Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
Reserved on: 27 August, 2024
th
% Pronounced on:11 September, 2024
+ BAIL APPLN. 3322/2023 & CRL.M.As. 712/2024, 635/2024,
838/2024, 1358/2024
ARUN RAMCHANDRAN PILLAI
S/o Shri K.S. Ramchandran Pillai,
R/o Villa 16, Sushee, Eden Garden,
Kokapet, Hyderabad
Through Pariokar/wife,
Rupa Arun Pillai ..... Petitioner
Through: Mr. Mohit Mathur, Sr. Advocate with
Mr. Nitesh Rana, Mr. Anuj Tiwari,
Mr. Kaushal Kait, Mr. Deepak Nagar,
Ms. Soumya Kumar, Mr. Rahul
Kumar & Mr. Nikhil Kohli,
Advocates.
Versus
DIRECTORATE OF ENFORCEMENT
(Through its Assistant Director)
Headquarters Office,
Directorate of Enforcement,
Pravartan Bhawan,
11, A.P.J. Abdul Kalam Road,
New Delhi-110011 ..... Respondent
Through: Mr. Zoheb Hossain & Mr. Manish
Jain, Special Counsels, Mr. Vivek
Gurnani, Panel Counsel, Mr. Vivek
Guurav, Mr. Kanishk Maurya, Mr.
Pranjal Tripathi & Mr. Kartik
Sabharwal, Advocates.
Signature Not Verified
BAIL APPLN. 3322/2023 Page 1 of 21
Digitally Signed
By:VIKAS ARORA
Signing Date:11.09.2024
18:23:52
CORAM:
HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA
J U D G M E N T
NEENA BANSAL KRISHNA, J.
1. The present Bail Application under Section 439 read with Section
167(2) of the Code of Criminal Procedure, 1973 (hereinafter referred to as
“Cr.P.C., 1973” ) read with Section 45 of the Prevention of Money
Laundering Act, 2002 (hereinafter referred to as “PMLA, 2002” ) has been
filed on behalf of the Applicant seeking grant of Regular Bail in ECIR No.
ECIR/HIU-II/14/2022 (hereinafter referred to as “ECIR case” ) dated
22.08.2022 registered under Sections 3/4 PMLA, 2002 at Police Station
HIU, Directorate of Enforcement (hereinafter referred to as ““ED” ) .
2. The Applicant has submitted that he is an experienced professional
with expertise in Tier-I Client Management, Regulatory, and Policy
expertise, Project Strategy and Management, Government Advisory,
Business Development with substantial International exposure. He is a
Bachelor of Technology in Mechanical Engineering from the University of
Kerala and has also completed Master of Science in Mechanical Engineering
from University of Saskatchewan and Master of Business Administration
from Indian School of Business, Hyderabad. The Applicant has worked in a
varied range of sectors and fields across countries. The Applicant started his
career with Reliance Industries Limited and went on to work in Canada for
seven years as an Analyst at the Ontario Power Generation Nuclear Safety
Solutions Limited and worked with various other Companies. The Applicant
had volunteered to work with organisations such as UNICEF, Canada to
Signature Not Verified
BAIL APPLN. 3322/2023 Page 2 of 21
Digitally Signed
By:VIKAS ARORA
Signing Date:11.09.2024
18:23:52
educate children about UNICEF’s Work for Children across the world, as
well as with Afghans4Tomorrow to help improve the business skills of
students at the Kabul Education University. The Applicant despite being
lodged in Tihar Jail No. 4 as an under-trial prisoner, has volunteered to work
as Horticulture Sahayak.
3. It is stated that the GNCTD released the Delhi Excise Policy for the
Year 2021-2022 (hereinafter referred to as the “Excise Policy” ) on
05.07.2021, after the fulfilment of all the procedures of Tenders and
Allotment; the Excise Policy was implemented on 17.11.2021 by the
GNCTD.
4. However, vague allegations have been made against high ranking
Government officials that they were in cahoots with one other and other
persons, and were instrumental in recommending the Excise Policy without
the approval of the Competent Authority to extend favours to certain
licensees that were issued after the implementation of the Excise Policy.
5. A Complaint dated 20.07.2022 addressed to the Union Home
Secretary by the Hon’ble Lieutenant Governor, NCTD vide D.O. Letter No.
