9911796707
TMI Blog2023 (7) TMI 1314X X X X Extracts X X X X X X X X Extracts X X X X ..... y CBI, ACB, New Delhi against Sh. Manish Sisodia, Deputy Chief Minister, GNCTD of Delhi and others under Section 120B r/w 477A of Indian Penal Code, 1860 and Section 7 of Prevention of Corruption Act, 1988 for irregularities in framing and implementation of the excise policy of GNCTD of Delhi for the year 2021-22. 6. The FIR is registered on the direction of competent authority conveyed by Shri Praveen Kumar Rai, Director, MHA, Govt. Of India vide OM No. 14035/06/2022-Delhi-1 dated 22/07/22 for enquiry into the matter of irregularities in framing and implementation of the excise policy of GNCTD of Delhi for the year 2021-22. Vide said OM Shri Praveen Kumar Rai has also forwarded DO letter no. SLG/Conf./2022/75 dated 20/07/2022 of Shri Vinai Kumar Saxena, Hon'ble Lt. Governor, GNCTD of Delhi alleging irregularities in framing and implementation of the excise policy of GNCTD of Delhi for the year 2021-22. 7. The OM discloses that Shri Manish Sisodia, Deputy Chief Minister, GNCTD of Delhi, Shri Arva Gopi Krishna, the then Commissioner (Excise), GNCTD of Delhi and Shri Pankaj Bhatnagar, Assistant Commissioner (Exicse), GNCTD of Delhi were instrumental in recommending and taking dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove-mentioned FIR no RC0032022A0053 dated 17.08.2022 in the Special Court, New Delhi. The cognizance of the same has been taken vide order dated 15.12.2022. 10. The gist of the CBI chargesheet is as under: a. The CBI has filed chargesheet in respect of the subject FIR on 24.11.2022. In the chargesheet filed by CBI. 6 accused persons have been covered- Sh. Sameer Mahandru, Sh. Vijay Nair. Sh. Abhishek Boinpally. Sh Gautam Mootha, Sh Arun Pillai and Excise officials Sh Kuldeep Singh. Deputy Commissioner, Excise. Sh Narinder Singh, Asst Commissioner. Excise. b. The CBI has found that, a conspiracy was hatched by Sh Vijay Nair along with Sh Abhishek Boinpally. Sh Dinesh Arora and others to get the undue benefits by circumventing the provisions of the policy. That, Sh Dinesh Arora is a close associate of Sh Vijay Nair and he participated in multiple meetings took place amongst Sh Vijay Nair. Sh Abhishek Boinpally and others to discuss and plan the conspiracy. In one of these meetings that took place in Hyderabad Sh Vijay Nair told Sh Dinesh is to coordinate with Sh Abhishek Boinpally to transfer Rs. 20-30 Cr approx. to Sh Vijay Nair. That, this payment will be returned by way of g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s granted L1 license to Indospirits without properly processing the file and collecting the requisite documents as well as without properly addressing the complaint against M/s Indospirits in lieu of Rs 30 lakh bribe taken by Sh Narender Singh from. Sh Sameer Mahandru and on the influence exerted by Sh Vijay Nair and Sh Dinesh Arora. h. That, Sh Abhishek Boinpally had threatened Sh Jagbir Sidhu of Diageo withdraw various complaints petitions filed anonymously/pseudonymously who he believed to have been filed by Sh Aman Dhall of Brindco, who was the wholesaler for Diageo else, Sh Abhishek Boinpally would blacklist Diageo from the 9 retail zones he was managing or was a part of. And that, he will get the wholesale license of his wholesale distributor M/s Brindco Sales and they will get it cancelled from the Excise Department. i. That, the part of the profits accrued from Indospirits have been transferred to Sh Arun Pillai, which was basically a recovery of the kickback given in advance. That, part of that sum has reached Sh Abhishek Boinpally through Sh Gautam Mootha of India Ahead and Andhra Prabha Publications. This amount is now being claimed as a loan reversal from Gautam Moo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Policy, 2021-22 was created by the top leaders of the AAP to continuously generate and channel illegal funds to themselves. The extent of involvement and abatement done by the leaders of the AAP of the criminal activities undertaken by the accused further substantiates their design and scheme of the scam. The policy was formed with deliberate loopholes to facilitate illegal and criminal activities. b. The policy promoted cartel formations through back door, awarded exorbitant wholesale profit margin @12% and huge retail profit margin of 185% and incentivized other illegal activities on account of criminal conspiracy by the top leaders of AAP to extract kickbacks from the businesses. c. As disclosed by