TaxTMI 
TaxTMI 
2023 (7) TMI 1312
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....w 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 decisions pertain....
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....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 getting stakes ....
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....icense 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 Mootha to Abhishe....
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.... 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 was neither an....
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....lf 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 was represented....
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....se 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 account, the Go....
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....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. Ms. Rebecca John, learned senior counsel along with Mr. Samundra Sarang, learned counsel for the petitioner-Vijay Nair has submitted that the entirety of the present case pertains to allegations of irregularities in the framing of the Excise Policy in a manner which permitted formation of cartels and windfall profits for certain preferred persons who had paid kickback/bribes in exchange thereof. 6. Learned senior counsel submitted that the petitioner-Vijay Nair is India's most renowned entrepren....
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....bmitted that the story of the alleged conspiracy can be broken down in terms of the following :- a. Vijay Nair is an influential and powerful person in the Party, who lives in a minister's official accommodation. b. He met members of the South Group, who were interested in joining the liquor business in Delhi, when the news of the Delhi government's changes to the excise policy broke. c. He held meetings with several liquor industry players and eventually, brokered a deal whereby members of the South Group would enter into a partnership with Sameer Mahendru in Indospirits LLP. d. The Applicant manipulated and tweaked the Excise Policy in such a way that Indospirit's business would yield exponential profits and permit formations of cartels in the liquor business. e. The Applicant also ensured that Indospirits would get the business of Pernod Ricard - one of the largest liquor manufacturers, which would also result in significant profits. f. In return, the Applicant would receive bribes worth INR 100 Crore and that from the overall profits generated from establishing these cartels - the Applicant would continue to receive a 6% cut (after recoupment of the 100 ....
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....being transferred. 18. Learned senior counsel for the petitioner further submitted that Dinesh Arora made another loose statement that Abhishek "expressed his anger by saying that even after giving INR 90-100 Cr to Vijay Nair (for AAP / Govt.), that their shops are not opening on time." 19. Learned senior counsel for the petitioner further submitted that statement of this nature can be corroborated by the bribe giver, or the bribe taker - all of whom are accused persons in this case. It has been submitted that Abhishek Boinpally has not corroborated Dinesh Arora's statement with respect to any payments of bribes. It has been submitted that Rajesh Joshi and Sudhir, the so-called receivers of the bribe have also not corroborated his statement. 20. Learned senior counsel for the petitioner submitted that in fact Dinesh Arora in exchange for his freedom cooked up a story that lacks corroboration in all material particulars and cannot be relied upon. 21. It has further been submitted that even the Trial Court while granting bail to Rajesh Joshi vide order dated 06.05.2023 has raised serious doubts about the reliability of the statements made by Dinesh Arora. 22. Ms. Rebecca John, l....
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....of this entire liquor scam as he enjoyed a close relationship with the top political leaders of the party and works from the Camp office located at the Delhi CM's residence in Civil Lines. It has been submitted that petitioner is residing at Bunglow No. 2 Ata-ur-Rehman Lane, New Delhi, which is the official residence of Sh. Kailash Gehlot, Minister of Road and Transport and Revenue in Delhi Government. 29. Sh. Zoheb Hossain, learned special counsel for the E.D. submitted that the petitioner-Vijay Nair was one of the main decision-makers of the New Delhi Excise Policy and for this purpose, he had met various manufacturers, stakeholders, etc. other big investors having full authority on the subject. It has been submitted that petitioner-Vijay Nair received a kickback Rs.100 Cr from the south group as an advance kickback on behalf of AAP and in exchange facilitated them in getting stakes in different wholesale businesses such as Indo Spirits and then direct big manufacturers to them to help them recover the advance kickback paid, apart from other undue favors awarded to the South Group. The part of kickbacks received was used in the Goa election campaign of the AAP through multip....