SLG/Conf./2022/75 alleging large-scale malpractice and corruption in the
framing and implementation of the Excise Policy for the Year 2021-22, was
conveyed to the Central Bureau of Investigation (CBI) by the Director,
Ministry of Home Affairs, Government of India vide O.M. No.
14035/06/2022-Delhi-1 dated 22.07.2022 for necessary enquiry and action.
6. Thereafter, the CBI registered an FIR No. RC0032022A0053
(hereinafter referred to as “CBI case” ) dated 17.08.2022 under Section
120B of the Indian Penal Code, 1860 read with Sections 7/7A/8 of
Prevention of Corruption Act, 1988 at Police Station CBI, ACB, New Delhi
Signature Not Verified
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Digitally Signed
By:VIKAS ARORA
Signing Date:11.09.2024
18:23:52
against Manish Sisodia and 14 others.
7. After five days of registration of the CBI case, the respondent also
registered the aforementioned ED case. Even though the Applicant was
named as an accused in this ED case, but the facts were never disclosed to
him while issuing summons to him. During the course of investigations by
the CBI and the respondent ED, the Applicant was summoned at least on 40
occasions which were duly complied and the Applicant fully cooperated
with the Investigating Agency. However, the Investigating Agency
conducted the entire investigations by coercing the
witnesses/accused/suspect and more particularly the Applicant to give self-
incriminating statements.
8. In the interim, on 25.11.2022, the CBI filed the Chargesheet in the
CBI case, wherein the Applicant was arrayed as an accused. He has been
granted bail in the CBI case by the learned Special Judge vide Order dated
28.02.2023.
9. The first Supplementary Chargesheet in CBI case has been filed in the
Court on 25.04.2023 against the four other accused persons, including the
Accused-Manish Sisodia. All the 11 accused persons are facing trial in the
CBI case.
10. Insofar as the facts of the ED case are concerned, it is alleged that the
investigations have revealed that advance kickback amount of Rs. 100 crores
has been paid to the politicians and other public servants in Delhi. Hence,
due to the nexus created by the political persons, Government officers and
officials and other accused persons involved in this conspiracy, a total loss
of Rs. 2873 cores has been caused to the Exchequer of GNCTD.
11. It is also alleged that all the accused persons are found to have been
Signature Not Verified
BAIL APPLN. 3322/2023 Page 4 of 21
Digitally Signed
By:VIKAS ARORA
Signing Date:11.09.2024
18:23:52
involved in multiple activities related to or connected with proceeds of crime
of scheduled offences in regard to which the ED registered the case in terms
of Section 3 of PMLA, 2002. It is alleged that all the accused persons have
dealt with the proceeds of crime and they are guilty of offence of money
laundering punishable under Section 4 of the PMLA, 2002.
12. The Applicant has been alleged to be the key member of the criminal
conspiracy and has been the part of the South Group. The Applicant has
participated and was deeply involved in drafting and formulation of the
Excise Policy 2021-22 in conspiracy with Vijay Nair.
13. In March, 2021, the Applicant, Butchi Babu and Abhishek Boinpally
had acted with Vijay Nair and Sameer Mahandru for discussing the business
opportunities in the new Excise Policy and forming a partnership. The
Applicant allegedly gave the inputs to Vijay Nair and further had been a
party to the discussions with him and had proposed favours in the Excise
Policy that was under drafting at that time.
14. The main Complaint has been filed by the respondent on 22.08.2022,
where the Applicant was named as an accused. Eight Supplementary
Complaints have been filed by the respondent thereafter, against the various
accused persons.
15. The Applicant has sought the regular bail in the ED case on the
ground that the investigations carried out by the respondent were against the
canons of law and the respondent abused its power for the purpose of search,
seizure and for extortion of incriminating statements from the Applicant as
well as the other witnesses.
16. The Applicant has been arrested on 06.03.2023 at around 09:20 P.M.
by the respondent in flagrant violation of Section 19 of PMLA, 2002. It is
Signature Not Verified
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Digitally Signed
By:VIKAS ARORA
Signing Date:11.09.2024
18:23:52
evident from the record that the Applicant or next his kin was not provided
with the reasons to arrest the Applicant, for the reasons best known to the
respondent. No Arrest Memo has ever been prepared in regard to his arrest.
