2023 (7) TMI 1312 - HC - Money Laundering

Seeking grant of bail - Money Laundering - Conspiracy - proceeds of crime - irregularities in the framing of the Excise Policy (excise policy of GNCTD of Delhi for the year 2021-22) in a manner which permitted formation of cartels and windfall profits for certain preferred persons who had paid kickback/bribes in exchange thereof - connection with various branches of this entire liquor scam - HELD THAT - Section 45 of PMLA provides that notwithstanding anything contained in the Code of Criminal Procedure 1973 no person accused of an offence under this Act shall be released on bail or on his own bond unless (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail. It is also pertinent to mention here that Section 45 also provides that this condition is in addition to the limitations imposed under Section 439 of the Code of Criminal Procedure 1973 or any other law for the time being in force on granting of bail. It is settled proposition Section 45 PMLA do not impose an absolute restraint on the grant of bail and the court at this stage is to prima facie consider whether applying the standard of broad probabilities the material against the applicant would result in conviction. The bare reading of Section 3 of PMLA would make it clear if a person is involved in any process or activity connected with the proceeds of crime including its concealment possession acquisition or use and projecting or claiming it as an untainted property shall be guilty of offence of money laundering. Therefore it is not necessary to attribute section 3 of the PMLA that the alleged person must have acquired or in possession of the proceeds of the crime - The present case is very peculiar in nature and may not have any parallel factual matrix. In brief the allegation in the predicate offence was that the conspiracy was hatched between the political head and certain persons which included an individual allegedly representing the government with the manufacturer liquor wholesaler and retailer. The conspiracy allegedly was hatched to introduce a new excise policy to benefit certain individuals who had given advance kickbacks to the AAP. Presently this court is considering the bail application of the accused person namely Mr.Vijay Nair who was arrested for the offence under Section 3 of the PMLA. The allegation against Vijay Nair is that though he did not hold any position in the government but he was representing the government and was interacting with all the stack holders including manufacturers wholesalers and retailers - The allegation against Manish Sisodia and Vijay Nair was also that M/s Indospirit was created as a special purpose vehicle to generate the proceeds of crime. The present case arises out of an alleged conspiracy wherein the government framed an excise policy with a mala fide intention to recoup the kickbacks received in advance from certain individuals and to further generate the ill money from the liquor trade - The analysis of provisions of PMLA has already been made herein before and has thus not been repeated herein for the sake of gravity. However it may be reiterated that the Court at the stage of bail is required to confine itself to the settled principles as contained in Section 439 of Cr. PC and Section 45 of PMLA. It may also be stated that Section 3 of the PMLA has a wider reach and anybody who is actually involved in knowingly assisting directly or indirectly in any process or activity with the proceeds of crime including assisting in the generation of proceeds of crime would be guilty of offence of money laundering. The accused person in the present case acting in furtherance of the conspiracy circumvented the policy and got framed the policy in such a manner to continuously generate and channel illegal funds. The allegations are that deliberate loopholes were left to facilitate illegal and criminal activities. It has also come on the record that accused Vijay Nair was a close associate of Chief Minister GNCT of Delhi and Sh. Manish Sisodia Deputy Chief Minister. The investigation has further revealed that Vijay Nair arranged a video call through face time between Chief Minister Government of NCT of Delhi and Sameer Mahendru where Chief Minister said that Vijay Nair is his boy and they should trust him. The allegations are extremely serious in nature. The alleged conspiracy has been well spun and there are prima facie credible materials on record. This Court also does not find any illegality or perversity in the order of learned Trial Court. Learned Special Judge has correctly gone through the entire material and has given an opinion which seems to be in accordance with law. There is no reason to interfere in the bail order. Bail application dismissed.

Summary

Issues Involved:

1. Early hearing of the bail application.
2. Dismissal of the bail application by the learned Special Judge.
3. Allegations and factual matrix as stated by the Enforcement Directorate (ED).
4. Submissions on behalf of the petitioner.
5. Submissions on behalf of the Enforcement Directorate.
6. Findings and analysis by the court.

Summary:

1. Early Hearing of the Bail Application:

The present application for early hearing was allowed for the reasons stated therein.

2. Dismissal of the Bail Application by the Learned Special Judge:

The bail application filed by the petitioner was dismissed by the learned Special Judge, PC Act, CBI-09, on 16.02.2023.

3. Allegations and Factual Matrix by the Enforcement Directorate:

An FIR was registered by the CBI against several individuals, including a Deputy Chief Minister, for irregularities in the framing and implementation of the excise policy of GNCTD of Delhi for the year 2021-22. The allegations include that certain individuals and companies were actively involved in irregularities, issuing credit notes to retail vendors to divert funds as undue pecuniary advantage to public servants, and showing false entries in their books of accounts. The CBI filed a chargesheet, and the Directorate of Enforcement initiated an investigation under the Prevention of Money Laundering Act (PMLA), 2002. The investigation revealed that the excise policy was created to generate and channel illegal funds to the top leaders of AAP, promoting cartel formations, and awarding exorbitant profit margins to certain entities. The ED filed a Prosecution Complaint and attached properties worth Rs. 76.54 crores.

4. Submissions on Behalf of the Petitioner:

The petitioner, represented by learned senior counsel, argued that the case pertains to allegations of irregularities in the excise policy, and the petitioner had no role in its drafting or implementation. The petitioner was associated with AAP as a volunteer and worked in media and communications. The petitioner was arrested by the CBI and later by the ED, but was granted bail in the predicate offence. The ED's case relies mainly on the statement of Dinesh Arora, who turned approver, and alleged that the petitioner received kickbacks. The petitioner argued that there is no evidence of receiving INR 100 Cr and that the statements made by Dinesh Arora lack corroboration. The petitioner also argued that the investigation is incomplete and the supplementary complaint was filed to defeat the statutory right of bail.

5. Submissions on Behalf of the Enforcement Directorate:

The ED argued that the petitioner is the kingpin of the liquor scam, connected with various branches of the conspiracy, and received kickbacks worth Rs. 100 Cr from the south group. The petitioner played a prominent role in the formulation and implementation of the excise policy, met with various stakeholders, and facilitated the transaction of kickbacks. The ED also alleged that the petitioner used a discreet Signal app for communication and disrupted evidence by influencing witnesses.

6. Findings and Analysis by the Court:

The court analyzed the provisions of PMLA, including the definition of "proceeds of crime" and the offence of money laundering. The court noted that the present case involves a conspiracy to frame an excise policy with mala fide intention to recoup kickbacks and generate ill money from the liquor trade. The court considered the statements recorded under Section 50 of PMLA and found that the petitioner actively participated in the formulation, drafting, and implementation of the excise policy. The court also noted that the petitioner was residing in a bungalow allotted to a senior minister, indicating his prominence in the government. The court concluded that there are prima facie credible materials on record and found no reason to interfere with the order of the learned Trial Court. The bail application was rejected.