C. Arvind, DANICS, Secretary to Manish Sisodia, in his statement dated 07.12.2022, the draft GoM report was given to him in the mid of March 2021 when Sh. C Arvind was called by Manish Sisodia to the residence of Arvind Kejriwal, CM (where Satyender Jain was also present). The conspiracy of the GoM to give wholesale business to private entities and fix 12% margin (to get 6% kickback out from the same) is clear from the statement of C. Arvind wherein he disclosed that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dlemen on behalf of the top leaders of the AAP for getting bribes/kickbacks from various stakeholders in the Delhi Liquor business in exchange of favourable outcomes (policy changes) in the Excise Policy of 2021-22, which was being drafted at that time. He even threatened the stakeholders who were not agreeing to his demands that he changes suitable/desired by them may not go through entirely if they do not concede to his demands. h. Sh Vijay Nair, in connivance with Sh Dinesh Arora and through him with Sh Amit Arora, has also arm twisted a wholesaler to surrender the L1 license and then coerced the manufacturers surrendered through that license to choose the wholesalers of his choice and favour to direct the profit margins to his co-conspirators, so that there was complete control on the kickbacks to be extracted. i. Sh Vijay Nair, on behalf of leaders of AAP has received kickbacks to the tune of Rs. 100 Cr from a group, for convenience, we may call it the South Group (as termed in the statements of various persons recorded during the investigation), whose prominent persons are Sh Magunta Srinivasulu Reddy, Sh Raghav Magunta, Sh Sarath Reddy and Ms K Kavitha. The South Group w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rits. The Excise Policy 2021-22 required the manufacturers to register their brands at the Lowest EDP net of all discount/commission/rebate of any nature whatsoever, however, Pernod Ricard by way of conspiracy has got their price fixed without deducting the discounts/rebates they offer thus getting a much higher price fixed for their brands and thus earning a huge additional profit which was ineligible to them and should have been passed to the consumers as lower MRP. If the manufacturer had registered the brands at actually lowest EDP, the capacity of the manufacturers to give out credit notes would have been limited. However, Pernod Ricard paid Rs. 131.9 Crores credit notes to the retailers via the wholesalers, where the benefit of discounts was shifted to the retailers instead of the actual consumer at large. n. That, in order to create a device for continuous payment of kickbacks to Sh Vijay Nair, an unheard of margin of 12% was provided to the private wholesalers (L1s) contrary to the recommendations of the Expert Committee headed by Sh Ravi Dhawan, IAS and then Excise Commissioner which as detailed below, suggested for a single Govt entity as Wholesaler for Delhi. On this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ume based credit notes was bogus and credit notes have been passed in an inconsistent manner considering the sale volume. For example, Pernod Ricard has not given any credit notes to M/s Adharv Enterprises (not a favoured L7) against the volume of 19,080 cases purchased in the months of Dec, 2021 Jan, 22 and Feb 22. However, Pernod Ricard has given Rs. 61.01 lakhs as credit notes to M/s Organomix Ecosystems Pvt. Ltd. (which is part of the South Group cartel) who has purchased 17,644 cases during the said 3 months." 4. The role of the Petitioner has been discussed in detail in the complaint filed by ED and is not been discussed here for the sake of brevity. B. SUBMISSIOINS ON BEHALF OF THE PETITIONER 5. Sh. Mukul Rohatgi, Sr. Advocate, Sh. Siddharth Luthra, Sr. Advocate with Sh. Madhav Khurana, learned Advocate on behalf of the petitioner have submitted that the petitioner is a mere employee being a Regional Manager of Pernod Ricard India (PRI). It has been submitted that PRI has a global presence and there are several level of employees over the petitioner and the Supreme board of companies is the Board of Directors. 