Introduction
The Apex Court, recently in Manish Sisodia v. Central Bureau of Investigation[i], denied bail to the former Deputy Chief Minister of the National Capital Territory of Delhi, Manish Sisodia. He is currently being investigated by both the Central Bureau of Investigation (‘CBI’) and the Directorate of Enforcement (‘ED’) on charges of corruption and money laundering, respectively. The current investigations pertain to the liquor excise policy enacted by the government of Delhi in 2021 that was later withdrawn.
The concerned investigation agencies are alleging that the said policies were used to grant unfair advantage to certain private entities at the cost of the government exchequer and consumers, by providing windfall gains to liquor wholesalers in return for bribes.
Brief Facts of the Case
The present appeals were filed seeking bail in RC registered by CBI dated 17.08.2022 under the Prevention of Corruption Act, 1988 (‘PCA’) and the Indian Penal Code, 1860 (‘IPC’) and ECIR dated 22.08.2022 filled by the ED under Prevention of Money Laundering Act, 2002 (‘PMLA’).
The CBI filed two chargesheets dated 24.11.2022 and 25.04.2023 alleging offences under ss. 7, 7A, 8, and 12 of the PCA and ss. 120B, 201, and 420 of the IPC. Simultaneously, the ED filed a criminal complaint dated 04.05.2023 for offences under ss. 3 and 4 of the PMLA.
The appellant has been in custody under the CBI's RC since 25.04.2023 and the ED's ECIR since 09.03.2023.
The CBI chargesheet alleges that the policy enhanced the commission to wholesale distributors to facilitate and get kickbacks and bribes from them. Further, an ecosystem was created to ensure the unjust enrichment of the wholesale distributors at the expense of the government exchequer or the consumer. The illegal income (proceeds of crime, as per the ED) was partly recycled and returned in the form of bribes.
It has been further alleged that a confidant of the appellant had been engaging with a few (named) industry stakeholders to frame the policy in a manner more beneficial to their interests.
Further, the CBI has submitted that an excess amount of 7% commission/fee to the extent of Rs. 380 crores constituted an offence under the PCA, relating to public servants being bribed. As such the new policy was meant to give windfall gains to a select few wholesale distributors who, in turn, agreed to give kickbacks and bribes.
Held
While bail was denied in the present case, the Court, relied on Vijay Madanlal Choudhary and Ors. v. Union of India and Ors.[ii], noted that the alleged payment of Rs. 2.20 crores as a bribe to the appellant is not a charge or allegation in the chargesheet filed by the CBI and as such cannot be accepted to be ‘proceeds of crime’ under the PMLA. Further, on ED’s contention that the generation of proceeds of crime is itself ‘possession’ or ‘use’ of the ‘proceeds of crime’, the Court held that the said contention appears to be unclear and not free from doubt in view of the rationale in the above-mentioned judgment.
Further on ED’s allegation of involvement of the appellant in the direct or indirect transfer of Rs. 45 crores to the Aam Aadmi Party (‘AAP’) for the Goa election, the Court concluded that there was a lack of clarity on this aspect.
The Court further noted that offences of conspiracy and abetment under the IPC are not applicable to offences under the PMLA.
Regarding the destruction of mobile phones by the appellant, the Court held that such an allegation would be decided post-recording of evidence and would not be a weighty factor while deciding the question of bail, given the period of detention undergone by the appellant.
Apart from the above findings, the Court held that charges under s. 3 of the PMLAs have been tentatively supported by material and evidence and were free from perceptible legal challenges. In view of the same, the prayer for the grant of bail was rejected.
On the issue of prolonged periods of incarceration, the Court observed that s. 436A of the Criminal Procedure Code, 1973 (‘CrPC’) should not be considered a mandate. Where the prosecution gets protracted despite assurances from the prosecution and it is evident that the case will not be decided in the foreseeable future, the prayer for bail may be meritorious. Even though the prosecution may pertain to economic offences, it would not be proper to equate those with offences punishable with death, imprisonment for life or other such grave offences. The right to bail in cases of delay, coupled with incarceration for a prolonged period, depending on the nature of the allegations, should be read into s. 439 of the CrPC and s. 45 of the PMLA.
In light of the above and assurances given at the Bar on behalf of the prosecution that the trial would be completed in the next six to eight months, the appellant was granted the liberty to move a fresh application in the next three months if there is a change in circumstances or trial gets protracted and ’proceeds at a snail’s pace’.
The Court further directed that if an application is filed in the above circumstances, the same would be considered by the trial court on merits without being influenced by earlier judgments.
The appellant was also granted the liberty to file an interim bail application in case of ill-health and medical emergency due to illness of his wife which would be examined on its own merits.
Analysis
The Apex Court judgment seems self-contradictory so far as on one hand it stipulates that bail cannot be granted to the appellant because of one charge under PMLA being tentatively established. While, on the other hand, it distinguishes the economic offence from offences punishable with death, life imprisonment, etc., and reiterates that no one should be incarcerated where the trial is being prolonged. Further, the Court seems to have imposed an astonishing condition by holding that if the appellant is incarcerated for three more months, then he may approach the trial court for bail. The Apex Court has heavily relied on the oral submission of the investigating agencies that the trial would be concluded in the next six to eight months, which seems to be a herculean task given the mammoth number of witnesses and other documents. The CBI and the ED have to examine a total of 456 witnesses based on documents running into 56,000 pages. This decision by the Apex Court seems to violate the principle of presumption of innocence and shows a lack of judicial empathy and pragmatism.
End Notes
[i] 2023 SCC OnLine SC 1393
[ii] (2022) SCC OnLine 929
Authored by Huzaifa Salim, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion.
For more information, please refer to the court ruling on our website titled: Delhi High Court Denies Bail to Manish Sisodia: Legal Analysis