# CASE DETAILS MANISH SISODIA v. CENTRAL BUREAU OF INVESTIGATION

- **Citation:** 2023 INSC 956
- **Court:** Supreme Court of India
- **Decided:** 2023-10-30
- **Case number:** Criminal Appeal No. 3352 of 2023
- **Bench:** Sanjiv Khanna, S.V.N. Bhatti
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/case-details-manish-sisodia-v-central-bureau-of-investigation-36869
- **Pages:** 33

## Headnote

Issue for consideration: The two appeals are fi led by the appellantformer Deputy Chief Minister of Delhi seeking bail in the prosecutions
arising from a case registered by the CBI under the Prevention of Corruption
Act, 1988 and the Penal Code, 1860; and enforcement case fi led by the
Directorate of Enforcement, under the Prevention of Money Laundering
Act, 2002.
Prevention of Money Laundering Act, 2002 - s.45 - Requirement
for grant of bail under:
Held: Referring to s.45 of the PML Act, in Vijay Madanlal Choudhary
it was held that provision does not require that to grant bail, the court must
arrive at a positive fi nding that the applicant has not committed an off ence
under the PML Act - Section 45 must be construed reasonably as the intent
of the legislature cannot be read as requiring the court to examine the issue
threadbare and in detail to pronounce whether an accused is guilty or is
entitled to acquittal - Further, an order on an application for bail is passed
much before the end of trial and sometimes even before commencement of
trial - Lastly, it is trite, that for the purpose of considering an application
for bail, although detailed reasons are not necessary to be assigned, and,
therefore, the evidence need not be weighed meticulously, a tentative fi nding
should be recorded on the basis of broad probabilities - The order granting
bail must demonstrate application of mind at least in serious cases where
the applicant has been granted or denied bail - The fi ndings recorded by the
Court for grant or refusing bail being tentative, will not have any bearing
on the merits of the case, and the trial court would proceed and decide the
481
case on the basis of evidence produced during trial without in any manner
being prejudiced thereby. [Para 8]
Prevention of Money Laundering Act, 2002 - s.3 - Contours of:
Held: On dissection of the main part of s.3, it is held that it postulates
three 'p's, namely, the person, the process or activity, and the product - The
process or activity consists of six parts- concealment, possession, acquisition,
use, projecting or claiming the proceeds of crime as untainted property - The
product, that is, the proceeds of the crime, has been defi ned in Section 2(u)
of the PML Act, as a property derived or obtained directly or indirectly by
a person as a result of criminal activity relating to a scheduled off ence or
the value of such property - As far as 'person' is concerned, it means those
who directly or indirectly attempt to indulge; those who knowingly assist, or
those who are knowingly a party, or those who are actually involved - On
the above interpretation, this court held in Y. Balaji v. Karthik Desari and
Another that the off ence u/s. 3 of the PML Act includes both the persons
who commit the predicate or schedule off ence and third party launderers.
[Para 16]
Prevention of Money Laundering Act, 2002 - Prevention of
Corruption Act, 1988 - Bail sought by the appellant:
Held: There is one clear ground or charge in the complaint fi led under
the PML Act, which is free from perceptible legal challenge and the facts
as alleged are tentatively supported by material and evidence - The facts as
alleged, which it is stated establish an off ence u/s. 3 of the PML Act and the
PoC Act., These are: (1) In a period of about ten months, during which the
new excise policy was in operation, the wholesale distributors had earned
Rs. 581,00,00,000 (rupees fi ve hundred eighty one crores only) as the fi xed
fee; (2) The one time licence fee collected from 14 wholesale distributors
was about Rs.70,00,00,000 (rupees seventy crores only); (3) Under the old
policy 5% commission was payable to the wholesale distributors/licensees;
(4) Under the old policy 5% commission was payable to the wholesale
distributors/licensees; (5) The diff erence between the 12%; minus 5%
of the wholesale profi t margin plus Rs.70,00,00,000/-; it was submitted,
would constitute proceeds of crime, an off ence punishable under the PM