6. It has been submitted that neither the Petitioner nor the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e commission of a crime, i.e. to investigate the proceeds generated from a crime and it's laundering and the Petitioner has no such link. 12. Learned senior counsel for the petitioner submitted that the corporate guarantee of Rs. 200 Crores by the Company was granted through the Board of Directors in favor of 5 retailers. It has been submitted that extension of financial comfort can never be termed as a crime. It has been submitted that the allegation that the hands of Indospirits (Sameer Mahandru-Wholesaler) were strengthened by grant of Corporate Guarantee is baseless. It has been submitted that the Petitioner got no money from anywhere and nor he has passed on any money to anybody. It has been submitted that it is Rs. 200 Crores worth of Corporate Guarantee by itself is not a PoC. This guarantee is based on the balance sheets of the Company. It has been submitted that the wholesaler may or may not sell products of PRI which will result in the profits to the Company and further the sale of products of PRI depends solely on the discretion of the customer. 13. Learned senior counsel for the petitioner submitted that in respect of the allegations of the E.D. that the petitioner go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (O&M) iii. Emta Coal v. ED,W.P. (C) 3821/2022 iv. Naresh Goyal v. ED, Crl. W.P. 4037/2022 17. It has been submitted that the petitioner has always cooperated in the investigation and is not a flight risk. It has been submitted that the petitioner has no authority to influence the witnesses or tamper with the evidence. 18. The learned senior counsels for the petitioner have placed reliance Vijay Madanlal Choudhary & Ors. v. Union of India & Ors. 2022 SCC OnLine SC 929 and Subramanian Swamy v. A. Raja (2012 9 SCC 257) to buttress the point that merely attending the official meetings as PRI representative at the express invitation of Delhi Excise Department does not constitute any sought of criminality. 19. It has been submitted that in Subramanian Swamy (supra) it was inter alia held that Criminal conspiracy cannot be inferred on the mere fact that there were official discussions between the officers of the MoF and that of DoT and between two Ministers, which are all recorded. It has been submitted that suspicion, however, strong, cannot take the place of legal proof and the meeting. C. SUBMISSIONS ON BEHALF OF ENFORCEMENT DIRECTORATE 20. Sh. Zoheb Hossain, learned special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned by Sh. Benoy Babu. It is also the case of the ED the petitioner signed the letter even before the formal approval from the PRI. 25. Sh. Zoheb Hossain, learned special counsel for the E.D. submitted that the financial support in the form of corporate guarantee in fact helped in formation of cartel of Pernod Ricard and thus received exponential financial gain. It has further been submitted that the petitioner was deeply involved in the conspiracy of the south group and facilitated their recoupment by his extended retail cartel formed through the financial support provided by M/s Pernod Ricard, which resulted in the huge profits accruing to M/s Indospirits. 26. Learned special counsel for the E.D. has placed reliance upon Vijay Madanlal Choudhary & Ors. v. Union of India & Ors. 2022 SCC OnLine SC 929, Union of India v. Rattan Mallik (2009) 2 SCC 624, State of Gujarat v. Mohanlal Jitamalji Porwal (1987) 2 SCC 364, Y. S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 439, Anil Kumar Yadav v. State (NCT of Delhi) (2018) 12 SCC 129, Sunil Dhaiya v. State (Govt. of NCT of Delhi) (2016) SCC OnLine Del 5566 Nimmagadda Prasad v. CBI, (2013) 7 SCC 466, Gautam Kundu v. Directorate of Enforcement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:- a. concealment; or b. possession; or c. acquisition; 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." 265. To put it differently, the section as it stood prior to 2019 had itself incorporated the expression "including", which is indicative of reference made to the different process or activity connected with the proceeds of crime. Thus, the principal provision (as also the Explanation) predicates that if a person is found to be directly or indirectly involved in any process or activity connected w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustly placed on reported decisions of this Court amongst other Sanjay Dutt, which had occasion to deal with the expression "arms and ammunition" occurring in Section 5 of the TADA Act. The Court noted that if it is to be read conjunctively because of word "and", the object of prohibiting unauthorised possession of the forbidden arms and ammunition would be easily frustrated by the simple device of one person carrying the forbidden arms and his accomplice carrying its ammunition so that neither is covered under Section 5 when any one of them carrying more would be so liable. The principle underlying this analysis by the Constitution Bench must apply proprio vigore to the interpretation of Section 3 of the 2002 Act. To the same end, this Court in the case of Ishwar Singh Bindra v. The State of U.P.165, Joint Director of Mines Safety and Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd., interpreted the word "and" in the concerned legislation (s) as word "or" to give full effect to the legislative intent. 