Delhi Liquor Policy Case: Why Political Party, Which Is Alleged To Be Beneficiary, Not Made An Accused? Supreme Court Asks ED In Manish Sisodia's Bail

The Supreme Court on Wednesday (04.09.2023,) while hearing the plea of Aam Aadmi Party (AAP) leader and former Delhi Deputy Chief Minister Manish Sisodia against the cases registered by the Central Bureau of Investigation (CBI) and the Directorate of Enforcement (ED) over the alleged Delhi liquor policy scam, asked why the political party, which is alleged to be a beneficiary, is not made an accused in the case under the Prevention of Money Laundering Act.

A bench comprising Justices Sanjiv Khanna and SVN Bhatti was hearing two petitions filed by Sisodia challenging the decisions of the Delhi High Court to deny Sisodia bail in the cases being investigated by the CBI and the ED. As the bench was about to raise after concluding the hearing today, Justice Khanna asked Additional Solicitor General SV Raju, who is appearing for the ED and CBI, "As far as PMLA is concerned, your whole case is that it went to a political party. That political party is still not an accused. How do you answer that? He is not the beneficiary, the political party is the beneficiary".

ASG said that he will respond to the query tomorrow.

"Whatever it is, you answer that. I just put the question. This is not a point which he (Sisodia's lawyer Senior Advocate AM Singhvi) has raised directly. I put it directly," Justice Khanna said concluding today's hearing.

Before that, Singhvi addressed the bench for over two hours, seeking bail for Sisodia in both the cases. While CBI is probing the allegations under the Prevention of Corruption Act, ED is handling the money laundering case under the Prevention of Money Laundering Act. The allegations relate to the excise policy framed by the Government of the National Capital of Delhi in 2021, which was later withdrawn after allegations of irregularities in implementation were made.  The Central Bureau of Investigation started investigation into the policy following a reference by the Union Ministry of Home Affairs on a complaint by Lieutenant-Governor Vinay Kumar Saxena.

Manish Sisodia was first arrested by the Central Bureau of Investigation on February 26 and has been behind the bars since then. Later, the Enforcement Directorate arrested him on March 9 this year.

No money trail found against Sisodia, argues Singhvi

Senior Advocate Dr Abhishek Manu Singhvi appearing for Sisodia argued that being is a sitting MLA, Sisodia is not a flight risk. There is also no question of him influencing any witnesses and hence the triple tests for bail are satisfied, he contended. "Everybody else has got bail. Unfortunately, in public life, there are some high value targets and they won't get bail," Singhvi said. He also cited the ailments of Sisodia's wife as a reason for grant of bail. 

The ED has claimed that there was a conspiracy which was coordinated by Vijay Nair and other individuals along with the "South Group" to give extraordinary profit margin to wholesalers. The allegation is that Vijay Nair is said to be Sisodia's close associate, Singhvi said. "But there is no material to prove he was my agent. The reliance is on various vague statements that have to be proven during trial", Singhvi added.

"The allegations stop at Vijay Nair and it is alleged he is a close associate of Manish Sisodia. There is no specific individual allegation against Sisodia. Vague allegation is that he assisted in the proceeds of crime. But there is no money trail," Singhvi stated. 

Singhvi told the Court that all other accused in the case, the principal perpetrators against whom money trail has been found, have all been granted bail.

Singhvi also informed the Court that in both cases by the CBI and ED, chargesheets have been filed. In the CBI matter, there is one main chargesheet and two supplementary chargesheets and 31,423 documents and 294 witnesses. In the Prevention of Money Laundering Act (PMLA) matter by the ED, there is one prosecution complaint, 4 supplementary complaints, 21,465 documents and 162 witnesses. "So total is, more than 50,000 documents and over 500 witnesses," he told the Court. 

As far as a policy decision is concerned, Prevention of Corruption Act will apply only if there is an element of bribery or quid pro quo, Justice Khanna said in the course of the hearing. 

"Given the fact that we are not going into the wisdom of the policy, it becomes a question of quid pro quo and for that we go into the question if the policy was something which was totally absurd or causing loss to the government or benefit to the third party", Justice Sanjiv Khanna told Dr. Singhvi.  "It was an institutional decision. Your lordships will allow a margin of error. In hindsight, everything can be done differently", Singhvi said. 

New policy increased revenue generation, no loss caused to public exchequer

"The liquor policy is an institutional decision spread over multi-levels. It was a collective decision. As per old policy, due to cartelisation of private manufacturers, profit margin went up to 70%. In Sep 2020, Ravi Dhavan committee was constituted and suggested overall reform measures," he told the Court. 

