AI Drafter 
TaxTMI 
TaxTMI 
2023 (11) TMI 63
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....u, A.S.G. Mr. Digvijay Dam, Adv. Mr. 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 ....
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....rom 26.02.2023 in RC No. 0032022A00553 and from 09.03.2023 in the ECIR No. HIU-II/14/2022. * 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....
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...., which expression is required to be construed strictly, as held in Vijay Madanlal Choudhary and Others v. Union of India and Others (2022) SCC Online 929. The offence under the PML Act has nothing to 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 ....
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.... o There was no concept of private wholesaler and no concept of zones. As per the appellant - Manish Sisodia, under the old liquor policy there were private whole-sellers, which assertion prima-facie appears to be correct o The distributor/wholesaler was entitled to 5% profit margin. o The 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 ....
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.... than 5%, or commission at the @ 12% of the landed cost. * A liquor group from Hyderabad stayed in Delhi from 16.03.2021 to 18.03.2021. Arun Pillai, Abhishek Boinpally, and Sarath Reddy from the liquor group had several meetings with Vijay Nair, who was the middleman, a member of the AAP, and a close confidant of the appellant - Manish Sisodia. He was residing in a government bungalow allotted 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 a....
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....Indo Spirit was granted in spite of existing complaints of cartelisation against the partners of Indo Spirit, namely, Sameer Mahendru and his wife. The complainant was asked to take back his complaint. Statement of Jagbir Sidhu dated 19.09.2022, under Section 161 of the Code. * The license fee payable by the wholesale distributor was fixed at Rs.5,00,00,000/- (rupees five crores only). The license fee was deliberately not fixed on the turnover, to facilitate 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 l....
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....e 22.07.2022. He has deliberately destroyed the evidence. * The appellant - Manish Sisodia, given his power and political clout, and being the main accused in the conspiracy, may have the evidence destroyed, and the witnesses and documents may be exposed. * Dinesh Arora's statement to the DoE dated 14.08.2023, under Sections 50(2) and 50(3) of the PML Act, had revealed that he had taken Rs. 2,20,00,000 (rupees two crore twenty lakhs only) from Amit Arora, for the appellant - Manish Sisodia. This was on account of favourable 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 likel....
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....ore the end of trial and sometimes even before commencement of trial. Lastly, it is trite, that for the purpose of considering an application for bail, although detailed reasons are not necessary to be assigned, and, therefore, the evidence need not be weighed meticulously, a tentative finding should be recorded on the basis of broad probabilities. The order granting bail must demonstrate application of mind at least in serious cases where the applicant has been granted or denied bail. The findings recorded by the Court for grant or refusing bail being 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....
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....unclear and not free from doubt in view of the ratio in Vijay Madanlal Choudhary (supra). Further, the DoE's contention that 'generation' amounts to possession and the expression 'possession' includes constructive possession, for which reliance is placed upon Mohan Lal v. State of Rajasthan (2015) 6 SCC 222, is not assured. 14. On the other hand, the appellant - Manish Sisodia relies on paragraphs 251, 269 and 270 of Vijay Madanlal Choudhay (supra), to contend that money laundering is an independent offence regarding the process or activity connected with the proceeds 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 ....
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.... crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. Explanation.-For the removal of doubts, it is hereby clarified that,- (i) a person shall be guilty 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. , referred to the drafting note on self-laundering contained in the U.N. Model Law 2009, which states that the third party w....
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....tentions will have to be examined threadbare by the trial court, or in an appropriate case by this Court. 18. The offence of conspiracy and abetment, in terms of Sections 120/ 120B and Sections 107/108 of the IPC, are not applicable to offences under the PML Act. At the same time, Section 3 of the PML Act is wide and encompassing as it uses the words, "directly or indirectly", with reference to the person involved, and knowingly assists, or knowingly is a party in an offence in relation to the concealment, possession, acquisition, use, projecting or claiming the proceeds of crime as untainted property. 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..."....
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....plea that the CBI, the DoE and the Court should not examine merits and wisdom behind the choice of policy decision have been raised. 20. The appellant - Manish Sisodia, it is claimed, had deliberately destroyed the two mobile phones so as to prevent any investigation. Further, he had changed his mobile phone on 22.07.2022, the date on which the media had covered the news of the complaint sent by the LG of NCT of Delhi to the CBI for investigation. The appellant - Manish Sisodia states that people do change mobile phones frequently, and old phones need not be retained. Whether or not the allegation 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 fro....
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....at not all distributor licensees may be involved or have committed an offence under Section 3 of the PML Act. The figures quoted above relate to the 14 licensees, and have to be watered down/lowered to the sales made by the delinquent whole-sale distributor licensees who are being prosecuted. Relevant portion of the criminal complaint filed by the DoE dated 04.05.2023, reads: "One of the reasons given by Sh Manish Sisodia is to compensate the wholesaler for increased license fee from Rs 5 lacs to Rs. 5 Cr. During this policy period, 14 LI licences were given by Excise Department, by raising the license fee for LI to Rs. 5 Cr in the 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. Wher....
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....nt or by using his personal influence over another public servant; or by any other corrupt or illegal means; (ii) it shall be immaterial whether such person being a public servant obtains or accepts, or attempts to obtain the undue advantage directly or through a third party." apply: (a) when a public servant obtains, accepts or intends to obtain from another person undue advantage with the intent to perform or fail to improperly or to forbear or cause forbearance to cause by himself or by another person; (b) obtains or accepts or attempts to obtain undue advantage from a person as a reward or dishonest performance of a public duty or forbearance to 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 th....
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....a fixed amount of Rs.5,00,00,000/- (rupees five crores only). It was not dependant on the turnover. The new policy facilitated big wholesale distributors, whose outpour towards the licence fee was fixed. * The policy favoured and promoted cartelisation. Large wholesale distributors with high market share because of extraneous reasons and kickbacks, were ensured to earn exorbitant profits. * Mahadev Liquor, who was a wholesale distributor for 14 small manufacturers, having 20% market share, was forced to surrender the wholesale distributorship licence. * Indo Spirit, the firm in which the liquor group had interest, was granted whole distributor licence, in spite of complaints of cartelisation 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 fig....
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....adhered to by the authorised officers to ensure fairness, objectivity and accountability. See also Pankaj Bansal v. Union of India and Ors., 2023 SCC OnLine SC 1244. Vijay Madanlal Choudhary (supra), also held that Section 436A of the Code 56 436A of the Code reads: "436-A. Maximum period for which an undertrial prisoner can be detained.-Where a person has, during the period of investigation, inquiry or trial under this Code of an offence under any law (not being an offence for which the punishment of death has been specified as one of the punishments under that law) undergone detention for a period extending up to one-half of the maximum period of imprisonment specified for that offence under that law, he shall be released by 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, inqu....