273. On a bare reading of Section 3, we find no difficulty in encapsulating the true ambit, given the various arguments advanced. Thus, in the conspectus of things It must follow t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take into consideration the limitations prescribed under Section 439 Cr.P.C. 31. In regard to the limitation under Section 439 Cr.P.C. in Kalyan Chandra Sarkar vs Rajesh Ranjhan (2004) 7 SCC 528 it has been held as under: "The law in regard to grant or refusal of bail is very well settled. The court granting bail should exercise its discretion in a judicious manner and not as a matter of course. Though at the stage of granting bail a detailed examination of evidence and elaborate documentation of the merit of the case need not be undertaken, there is a need to indicate in such orders reasons for prima facie concluding why bail was being granted particularly where the accused is charged of having committed a serious offence. Any order devoid of such reasons would suffer from non-application of mind. It is also necessary for the court granting bail to consider among other circumstances, the following factors also before granting bail; they are: (a) The nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence. (b) Reasonable apprehension of tampering with the witness or apprehension of threat to the complainant. (c) Prim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been recovered and therefore section 3 of the PMLA will not come into operation is totally fallacious and is liable to be rejected. It is necessary to keep in mind that such crimes are committed under a deep conspiracy and under the dark cover. An act may not be an offence at all if it is done in relation to any process or activity not connected with the proceeds of crime, but if such an act is done in relation to any process or activity connected with the proceeds of crime it will certainly be an offence under Section 3 of PMLA. The scope and ingredients of offence of money laundering under Section 3 of PMLA has been defined in Vijay Madanlal Chaudhary (supra). 35. The present case is very peculiar in nature and may not have any parallel factual matrix. In brief, the allegations 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. The prominent players if we pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Mr.Siddharth Luthra, learned Senior counsels have submitted that he was a low-rank employee of Pernod Recard and had no authority to take decisions. The plea was that in any case, a grant of corporate guarantee cannot be taken as a process or an activity connected to the proceeds of crime. 38. This court is fully conscious of the fact that personal liberty is a sacrosanct right and pre-trial detention cannot be taken as a punitive measure. However such individual right has to be balanced with the rights of society at large. This court is also conscious of the fact that though the statements recorded under Section 50 PMLA are admissible in evidence but their evidentiary value has to be weighed at the time of trial. Mr. Mukul Rohatgi and Mr. Siddharth Luthra, learned senior counsels for Binoy Babu have argued that the ED is basing its case only on the statements of the witnesses recorded under Section 50 of PMLA. In case of Binoy Babu, the plea has also been raised that since he is a witness in the predicate offence and he could not have been made an accused in the PMLA case. The present case arises out of an alleged conspiracy wherein the government framed an excise policy wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecided, but at the same time such reason should not be detailed in such a manner that it may prejudice the trial. 