The new liquor policy busted cartelisation, prescribed conditions as per global standards and increased revenue, Singhvi said. In the old policy, wholesalers were also manufacturers and were earning profits to the extent of 65-70%. "The new policy restricted the scope for unreasonable profits and capped at 12%. There were massive leaks in the old policy".

The 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, although such a stipulation was not mentioned in the minutes of meetings of Group of Ministers (GoM) "Everywhere it is a one-word allegation. Manish Sisodia made 5% as 12%" Singhvi said. "Three secretaries are involved, three ministers are involved and ultimately the LG is also involved in the decision-making," Singhvi argued.

The Counsel for Sisodia explained how the excise policy came into effect. First there was the Ravi Dhavan Committee report, followed by cabinet discussions, after which it was sent to the LG. The LG then sends it back with certain recommendations and then the Cabinet approves it after which the matter again goes to LG for his approval, he explained. Singhvi said that the problems started after the new LG was appointed in May 2022.

Singhvi explained to the Apex Court that the old policy had incentives to cheat, and indulge in cartelisation. He also told the Court that there has been no revenue loss because of the new policy. "The old lobby wanted the status quo to continue. They produced three legal opinions for the continuation of the old policy. The allegation is that those legal opinions were not found with the cabinet note. The new policy was implemented despite these opinions. What is this allegation? They are only on the policy. Can there be a CBI/ED case on these? Then the entire Group of Ministers, Secretaries and the LG should be in the dock" Singhvi said. The opinions were obtained by the old retailers, not by the government and what is followed is the new policy based on Ravi Dhavan committee, he explained.

With regard to the allegation of destruction of mobile phones, Singhvi argued that there was no evidence that the phones in question had incriminating evidence. Out of the three phones which Sisodia was having, two were discarded much prior to the registration of the FIR and the third one is with the investigating agency.

Regarding the allegation of destruction of cabinet files, Singhvi said "The cabinet file containing three legal opinions is supposedly destroyed. Why would I destroy something which I am not intending to follow? There is no independent evidence regarding the existence of such files. Those opinions were for following the old policy," he argued.  These opinions were obtained by private players having interest in the old policy and the absence of the said opinions is of no consequence, he said.

No evidence to show money laundering

With regard to the allegations by the ED, Singhvi said that the only allegation against Sisodia is that Vijay Nair was his agent. He argued that the requirement under Section 3 of the PMLA has not been satisfied. "There is not a word about how petitioner has done any of the acts under Section 3 of PMLA. ED is still tracing the money. They only have a bald statement that Sisodia assisted in the generation of proceeds of crime. That is not sufficient for Sec 3 PMLA. If someone takes a bribe and keeps the money under bed, without doing anything, it is still a predicate offence not PMLA offence. You have to project it as untainted money for PMLA. Section 3 PMLA is predicate offence plus something more," he argued. Singhvi cited the ruling in Vijay Madanlal Choudhary to argue that Sec 3 PMLA is an independent offence. "You have to show how Manish Sisodia is involved, not just say he is. You have to show at least some involvement in projection, concealment, possession," Singhvi added. 

Other accused got bail after giving statements incriminating Sisodia

Singhvi also referred to the statement of a witness recorded under Section 164 of the CrPC which contains allegations against Sisodia. Singhvi said that the said statement does not have any specific allegation of Sisodia taking money. Singhvi added that there were contradictions between the two statements of the witness. "See the overall context. Statement was given by him due to threat of arrest and due to non-grant of bail to his son. His statement is given on 17 March and next day the son is given bail," Singhvi pointed out.

Singhvi also said that one of the accused who turned approver, Dinesh Arora, has changed his statements several times in the course of the investigation. Singhvi said that after making the statements, Dinesh Arora was granted bail. "6th of July arrest, 19th of July he makes the statements, 1st of August he gets bail. See the dates" Singhvi said. Singhvi also told the Court that Sarath Reddy turned approver in the case and he was also granted bail.

In this context, Singhvi said "Judges need to read between the lines also and I urge your lordships to do so. Everything cannot be black and white" 

During the course of the hearing, Justice Khanna told the ASG to address the Court on the justiciability of cabinet notes and decisions."I believe there are constitution bench judgments barring us from examining cabinet notes. I do not know if it applies to Delhi, because it is a Union Territory, " Justice Khanna said.

Case Details

Manish Sisodia v. Central Bureau of Investigation | Special Leave Petition (Criminal) No. 8167 of 2023

Manish Sisodia v. Directorate of Enforcement | Special Leave Petition (Criminal) No. 8188 of 2023