Delhi Liquor Policy : Supreme Court Grants Bail To Vijay Nair After 23 Months Custody In Money Laundering Case

A bench of Justice Hrishikesh Roy and Justice SVN Bhatti The court stated that the principle of "bail as the rule and jail as the exception" would be defeated if the petitioner remained in custody without trial.

“The right of liberty guaranteed under Article 21 of the Constitution is a sacrosanct right which requires to be respected even in cases where stringent provisions are incorporated in the special enactments. The petitioner has been in custody for over 23 months and his incarceration as an undertrial cannot be a mode of punishment without trial having commenced in the case. The universal proposition of bail being the rule and jail being the exception will be entirely defeated if petitioner is kept in custody as an undertrial for such long duration particularly when in the event of conviction, the final sentence can only be 7 years in the maximum. We are of the view that petitioner deserves bail. Accordingly bail is granted on the following terms…”, Justice Roy said, dictating the order.

Nair filed the present SLP challenging the Delhi High Court's decision to deny him bail. Nair, along with co-accused Sameer Mahendru, Sharath Reddy, Abhishek Boinpally, and Benoy Babu, had been denied bail by the Rouse Avenue Courts on February 16. The trial court cited ongoing investigations and potential risks of evidence tampering if the accused were released. The High Court upheld this decision, finding no illegality or perversity in the trial court's order.

Senior Advocate Abhishek Manu Singhvi for Nair argued that since co-accused Manish Sisodia and K. Kavitha were granted bail, and Nair is on better footing than they were as he has already been granted bail in the predicate offence. He pointed out that Nair has been incarcerated for 23 months, and the maximum possible sentence for the charges against him under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA) is seven years.

Additional Solicitor General SV Raju alleged that Nair acted as a middleman for taking kickbacks from those persons who got liquor licenses for the other accused such as Chief Minister and deputy CM who made the policy. He cited the threshold bar under Section 45 of the PMLA, which imposes stringent conditions for granting bail in such cases. He argued that bail should not be considered without prima facie establishing that the accused is not guilty. He distinguished Nair's case from that of K Kavitha, arguing that she received the benefit of the proviso under Section 45(1) of the PMLA. He also contended that delays in the trial could not be attributed to the prosecution, as multiple applications filed by the petitioner needed to be disposed of.

The Court noted that Dinesh Arora, an accused who turned approver, had implicated Nair in his 12th statement, although earlier statements did not do so. The ED has filed 9 prosecution complaints in the case, and the petitioner has remained in custody for about 23 months, the Court pointed out. The Court further noted that despite an assurance from the ED on October 30, 2023, in Manish Sisodia's case that the trial would be concluded within eight months the trial has not commenced. About 40 individuals have been added as accused, and the prosecution intends to examine about 350 witnesses, the Court noted.

"When the case of the co-accused Manish Sisodia was taken up by this court, an assurance was given by counsel representing the directorate of enforcement on 30-10-2023 that the trial would get concluded within 6-8 months. As can be seen the trial is yet to commence", the Court observed in its order.

The Court cited judgment granting bail to Manish Sisodia where it was emphasized that the right to speedy trial and the fundamental right to liberty under Article 21 of the Constitution, cannot be subjugated to the stringent provisions of Section 45 of the PMLA.

"We have perused the reasoning in this court's judgment date 9-08-2024 in granting bail to co-accused Manisha Sisodia. In the said proceedings, the court had reiterated the right of an accused to speedy trial as enshrined under Article 21 of the Constitution and also the fact that fundamental rights guaranteed under Article 21 cannot be subjugated to statutory power under section 45 of PMLA."

The Court reiterated that incarceration as an undertrial for an extended period without the commencement of the trial could not be justified, especially when the maximum sentence upon conviction is seven years.

Therefore, the Court granted bail to Vijay Nair.

Case no. – Diary No. 22137 / 2024

Case Title – Vijay Nair v. Directorate of Enforcement 

Citation : 2024 LiveLaw (SC) 644

Click here to read the order