## Text

_Characters 0–39,703 of 70,264. This is a partial read: ask again with offset=39703 for what follows._

[2023] 15 S.C.R. 480 : 2023 INSC 956
480
CASE DETAILS
MANISH SISODIA
v.
CENTRAL BUREAU OF INVESTIGATION
(Criminal Appeal No(s). 3352 of 2023)
OCTOBER 30, 2023
[SANJIV KHANNA AND S.V.N. BHATTI, JJ.]
HEADNOTES
Issue for consideration: The two appeals are fi led by the appellantformer Deputy Chief Minister of Delhi seeking bail in the prosecutions
arising from a case registered by the CBI under the Prevention of Corruption
Act, 1988 and the Penal Code, 1860; and enforcement case fi led by the
Directorate of Enforcement, under the Prevention of Money Laundering
Act, 2002.
Prevention of Money Laundering Act, 2002 - s.45 - Requirement
for grant of bail under:
Held: Referring to s.45 of the PML Act, in Vijay Madanlal Choudhary
it was held that provision does not require that to grant bail, the court must
arrive at a positive fi nding that the applicant has not committed an off ence
under the PML Act - Section 45 must be construed reasonably as the intent
of the legislature cannot be read as requiring the court to examine the issue
threadbare and in detail to pronounce whether an accused is guilty or is
entitled to acquittal - Further, an order on an application for bail is passed
much before the end of trial and sometimes even before commencement of
trial - Lastly, it is trite, that for the purpose of considering an application
for bail, although detailed reasons are not necessary to be assigned, and,
therefore, the evidence need not be weighed meticulously, a tentative fi nding
should be recorded on the basis of broad probabilities - The order granting
bail must demonstrate application of mind at least in serious cases where
the applicant has been granted or denied bail - The fi ndings recorded by the
Court for grant or refusing bail being tentative, will not have any bearing
on the merits of the case, and the trial court would proceed and decide the
481
case on the basis of evidence produced during trial without in any manner
being prejudiced thereby. [Para 8]
Prevention of Money Laundering Act, 2002 - s.3 - Contours of:
Held: On dissection of the main part of s.3, it is held that it postulates
three 'p's, namely, the person, the process or activity, and the product - The
process or activity consists of six parts- concealment, possession, acquisition,
use, projecting or claiming the proceeds of crime as untainted property - The
product, that is, the proceeds of the crime, has been defi ned in Section 2(u)
of the PML Act, as a property derived or obtained directly or indirectly by
a person as a result of criminal activity relating to a scheduled off ence or
the value of such property - As far as 'person' is concerned, it means those
who directly or indirectly attempt to indulge; those who knowingly assist, or
those who are knowingly a party, or those who are actually involved - On
the above interpretation, this court held in Y. Balaji v. Karthik Desari and
Another that the off ence u/s. 3 of the PML Act includes both the persons
who commit the predicate or schedule off ence and third party launderers.
[Para 16]
Prevention of Money Laundering Act, 2002 - Prevention of
Corruption Act, 1988 - Bail sought by the appellant:
Held: There is one clear ground or charge in the complaint fi led under
the PML Act, which is free from perceptible legal challenge and the facts
as alleged are tentatively supported by material and evidence - The facts as
alleged, which it is stated establish an off ence u/s. 3 of the PML Act and the
PoC Act., These are: (1) In a period of about ten months, during which the
new excise policy was in operation, the wholesale distributors had earned
Rs. 581,00,00,000 (rupees fi ve hundred eighty one crores only) as the fi xed
fee; (2) The one time licence fee collected from 14 wholesale distributors
was about Rs.70,00,00,000 (rupees seventy crores only); (3) Under the old
policy 5% commission was payable to the wholesale distributors/licensees;
(4) Under the old policy 5% commission was payable to the wholesale
distributors/licensees; (5) The diff erence between the 12%; minus 5%
of the wholesale profi t margin plus Rs.70,00,00,000/-; it was submitted,
would constitute proceeds of crime, an off ence punishable under the PML
Act - The proceeds of crime were acquired, used and were in possession
of the wholesale distributors who have unlawfully benefi tted from illegal
