BREAKING - Delhi High Court Denies Bail To Manish Sisodia In Money Laundering Case

The Delhi High Court on Monday denied bail to Aam Aadmi Party leader and Delhi’s former Deputy Chief Minister Manish Sisodia in the money laundering case related to the implementation of previous liquor policy in national capital.

Justice Dinesh Kumar Sharma also denied bail to co-accused persons Hyderabad businessman Abhishek Boinpally, AAP’s communications incharge Vijay Nair and General Manager of Pernod Ricard India Benoy Babu. 

The court observed that the order of the special judge denying bail to Sisodia was well reasoned and was passed on the basis of material on record. Furthermore, Justice Sharma also noted that the court has also denied bail to Sisodia in CBI case. 

In the order running into 56 pages, the court observed that the gravity of the allegations against Sisodia are very serious in nature and in that the matter has to be “visited with a different approach” as a deep rooted conspiracy involving huge loss of public funds has been alleged.

“The twin conditions under Section 45 of PMLA are in addition to the triple test. This Court is of the considered view that the petitioner has not only been able to pass the twin conditions as provided under Section 45 of PMLA, but he has also not been able to cross the triple test. I consider, in view of the discussion made hereinabove, the petitioner is not entitled to bail,” the court said.

The court also noted that allegedly, the excise policy was framed as a “special purpose vehicle” to generate the proceeds of crime. It added that M/s Indo spirit was also constituted for regular generation of proceeds of crime.

“There may not be any recovery of the proceeds of crime. However, if the excise policy has been framed for the purpose of generation of proceeds of crime or M/s Indo Spirits has been constituted in a manner to continuously generate the proceeds of crime then all the stakeholders who instrumental in framing, drafting and formulating of excise policy are covered under Section 3 of PMLA as their acts and conducts amount to involvement in any process of activity connected with the proceeds of crime,” the court said.

Justice Sharma also took note of ED’s allegations and said that the material on record indicate that profit margin was increased from 5% to 12% “without having any discussion” in the GoM which was indicated by the statements of then Excise Commissioner, the then Secretary to Sisodia and the then Excise Commissioner.

“The ED has also alleged that even the petitioner Manish Sisodia in his statement dated 07.03.2023 could not give any plausible reason for increase of the margin from 5% to 12%,” the court noted further.

Noting that the facts of the case are unique in nature, the court said that the serious allegations against Sisodia include that he framed the excise policy at the instance of some outsiders, who were going to be beneficiaries of the same.

“The functioning of the government is such that generally it is done in a discrete manner. The outside public has no means to have any access while policies are framed. The policies are framed under the supervision of the political heads by the senior bureaucrats. The senior bureaucrats in the present case are saying that no discussion took place on the material points like the increase of margin from 5% to 12%,” the court said.

It adder: “It has also come on the record that in the draft dated 15.03.2021, the profit margin was 5% and in the draft dated 19.03.2021, the profit margin was increased from 5% to 12% and no deliberation had taken place between 15.03.2021 and 19.03.2021. It has also come on the record that even before this report was submitted to the cabinet, the same was in possession of the liquor traders. In such a case, it is not only difficult but seems to be impossible to get any direct evidence.”

The court said that while it is fully conscious of the fact that personal liberty is a sacrosanct right and pre-trial detention cannot be taken as a punitive measure, it added that a balance has to be ensured between the interest of an individual and the interest of the society at large.

“The present case arises out of an alleged conspiracy wherein the government framed an excise policy with a malafide intention to recoup the kickbacks received in advance from certain individuals and to further generate the ill money from the liquor trade. There are witnesses and witnesses on record to show that certain outsiders were actively participating from the stage of drafting and formulation of the policy,” the court said.

Justice Dinesh Kumar Sharma also added that the statements of the witnesses clearly indicate that some “extraneous factors” were working since the time of conceptualization, formulation and drafting of the excise policy.

“The allegation regarding generating of the emails in support of the excise policy also raises the red flag that everything was not being done in a transparent and bonafide manner,” the court said. 

The court had last month also rejected Sisodia’s application seeking interim bail for six weeks in view of the poor health condition of his wife. Justice Sharma had observed that the allegations against Sisodia were extremely serious in nature and that it cannot forget the positions held by him.

The AAP leader was arrested by the CBI on February 26. It is the case of the probe agency that there were irregularities in the framing and implementation of the excise policy for the year 2021-22.

The CBI alleged that Sisodia was arrested as he gave evasive replies and did not cooperate with the investigation despite being confronted with evidence.

The CBI FIR states that Sisodia and others were instrumental in “recommending and taking decisions” regarding the excise policy 2021-22 “without approval of competent authority with an intention to extend undue favours to the licensee post tender.”

On the other hand, ED has alleged that the excise policy was implemented as part of a conspiracy to give wholesale business profit of 12% to certain private companies. It has said that such a stipulation was not mentioned in the minutes of meetings of Group of Ministers (GoM).

The agency has also claimed that there was a conspiracy which was coordinated by Vijay Nair and other individuals along with South Group to give extraordinary profit margin to wholesalers. Nair was acting on behalf of the Chief Minister and Deputy Chief Minister of Delhi, according to the agency.

Title: Manish Sisodia v. Enforcement Directorate 

Citation: 2023 LiveLaw (Del) 541

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