The reasons for belief while arresting the Applicant have to be recorded in
writing. However, the arrest has been made in a mechanical manner by way
of a Format based arrest Order and that not even an attempt has been made
to set up the reasons for arrest of the Applicant. The arrest of the Applicant
has been made without taking into account that he had been g ranted interim
bail in the CBI case vide Order dated 03.01.2022 and had been admitted to
regular bail in CBI case vide Order dated 28.02.2023 in the connected
predicate offence. It was also ignored that the Applicant had cooperated with
the investigations and was arrayed as an accused in the Chargesheet without
arrest being made by the CBI.
17. Further ground for seeking regular bail pleaded on behalf of the
Applicant are that no prima facie case is made out against the Applicant.
The entire case of the respondent rests on the statements extracted under
Section 50 of PMLA, 2002 from the Approvers, Witnesses or co-accused
persons, to which there is not a single document which corroborates the
statements of them and there is not a single piece of evidence which points
to the guilt of the Applicant. Moreover, though such statements may be
admissible in evidence but their prohibitive value is extremely weak and
cannot be made a sole basis for reaching any conclusion under Section 45 of
PMLA, 2002. Those Statements under Section 50 of PMLA, 2002 are only
corroboratory in nature and are required to be substantiated with further
evidence. Reliance has been placed on behalf of the Applicant on the
decision in Chandra Prakash Khandelwal vs. Directorate of Enforcement ,
Signature Not Verified
BAIL APPLN. 3322/2023 Page 6 of 21
Digitally Signed
By:VIKAS ARORA
Signing Date:11.09.2024
18:23:52
decided vide Bail Application 2470/2022 by the Co-ordinate Bench of this
Court on 23.02.2023, wherein it had been observed that the weightage of
Section 50 of PMLA, 2002 statement can be seen only at the time of trial.
18. It is further argued that only such property which is derived or
obtained directly or indirectly as a result of criminal activity relating to
scheduled offence can be termed as proceeds of crime . The possession of
unaccounted property acquired by legal means may be actionable for tax
violations, yet cannot be regarded as proceeds of crime unless it constitutes
an offence which is included in the Schedule, as has been observed in the
decision of Anil Vasantrao Deshmukh vs. State of Maharashtra , 2022 SCC
OnLine Bom 3150.
19. The Applicant has further asserted that even on merits , no case is
made out against him as there is no corroborative evidence to substantiate
the allegations made against him.
20. It has been alleged by the respondent that the Applicant used to
collect undue pecuniary advantage from Sameer Mahandru, Managing
Director, M/s Indo Spirits for onward transmission to accused public servant
through Vijay Nair. It is also alleged that the Applicant in collusion with
Sarath Chandra Reddy, Sameer Mahandru and other accused persons,
created a nexus of manufacturer, wholesaler, retailers. PRI gave its L1
wholesale business to M/s Indo Spirits (L1) of Sameer Mahandru, wherein
Sarath Chandra Reddy, Magunta Srinivasulu Reddy along with others were
having financial interests through the Applicant and Prem Rahul Manduri.
Out of 32 retail zones, 9 were controlled by this cartel.
21. It has been further alleged that the Applicant is one of the key
persons in the entire exercise of Excise Policy Scam involving payments of
Signature Not Verified
BAIL APPLN. 3322/2023 Page 7 of 21
Digitally Signed
By:VIKAS ARORA
Signing Date:11.09.2024
18:23:52
huge kickbacks and formation of the biggest cartel of the South Group
represented by the Applicant along with Abhishek Boinpalli and Butchi
Babu.
22. The Applicant is claimed to be a partner of 32.5% in M/s Indo Spirits
which had got an L1 licence. M/s Indo Spirits is a partnership firm of Prem
Rahul and Indospirit Distribution Limited, wherein the Applicant and Prem
Rahul represented the benami investments of K. Kavitha and Magunta
Srinivasulu Reddy and his son Raghav Magunta.
23. It is further the case of the respondent that the Applicant along with
his associates, Abhishek Boinpalli and Buchi Babu on behalf of the South
Group, orchestrated the whole scheme of forming a cartel of the
manufacturers, wholesalers and retail which controlled more than 30% of
the whole liquor business in Delhi.
