Delhi special court denies bail to Manish Sisodia in ED money laundering case

Prosecution was able to show "genuine and prima facie" case against Sisodia, court held, rejecting bail.

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BAIL was denied to former Deputy Chief Minister of the Government of National Capital Territory of Delhi (GNCTD), politician, journalist and former social activist Manish Sisodia, in judicial custody as an accused in the money laundering case registered by the Enforcement Directorate (ED) in the alleged Delhi excise policy scam, by a Prevention of Corruption Act special court in Delhi.

"… [T]he prosecution has … been able to show a genuine and prima facie case for involvement of the applicant in commission of the alleged offence of money laundering," held Special Judge M.K. Nagpal of the Rouse Avenue Court, Delhi disposing of Sisodia's plea for regular bail in the ED case alleging the commission of the offence of money laundering under Section 3 of the PMLA.

The case against Sisodia is based on alleged irregularities in the framing and implementation of the now-retracted 2021–22 Delhi excise policy. It is claimed that the policy gave certain vendors applying for liquor licences improper financial favours, resulting in losses to the exchequer, and kickbacks were allegedly received in exchange for those favours.

The Enforcement Case Information Report (ECIR) of the ED was based on a previous case registered by the Central Bureau of Investigation (CBI) in August 2022 under Section 7 (offence related to a public servant being bribed) of the Prevention of Corruption Act, and Section 477A (falsification of accounts)  read with Section 120B (criminal conspiracy) of the Indian Penal Code.

Sisodia was arrested by the Central Bureau of Investigation on February 26 after an eight-hour long interrogation at the CBI Headquarter in Delhi. In total, Sisodia has undergone custody of around 60 days.

Judge Nagpal had rejected Sisodia's bail plea in the CBI case on March 31 on the ground that releasing him at that stage could hamper the ongoing investigation, though he was not deemed a flight risk. Taking the conclusions drawn in that decision as support for denying bail in the present case, judge Nagpal writes that "this court was of the prima facie view that the possibility of destruction of or tampering with the evidence by him could not be ruled out."

The possibility of evidence tampering by Sisodia was rooted in the allegation levelled against him of not producing three of four mobile phones he is alleged to have possessed "as the same were expected to contain some vital piece of evidence … regarding his involvement therein".

On the material placed by the ED on record, the court said, "[I]t clearly emerges out from the evidence placed before the court that the applicant herein was connected with generation of proceeds of crime of around Rs. 100 crores in the form of advance kickbacks…"

According to the court, the said amount was used for extending undue pecuniary benefits to conspirators and members of the liquor cartel, which was permitted to be formed by manipulation of provisions of the Delhi excise policy and by insertion of favourable clauses for the benefit of conspirators.

The court also noted that some evidence is also "alleged to have surfaced during investigation" to show that some part of the alleged kickback received was spent on the Aam Aadmi Party's election campaign for the Goa Assembly elections in 2022, and some fake invoices are alleged to have been created as a cover up for the cash amounts transferred through hawala channels.

Despite two cases running parallelly against Sisodia, the court held that it would not amount to a violation of the principle of double jeopardy encapsulated in Article 20(2) (Protection in respect of conviction for offences) of the Constitution of India and Section 26 (provision as to offences punishable under two or more enactments) of the General Clauses Act.

The court was in agreement with the ED's submission that "an accused can be prosecuted on similar facts in two different cases and for two different offences if the ingredients of the offences of these two cases, as disclosed by the facts and circumstances alleged against him, are different."

On Tuesday, the CBI filed a supplementary chargesheet, naming Sisodia as an accused for the first time in a chargesheet. Sisodia and three others have been charged under Sections 420 (cheating and dishonestly inducing delivery of property) and 120B (punishment of criminal conspiracy) of the Indian Penal Code, and Sections 7 (offence relating to public servant being bribed), 7A (taking undue advantage to influence public servant by corrupt or illegal means or by exercise of personal influence), 8 (offence relating to bribing of a public servant) and 12 (punishment for abetment of offences) of the Prevention of Corruption Act.

Even if "the rigors and restrictions contained U/S 45 of the PMLA (offences to be cognisable and non-bailable) are viewed and construed reasonably, the prosecution has still been able to show a genuine and prima facie case", the court held.

As per the 'twin test' under Section 45 (offences to be cognisable and non-bailable), an accused can only be released on bail or on their own bond if the following two conditions are satisfied:

"(i) The public prosecutor has been given an opportunity to oppose the application for such release; and

(ii) Where the public prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail."

The conclusion eventually drawn by judge Nagpal is that in view of the "serious nature of allegations made and role played by the applicant in above criminal conspiracy, his connection with the activities relating to generation or acquisition and use etc. of the above proceeds of crime within the meaning of Section 3 of the PMLA and the oral and documentary evidence collected in support of the same", Sisodia's case is not fit for the grant of bail.

"However, nothing contained in this order shall tantamount to expression of opinion on merits of the case," the order adds at the end.

Click here to view the court's full order in Manish Sisodia versus Directorate of Enforcement, Bail Matter No. 62/2023, Filing No. 248/2023.

(With inputs from Archita Anish, an undergraduate law student at Symbiosis Law School, Pune and an intern with The Leaflet.)