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TMI Blog2023 (11) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Zoheb Hussain, Adv. Mr. Annam Venkatesh, Adv. Ms. Sweksha, Adv. Mr. Arvind Kumar Sharma, AOR JUDGMENT SANJIV KHANNA, J. Leave granted. 2. Rule of law means that laws apply equally to all citizens and institutions, including the State. Rule of law requires an equal right to access to justice for the marginalised. The rule also mandates objective and fair treatment to all. Thirdly, rule of law is a check on arbitrary use of powers. It secures legitimate exercise of power for public good. 3. This is precisely the reason why we had heard arguments at some length in these two appeals filed by the appellant - Manish Sisodia, former Deputy Chief Minister of Delhi, who seeks bail in the prosecutions arising from RC No. 0032022A00553, dated 17.08.2022, registered by the Central Bureau of Investigation For short, "CBI", at CBI, ACB, New Delhi, under the Prevention of Corruption Act, 1988 For short, "PoC Act" and the Indian Penal Code, 1860 For short, "IPC".; and Enforcement Case Information Report For short, "ECIR". No. HIU-II/14/2022, dated 22.08.2022, filed by the Directorate of Enforcement For short, "DoE", under the Prevention of Money Laundering Act, 2002 For short, "PML Act" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . * CBI had submitted charge-sheet on 25.04.2023 and the DoE had filed the criminal complaint on 04.05.2023 against the appellant - Manish Sisodia. * There are 294 witnesses and about 31,000 pages of documents in the charge-sheet filed by the CBI. There are 162 witnesses and 25,000 pages of documents in the prosecution complaints filed by the DoE. * Arguments on charge have not commenced, and the trial will take years. * The new excise policy was validly adopted after due deliberation by the Council of Ministers/Cabinet in larger and greater public interest: o Under the old excise policy there was an incentive to cheat because of the very nature of liquor - fast selling and highly taxed. As per the Ravi Dhawan Committee For short, "R.D. Committee" Report dated 13.10.2020, the profit margins could be up to 65-70%, as the manufacturers were able to acquire retail licenses through proxy ownership. o As a check, wholesale licenses were not to be issued to a manufacturer or retail licence holder, directly or to sister concerns or related entities. o 272 wards in 68 Assembly Constituencies were divided into 30 zones. Each zone was to have 9-10 wards with a maximum of 27 ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do with the criminal activity, subject matter of the scheduled offence. PML Act penalises indulging in activity/process relating to the proceeds of the crime, derived or obtained as a result of that crime. * Allegation regarding kickback of Rs.100,00,00,000 (rupees one hundred crore only), and a portion of it being used for funding the Aam Aadmi Party For short, "AAP", for its election campaign in Goa, is a concocted story unsupported by any legal and admissible evidence and material. The money trial is unproven and false. * Co-accused Rajesh Joshi and Gautam Malhotra have been granted bail for the offence under the PML Act on the ground that there was no documentary evidence to show that proceeds of crime were used for the election purposes. * To establish the money trail and payment of bribe/kickback of Rs.100,00,00,000 (rupees one hundred crore only), the DoE has relied upon the statements made by co-accused or approvers. These statements are hearsay and do not in any manner implicate or connect the appellant - Manish Sisodia with the transfer and use of the proceeds of the crime. * The statements of co-accused or other witnesses relied upon by the DoE were extracted and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retail trade was primarily undertaken by four corporations of the Government of NCT of Delhi. * R.D. Committee Report dated 13.10.2020 The Expert Committee headed by Ravi Dhawan was constituted on 04.09.2020 recommended: o Gradual withdrawal of government presence. o Wholesale operation under one government entity. o Three models were examined: (i) existing model, (ii) licenses vide lottery system, and (iii) licenses to limited entities. o Licenses vide lottery system was recommended since auctioning licenses to limited entities could lead to cartelisation. * The R.D. Committee Report dated 13.10.2020 was not preferred by the appellant - Manish Sisodia. Reliance is placed upon the statement of C. Arvind Posted as Secretary to appellant - Manish Sisodia between July, 2019 to June, 2022 dated 16.02.2023 under Section 164 of the Code, and Rahul Singh Erstwhile Excise Commissioner of NCT of Delhi dated 03.03.2023 under Section 161 of the Code. The appellant - Manish Sisodia had not accepted the report because of ulterior reasons. * A conspiracy was entered viz. the new excise policy to enable supersize profits for wholesale distributors in return for kickbacks and bribes. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lotted to a Cabinet Minister, who was a part of GOM. Reliance is placed upon statements made by Arun Pillai, Butchi Babu and Dinesh Arora. Reliance is also placed on screenshots found in the phone of Manoj Rai, an employee of Pernod Ricard. The agenda of the meetings were to decide changes in the excise policy, to enable them to earn super-profits in return for kickbacks. o On the evening of 16.03.2021, Abhishek Boinpally and Butchi Babu, who were staying at Hotel Oberoi, travelled to another Oberoi hotel in Civil Lines, where they met Vijay Nair, who was staying in a close proximity. The travel to the Oberoi Hotel in Civil Lines is established by an invoice On 16.03.2021, Rs. 3,000/- had been billed under the description, "Logistic Charges"., call record details and statement of an employee of the Oberoi. Statement of Ibrahim Magdum dated 03.02.2023, under Section 161 of the Code. o A print/photocopy of a 36 page document was made on 16.03.2021 at Hotel Oberoi, Civil Lines, Delhi. On 16.03.2021, Rs. 360/- had been billed under the description, "Print/Photocopy" o The document/print was taken by Vijay Nair, and handed over to the appellant - Manish Sisodia. The appellant - M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate and at the behest of the liquor group. * Three big manufacturers held 85% market share. The entire scheme was a pretence to recoup and get bribe and kickback from the big wholesale distributors, who acted as the middlemen and were entitled to fixed commission @ 12% of the landed price on the turnover, but were required to pay a fixed license fee of Rs.5,00,00,000/- (rupees five crores only) to the government. * The manufacturers could appoint and enter into a distributorship agreement with only one wholesale distributor. They were not entitled to appoint multiple wholesale distributors. However, the wholesaler could enter into a contract with more than one manufacturer. New excise policy was clearly lopsided and favoured the big wholesale distributors. * Mahadev Liquor, a contender and wholesale distributor of 14 small manufacturers having about 20% market share, was forced to surrender their licence since they were not ready to pay kickbacks. Mahadev Liquor had business in Punjab and the state machinery of Punjab Excise Department was used to arm-twist them. Statement of Jasdeep Kaur Chadha dated 23.08.2022 under Section 50(2) and 50(3) of the PML Act. * Pernod Ricard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble change and tweak in the new excise policy. Analysis 8. Referring to Section 45 31 Section 45 reads: "45. Offences to be cognizable and non-bailable.- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), 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: Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees, may be released on bail, if the Special Court so directs: Provided further that the Special Court shall not take cognizance of any offence punishable under Section 4 except upon a complaint in writing made by- (i) the Director; or (ii) any officer of the Central Government or a State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing tentative, will not have any bearing on the merits of the case, and the trial court would proceed and decide the case on the basis of evidence produced during trial without in any manner being prejudiced thereby. 9. We have copiously referred to the assertions, arguments and contentions of both sides, and in terms of the mandate in Vijay Madanlal Choudhary (supra), we will be examining the allegations and the legal position to form our tentative opinion. However, we must notice and take on record at some aspects upfront. 10. First, the assertion that Rs. 2,20,00,000 (rupees two crores twenty lakhs only) was paid as bribe to the appellant - Manish Sisodia by Amit Arora, through middleman Dinesh Arora, is not a charge or an allegation made in the chargesheet filed by the CBI. It may be difficult to regard the alleged payment as a 'proceed of crime' under the PML Act. 11. Secondly, it has been submitted by the DoE that AAP is a trust and is a "person" under Section 2(1)(s) of the PML Act. Being a juristic person, it acts through natural persons. The assertion made is that a portion of the proceeds of crime were used for the purpose of the artificial judicial person to fund the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeds of crime derived as a result of criminal activity relating to or in relation to a scheduled offence. It is submitted that Vijay Madanlal Choudhry (supra) has held that PML Act is an independent and distinct Act which deals with offences relating to only proceeds of crime, and not with the crime itself which generates the proceeds of the crime. In particular, paragraph 406 in Vijay Madanlal Choudhary (supra) states: "406...The fact that the proceeds of crime have been generated as a result of criminal activity relating to a scheduled offence, which incidentally happens to be a non-cognisable offence, would make no difference. The person is not