Manish Sisodia Bail | 'If Bribery Isn't There In Predicate Offence, Difficult To Prove PMLA Case' : Supreme Court Reserves Judgment

A bench of Justices Sanjiv Khanna and SVN Bhatti has been hearing Sisodia’s pleas against the Delhi High Court denying him bail in both the CBI and ED cases. The apex court issued notice in his petitions last month, on July 14.

In the final arguments that took place today, Senior Advocate Dr. Abhishek Manu Singhvi appearing for Sisodia submitted that there was no allegation of bribery against Sisodia in the CBI predicate offence under the Prevention of Money Laundering Act (PMLA). "If there is no predicate offence, ED can't be there" he said. He submitted that the allegation of bribe of 220 crore with regard to the modification of the liqour policy with regard to airport licences, is not part of the predicate offence. “Without the predicate offence, this 220 is nothing. I am not on the amount, I'm on the concept,” he said.

Justice Khanna then turned to the Additional Solicitor General SV Raju and said :

"Mr Raju, if it is not part of the predicate offence, that this bribe was paid, you may be in difficultly in proving PMLA. If you had said bribe of 2.2 crores was paid for tweaking the policy, yes. But you cannot create a predicate offence in your PMLA case. We cannot go on an assumption. Whatever protection is given in the law will be fully extended. If protection is not there, its not there.”  

The ASG responded to this by arguing that as per Section 66 (2) of the PMLA, the ED can intimate the jurisdictional police about any new information. 

To which Justice Khanna responded, "but you have not done it, so we will not go on presumption".

Singhvi argued that the generation of proceeds of crime occurs only in the predicate offence as per the Vijay Madanlal Chaudhary judgment. "ED, of all people, wants Vijay Madanlal Chaudhary judgment to be reconsidered?", he said. Singhvi also said that the ED as a premier investigative agency is bound to be transparent.

Notably, in the beginning of the hearing, the ASG had read out a line from the Vijay Madanlal Choudhary judgment that said that bail as per Sec 45 PMLA can be given only in a "genuine case".

During today's hearing, the ASG also informed the Court that the trial can be finished in 9 to 12 months. "You can't keep me behind bars with 500 witnesses and 50,000 documents in the interim when the trial is to start and when there is no evidence linking me" Singhvi exclaimed. 

Singhvi also argued the liquor policy was a result of "institutional, multi-layered decision making process spread over a year". He submitted that there was nothing directly linking Sisodia to the proceeds of crime and that he was not a flight sick and hence he deserved to be out on bail. Singhvi told the Court that the allegation is that the policy itself was made to defraud, however, he argued that the policy was made in a transparent manner after deliberations by several committees and approved by the then LG. He argued that the ED's claim that the liquor policy resulted in an increase of prices was wrong. Singhvi refuted this and submitted that after the liquor policy was introduced, the price offered to customers actually decreased.

The allegation against Sisodia says that he pressurised excise officials to give licence to the company IndoSpirit.  'Indospirit's 12% profit margin for the policy period was Rs 192 crore and all endeavours were made that Indospirit gets this' ASG SV Raju had told the Court in yesterday's hearing. 

In today's hearing, Singhvi also submitted that there was nothing to show that Sisodia insisted on the license being given to Indospirts violating the law. "Admittedly, there is no money trail found against me. What they say is that a company generated profits and since it is the policy which was created by me which helped the company, I am involved. That is too far fetched" Singhvi said on the Indospirits allegation. 

Yesterday, the ASG had claimed that Sisodia had tampered with evidence by discarding a mobile phone that has allegedly not yet been recovered. "Ministers change their phones. It is a ministerial phone. And it was discarded before the registration of FIR. It becomes a tampering of evidence?" Singhvi said in Court today. 

Pervious Hearings

Earlier this month, Singhvi, appearing for the embattled legislator, argued that no money trail directly implicating Sisodia, a sitting legislative assembly member and former Delhi Deputy Chief Minister, has been unearthed. No evidence, he further argued, linked Sisodia with the independent offence of money laundering in Section 3 of the Prevention of Money Laundering Act, 2002. Regarding the controversy surrounding the liquor policy, Singhvi argued that the new policy, which was a collective institutional decision aimed at breaking the cartelisation prevalent among private manufacturers - had increased revenues and limited the unreasonable and exorbitant profits earned by wholesalers. The senior counsel also stressed Sisodia's minimal flight risk and his incapacity to influence witnesses, in support of the contention that the criteria for granting bail had been met.

