TaxTMI 
TaxTMI 
2023 (5) TMI 1309
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....Union Home Secretary, a FIR bearing No. RC0032022A0053 dated 17.08.2022, PS CBI, ACB, New Delhi under section 120-B read with 477A IPC & substantive offences thereof against petitioner Sh.Manish Sisodia and others. In the FIR bearing No. RC0032022A0053 dated 17.08.2022, PS CBI, ACB, New Delhi under section 120-B read with 477A IPC & substantive offences, it was alleged that Sh. Vijay Nair, Former CEO of M/s. Only Much Louder, an entertainment and event management company, Shri Manoj Rai, Ex- Employee of M/s. Pernod Ricard, Sh. Amandeep Dhal, Owner of M/s. Brindco Spirits and Sh. Sameer Mahendru, Owner Of M/S, Indo Spirit was actively involved in irregularities in framing and implementation of excise policy of GNCTD of Delhi for the Year 2021-22. 2. It was further alleged that some L-1 license holders were issuing credit notes to retail vendors with an ab-initio intention to divert the funds as undue pecuniary advantage to public servants. In furtherance to this, they were showing false entries in their books of accounts to keep their record straight. 3. In the FIR it was also alleged that Sh. Amit Arora, Director of M/s. Buddy Retail Pvt Limited, Shri Dinesh Arora, Shri Arjun....
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..... Out of the said amount, INR 30 crores was paid through Hawala channels using Dinesh Arora. Further, cash payments through Hawala channels were made by Vijay Nair, close associate of the Applicant, to vendors engaged by Aam Aadmi Party for Goa Assembly Election 2022 through Chariot Media of Rajesh Joshi. d. The Applicant misused his official position and dishonestly introduced changes to the Excise Policy under the influence of the South Group, through his close associate Vijay Nair. The changes introduced by the Applicant in the Excise Policy not only facilitated the cartelization of the liquor trade in Delhi by the South Group but also enabled the* South Group to recover the kickbacks paid by them upfront. As a part of the said conspiracy, the Applicant increased the wholesale profit margin from 5% to 12% without any cogent reason or justification. Investigation has revealed that the South Group was to recoup the money by way of such increased profit margin (6% commission was to be paid to the South Group from the 12% profit margin). e. The changes in the Excise Policy were made by the Applicant with malafide intention in utter disregard to the recommendations ....
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.... upon to frame a particular kind of excise policy leaving entire liquor trade in hands of private players for some monetary benefits and political reasons. Learned trial court also rejected the bail inter-alia on the following grounds: "44. Thus, it is clear from the above discussion that the applicant had played the most important and vital role in the above criminal conspiracy and he had been deeply involved in formulation as well as implementation of the said policy to ensure achievement of objectives of the said conspiracy. The payment of advance kickbacks of around Rs. 90-100 crores was meant for him and his other colleagues in the GNCTD and Rs. 20-30 crores out of the above are found to have been routed through the co-accused Vijay Nair, Abhishek Boinpally and approver Dinesh Arora and in turn, certain provisions of the excise policy were permitted to be tweaked and manipulated by the applicant to protect and preserve the interests of South liquor lobby and to ensure repayment of the kickbacks to the said lobby. The evidence collected so far clearly shows that the applicant through the co-accused Vijay Nair was in contact with the South lobby and formulation of a fav....
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....r Antil (Supra) being referred to by Ld. Senior Counsel for applicant are found to have been made only with reference to cases falling under different categories of the accused persons who were not arrested by the investigating agencies and not with regard to cases of accused who have been arrested and are sought to be released on bail. 46. Further, the applicant does not even satisfy the triple test as discussed above because though, admittedly, he cannot be considered to be a flight risk, but keeping in view his conduct as reflected from destruction or non-production of his previous mobile phones of the relevant period and also the apparent role played by him in not producing or missing of the file of one Cabinet Note put up through the then Excise Commissioner Sh. Rahul Singh, there may be serious apprehensions of destruction or tampering of some further evidence and even of influencing some prime witnesses of this case by him or at his instance, in case he is released on bail by the court." 9. Learned trial court has rejected the bail on the ground of parity that the role played by Applicant cannot be equated with or put at par with the roles of other three accused ....