prosecuted for the scheduled offence by invoking provisions of the 2002 Act, but only when he has derived or obtained property as a result of criminal activity relating to or in relation to a scheduled offence and the indulges in process or activity connected with such proceeds of crime..." Paragraph 407 similarly states: "407...the offence under this Act in terms of Section 3 is specific to involvement in any process or activity connected with the proceeds of crime which is generated as a result of criminal activity related to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property, in any manner whatsoever; (ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever. , referred to the drafting note on self-laundering contained in the U.N. Model Law 2009, which states that the third party would be liable for money laundering even where the fundamental principles of domestic law require that it will not apply to persons who commit the predicate offence. In some countries, constitutional principles prohibit prosecuting a person both for money laundering and a predicate offence. However, in most common law countries, the fundamental principles do not prohibit application of money laundering offence to self-launderers. On dissection of the main part of Section 3, it is held that it postulates three 'p's, namely, the person, the process or activity, and the product. The process or act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty. Scope and ambit of these words/expressions has not been examined by us. 19. We must also record that the DoE has not urged and argued before us the contention that the new liquor policy is vitiated on the ground that retail vends had to be and were auctioned, though the R.D. Committee's Report dated 13.10.2020 has suggested retail vends should be allotted by lottery. Relevant portion of the R.D. Committee Report dated 13.10.2020 reads: "1.3.4.... The lottery applications will be against the pool of all 846 vends and will be randomly allotted in wards, NDMC area and airports..." In the written submissions filed by the prosecution several assertions have been made. Normally, auction and allotment to the highest bidder would be fair and beneficial for revenue generation, though in certain circumstances allotment by other modes may be more fair and better. In Indian Medicines Pharmaceuticals Corporation Ltd. v. Kerala Ayurvedic Cooperative Society Ltd. And Ors., 2023 SCC OnLine SC 5, this Court held that: "17. This Court has consistently held that government contracts must be awarded by a transparent process. The process of inviting tenders ensures a level playing field for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to deliberate destruction of mobile phones is correct would be decided post recording of evidence, but this would not be a weighty factor for deciding the question of bail, given the period of detention undergone by the appellant - Manish Sisodia.45 See Section 201 of the IPC, which reads: "201. Causing disappearance of evidence of offence, or giving false information to screen offender.- Whoever, knowing or having reason to believe that an offence has been committed, causes any evidence of the commission of that offence to disappear, with the intention of screening the offender from legal punishment, or with that intention gives any information respecting the offence which he knows or believes to be false, if a capital offence.-shall, if the offence which he knows or believes to have been committed is punishable with death, be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine; if punishable with imprisonment for life.-and if the offence is punishable with imprisonment for life, or with imprisonment which may extend to ten years, shall be punished with imprisonment of either description for a term whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire period of operation of the Delhi Excise Policy 2021- 22, the Govt. has earned Rs. 75.16 Cr from the license fee of LI (as per Excise department communication dated 11.04.2023) (RUD 34). On the other hand the excess profit earned by the wholesalers during this period is to the tune of Rs. 338 Cr. (7% additional profit earned due to increase from 5% to 12%, Rs. 581 Cr being the total profit of LI as informed by Excise department). Therefore there 1s no logical correlation between the license fee increase and the profit margin increase. Whereas this excess profit margin benefit could have been passed on to the consumers in form of lower MRP. Contrary to the claim that the policy was meant to benefit the public or the exchequer, it was rather a conspiracy to ensure massive illegal gains to a select few private players/individuals/entities." 