24. It is also alleged that on paper, the Applicant has invested Rs.
3,40,00,000/- in M/s Indo Spirits, out of which, 1,00,00,000/- was given to
the Applicant on the instructions of K. Kavitha. In exchange of the
kickbacks given by the South Group to Vijay Nair and AAP, M/s Indo
Spirits was made the wholesaler of M13 PRI which is one of the most
profitable L1. The funds of Rs. 3,40,00,000/- which was used to show the
investment in M/s Indo Spirits, is actually claimed to be the proceeds of
crime.
25. Further allegations against the Applicant are that he conducted,
organised and participated in several Meetings to form and shape this cartel.
One such meeting took place in May, 2021 at Gauri Apartments, New Delhi,
wherein he along with his associates Abhishek Boinpalli and Buchi Babu,
met Vijay Nair and others to discuss the retail cartel formation and an
Signature Not Verified
BAIL APPLN. 3322/2023 Page 8 of 21
Digitally Signed
By:VIKAS ARORA
Signing Date:11.09.2024
18:23:52
arrangement was arrived at, wherein ADS Group was supposed to assist the
South Group to set up its business in Delhi. In June, 2021, the Applicant
along with his associates, Abhishek Boinpalli and Buchi Babu arranged the
meeting of Sameer Mahandru with Sarath Chandra Reddy with regards to
investments in liquor business. They all flew in a chartered flight of Sarath
Chandra Reddy from Hyderabad to Delhi, wherein they discussed
investments in M/s Indo Spirits. In September, 2021, PRI had hosted a
dinner at Taj Mansingh, Delhi for successful retail bidders, which was
attended by the Applicant as well.
26. Similar meeting is claimed to have been held in April, 2022, to
discuss the issues of recovering the bribes paid from their business
operations which were faltering.
27. Further, it has been alleged that the Credit Notes of worth of Rs.
4,35,00,000/- to these three L7 firms were issued by M/s Indo Spirits on the
directions of the Applicant.
28. Furthermore, there was more than Rs. 60,00,00,000/- approximately
pertaining to retail zones of Trident Chemphar Pvt. Ltd., Organomix
Ecosytems and Sri Avantika Contractors towards Indo Spirits. This pattern
of outstanding payments is unusual and disproportionately high when
compared to the non-cartel retail zones. According to the statement of
M/s Indo Spirits , this outstanding was not to be followed up, which makes it
evident that this was another way of recoupment .
29. It is claimed that the Applicant was involved in this scam from the
beginning in March, 2021. The Applicant and others had connected with
Vijay Nair and Sameer Mahandru for discussing the business opportunities
in the Excise Policy and about forming a partnership. He is claimed to have
Signature Not Verified
BAIL APPLN. 3322/2023 Page 9 of 21
Digitally Signed
By:VIKAS ARORA
Signing Date:11.09.2024
18:23:52
been involved in the Policy formulation and given inputs to Vijay Nair and
had been a part of the discussions where Vijay Nair proposed favours in the
Policy that was under drafting at that time.
30. Further, M/s Indo Spirits 12% profit margin for the Policy period
stood at Rs. 192,80,00,000/- as provided by the Excise Department of Delhi
vide its Letter dated 23.09.2022. This amount was claimed to be an outcome
of the conspiracy hatched by the Applicant and others as a result of
exchange of kickbacks and favours and were the proceeds of crime . Similar
allegations have been made about various amounts which are claimed to
have been generated as proceeds of crime.
31. The Applicant has denied the entire case of the respondent as a
figment of imagination of the respondent. It is claimed that the Applicant is
not involved in generating or dealing with proceeds of crime and is not
guilty of offence under Sections 3/4 of PMLA, 2002.
32. It is asserted that the Applicant fulfils the twin conditions as
prescribed under Section 45 of PMLA, 2002, for which, reliance has been
placed on the decisions in Ranjitsingh Brahmajeetsingh Sharma vs. State of
Maharashtra & Anr. , (2005) 5 SCC 294 and Vijay Madanlal Choudhary &
Ors. vs. Union of India & Ors. , 2022 SCC OnLine SC 929.
