Excise policy scam: HC denies bail to Sisodia in money laundering case, says allegations very serious

New Delhi: In a fresh setback to senior AAP leader Manish Sisodia, the Delhi High Court on Monday declined him bail in a money laundering case linked to alleged irregularities in the city government's excise policy, saying the charges against him were "very serious in nature".

Sisodia was arrested in connection with the case on March 9.

This matter has to be visited with a "different approach" as a deep rooted conspiracy involving huge loss of public funds has been alleged, the court observed while rejecting his bail application.

Justice Dinesh Kumar Sharma said the former deputy chief minister of Delhi has not been able to pass the "triple test" for bail under the anti-money laundering law in which the court has to see whether an accused is likely to flee from justice, tamper with evidence or influence witnesses.

Besides rejecting Sisodia's plea, the Delhi High Court also refused bail to businessmen Abhishek Boinpally, Benoy Babu and Vijay Nair, who are his co-accused in the money laundering case lodged by the Enforcement Directorate (ED).

"The present case arises out of an alleged conspiracy wherein the government framed an excise policy with a malafide intention to recoup the kickbacks received in advance from certain individuals and to further generate ill money from the liquor trade.

"There are witnesses and witnesses on record to show that certain outsiders were actively participating from the stage of drafting and formulation of the policy," the high court said in the 56-page judgment on Sisodia's bail plea.

It said the statements of the witnesses clearly indicate some "extraneous" factors were working since the time of conceptualisation, formulation and drafting of the excise policy.

The allegation regarding generation of the e-mails in support of the excise policy also raises the "red flag that everything was not being done in a transparent and bonafide manner", the high court said.

"This court at this stage cannot go into the probative value of the witnesses nor can it meticulously examine those facts. The involvement of the third parties in the formulating and drafting of the policy certainly points at mens rea (criminal intent)," it said.

Justice Sharma said he has gone through the order of the special court which had earlier dismissed Sisodia's bail petition, and he does not find any infirmity or illegality in the decision.

The special court has passed a reasoned order on the basis of material available on record, Justice Sharma said, adding "The petitioner (Sisodia) is not entitled to bail and the petition is accordingly dismissed."

He said the high court was fully conscious of the fact that personal liberty is a "sacrosanct right and pre-trial detention cannot be taken as a punitive measure".

However, the court has to strike a balance between the interest of an individual and the interest of the society at large, the judge said.

Sisodia, who also held the excise portfolio among many that he handled as the deputy chief minister, was first arrested by the CBI on February 26 for his alleged role in the scam, and has been in custody since then. He resigned from the Delhi Cabinet on February 28.

The high court has already denied him bail in the corruption case registered by the CBI in connection with the alleged scam on May 30. The ED case stems from the FIR registered by the CBI.

He was arrested on March 9 in the case lodged by the ED and is currently in judicial custody.

The high court said the facts of this case are "unique in nature" and referred to the accusation that he as the deputy chief minister and excise minister framed the excise policy at the instance of some "outsiders", who were to become the beneficiaries in the future.

"The functioning of the government is such that generally it is done in a discreet manner. The outside public has no means to have any access while policies are framed. The policies are framed under the supervision of the political heads by the senior bureaucrats.

"The senior bureaucrats in the present case are saying that no discussion took place on the material points like the increase of margin from 5 per cent to 12 per cent," it said.

The court noted the ED has alleged that the excise policy was framed as a "special purpose vehicle" to generate the proceeds of crime and, with the same motive, M/s Indo spirits was also constituted for regular generation of proceeds of crime.

"There may not be any recovery of the proceeds of crime. However, if the excise policy has been framed for the purpose of generation of proceeds of crime or M/s Indo Spirits has been constituted in a manner to continuously generate the proceeds of crime, then all the stakeholders instrumental in framing, drafting and formulating of excise policy are covered under Section 3 (offence of money laundering) of PMLA as their acts and conduct amount to involvement in any process of activity connected with the proceeds of crime," it said.

The ED has alleged that Sisodia got Indo Spirits formed as a special purpose vehicle for recoupment of the kickbacks.

The high court had on June 2 reserved its order on the bail plea of Sisodia, who sought bail on various grounds including the deteriorating health of his wife who is suffering from multiple sclerosis.

According to the CBI and ED, which are probing the cases against Sisodia, irregularities were committed while modifying the excise policy and undue favours were extended to licence holders.

Sisodia had challenged the March 31 order of the trial court, which had dismissed his bail plea saying he was prima facie the "architect" of the alleged scam.

The Delhi government implemented the excise policy on November 17, 2021 but scrapped it at the end of September 2022 amid allegations of corruption.

On May 30, the high court dismissed the bail plea of Sisodia in the excise policy scam being probed by the CBI, saying he could influence witnesses, who are mostly public servants, and the allegations against him are very serious in nature.