Manish Sisodia, the former Deputy Chief Minister of Delhi, was denied bail by the Supreme Court in connection with corruption and money laundering charges. The Court emphasized that there is ‘material and evidence’ that ‘tentatively’ lends support to one of the charges filed under the Prevention of Money Laundering Act, 2002 (PMLA).
Facts of the Case:
Manish Sisodia, the former Deputy Chief Minister of Delhi, sought bail in connection with two prosecutions: one under the Prevention of Corruption Act, 1988 (PCA), and the Indian Penal Code (IPC), and another under PMLA. He was accused of being involved in a conspiracy that aimed to generate illicit profits through changes in the excise policy in favour of certain liquor distributors. The case raised several legal issues, including the interpretation of the PMLA and the extent of the appellant's involvement in the same.
Contentions of the Appellant:
- Manish Sisodia asserted that he had been in custody since 26.02.2023 and that the trial process would take a long time since arguments on charges had not commenced.
- The new excise policy, which aimed to curb fraudulent practices in the liquor industry, was adopted through a thorough deliberative process by the Council of Ministers/Cabinet in the interest of the public. It introduced measures such as zoning, auctioning of licenses, and higher fees to maximize revenue and a 12% distribution fee for quality control.
- The appellant claimed that the allegations of kickback of Rs.100,00,00,000 being used to fund the Aam Aadmi Party's election campaign in Goa were false and unsupported.
- It was claimed that the appellant did not instruct the Excise Commissioner to expedite Indo Spirit's license clearance.
- The appellant was unable to provide any rational explanation for increasing the commission from 5% to 12%. He had stated that even under the old regime there was no calculation for the 5% margin.
Contentions of the Respondent:
- The prosecution argued that the new excise policy was influenced by a conspiracy to generate super profits through kickbacks from wholesale distributors.
- They contended that the new policy favoured certain liquor distributors and that the appellant used his political influence to effect these changes.
- It was contended that Rs. 100 crore in illicit funds were received from the liquor group and employed by Manish Sisodia's associates and AAP leaders, including their use in the Goa election campaign, alongside efforts to obscure the money's origin through a complex hawala network despite data erasure.
Observations of the Court:
The Supreme Court referred to Section 45 of the PMLA and noted that the “provision does not require that to grant bail, the court must arrive at a positive finding that the applicant has not committed an offence under the PML Act. Section 45 must be construed reasonably as the intent of the legislature cannot be read as requiring the court to examine the issue threadbare and in detail to pronounce whether an accused is guilty or is entitled to acquittal.” The Court emphasized that while detailed reasons aren't necessary for bail applications, a tentative finding based on broad probabilities should be made. It also highlighted the importance of the right to a speedy trial.
The Court relied on its judgment in the case of Vijay Madanlal Choudhary and Ors. vs. Union of India and Ors.[1] and emphasized the adverse impact of economic offences like money laundering on society and individuals. The Court also pointed out that Section 19 of the PMLA contains safeguards to ensure fairness, objectivity, and accountability, and that Section 436A of the IPC could be applied to PMLA offences to uphold the right to a speedy trial.
The Supreme Court's decision to not grant bail to the Appellant was based on the following factors:
Knowledge of Market Share: Sisodia was aware that three liquor manufacturers dominated 85% of the market, with two of them holding 65%, while 14 smaller manufacturers had 20%.
New Excise Policy and Kickbacks: The new excise policy allowed manufacturers to appoint only one wholesale distributor, creating an opportunity for kickbacks from distributors with significant market share.
Fixed License Fee: Wholesale distributors paid a fixed license fee of Rs. 5,00,00,000, regardless of their turnover, favouring larger distributors.
Cartelization Promotion: The policy promoted cartelization, benefiting larger distributors with high market share due to external influences.
Licensing Issues: Concerns arose over licenses granted despite complaints, highlighting potential irregularities.
Excessive Commission: Wholesale distributors earned an excessive 7% commission of Rs. 338,00,00,000, (338 Crores) which was seen as proceeds of crime under the PCA.
Considering these factors and the supporting evidence, the Court concluded that the new excise policy was designed to benefit a select group of distributors who allegedly offered kickbacks.
The Decision of the Court:
The Supreme Court did not grant bail to Manish Sisodia due to the allegations related to economic offences. However, concern was expressed about the prolonged incarceration and gave him the liberty to file a fresh bail application if the trial is protracted and proceeds slowly. The Court emphasized that the right to a speedy trial is a fundamental right, and lengthy pre-trial detention could infringe upon an individual's right to life. The Court also allowed him to apply for interim bail in case of medical emergencies for his wife.
Case Title: Indrakunwar vs. State of Chhattisgarh
Coram: Hon’ble Mr. Justices Abhay S. Oka and Sanjay Karol
Case No.: Criminal Appeal No. 1730 of 2012
Citation: 2023 Latest Caselaw 831 SC
Advocates for Appellant: Suryanarayana Singh, Naresh Kumar, and Shantanu Sharma
Advocates for the Respondent: Gautam Narayan, Asmita Singh, Harshit Goel, and Siddhant Singh
Read Judgment @LatestLaws.com
[1] 11 (2022) SCC Online 929
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