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Mainstream, VOL 61 No 45 November 4, 2023

Sisodia bail: Strange are the ways of the apex court | Faraz Ahmad

Saturday 4 November 2023, by Faraz Ahmad


On October 30 a two-judge bench of the Supreme Court led by Justice Sanjiv Khanna and S.V.N. Bhatti rejected former Delhi Deputy chief minister and Aam Aadmi Party (AAP) leader Manish Sisodia’s bail plea in the case of Money Laundering slapped upon Sisodia by the Enforcement Directorate.

The Central Bureau of Investigations (CBI) arrested Sisodia on February 26 this year under the Prevention of Corruption Act (PCA) charging him with taking a bribe from the liquor lobby for tweaking the excise policy of the Delhi government to favour wholesale liquor distributors. On March 8, the ED formally arrested him, also accusing him of money laundering under the Prevention of Money Laundering Act (PMLA). Since then, Sisodia has been in prison without trial with lower courts right up to the Delhi High Court, denying him bail.

In the judgement, Justice Khanna who wrote it out, raised doubts about “some of the charges” against Sisodia but avoided “from delving …in depth and detail” into some of the legal issues arising in this matter and stated, “However there is one clear charge in the complaint filed under the PMLA, which is free from perceptible legal challenge, and the facts as alleged are tentatively supported by material evidence.”

The ED had contended that Rs 338 crore was what accrued to 14 wholesale distributors following the increase of their commission from 5 per cent in the old excise policy of 2021-22 to 12 per cent in the new excise policy. This, the ED said, “would constitute proceeds of crime” and “were acquired, used and were in possession of the wholesale distributors who had unlawfully benefitted from illegal gain at the expense of the government exchequer and the consumer/buyers.”

On October 17, when the arguments in this case concluded, while reserving the judgement Justice Khanna had asked the ED how an offence under the PMLA would be made out in the absence of a bribery charge against Sisodia. “If the charge of a bribe is not part of the predicate offence, it may be difficult for you to prove a case under the PMLA. If you had said a bribe of Rs 2.2 crore was paid, yes. But you cannot create a predicate offence in your PMLA case. We cannot go on an assumption.”

In an earlier hearing, the court noted, “You have to establish a chain. The money has to flow from the liquor lobby to the person. We know it is difficult to establish the chain as everything is done under cover…but that is where your competence lies.”

The bench had pointed out that as per the ED’s case, the recipient of the proceeds of the crime was “a political party” and not Sisodia, and asked why the party was not made an accused then. “As far as PMLA is concerned your whole case is that it went to a political party. That political party is still not an accused. How do you answer that? He is not the beneficiary, the political party is the beneficiary,” Justice Khanna stated then. On October 17, repeating the same line Justice Khanna on the conclusion of arguments announced that the verdict on Sisodia’s plea would be delivered on October 30. Following this the ED told the media that it was contemplating making AAP an accused too in this case.

During arguments Justice Khanna, had warned that the ED’s claims against Sisodia “will fall flat” after “two questions in the cross-examination.” The ED had contended that the CBI investigating the alleged act of corruption had claimed that an amount of Rs. 2.2 crore was paid by Amit Arora through middleman Dinesh Arora. The bench pointed out that it “is not a charge or an allegation made in the chargesheet filed by the CBI” and “it may be difficult to regard alleged payment as a “proceed of crime under the PMLA.”

The ED had claimed that part of the proceeds of the crime were used to fund the AAP’s poll campaign in Goa. However, the bench reminded that the agency had said earlier that “once the quantum of amount used in the election in Goa is ascertained, a decision to consider AAP as an accused under Section 3 of the PMLA will be taken. Goa assembly elections were held in February 2022. But it is evident from whatever the ED stated in the apex court that after more than 20 months the ED has no idea how much the AAP spent in Goa assembly elections. And so, there is no substance in its charge.

The bench had also pointed out that “the charge that…Sisodia is vicariously liable in terms of Section 70 of the PMLA cannot be alleged and has not been argued.” The bench mentioned that “Prima facie there is lack of clarity, as specific allegation on the involvement of …Sisodia, direct or indirect, in the transfer of Rs 45 crore to AAP for Goa elections is missing.”

It further noted that the ED’s allegation that the kickback of Rs 100 crore “was actually paid by the liquor group is somewhat a matter of debate, questioning also the ED’s contention.. that generation of proceeds of crime is itself possession or use of the proceeds of crime.

In effect all the questions the bench raised and observations it made during the course of the arguments clearly demonstrated it found no substance or strength in ED’s case against Sisodia.

Yet on October 30 the Supreme Court seemed to have found sufficient grounds to reject Sisodia’s bail plea, going totally against the kernel of Justice Khanna’s public observations during the course of the arguments the ED had offered, on Sisodia’s bail plea. That is the mysterious part of this case.

Perhaps to lessen Sisodia’s disappointment in the denial of bail, the bench stated that “In view of the aforesaid discussion and for the reasons stated, we are not inclined to accept the prayer for grant of bail at this stage.” adding, that the prosecution had assured that the trial would be completed in next six-eight months and suggested that Sisodia could file a fresh bail application if the trial was protracted.”

In effect, the bench ensured that Sisodia is not let out on bail till at least he completes a year behind bars without trial.

What happened between October 17 and October 30 that despite all the pertinent points Justice Khanna made against the ED arguments, he suddenly found merit in the ED case. That’s a mystery for anyone to solve.

While Justice Khanna was reading out his judgement in the Supreme Court, the ED was sending summons to Delhi Chief Minister and AAP president Arvind Kejriwal to appear before the agency on November 2, which by the way, Kejriwal ignored and did not go to ED office. But it is evident that summoning Kejriwal is an afterthought once the apex court pointed out that its case against Sisodia was far too weak to stand the scrutiny of cross-examination during the trial. ED then announced to the media on October 17 that it was contemplating making the AAP an accused in the excise policy case.

The central agencies have been pursuing this case for close to two years and they are still unable to put up this case for trial. In the meantime, on October 5 the ED raided and arrested AAP MP Sanjay Singh a virulent critic of Modi on the floor of the House who had questioned Prime Minister Modi’s links to Gautam Adani, holding Modi responsible for enriching Adani illegitimately. Mind you that was the day Justice Khanna admonished the ED saying that their case against Sisodia was too weak.

As for the liquor policy, and the profits going to private vendors, anybody buying liquor regularly knows that in the neighbouring Gurgaon and Faridabad liquor is not even one-third the price of the same brand in Delhi at present. For instance, I bought a bottle of Black Dog scotch whisky for Rs 1300 from Gurgaon L1 Retail Vend next to Guru Dronacharya Metro station and a Black and White scotch bottle for 1200. I found that inside the big wholesale hall, if three bottles of Black Dog were bought together these were only for 3000, meaning each bottle was for 1000 only. Similar would be the case with Black and White bottle and other brands, I presume. In Delhi, I checked a single bottle of Black Dog costs 3300 and Black and White whisky 2300. And these expensive brands are not even available on reopened government vends, what with private vends suddenly closed down.

While it is for the investigators to establish any bribe influencing the Delhi Excise policy, the fact remains that the new excise police of Delhi caused panic among Haryana liquor vendors who had started suffering huge business losses and suddenly Delhi wallas like me decided not to waste time and energy to drive down to Gurgaon to buy liquor. Thus the new excise policy flourished in Delhi. But Haryana and UP are governed by the double-engine BJP governments. That much is evident.

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