MANISH SISODIA v. CENTRAL BUREAU OF
INVESTIGATION
482
SUPREME COURT REPORTS
[2023] 15 S.C.R.
gain at the expense of the government exchequer and the consumers/
buyers - Charge-sheet fi led by the CBI also alleged, inter-alia, that existing
policy was changed to facilitate and get kickbacks and bribes from the
wholesale distributors - The policy was framed to the desire and satisfaction
of the liquor group - The commission/fee earlier fi xed at minimum 5%
was enhanced to fi xed fee at 12% payable to wholesale distributor - The
appellant was aware that three liquor manufacturer have 85% share in the
liquor market - Policy favoured and promoted cartelisation - The excess
amount of 7% commission/fee earned by the wholesale distributors of
Rs.338,00,00,000/- (rupees three hundred thirty eight crores only) constitute
an off ence as defi ned u/s. 7 of the PoC Act, relating to a public servant being
bribed. (As per the DoE, these are proceeds of crime) - This amount was
earned by the wholesale distributors in a span of ten months - This fi gure
cannot be disputed or challenged - Therefore, the Court not inclined to give
bail at this stage. [Paras 21, 24 and 25]
Constitution of India - Art.21 - Detention or jail before being
pronounced guilty of an off ence should not become punishment without
trial:
Held: If the trial gets protracted despite assurances of the prosecution,
and it is clear that case will not be decided within a foreseeable time, the
prayer for bail may be meritorious - While the prosecution may pertain to
an economic off ence, yet it may not be proper to equate these cases with
those punishable with death, imprisonment for life, ten years or more like
off ences under the Narcotic Drugs and Psychotropic Substances Act, 1985,
murder, cases of rape, dacoity, kidnaping for ransom mass violence, etc. -
Neither is this a case where 100/1000s of depositors have been defrauded
- The allegations have to be established and proven - The right to bail in
cases of delay, coupled with incarceration for a long period, depending on
the nature of the allegations, should be read into s.439 of the Code and s.45
of the PML Act - The reason is that the constitutional mandate is the higher
law, and it is the basic right of the person charged of an off ence and not
convicted, that he be ensured and given a speedy trial - When the trial is
not proceeding for reasons not attributable to the accused, the court, unless
there are good reasons, may well be guided to exercise the power to grant
bail - This would be truer where trial would take years. [Para 28]
483
Trial - Speedy trial - Assurance given by the Bar:
Held: In view of the assurance given at the Bar on behalf of the
prosecution that they shall conclude the trial by taking appropriate steps
within next six to eight months - Liberty granted to the appellant to move
a fresh application for bail in case of change in circumstances, or in case
the trial is protracted and proceeds at a snail's pace in next three months.
[Para 29]
LIST OF CITATIONS AND OTHER REFERENCES
Vijay Madanlal Choudhary and Others v. Union of India and Other
(2022) SCC Online 929; Y. Balaji v. Karthik Desari and Another (2023)
SCC Online SC 645 - relied on.
Ravinder Singh v. State of Haryana [1975] 3 SCR 453 : (1975) 3 SCC
742; Mohan Lal v. State of Rajasthan (2015) 6 SCC 222 : [2015] 5 SCR 435;
Indian Medicines Pharmaceuticals Corporation Ltd. v. Kerala Ayurvedic
Cooperative Society Ltd. And Ors. 2023 SCC OnLine SC 5; Yashwant Sinha
and Ors. v. Central Bureau of Investigation [2019] 5 SCR 638 : (2019) 6
SCC 1; State of Uttar Pradesh v. Raj Narain [1975] 3 SCR 333 : (1975) 4
SCC 428; Doypack Systems (P) Ltd. v. Union of India [1988] 2 SCR 962 :
(1988) 2 SCC 299; P. Chidambaram v. Directorate of Enforcement (2020)
13 SCC 791 : [2019] 14 SCR 450; P. Chidambaram v. Central Bureau of
Investigation (2020) 13 SCC 337; Shri Gurbaksh Singh Sibbia and Others
v. State of Punjab (1980) 2 SCC 565 : [1980] 3 SCR 383; Sanjay Chandra
v. Central Bureau of Investigation (2012) 1 SCC 40 : [2011] 13 SCR 309;
Satender Kumar Antil v. Central Bureau of Investigation and Another
(2022) 10 SCC 51; Surinder Singh Alias Shingara Singh v. State of Punjab
(2005) 7 SCC 387 : [2005] 2 Suppl. SCR 1172; Kashmira Singh v. State of
Punjab [1978] 1 SCR 385 : (1977) 4 SCC 291; Pankaj Bansal v. Union of
India and Ors. (2023) SCC OnLine SC 1244; Arnab Manoranjan Goswami