During the hearing, the Supreme Court, among other things, questioned the non-inclusion of the political party allegedly benefitting from the alleged excise policy scam. This inquiry, which the court later clarified was meant to only be a legal question regarding the culpability of suspected co-conspirators, led to a barrage of media reports claiming that the Enforcement Directorate was planning to arraign Aam Aadmi Party as one of the accused. When asked by the press for a statement, Additional Solicitor-General SV Raju categorically stated that no one would be spared if evidence against them is discovered by the central agencies. In the course of the marathon hearing, the court asked the agencies a number of other important questions regarding the investigations over Sisodia's role in the alleged financial irregularities in the framing and implementation of the Delhi liquor policy.

On the last occasion, ASG Raju told the bench that the Enforcement Directorate is 'contemplating' making the Aam Aadmi Party an accused in the money laundering case and invoking Section 70 of the Prevention of Money Laundering Act to probe into the aspect of vicarious liability of the political party in connection with the liquor scam. Besides this, he reiterated the seriousness of the offence allegedly committed by Sisodia, pointing to the rank he held as the deputy chief minister, holding 18 portfolios, with exclusive charge of the excise policy, and claiming that there is 'sufficient' evidence of his involvement in money-laundering activities. The sudden and unexplained increase of the wholesalers' profit margin under the excise policy from 5 percent to 12 percent, ASG Raju said, had caused massive losses to not only the public exchequer but also the consumers. This additional profit margin is also being considered as proceeds of crime, the law officer told the bench. Further, the additional solicitor-general claimed that Sisodia had tampered with evidence, referring, among other things, to a mobile phone belonging to the former deputy chief minister that has allegedly not yet been recovered. "Even if they are prima facie entitled to bail, on grounds of tampering with evidence, it ought to be denied."

After the law officer's submissions, Justice Khanna questioned the central agencies about the delay in the trials. In neither the CBI, nor the ED case has the arguments on charges begun. The judge categorically said that Sisodia cannot be kept behind bars ad infinitum, and that the arguments ought to have commenced immediately after the charge-sheet was filed. "You can answer this tomorrow. Why have the arguments not commenced yet and when will they commence?" Justice Khanna asked ASG Raju, who cited applications under Section 207 of the Code of Criminal Procedure to inspect documents that have not been relied upon by the prosecution as one of the primary reasons for the delay. He informed the bench, "In the ED case, cognizance has been taken and summonses issued. They will try to finish it as early as possible."

Background

The origin of the controversy is the excise policy framed by the Government of the National Capital of Delhi to boost revenue and reform liquor trade in 2021, which was later withdrawn after allegations of irregularities in implementation were made and Lieutenant-Governor Vinay Kumar Saxena ordered a probe by the Central Bureau of Investigation into the policy. This policy – which sought to completely privatise liquor trade in the national capital – was used to grant undue advantage to private entities at the cost of the public exchequer and smacked of corruption, the Enforcement Directorate and the Central Bureau of Investigation have claimed. The investigations are currently underway and led to the arrest of, among others, Manish Sisodia – the former deputy chief minister of Delhi and a prominent leader of the Aam Aadmi Party.

Manish Sisodia was first arrested by the Central Bureau of Investigation in a case related to the excise policy on February 26 and later by the Enforcement Directorate on March 9. In the first information report (FIR) registered by the CBI, Sisodia and others have been accused of being instrumental in ‘recommending’ and ‘taking decisions’ regarding the 2021-22 excise policy, “without the approval of competent authority with an intention to extend undue favours to the licensee post tender”. The central agency has also claimed that the AAP leader was arrested because he gave evasive replies and refused to cooperate with the investigation, despite being confronted with evidence.

On the other hand, the Enforcement Directorate has alleged that the excise policy was implemented as part of a conspiracy to give wholesale business profit of 12 percent to certain private companies, although 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 that was coordinated by Vijay Nair and other individuals along with South Group to give extraordinary profit margins to wholesalers. Nair was acting on behalf of Delhi chief minister Arvind Kejriwal and deputy chief minister Manish Sisodia, according to the agency.

Sisodia’s bail applications in both cases – investigated by the CBI and the ED respectively – were rejected by Special Judge MK Nagpal of Rouse Avenue Courts in Delhi on March 31 and April 28.

Last month, on July 3, the Delhi High Court denied bail to Sisodia in the money laundering case related to the implementation of the previous liquor policy in the national capital. Earlier, on May 30, the high court rejected his bail plea in the corruption case registered by the CBI in relation to the liquor policy. The former litigator has approached the Supreme Court challenging both these verdicts.

Case Details

1. Manish Sisodia v. Central Bureau of Investigation | Special Leave Petition (Criminal) No. 8167 of 2023
2. Manish Sisodia v. Directorate of Enforcement | Special Leave Petition (Criminal) No. 8188 of 2023