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....The final decision and recommendation of GoM was taken on 22.03.2022 by way of a detailed report. That in the said final GoM report dated 22.03.2021 itself the said profit margin of 12% was justified for following reasons: a. That the L1 licensee is required to pay a fees of Rs. 5 crores as compared to Rs. 5 lakhs which was paid in the earlier policy. This was an increase of 10000% in the license fees which was supposed to be paid by the licensee. b. That to ensure strict standards and full proof quality control, under the new policy an L1 licensee was mandatory to setup a Govt. approved laboratory at their warehouse to check for spurious liquor in each batch of liquor received from the manufacturer. It was the responsibility of the L1 distributor to systematically check the product for spurious liquor and to inform the excise department in case of any spurious liquor being found. Therefore there was an increase of expense on account of higher standards prescribed to check spurious liquor. c. That in the new policy a higher level of investment was required in terms of global distribution standards and setting up of quality checking systems. d. Th....
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....6.02.2023 and has been in custody since then. It has been submitted by the Learned Senior Counsels that the CBI's understanding of old policy is flawed and contradicted by their own documents. It has been submitted that the understanding of the CBI that in the old policy there was no concept of private wholesalers and the assumption that in the old policy there were no leakages and the wholesalers were earning a margin of 5% only was totally flawed. It has been submitted that there existed a concept of a private retailer under the old policy. Learned Senior Counsels submitted that there were only private wholesalers in the old policy and the wholesalers were the manufacturers. It has been submitted that even the Ravi Dhawan Committee Report states that such wholesalers/Manufacturers were also holding retail vends in certain cases. It has been submitted that therefore in the Old Policy there was a complete cartelization wherein the the Manufacturers and Wholesalers were the same parties with even instances of such also these Wholesaler/Manufacturer holding retail vends. It has been submitted that in the earlier policy there was a huge incentive to cheat and sell Non-duty paid li....
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....se Policy 2020-2021. Learned Senior Counsels have submitted that in the new Excise Policy a conscious decision was taken to keep the government outside of liquor trade being in tune with contemporary economic standards of disinvestment. It has further been submitted that the profit margin was increased from 5% to 12% on the basis of valid policy considerations. It has further been submitted that under the old policy license fee for the wholesaler was only Rs. 5 lakhs whereas under the new policy this was set to be increased to Rs. 5 crores. It has been submitted that under the old policy the wholesaler would be allowed to recover the charges incurred for local transport separately. However, this recovery was done away with under the new policy. It has further been submitted that under the new policy wholesalers were required to maintain testing laboratories built to adhere to the global best standards of testing. Learned Senior Counsels have submitted that provision was also made for zone-wise auctions and limitation of number of manufacturers. 17. In regard to the discrepancy in the alleged document dated 15.03.2021 and 19.03.2021, Learned Senior Counsels have submitted that th....
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....ior Counsels have further argued that there is no material to show that the petitioner has committed any wrongdoing with regard to grant of license to M/s. Indo Spirits. It has been submitted that rather C. Arava Gopi Krishna, has stated that the instructions of the petitioner was only to process the file as per rules. It has been submitted that there is no material on record to connect the Applicant with events concerning licence of M/s. Mahadev Liquor. It has been submitted that Ms. Jasdeep Kaur Chadha was not the owner of Mahadev Liquor and thus there is no connection between M/s. Mahadev Liquor and Ms. Jasdeep Kaur Chadha. 20. In respect of the destruction or tampering of the evidence, Learned Senior Counsels have submitted that the office or the residence of the Applicant was raided on 19.08.2022. The CBI in addition to the material collected in these operations, only issued Section 91 notices seeking his mobile devices which were duly responded to. It was stated that the CBI did not seek any further documents from the Applicant. Learned Senior Counsels have submitted that CBI has made bald assertions regarding the tampering of the evidence and the same cannot be believed i....
