khanna and SVN Bhatti heard Sisodia’s arguments against the Delhi High Court’s denial of bail in the CBI and ED cases, and they issued the decision today dismissing his bail motion. The Supreme Court heard arguments opposing the granting of bail, one of which was that the creation of criminal proceeds fell under the definition of “possession” in Section 3 of the Prevention of Money Laundering Act, 2002, and that this included constructive possession.
Additional Solicitor-General SV Raju had contended that the creation of such proceeds of crime was a crime in and of itself, citing Y Balaji v. Karthik Desari (2023). In that instance, the Supreme Court held that criminal activity and the creation of the proceeds of crime are like “Siamese twins” in the case of an offence of corruption and that the acquisition of the proceeds of crime in such cases would itself amount to money laundering. The court also lifted a stay on an ED investigation into allegations of money laundering against Tamil Nadu minister V. Senthil Balaji. With the backing of this ruling from a bench presided over by retired Justice V. Ramasubramanian, the extra solicitor general informed the court that “there will be some possession if proceeds of crime are created.” Someone needs to be in possession after a generation. Simplicity generation is not possible.
The SC observed that offences for unlawful gains to a private person at the expense of the public coffers are included in the chargesheet filed by the CBI under the Prevention of Corruption Act. It makes no difference if the individual, a public servant, accepts or attempts to obtain undue advantage directly or through a third party.
The existing excise policy was altered to facilitate and get kickbacks and bribes from wholesale distributors by raising their commission or fee from 5% under the previous policy to 12% under the new policy, the court continued, citing the CBI chargesheet. Consequently, a plot was conceived to meticulously sketch the new policy. In order to frame the excise policy on the terms and conditions proposed and to the satisfaction and desire of the liquor group, Butchi Babu, Arun Pillai, Abhishek Boinpally, and Sarath Reddy had discussions with Vijay Nair, who served as a go-between, middleman, and co-confidant of the appellant, Manish Sisodia. Manish Sisodia knew that three spirits producers held an 85% market share in Delhi. Two of the producers held a 65% share of spirits, and the remaining fourteen had a 20% market share.
Cartelization was encouraged and supported by the strategy. Due to bribery and other unrelated factors, large wholesale distributors with a significant market share were guaranteed to make enormous profits. Mahadev Liquor, a 20% market share wholesale distributor for 14 minor producers, had to give up its permit to operate as a wholesale distributor. The excess of Rs 338,00,00,000, or 7% commission or fee, that the wholesale wholesalers received… constitutes a crime as that term is defined in Section 7 of the PoC Act concerning the bribery of a public worker. One of the major companies in the industry, Pernod Ricard, will be distributed to the spirits group, as promised by Vijay Nair. In its charge sheet, the CBI stated that “this did happen.
The bench declared, “We are not inclined to accept the prayer for grant of bail at this stage in light of the aforementioned discussion and for the reasons stated.” On the other hand, it stated that Sisodia might submit a new bail application if the trial took longer than expected and that the prosecution had promised that the trial would end in six to eight months.
The court also spoke about a few of Sisodia’s additional charges. The bench stated that the claim that Amit Arora paid Sisodia a bribe of Rs. 2.2 crore through intermediary Dinesh Arora “is not a charge or an allegation made in the chargesheet filed by the CBI” and that “it may be difficult to regard the alleged payment as a ‘proceed of crime’ under” the CBI. The panel declared that the Aam Aadmi Party (AAP) was not facing prosecution in this matter, stating that “it cannot be alleged and has not been argued that Sisodia is vicariously liable in terms of Section 70 of the PMLA.”
“As there is no specific allegation of Sisodia’s involvement, either direct or indirect, in the transfer of Rs 45 crore to AAP for the Goa elections, there appears to be a lack of clarity,” the statement read. The court acknowledged that there is considerable disagreement regarding the ED’s claim that the liquor group had paid Rs 100 crore in kickbacks. The “contention…that generation of proceeds of crime is itself possession or use of the proceeds of crime” made by the ED was also questioned.