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....nd Narinder Singh, Assistant Commissioner (IMFL) Delhi Excise dated 01.11.2022. 36. It has also been submitted that the petitioner- Vijay Nair arm twisted L1 licensees who denied to pay kickbacks as demanded by him and their operations were stopped arbitrarily, they were forced to surrender their L1 License in Delhi, which was then ultimately given to Shiv associates and Diwan Spirits where Dinesh Arora and other associates of Vijay Nair were partners (on paper or otherwise). It has been submitted that the profit of Rs.8.02 Cr. made by Shiv Associates and Diwan Spirits after the business was transferred to them was illegally accrued to them. In this regard a reference has been made to the statement of Ms. Deepa Kaur Chadha, Managing Director of Adie Broswon Group dated 23.08.2022. It has also been alleged that the petitioner-Vijay Nair had disrupted the evidence and influenced the witnesses. 37. The Directorate of Enforcement has placed reliance on Vijay Madanlal Choudhary & Ors. v. Union of India & Ors. 2022 SCC OnLine SC 929. D. FINDING AND ANALYSIS 38. The offence of money laundering has been defined in section 3 of the PMLA, which reads as under: "3. Offence of money-laun....
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....th 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 with the proceeds of crime must be held guilty of offence of money-laundering. If the interpretation set forth by the petitioners was to be accepted, it would follow that it is only upon projecting or claiming the property in question as untainte....
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....se 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 that the interpretation put forth by the respondent will further the purposes and objectives behind the 2002 Act and also adequately address the recommendations and doubts of the international body whilst keeping in mind the constitutional limits....
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....r: "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) Prima facie satisfaction of the court in support of the charge." 43. Before proceeding further, it is also necessary to remind the scope of jurisdiction to be exercised while granting bail in the economic offence. The Hon'bl....
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....cy 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). 46. 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. Allegedly the prominent players if we put names to the faces are Mr.Manish Sisodia, the then Deputy Chief Minister and Excise Minister, Mr.Vijay Nair, purportedly Media Incharge of AAP, Sameer Mahendru. Mr.Amit Arora, Mr.Dinesh Arora, Mr.Abhishek Boi....
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....otect himself. It is also the case of the defence that the public servants who are under the direct control of Hon'ble LG, who is the complainant in the present case, have made their statements only to save their skin. 49. 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, the court has to strike a balance between the interest of an individual and the interest of the 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. It is pertinent to mention here that learned senior counsels has argued that the ED is only basing its case only on the statements of the witnesses recorded under Section 50 of PMLA. 50. 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. There are witnesses and witnesses on record to show that cert....
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....on the basis of which their bail application has been decided, but at the same time such reason should not be detailed in such a manner that it may prejudice the trial. 53. 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. 54. The material produced by the E.D. goes to show that Vijay Nair had actively participated in the formulation drafting and implementation of the new Excise Policy. There are Statements under Section 50 of PMLA on the record to show that the petitioner- Vijay Nair had indulged and actually involved knowingly assisted in the process or activity connected with the proceeds of crime including it....
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....hat the petitioner-Vijay Nair used to ask him about the Excise Policy and provisions of different states. He stated that though Vijay Nair used to ask him questions about these policies but mostly he was fixed on a certain format wherein there were to be private wholesale and retail. He also stated that petitioner Vijay Nair was also working with bigger players in Delhi Liquor business such as Aman Dhall of Brindco for the formulation of the policy. 59. Sh. Dinesh Arora also in his statement dated 01.10.2022 specifically stated that the Petitioner-Vijay Nair got into an arrangement with Arun Pillai, Abhishek Boinpally, and Buchi Babu (who were the representatives of South Group led by K Kavitha, M.S. and Sarath Reddy). The south group gave Rs. 100 Cr (approx.) to Vijay Nair in advance and they were supposed to recoup this money from the 3 major wholesalers as mentioned above. 60. There are also statements on the record that how this kickback was used in Goa elections. The conspiracy in the present case as has also been stated above is peculiar in nature where the excise policy was allegedly framed with mala fide intention. There are serious allegations regarding tempering excise ....
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....is effect has been collected and brought on record by the investigating agency and nothing has been intentionally withheld or concealed from the court and the evidence brought on record includes some documentary evidence in the form of call detail records of the persons involved in transmission of the above kickback amount through the approver. 65. It was also observed that oral and documentary evidence suggests that he was also in frequent touch with various stakeholders of liquor business through different secured modes of communication, including the Signal App, and * their use of the said modes and App was only in pursuance to their attempt of not leaving any trail of their misdeeds. Some evidence is also alleged to have been collected to show that certain amounts, though meagre, out of the above kickbacks were spent by him towards election expenses in Goa and further allegations of tampering with evidence of commission of the above offences are also there on record by destruction of his mobile phones used during the relevant period. 66. Learned Trial court rejected the contention raised by Learned Senior Counsel for accused regarding reliance upon the judgments in cases Sanj....