v. State of Maharashtra and Others [2020] 11 SCR 896: (2021) 2 SCC
427 - referred to.
OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
3352 of 2023.
MANISH SISODIA v. CENTRAL BUREAU OF
INVESTIGATION
484
SUPREME COURT REPORTS
[2023] 15 S.C.R.
From the Judgment and Order dated 30.05.2023 of the High Court of
Delhi at New Delhi in BA No.1097 of 2023.
With
Criminal Appeal No.3353 of 2023.
Appearances:
Dr. Abhishek Manu Singhvi, Sr. Adv., Vivek Jain, Mohd. Irshad, Rajat
Jain, Karan Sharma, Rishikesh Kumar, Rishabh Sharma, Amit Bhandari,
Abhinav Jain, Ms. Honey Kumbhat, Mohit Siwach, Siddhant Sahay, Advs.
for the Appellant.
S. V. Raju, ASG, Mukesh Kumar Maroria, Zoheb Hussain, Annam
Venkatesh, Ms. Sairica Raju, Arkaj Kumar, Digvijay Dam, Ms. Sweksha,
Ankit Bhatia, Vivek G., Ms. Manisha Dubey, Vinayak Sharma, Kshitiz
Agarwal, Ms. Shweta Desai, Arvind Kumar Sharma, Advs. for the
Respondent.
JUDGMENT / ORDER OF THE SUPREME COURT
JUDGMENT
SANJIV KHANNA, J.
Leave granted.
2. Rule of law means that laws apply equally to all citizens and
institutions, including the State. Rule of law requires an equal right to access
to justice for the marginalised. The rule also mandates objective and fair
treatment to all. Thirdly, rule of law is a check on arbitrary use of powers.
It secures legitimate exercise of power for public good.
3. This is precisely the reason why we had heard arguments at some
length in these two appeals fi led by the appellant - Manish Sisodia, former
Deputy Chief Minister of Delhi, who seeks bail in the prosecutions arising
from RC No. 0032022A00553, dated 17.08.2022, registered by the Central
Bureau of Investigation1, at CBI, ACB, New Delhi, under the Prevention of
1
For short, "CBI".
485
Corruption Act, 19882and the Indian Penal Code, 18603; and Enforcement
Case Information Report4 No. HIU-II/14/2022, dated 22.08.2022, fi led by
the Directorate of Enforcement5,under the Prevention of Money Laundering
Act, 20026.
4. CBI has fi led two chargesheets, dated 24.11.2022 and 25.04.2023,
wherein the appellant - Manish Sisodia is named and is facing trial for the
off ences under Sections 7, 7A, 8 and 12 of the PoCAct and Sections 120B,
201 and 420 of the IPC. DoE has fi led a criminal complaint dated 04.05.2023
against the appellant - Manish Sisodia for the off ences under Sections 3
and 4 of the PML Act.
5. A number of legal issues and questions were raised, and do arise,
for consideration, but we would refrain from delving into them in depth and
detail. However, there is a bounded discussion in the subsequent portion
of the judgment only for deciding the present appeals and the question as
to whether the appellant - Manish Sisodia is entitled to bail. Nevertheless,
for the purpose of record, we will delineate some of them:
(a)
What is the scope and ambit of the constitutional protection under
Articles 74 and 163 of the Constitution of India on the decisions
taken by the Council of Ministers?
(b) Whether on interpretation of Section 3 of the PML Act, 'the
act/process of generation' or 'the attempt to generate the
proceeds of crime' falls within the ambit of the expressions
'assist', 'acquisition', 'possession' or 'use' under Section 3 of
the PML Act? If the answer is in affi rmative, what are the legal
consequences as per the Constitution of India, under the Code
of Criminal Procedure, 19737, the IPC, and the General Clauses
Act, 1897?
2
For short, "PoC Act".
3
For short, "IPC".
4
For short, "ECIR".
5
For short, "DoE".
6
For short, "PML Act".
7
For short, "The Code".
MANISH SISODIA v. CENTRAL BUREAU OF
INVESTIGATION [SANJIV KHANNA, J.]
486
SUPREME COURT REPORTS
[2023] 15 S.C.R.
(c)
Whether a person can be prosecuted under the PML Act only
when there is material to show that he has indulged or assisted
in any activity/process of money laundering, albeit an activity/
process diff erent and separate from the scheduled off ence?
(d) Whether an accused, who allegedly has committed the scheduled
off ence, can be prosecuted under the PML Act, when the alleged
prime accused and the benefi ciary of the proceeds of crime,
a juristic person, is not arrayed as an accused in the criminal
complaint fi led by the DoE?
(e)
Whether Sections 45 and 50 of the PML Act should be read down
in view of the constitutional scheme and mandate of Article 20
of the Constitution of India?
6. On behalf of the appellant - Manish Sisodia, the following
submissions have been made:

The appellant - Manish Sisodia has been in custody from
26.02.2023 in RC No. 0032022A00553 and from 09.03.2023 in
the ECIR No. HIU-II/14/2022.

CBI had submitted charge-sheet on 25.04.2023 and the DoE had
fi led the criminal complaint on 04.05.2023 against the appellant
- Manish Sisodia.

There are 294 witnesses and about 31,000 pages of documents in
the charge-sheet fi led by the CBI. There are 162 witnesses and
25,000 pages of documents in the prosecution complaints fi led
by the DoE.

Arguments on charge have not commenced, and the trial will
take years.

The new excise policy was validly adopted after due deliberation
by the Council of Ministers/Cabinet in larger and greater public
interest:
o
Under the old excise policy there was an incentive to cheat
because of the very nature of liquor - fast selling and highly
487
taxed. As per the Ravi Dhawan Committee8 Report dated
13.10.2020, the profi t margins could be up to 65-70%, as the
manufacturers were able to acquire retail licenses through
proxy ownership.
o
As a check, wholesale licenses were not to be issued to a
manufacturer or retail licence holder, directly or to sister
concerns or related entities.
o
272 wards in 68 Assembly Constituencies were divided
into 30 zones. Each zone was to have 9-10 wards with a
maximum of 27 retail vends which were to be allotted on
the basis of auction. Each zone operator was to operate two
mandatory vends in each ward. The remaining vends were
freehold vends to be operated anywhere within that zone.
o
Auction, with a reserve price equal to the existing license
fee plus sum of potential revenue, estimated VAT and
10% additional fee for increase on year to year ensured
maximization of revenue.
o
The licence fee payable by the wholesaler was raised from
Rs.5,00,000/- (rupees fi ve lakhs only) under the old policy
to Rs.5,00,00,000/- (rupees fi ve crores only), which is an
increase of approximately 10,000%.
o
The wholesalers were entitled to a standard distribution fee
at the rate of 12% of the landed price. The landed price or
the ex-distillery price was the lowest price as declared by
the manufacturer in any market in India.
o
The standard distribution fee at the rate of 12%, though
higher than the fee under the old policy, was necessary to
cover the higher level of investment required, setting up
of quality checking system, etc. The fee of 12% had also
subsumed several other charges payable under the old
policy.
8
For short, "R.D. Committee".
MANISH SISODIA v. CENTRAL BUREAU OF
INVESTIGATION [SANJIV KHANNA, J.]
488
SUPREME COURT REPORTS
[2023] 15 S.C.R.