33. It is claimed that the threshold for arrest under Section 19 of PMLA,
2002 is very high and the Applicant has been arrested on 06.03.2023 at
around 09:20 P.M. by the respondent in flagrant violation of Section 19 of
PMLA, 2002. Furthermore, the investigations are still pending qua the other
persons and it will take years for the trial to begin. The Prosecution
Complaint and Supplementary Prosecution Complaints contain 16,576 pages
of relied upon documents. Further two other Supplementary Prosecution
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BAIL APPLN. 3322/2023 Page 10 of 21
Digitally Signed
By:VIKAS ARORA
Signing Date:11.09.2024
18:23:52
Complaints have been filed on 06.04.2023 and 28.04.2023. Owing to the
voluminous nature of evidence, the trial would take years to conclude, for
which, the reliance has been placed on the decisions in State of Kerala vs.
Raneef , (2011) 1 SCC 784 and Sanjay Agarwal vs. Directorate of
Enforcement , decided vide Crl. Appeal 1835/2022 by the Apex Court on
21.10.2022.
34. It is further stated on behalf of the Applicant he satisfies the general
triple test for grant of regular bail as laid down in the case of P.
Chidambram vs. CBI , (2020) 13 SCC 337. In the instant case, there was not
even a hint of any allegation that the Applicant has attempted to influence
any witness . The Applicant has deep roots in the society and is not a flight
risk. The investigations are complete and the Applicant has cooperated and
the joined the investigation.
35. It is stated that the Special Judge while declining the bail to the
Applicant vide Order dated 08.06.2023, has failed to appreciate all the
aforesaid factors. The medical condition of the Applicant and his wife has
also been ignored. The Applicant has claimed that he has lost 15 kgs. of
weight during incarceration of around six months and has recurring fever.
The Applicant’s mother has recently suffered strokes and is in a very high
fragile condition on account of her old age.
36. Therefore, the Applicant has thus made a prayer that he may be
granted bail in the ED case.
37. The Reply has been filed on behalf of the respondent , wherein a
preliminary objection has been taken that the Applicant is not entitled to
grant of bail as he has failed to satisfy the twin conditions as laid down
under Section 45 of PMLA, 2002. He is a highly influential individual and
Signature Not Verified
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Digitally Signed
By:VIKAS ARORA
Signing Date:11.09.2024
18:23:52
is accused of commission of a white collar crime and has the potential to
tamper with the evidences and influence the witnesses.
38. It is submitted that there exists a reasonable apprehension of crucial
evidence being destroyed if the Applicant is enlarged on bail. He is involved
in the commission of grave economic offences and there is ample evidence
on record to link him with the commission of offence of money laundering
and his release on bail is not warranted. Even otherwise, the likelihood of
the Applicant of evading the process of law if enlarged on bail, cannot be
ruled out. While personal liberty is of paramount importance, the same is not
absolute but subject to reasonable restrictions, including the interest of the
State and public. Reliance has been placed on behalf of the respondent on
the decisions in Vijay Madanlal Choudhary , (supra), State of Kerala vs.
Rajesh, (2020) 12 SCC 122 and Rohit Tandon vs. Directorate of
Enforcement , (2018) 11 SCC 46.
39. It is submitted that as per the evidence collected during the course of
investigations, the Applicant is one of the key persons in the entire Excise
Policy Scam involving payment of huge kickbacks amounts from the South
Group to Vijay Nair and the recoupment of the same from the business in
Delhi. The Applicant has a partnership of 32.5% in M/s Indo Spirits which
got L1 licence. He along with other co-accused persons orchestrated the
whole scheme of forming a cartel of the manufacturers, wholesalers and
retail which controlled almost 30% of the entire liquor business in Delhi
alone.
40. The Applicant was involved in formation of cartel of manufacturers,
wholesalers and multiple retail zones. Though on paper, the Applicant is
shown as a partner of M/s Indo Spirits, but he represented the interest of K.
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Digitally Signed
By:VIKAS ARORA
Signing Date:11.09.2024
18:23:52
Kavitha as her proxy, which is established by the extensive evidence that has
been collected during the investigations.
41. It has been explained that the Applicant was deeply involved in the
drafting and formulation of the Excise Policy 2021-22 in conspiracy with
Vijay Nair and had given inputs to Vijay Nair and being a part of the
discussions where Vijay Nair had proposed favours in the Policy that was
under drafting at that time.