42. The investigation under PMLA by the E.D. qua Benoy Babu as stated by E.D. has revealed as under: (i) Pernod Ricard, one of the accused entities, through Benoy Babu and others, in conspiracy with the South Group and Vijay Nair, gave their wholesale business to Indo Spirits. (ii) The scheduled offence relates to a criminal conspiracy relating to the irregularities in framing and implementation of the excise policy with an intention to extend undue favours to the licences and diversion of undue pecuniary benefits collected from liquor licences to accused public servants and formation of cartel between manufacturers, wholesalers and retailers. The applicant is involved in at least 3 direct ways in the process or activity relating to generation of proceeds of crime. a. Benoy Babu is directly involved in Pernod Ricard wholesale business going to Indo Spirits (L1). b. Benoy Babu signed the approval letter for making Indo Spirits as its exclusive distributor even before the formal approval was received from the country head. c. Benoy Babu also was aware that no w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey offer thus getting a much higher price fixed for their brands and thus earning a huge additional profit which was ineligible to them and should have been passed to the consumers as lower MRP. If the manufacturer had registered the brands at actually lowest EDP, the capacity of the manufacturers to give out credit notes would have been limited. However, Pernod Ricard paid Rs. 131.9 Cr as credit notes to the retailers via the wholesalers, where the benefit of discounts was shifted to the retailers instead of the actual consumer at large. (iv) In order to generate kickbacks in perpetuity, a novel method of recovery of the kickbacks formulated through passing of Credit Notes. Ordinarily the credit notes are passed to the person who had direct nexus with or has sold the goods, however, in this business, the manufacturers were giving credit notes to the retailers with whom they had no direct transactions with. Further, there was no apparent reason to give credit notes to businesses which are minting money with MRP being 3 times of the cost and having profit margin of 185% approx. 43. The communication between Benoy Babu, Manoj Rai and Vijay Nair dated 01.08.2021 and 09.08.2021 als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 31.05.2021 whereas the policy was made public in July 2021. Further, he has forwarded the same to Manoj Rai (his senior in Pernod Ricard) on whatsapp on 31.05.2021 this was available in the phone of Manoj Rai but the same is not available/deleted by Benoy Babu from his phone. It has been submitted that the petitioner had stated that he had received the same from Aman Dhall. However, it is come on record that petitioner selectively deleted his individual whatsapp chats with Sameer mahandru of Indospirits for the period to 26.10.2021. 46. As per the E.D., the material evidences against Benoy Babu are as follows: i. Digital evidence of chats dated 28th March, 2021 wherein Sh Aman Dhall asked Benov Babu if he had sent the recommendations to Sh Vijay Nair, which reflects that Benoy Babu was involved in the formulation of Excise Policy. ii. Digital evidences in form of email communication dated 31.05.2021 of Sh. Benoy Babu, PRI which revealed that he was in possession of confidential documents of Excise Department including the GoM report (which was never officially released to the public) and the Draft Excise Policy of Delhi (which was officially released after more than a month. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t activity constituting offence of money-laundering. 49. The Learned Special judge in it's order prima facie opined that Benoy Baby was the brainchild behind the decision of M/s Pernod Ricard for furnishing corporate guarantees of Rs. 200 crores for the loans availed by other members of the cartel from HSBC bank and this was considered to be an investment to take control of the retail liquor business and to achieve highest market share in the sale of liquor brands by the company and thus, to ensure that the retail vendors which were part of the above cartel kept at least 30% stock of the liquor brands owned by this company. It was noted that the above-said corporate guarantees were given without any collateral security nor any formal requests in this regard made. Further, Ld. Special Judge observed that M/s Pernod Ricard never issued such types of corporate guarantees before and it was at the instance of the Benoy Baby that these guarantees were issued to HSBC bank. Further, the applicant namely Benoy Baby was found to be actively involved in the formulation of a cartel between M/S Pernod Ricard, Wholesaler M/s Indospirits, and the nine other retail entities of other co-accused pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