The new policy was drafted in a transparent manner after
deliberation at diff erent levels by Secretaries/Offi cers of the
Excise, Planning, Finance and Law departments. The revenue
generation was projected at 12%.

Comments from general public were invited. Around14,671
e-mails were received. The comments were considered. As per
the prosecution,6 e-mails were planted/prompted. This assertion
to establish a criminal off ence relying on 0.04% e-mails is
assumptive and overweening.

The policy was sent to the Lieutenant Governor9 of the National
Capital Territory10 of Delhi for comments and recommendation.
The LG gave his recommendation on some aspects. The Cabinet
had considered and accepted the recommendations.

The new excise policy report prepared by the GoM was accepted
by the Excise Department and the Cabinet of the NCT of Delhi. It
was uploaded on the website on 05.07.2021. It was implemented
only on 17.11.2021.

Proceeds of crime is the core ingredient for the off ence of money
laundering, which expression is required to be construed strictly,
as held in Vijay Madanlal Choudhary and Others v. Union of
India and Others11. The off ence under the PML Act has nothing
to do with the criminal activity, subject matter of the scheduled
off ence. PML Act penalises indulging in activity/process relating
to the proceeds of the crime, derived or obtained as a result of
that crime.

Allegation regarding kickback of Rs.100,00,00,000 (rupees one
hundred crore only), and a portion of it being used for funding
the Aam Aadmi Party12, for its election campaign in Goa, is
9
For short, "LG".
10 For short, "NCT".
11 (2022) SCC Online 929.
12 For short, "AAP".
489
a concocted story unsupported by any legal and admissible
evidence and material. The money trial is unproven and false.

Co-accused Rajesh Joshi and Gautam Malhotra have been granted
bail for the off ence under the PML Act on the ground that there
was no documentary evidence to show that proceeds of crime
were used for the election purposes.

To establish the money trail and payment of bribe/kickback of
Rs.100,00,00,000 (rupees one hundred crore only), the DoE has
relied upon the statements made by co-accused or approvers.
These statements are hearsay and do not in any manner implicate
or connect the appellant - Manish Sisodia with the transfer and
use of the proceeds of the crime.

The statements of co-accused or other witnesses relied upon
by the DoE were extracted and forced by a threat of arrest, as
in the case of Magunta Sreenivasulu Reddy, Butchi Babu and
Manoj Rai. Some of the co-accused like Arun Pillai and Sameer
Mahendru have retracted from their statements.

Raghav Magunta, son of a Member of Parliament of the ruling
party in Andhra Pradesh, was forced to make the statement dated
27.07.2023, which is contrary to his earlier statement dated
16.09.2022.

Statements obtained from Dinesh Arora, an approver, is weak
evidence and in this regard, reliance is placed upon Ravinder
Singh v. State of Haryana13.

Statement of Dinesh Arora dated 12.07.2023 is contrary to his
earlier statement made on 09.04.2023.

Allegations regarding the appellant - Manish Sisodia's
involvement in the grant of licence to Indo Spirit is make belief
and a false assertion. Statements obtained from the offi cers of
the Excise Department under Section 164 of the Code,namely,
13 (1975) 3 SCC 742.
MANISH SISODIA v. CENTRAL BUREAU OF
INVESTIGATION [SANJIV KHANNA, J.]
490
SUPREME COURT REPORTS
[2023] 15 S.C.R.
Suman, Sachin Solanki and Arava Gopi Krishna do not implicate
the appellant - Manish Sisodia.