42. It is claimed that Manish Sisodia had called C. Arvind to the
residence of Arvind Kejriwal on 18.03.2021 and handed over a document
containing the draft of GoM Report on the basis of which he got typed the
Document dated 19.03.2021 that was retrieved from a computer from the
office Conference Room of Manish Sisodia. The draft GoM Report prior to
19.03.2021 contained the wholesale profit margin to be only 5%, which in
the subsequent document typed on 19.03.2021, had been enhanced to 12%
profit margin. The change of profit margin in the GoM Report from 5% to
12% overlapped with the stay of the members/representatives of the South
Group in Oberoi Hotel, New Delhi from 14.03.2021 till 17.03.2021 during
which period, a print was taken at hotel and a document was handed over by
Manish Sisodia which clearly proves the collusion of the Applicant and
other representatives/members of the South Group to increase the profit
margin of wholesalers from 5% to 12%. Out of this 12%, 6% profit was
earmarked as kickbacks to be given to AAP. On an average, the total annual
sale of Delhi was Rs. 4000-5000 crores. The three biggest L1 wholesalers
i.e., Indo Spirits, Brindco and Mahadev Liquors, controlled approximately
Rs. 3,500/- crores. 12% of Rs. 3,500/- crores which is about 420 crores.
Therefore, Rs. 210/- crores i.e., 6% of the profit was supposed to be
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By:VIKAS ARORA
Signing Date:11.09.2024
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collected by the AAP. All L1s were supposed to give 6% kickback money
in principal, but major focus was only on the top three wholesalers.
43. The respondent has given the details of various transactions to explain
that the Applicant first transferred Rs. 5,00,00,000/- to M/s Creative
Developers for purchase of property. Though it was neither registered nor
any Sale Agreement was signed at the time of transferring of funds by the
Applicant to Creative Developers which makes it evident that this was only
a benami transaction. Various details of the transactions have been
explained vide which the proceeds of crime have been utilised.
44. On merits , all the averments made in the present petition are denied.
45. It is submitted that considering the active involvement of the
Applicant with the South Group in the formulation of the Excise Policy and
his active role in conspiracy of kickbacks, payments of the same and its
recoupment, the Applicant is not entitled to grant of bail.
46. Learned Senior Advocate on behalf of the Applicant has argued in
detail and has also filed the Written Submissions that while it has been
claimed that the Applicant had an active role in cartel formation, but there is
no such evidence as the investment of Rs. 3.4 crores into M/s Indo Spirits
was sourced through legal channels and from different entities as loan.
There is no evidence that the investment was financed by K. Kavitha or at
her behest. The only allegation is qua Rs. 1,00,00,000/- given by V.
Srinivas on the instructions of K. Kavitha, but it is admitted to be a loan
which has been repaid on 10.12.2021.
47. It is also submitted that the statements made by Sameer Mahandru
have been retracted. Moreover, Sameer Mahandru is an accomplice and
hence, his statements are not reliable.
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Digitally Signed
By:VIKAS ARORA
Signing Date:11.09.2024
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48. Similarly, statements given by Butchi Babu for the same reason
cannot be relied upon as he is also an accused in scheduled offence. No
statement/evidence of any transaction/payment of money from the Applicant
to K. Kavitha, has been produced. It is submitted that the cartel formation at
the most was a violation of the Policy, but it was a business cartel.
49. Further, it is argued on behalf of the Applicant that there is no
evidence whatsoever to establish the role of the Applicant in formulation of
Policy. There is no recovery of Policy/GoM Report from the Applicant or
from his mobile phone. The stay at Oberoi Hotel during the same period
when changes were made in GoM Report, does not prove the Applicant’s
role in formation of Policy. Only Statements under Section 50 of PMLA,
2002 are there which are not only in material contradiction but also are of
the accomplices who are accused in the present case and the same are not
reliable.
50. Insofar as the allegations of payment of advance kickbacks are
concerned, there is no evidence of the involvement of the Applicant in
payment of Rs. 100 crores as bribe. There is no statement of hawala
operator to whom the cash was allegedly handed over in Delhi.