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.... no material on record to support the allegation that 'Mr.Vijay Nair' who was allegedly collecting the bribe amount of Rs. 100 crore was doing so at the instance of the Applicant. Learned Senior Counsels have submitted that the excise policy was framed in accordance with the rules and it was checked and tested at all the levels including Group of Ministers, Cabinet and by the Lt. Governor. Learned Senior Counsels have further submitted that the assertion of the CBI that no discussion was held in the Group of Ministers is patently incorrect and untenable. Learned Senior Counsels have submitted that Hon'ble Lt. Governor was duly apprised and recommendations made by him were duly followed. It has been submitted that the new Excise Policy led to a substantial increase in the revenue and therefore, no fault can be found with the same. It has been submitted that the arrest was effected only for the purpose of extracting a confession from the Applicant. Reliance has been placed upon Santosh vs. State of Maharashtra (2017) 9 SCC 714, Chanda Deepak Kocchar vs. CBI, 2023 SCC OnLine Bom 72. Reliance has also been placed upon Rule 5, Part B, Vol.III Chapter 11, Delhi High Court Rul....
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.... Committee also examined three models for proposed retail licenses including the existing model containing government and private players; License to individuals by lottery system; and license to limited entities. It opined that retail license to individuals through lottery system is a preferred model and added that license by auction to limited entities could lead to proxy ownership and cartelization. 26. Learned ASG has submitted that this report was not taken kindly by the Applicant as it did not recommend the option of retail trade through auctioning of zones and further the committee did not recommend private wholesale model. Reliance has been placed upon the statement of Ravi Dhawan recorded under Section 161 Cr.P.C. Learned ASG has submitted that Ravi Dhawan in his statement under Section 161 Cr.P.C. deposed that before submitting the report he met the Applicant Sh. Manish Sisodia informed him of the recommendations he was going to make. However, the petitioner asked to explore the other models of retail trade through auction/tender for particular area/zone and Delhi could be divided into zones. 27. Learned ASG has also placed reliance on the Statements of C. Arvind, S....
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....eport in public. It has been submitted that the petitioner influenced opinions received from the public and planted emails for the purpose of tweaking to show fake public approval for deviating from the Expert Committee report. Reliance has been placed upon the statement under Section 161 Cr.P.C. of Mr. Zakir Khan, Chairperson, Delhi Minority Commission. The attention of the court has also been invited to emails of interns of Delhi Minority Commission regarding re-suggestions on Expert Committee. 30. Learned ASG has further submitted that the petitioner Rahul Singh, Excise Commissioner, was directed to prepare a cabinet note containing comments/suggestions of Public and Stakeholders by Sh. Rahul Singh and he gave Rahul Singh a draft template for making such a cabinet note. Reliance has been made on the statement of Sh. Rahul Singh and Whatsapp chat regarding preparation of cabinet note. Learned ASG has also invited the attention of the court to the legal opinions of Justice K.G. Balakrishnan, former Hon'ble CJI, Justice Ranjan Gogoi, former Hon'ble CJI and Mr. Mukul Rohatgi, Learned Senior Advocate, former attorney general. Learned ASG has invited the attention of the co....
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....ted between 15.03.2021 and 19.03.2021, there were no GoM meetings and this was confirmed by Sh. Arava Gopi Krishna, Excise Commissioner that he has not attended any meeting during this period., which he would have attended as the excise commissioner. 35. Learned ASG has submitted that on 19.03.2021, the WhatsApp chat of Butchi babu (CA, South Group) revealed a recommendation of a new post of Director, Wholesale of Operations and Elite Stores, which was later verbatim included in the GoM report recovered from the office computer. 36. Learned ASG submitted that there was no deliberation, discussion for change of margin profit from 5% to 12%. It has been submitted that no proper Minutes of Meetings were ever prepared. Reference has been made to the statements of Sh. Arava Gopi Krishna, Excise Commissioner and Sh. Sanjay Goel, Excise Commissioner. 37. Learned ASG has submitted that the Applicant used influence for grant of L1 license illegally to M/s. Indospirit Ltd. Learned ASG has submitted that M/s. Indospritis Marketing Ltd. had applied to the Excise department for a wholesale license. The Applicant pressurised the excise officials to expedite the grant of this license. Th....