22. The charge-sheet under the PoC Act includes offences for unlawful gains to a private person at the expense of the public exchequer. Reference in this regard is made to the provisions of Sections 7, 7A, 8 and 12 of the PoC Act. 23. Clauses (a) and (b) to Section 7 of the PoC Act 47 Section 7 of PoC Act reads: "7. Offence relating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o perform such duty, either by himself or by another public servant. Explanation (2) construes the words and expression, "obtains, accepts or attempts to obtain", as to cover cases where a public servant obtains, accepts or intends to obtain any undue advantage by abusing his position as a public servant or by using his personal interest over another public servant by any other corrupt or illegal means. It is immaterial whether such person being a public servant accepts or attempts to obtain the undue advantage directly or through a third party. 24. On this aspect of the offences under the PoC Act, the CBI has submitted that conspiracy and involvement of the appellant - Manish Sisodia is well established. For the sake of clarity, without making any additions, subtractions, or a detailed analysis, we would like to recapitulate what is stated in the chargesheet filed by the CBI against the appellant - Manish Sisodia: * The existing excise policy was changed to facilitate and get kickbacks and bribes from the wholesale distributors by enhancing their commission/fee from 5% under the old policy to 12% under the new policy. Accordingly, a conspiracy was hatched to carefully draft the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lisation etc. which were overlooked. The complainant was forced to take back his complaint. * The excess amount of 7% commission/fee earned by the wholesale distributors of Rs.338,00,00,000/- (rupees three hundred thirty eight crores only) constitute an offence as defined under Section 7 of the PoC Act, relating to a public servant being bribed. (As per the DoE, these are proceeds of crime). This amount was earned by the wholesale distributors in a span of ten months. This figure cannot be disputed or challenged. Thus, the new excise policy was meant to give windfall gains to select few wholesale distributors, who in turn had agreed to give kickbacks and bribes. * No doubt, VAT and excise duty was payable separately. However, under the new policy the VAT was reduced to mere 1%. * Vijay Nair had assured the liquor group that they would be made distributor of Pernod Ricard, one of the biggest players in the market. This did happen. 25. In view of the aforesaid discussion and for the reasons stated, we are not inclined to accept the prayer for grant of bail at this stage. 26. However, we are also concerned about the prolonged period of incarceration suffered by the appellant - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Court on his personal bond with or without sureties: Provided that the Court may, after hearing the Public Prosecutor and for reasons to be recorded by it in writing, order the continued detention of such person for a period longer than one-half of the said period or release him on bail instead of the personal bond with or without sureties: Provided further that no such person shall in any case be detained during the period of investigation, inquiry or trial for more than the maximum period of imprisonment provided for the said offence under that law. Explanation.-In computing the period of detention under this section for granting bail, the period of detention passed due to delay in proceeding caused by the accused shall be excluded." can apply to offences under the PML Act, as it effectuates the right to speedy trial, a facet of the right to life, except for a valid ground such as where the trial is delayed at the instance of the accused himself. In our opinion, Section 436A should not be construed as a mandate that an accused should not be granted bail under the PML Act till he has suffered incarceration for the specified period. This Court, in Arnab Manoranjan Goswa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bar on behalf of the prosecution that they shall conclude the trial by taking appropriate steps within next six to eight months, we give liberty to the appellant - Manish Sisodia to move a fresh application for bail in case of change in circumstances, or in case the trial is protracted and proceeds at a snail's pace in next three months. If any application for bail is filed in the above circumstances, the same would be considered by the trial court on merits without being influenced by the dismissal of the earlier bail application, including the present judgment. Observations made above, re.: right to speedy trial, will, however, be taken into consideration. The appellant - Manish Sisodia may also file an application for interim bail in case of illhealth and medical emergency due to illness of his wife. Such application would be also examined on its own merits. 30. Recording the aforesaid, the appeals are dismissed. However, we clarify that the observations made in this judgment, either way, are only for disposal of the present appeals, and these would not influence the trial court on the merits of the case, which would proceed in accordance with law, and decided on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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