51. It is also submitted that Butchi Babu’s Statement dated 23.02.2023 is
vague and the Applicant has retracted from his Statement dated 18.09.2022.
52. Further, Dinesh Arora has turned an approver in the CBI case and has
given his Statement dated 01.10.2022, but the same does not mention the
name of the Applicant for his involvement in payment of advance
kickbacks.
53. The other allegation of the recoupment of kickbacks is also not
supported by any direct evidence. The sum of Rs. 25.5 crores had been
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By:VIKAS ARORA
Signing Date:11.09.2024
18:23:52
transferred directly in the account of the Applicant, out of which, Rs. 6.68
crores had been transferred from M/s Indo Spirits. It is claimed that all the
transactions were through banking channels and no cash transaction took
place. The money used was for the personal use and the Applicant’s share of
expenses for M/s Indo Spirits. There is no evidence of the amount having
been forwarded by the Applicant to K. Kavitha directly or indirectly.
54. It is thus, submitted that the Applicant not only establishes the twin
conditions contained in Section 45 of PMLA, 2002 but also satisfies the
triple test.
55. Therefore, it is submitted that the Applicant is entitled to bail.
56. Learned Special Counsel on behalf of the respondent has
vehemently opposed the present petition. The arguments addressed on
behalf of the respondent are essentially on the same lines as contain in its
Reply.
57. It has been re-emphasised that the Applicant was actively involved in
the conspiracy for cartel formation and has played an active role in Policy
formation and also participated in conspiracy of kickbacks, payments of the
same and its recoupment. Detailed transactions have been recorded in the
ED case about the handling of the proceeds of crime by the Applicant.
58. The twin conditions as laid down in Section 45 of PMLA, 2002 are,
therefore, not satisfied.
59. Furthermore, the offence of money laundering is an independent
offence and grant of bail in predicate offence has no bearing to the present
proceeding.
60. Reliance has been placed on behalf of the respondent on the decisions
in Vijay Madanlal Choudhary , (supra), Pavana Dibbur vs. Enforcement
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Directorate , 2023 SCC OnLine SC 1586, ED vs. Aditya Tripathi, decided
vide Criminal Appeal No. 1401/2023 by the Apex Court on 12.05.2023, P.
Rajendran vs. Directorate of Enforcement , decided vide Criminal Original
Petition No. 19880/2023 by the Madras High Court on 14.09.2022, J. Sekar
vs. Union of India & Ors. , 2018 SCC OnLine Del 6253, Radha Mohan
Lakhotia vs. Directorate of Enforcement , 2010 SCC OnLine Bom 1116 and
Dr. Manik Bhattacharaya vs. Ramesh Malik & Ors. , decided vide SLP (C)
16325/2022.
61. In the end, it is argued that the delay cannot be the sole ground to
grant bail even after the Court is of the view that the person is guilty of the
offence of money laundering.
62. Reliance has also been placed on the decisions in Tarun Kumar vs.
Enforcement Directorate , 2023 SCC OnLine SC 1486, Satyender Kumar
Jain vs. Directorate of Enforcement decided vide SLP (Crl) 6561/2023,
State of Bihar & Anr. vs. Amit Kumar , (2017) 13 SCC 751 and Religare
Finvest Ltd. vs. State of NCT of Delhi & Anr. , decided vide CRL.M.C.
796/2021 by the Co-ordinate Bench of this Court on 14.06.2021.
63. Submissions heard and record as well as judgments perused.
64. It is admitted by the parties that the CBI case was registered on
17.08.2022 under Section 120B of the Indian Penal Code, 1860 read with
Sections 7/7A/8 of Prevention of Corruption Act, 1988 at Police Station
CBI, ACB, New Delhi against Manish Sisodia and others, wherein the
Applicant was named as an accused, but the Chargesheet in the CBI case
(predicate offence) was filed without the arrest of the Applicant and he has
been admitted to bail in the CBI case vide Order dated 28.02.2023
65. Further, the ED case was registered after five days of registration of
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the CBI case on 22.08.2022 on the allegations that the Applicant was
actively involved in the conspiracy of drafting the Delhi Excise Policy 2021-
22 and was also actively involved in forming the cartel and also participated
in conspiracy of kickbacks, payments of the same and its recoupment and
also that he had undertaken various transactions in regard to the transactions
related to proceeds of crime. The evidence so collected by the respondent is
in the nature of statements of the accomplices, witnesses and co-accused
persons, many of which have been retracted.