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....of INR 100 Crores and the persons who gave Rs. 100 crores were to be benefitted in the following manner. (i) INR 90-100 crores were paid by South Group to Vijay Nair, Media & Communication Incharge, AAP in order to get favourable policy and post tender benefits. Out of the same, INR 30 Crores were transferred through Hawala channels by Abhishek Boinpally to Vijay Nair through Dinesh Arora. The said money was collected from Hawala operators by members of Vijay Nair Team, namely Rajesh Joshi and Sudhir. (ii) South group member Arun Pillai was given 32.5% share for investment of INR 3.6.crores in M/s. Indospints. (iii) The L-1 License was issued to M/s. Indospirits under the influence of Manish Sisodia, despite pendency of complaint of cartelization and blacklisting. (Statement of Arava Gopikrishnan and C. Avind u/s 164 Cr.PC. (iv) Vijay Nair also used his political clout and pressurized M/s. Pernod Ricard India Private Limited to appoint Indospirits as its wholesale distributor in Delhi. (Statement of Benoy Babu u/s 164 CrPC @453 of convenience compilation filed by CB1). (v) 65% profit after tax (Rs. 29.29 crores) against 32.5% share was t....
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....cution is that the Applicant is a prominent leader of the Aam Aadmi Party, besides being Excise Minister and Dy. Chief Minister, having 18 portfolios, allegedly entered into the conspiracy with several other persons to amend the Excise Policy with a motive to derive illegal gains. The change was announced to be undertaken purportedly to bring transparency. To begin with Mr. Ravi Dhawan the then Exercise Commissioner was appointed as the Chairman of the expert committee known as "Ravi Dhawan Committee". The committee gave its report on 13.10.2020 which inter alia recommended that the entire wholesale operation be brought under the government and for retail allotment of license be done through lottery. 40. The case of the CBI is that it was not liked by the Applicant and his party. In order to overcome the recommendation the expert report was made public and suggestions were invited from the public. It has been alleged by the CBI that the responses were manipulated and E-mails were procured to suit the illegal purpose of the Applicant and for this purpose, the services of Mr. Zakir Khan the then chairperson of Delhi Minority Commission was utilised. 41. In the meanwhile, Mr. Ra....
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....of liquor trade in Delhi by the "South Group". The case of CBI is that "South Group" manipulated the policy in a manner so as to monopolise the liquor trade in Delhi by the "South Group". The case of the CBI is that against the increase in margin from 5% to 12% the "South Group" was to recoup the money already paid to the petitioner and his party as a kickback. The wholesalers M/s. Indo Spirits Limited, M/s. Brindco Sales Pvt. Ltd. and M/s. Mahadev Liquors controlled 85% of the market. It is also the case of the CBI that the definition of related entities was also tinkered with in the excise policy. 43. The CBI has also alleged that M/s. Mahadev Liquors was forced to surrender the license in order to ensure complete control over the wholesale liquor market in Delhi by the "South Group". It has been alleged that the political party of the petitioner came into power in the Punjab and canceled the license of distilleries and the same were restored only after M/s. Mahadev Liquors succumbed to the pressure of the petitioner and his political party. The case of the CBI further is that the petitioner and his political party was dealing through Mr. Vijay Nair who was purportedly Media a....
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....ven the statement of the excise commissioner Mr. Arava Gopi Krishna is that the instruction was on his part was to grant the license in accordance with the rules. 46. The plea of the petitioner is also that no fault can be found in the increase of margin from 5% to 12%. It has been submitted that earlier there was no capping of the margin and by doing such an amendment the petitioner kept the margin which even as per the Expert Committee Report was sometimes to the tune of 65% to 70%. The Applicants case is that the excise policy was formed by the elected government in discharge of their duties and was duly approved by the Group of Ministers, the cabinet and the then Lieutenant Governor. 47. The petitioner has also stated that the entire case of the CBI is based on circumstantial evidence which requires it to be proved by way of evidence. The bail cannot be denied and the rule is being the bail and not the jail and merely on the assumptions and presumptions, conjectures and surmises of the CBI. 48. The petitioner has also based his case on the legal proposition that the State is not bound to accept the report in its entirety. Reliance has been placed upon Kerala Bar Hotel ....
