Wholesale Distributors Have Unlawfully Benefitted At The Expense Of Government & Consumers- SC While Denying Bail To Manish Sisodia

A Supreme Court Bench of Justice Sanjiv Khanna and Justice SVN Bhatti has denied bail to former Delhi deputy Chief Minister Manish Sisodia in the Delhi excise policy scam case. The Court has also directed that the trial be fast tracked.

In that context, it was observed that, "there is one clear ground or charge in the complaint filed under the PML Act, which is free from perceptible legal challenge and the facts as alleged are tentatively supported by material and evidence. This discussion is equally relevant for the charge-sheet filed by the CBI under the PoC Act and IPC."

In that vein, a facet discussed was that, "The proceeds of crime were acquired, used and were in possession of the wholesale distributors who have unlawfully benefitted from illegal gain at the expense of the government exchequer and the consumers/buyers".

In light of the same, it was held that, "we are not inclined to accept the prayer for grant of bail at this stage." Notably, the Court further directed that, "In view of the assurance given at the Bar on behalf of the prosecution that they shall conclude the trial by taking appropriate steps within next six to eight months, we give liberty to the appellant– Manish Sisodia to move a fresh application for bail in case of change in circumstances, or in case the trial is protracted and proceeds at a snail’s pace in next three months."

Counsel Vivek Jain appeared for the petitioner, while Counsel Arvind Kumar Sharma appeared for the respondent.

In this case, the appellant was facing money laundering and corruption charges owning to alleged irregularities in the framing and implementation of a liquor policy (now scrapped) in Delhi. Notably, he was taken into custody in February 2023 and is under investigation by the CBI and the ED.

Mere Generation Of Proceeds Of Crime Does Not Amount To Money Laundering

The Court observed that the assertion that Rs. 2,20,000 was paid as a bribe to the appellant was not a charge or allegation made in the chargesheet filed by the CBI. In light of the same, it was observed that, "It may be difficult to regard the alleged payment as a ‘proceed of crime’ under the PML Act."

With regard to the assertion that a kickback of Rs. 100,00,00,000 was actually paid by the liquor group, the Court observed that it was somewhat a matter of debate.

It was further observed that the contention of the DoE that generation of proceeds of crime is itself ‘possession’ or ‘use’ of the ‘proceeds of crime’, "prima facie, appears to be 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, is not assured".

Offences Under PML Act & PoC Act

It was observed that there was one clear ground/charge filed under the PML Act which was free from perceptible legal challenge and the facts alleged were tentatively supported by material and evidence.  These were:

i) In a period of about ten months, during which the new excise policy was in operation, the wholesale distributors had earned Rs. 581,00,00,000 (rupees five hundred eighty one crores only) as the fixed fee.

ii) The one time licence fee collected from 14 wholesale distributors was about Rs.70,00,00,000 (rupees seventy crores only).

iii) Under the old policy 5% commission was payable to the wholesale distributors/licensees.

iv) The difference between the 12%; minus 5% of the wholesale profit margin plus Rs.70,00,00,000/-, would constitute proceeds of crime, an offence punishable under the PML Act. The proceeds of crime were acquired, used and were in possession of the wholesale distributors who have unlawfully benefitted from illegal gain at the expense of the government exchequer and the consumers/buyers.

In that context, the Court observed that, Clauses (a) and (b) to Section 7 of the PoC Act 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. It was further noted that 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. 

In the same vein, the Court observed that the CBI had submitted that conspiracy and involvement of the appellant was well established.

Fast Track of Trial

It was observed that detention or jail before being pronounced guilty of an offence should not become punishment without trial. In that context, it was further said that, "If the trial gets protracted despite assurances of the prosecution, and it is clear that case will not be decided within a foreseeable time, the prayer for bail may be meritorious. While the prosecution may pertain to an economic offence, yet it may not be proper to equate these cases with those punishable with death, imprisonment for life, ten years or more like offences under the Narcotic Drugs and Psychotropic Substances Act, 1985, murder, cases of rape, dacoity, kidnaping for ransom, mass violence, etc."

Taking view of the assurance given by the prosecution that they shall conclude the trial by taking appropriate steps within next six to eight months, the appellant was given liberty a to move a fresh application for bail in case of change in circumstances, or in case the trial is protracted and proceeds at a snail’s pace in next three months.

Order:

The appeals were dismissed and bail was not granted.

Cause Title: Manish Sisodia vs Central Bureau of Investigation 

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