66. It is pertinent to observe that the Prosecution Complaint has already
been filed against the Applicant, in which he has been summoned. The
investigations qua the Applicant are complete.
67. Moreover, the Applicant is an experienced professional with various
educational qualifications and had volunteered to work with Organisations
such as UNICEF Canada to educate children about UNICEF’s work for
children across the world, as well as with Afghans4tomorrow to help
improve the business skills of students at the Kabul Education University.
The Applicant despite being lodged in Tihar Jail No.4 as an under-trial
prisoner, has volunteered as Horticulture Sahayak . The Applicant has deep
roots in the society and is not a flight risk and has business and
professions which are based in India and he is not likely to abscond from
the country.
68. As noted in Manish Sisodia v. Directorate of Enforcement 2024
INSC, there is no possibility of tampering of evidence by the Applicant if the
Applicant is granted bail as the case is primarily dependent on documentary
evidence which is already seized by the prosecution. Similarly, the
apprehension regarding influencing witnesses and that of being a flight risk
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can be diffused by imposing stringent conditions while granting bail.
Therefore, the conditions of triple test are duly satisfied by the Applicant.
69. It is admitted that the Applicant has been behind bars since
06.03.2023, there are around 69,000 pages of documents involved in both
CBI and ED matters. Moreover, there are 493 witnesses, who have to be
examined on behalf of the prosecution. In the same case, the other accused
persons, namely, Manish Sisodia, K.Kavitha, and Vijay Nair have already
been admitted to bail in similar circumstances.
70. In the case of Manish Sisodia (supra) the Hon’ble Supreme Court
observed that prolonged incarceration before being pronounced guilty of an
offence should not be permitted to become punishment without trial. It was
further observed that fundamental right of liberty provided under Article 21
of the Constitution is superior to statutory restrictions and reiterated the
principle that “ bail is the rule and refusal is an exception” . The Apex Court
reiterated observation in Gudikanti Narasimhulu v. Public Prosecutor, High
Court of A.P. (1978) 1 SCC 240 that the objective to keep a person in
judicial custody pending trial or disposal of an appeal is to secure their
attendance at trial. The same observations have been reiterated by the Apex
Court while granting bail to similarly placed accused under the Complaint
in PMLA case in Kalvakuntla Kavitha v. Directorate of Enforcement 2024
INSC 632 and Vijay Nair v. Directorate of Enforcement in SLP (Crl.) No.
22137/2024 vide order dated 02.09.2024.
71. Considering the above, the Applicant is admitted to bail on the
following terms and conditions: -
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a. The Applicant is directed to be released forthwith on bail in
connection with the ECIR No. ECIR/HIU-II/14/2022 dated
22.08.2022, registered by the Directorate of Enforcement, subject
to furnishing a personal bond in the sum of Rs.10,00,000/- with
two sureties of the like amount; to the satisfaction of the learned
Special Judge/Trial Court.
b. The Applicant shall appear before the Court as and when the
matter is taken up for hearing.
c. The Applicant shall provide mobile number to the IO concerned
which shall be kept in working condition at all times and he shall not
change the mobile number, without prior intimate to the
Investigating Officer concerned.
d. The Applicant shall not change his residential address and in case
of change of the residential address, the same shall be intimated to
this Court, by way of an affidavit.
e. The Applicant shall surrender his passport with the learned
Special Court;
f. The Applicant shall report to the Investigating Officer on every
Monday and Thursday between 10:00 to 11:00 AM;
g. The Applicant shall not indulge in any criminal activity and shall
not communicate with or come in contact with the witnesses.
h. The Applicant shall not leave the country, without permission of
this Court.
i. The Applicant shall not make any attempt to tamper with the
evidence or influence the witnesses;
72. Any observation made herein is without prejudice to the trial.
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73. The petition along with pending applications are disposed of.
74. The copy of this Order be communicated to the concerned Jail
Superintendent as well as to the learned Trial Court.
(NEENA BANSAL KRISHNA)
JUDGE
SEPTEMBER 11, 2024
S.Sharma
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