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....which must be left to the Government of the day. 71. "It may seem unjust and oppressive, yet be free from judicial interference. The problems of government are practical ones and may justify, if they do not require, rough accommodations, illogical, it may be, and unscientific. But even such criticism should not be hastily expressed. What is best is not always discernible; the wisdom of any choice may be disputed or condemned. Mere errors of the Government are not subject to our judicial review. It is only its palpably arbitrary exercises which can be declared void. Parliament having entrusted the fixation of prices to the expert judgment of the Government, it would be wrong for this Court, as was done by common consent in Premier Automobiles [20 L Ed 2d 3121 to examine each and every minute detail pertaining to the Governmental decision. ... The interest of the producer and the investor is only one of the variables in the "constitutional calculus of reasonableness" and courts ought not to interfere so long as the exercise of Governmental power to fix fair prices is broadly within a "zone of reasonableness". If we were to embark upon an examination of the disparate....
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....t if, after taking into consideration other factors, the accused is entitled to the grant of bail. Bail and not jail is the normal rule. The two paramount considerations, namely, likelihood of the accused fleeing from justice and his tampering with prosecution evidence relate to ensuring fair trial of a case in the course of justice. Due and proper weight should be bestowed on these two factors apart from others. There cannot be a set formula in the matter of granting bail. The facts and circumstances of each case will govern the exercise of judicial discretion in granting or cancelling the bail." 52. Similarly, Reliance has been placed upon Gurucharan Singh v. State (1978) 1 SC 118 wherein it was inter alia held that unless exceptional circumstances are brought to the notice of the Court which may defeat proper investigation and a fair trial, the Court will not decline to grant bail to a person who is not accused of an offence punishable with death or imprisonment for life. Learned counsel has further placed reliance upon 53. Sukh Ram v. State (CBI) wherein it was inter alia held that unless there are exceptional circumstances brought to the notice of the Court which may def....
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....to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. 35. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations." 56. Similarly in Nimmagadda Prasad vs. CBI (2013) 7 SCC 466, it was inter alia held as under 23. Unfortunately, in the last few years, the country has been seeing an alarming rise in white-collar crimes, which has affected the fibre of the country's economic structure. Incontrovertibly, economic offences have serious repercussions on the development of the country as a whole. In State of Gujarat v. Mohanlal JitamaljiPorwal [(1987) 2 SCC 364 : 1987 SCC (Cri) 364] this Court, while considering a request of the pro....
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....stence of prima facie case against the accused, the gravity of the allegations, the position and status of the accused, the likelihood of the accused fleeing from justice and repeating the offence, the possibility of tampering with the witnesses and obstructing the court in administration of justice as well as the criminal antecedents of the accused. It is also well settled that the court ought not to go deep into the merits of the matter while considering an application for bail. However, all that needs to be established from the record is the existence of the prima facie case against the accused. Reliance can be placed upon the State of Orissa vs. Mahimanand Mishra, 2018 pen SCC 516 and Anil Kumar Yadav vs. State (NCT of Delhi) 2018 12 SCC 129. 58. The present case revolves around the formation of a New Excise Policy replacing the Old Excise Policy. The purported reason for changing the policy was to bring transparency and to enhance the state excise duty revenue. Besides this, the object was to simplify liquor policy pricing mechanism and checking malpractices. The purpose was also to transform the nature of liquor trade commensurating with the changing structure in the natio....
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....ons have been taken bonafidely and in the interest of the public. But if such policy decisions or schemes are alleged to have been taken malafidely or have the taint of any corrupt practice then certainly such decisions are required to be enquired into by concerned investigating agencies and examined by the court. 60. In the present case, the allegation is that the New Excise Policy has been brought in and certain provisions have been added to render undue advantage to a particular group against the illegal gratification having been received from them. The allegations if found to be correct are very serious in nature and goes to the very foundation of the case. The court at this stage is not to meticulously examine the material and evidence on the record nor should it make any comment beyond the same as it may prejudice the parties during the trial. 61. The grant of the bail is a discretionary jurisdiction. However, such discretion has to be exercised judicially and within the four corners of the law. Such discretion cannot be allowed to be influenced by any arbitrariness. There are statements under Section 161 Cr.P.C. of the successive commissioners of excise including Sh. R....