The appellant - Manish Sisodia, in his statement dated
14.03.2023, has stated that he had not instructed the Excise
Commissioner to expedite the clearance of Indo Spirit's license.

Interaction and communications between the private parties
viz. business of Indo Spirit was independent, and without any
interference, knowledge and participation of the appellant -
Manish Sisodia.

Vijay Nair was not associated with the appellant - Manish
Sisodia. There are also contradictions in the statements made by
C. Arvind, under Section 50 of the PMLA, dated 07.12.2022,
and the one under Section 164 of Cr.P.C., dated 16.02.2023.

Allegation regarding destruction of the cabinet fi le is nothing but
making a mountain out of a molehill. The three legal opinions,
two by former Chief Justices of India and one by a Law Offi cer,
on merits or demerits of the old policy, were benign, and of no
consequence and relevance. The allegation is also contrary to
the contemporaneous records maintained by DoE.
7. The CBI and DoE have submitted as under:

Under the old excise policy:
o
There was no concept of private wholesaler and no concept
of zones.14
o
The distributor/wholesaler was entitled to 5% profi t margin.
o
The retail trade was primarily undertaken by four
corporations of the Government of NCT of Delhi.

R.D. Committee Report dated 13.10.202015 recommended:
o
Gradual withdrawal of government presence.
14 As per the appellant-Manish Sisodia, under the old liquor policy there were private
whole-sellers, which assertion prima-facie appears to be correct.
15 The Expert Committee headed by Ravi Dhawan was constituted on 04.09.2020.
491
o
Wholesale operation under one government entity.
o
Three models were examined: (i) existing model, (ii)
licenses vide lottery system, and (iii) licenses to limited
entities.
o
Licenses vide lottery system was recommended since
auctioning licenses to limited entities could lead to
cartelisation.

The R.D. Committee Report dated 13.10.2020 was not preferred
by the appellant - Manish Sisodia. Reliance is placed upon the
statement of C. Arvind16 dated 16.02.2023 under Section 164 of
the Code, and Rahul Singh17 dated 03.03.2023 under Section 161
of the Code. The appellant - Manish Sisodia had not accepted
the report because of ulterior reasons.

A conspiracy was entered viz. the new excise policy to enable
supersize profi ts for wholesale distributors in return for kickbacks
and bribes. To start with:
o
Public comments were invited to the R.D. Committee
Report dated 13.10.2020. Some public comments vide
emails were prompted by the appellant - Manish Sisodia
to infl uence the decision making process. The emails18,
statement of Zakir Khan19 dated 29.03.2023 recorded under
Section 161 of the Code, and screenshots of WhatsApp
chats of Kartikey Azad and Zakir Khan establish the motive.
Thus, a facade of transparency and openness in policy
making was created.
o
Rahul Singh20 supports the charge. He was asked to prepare
a cabinet note in a particular manner with comments and
suggestions of the stakeholders and public. The appellant -
16 Posted as Secretary to appellant - Manish Sisodia between July, 2019 to June, 2022.
17 Erstwhile Excise Commissioner of NCT of Delhi.
18 Emails shared by interns of the Delhi Minorities Commission as public comments to
the R.D. Committee Report.
19 Chairperson of the Delhi Minorities Commission.
20 Erstwhile Excise Commissioner of NCT of Delhi.
MANISH SISODIA v. CENTRAL BUREAU OF
INVESTIGATION [SANJIV KHANNA, J.]
492
SUPREME COURT REPORTS
[2023] 15 S.C.R.
Manish Sisodia reprimanded Rahul Singh for annexing the
opinion of legal experts in the cabinet note.21 C. Arvind's
statement dated 16.02.2023 under Section 164 of the Code
is similar.
o
The appellant - Manish Sisodia, had issued directions to
Sanjay Goel,22 to prepare a note without the opinion of legal
experts. Reliance is placed on the statement of Sanjay Goel
dated 17.01.2023 under Section 161 of the Code, and the
letter dated 02.02.2023 by the appellant - Manish Sisodia
to the Excise Commissioner.

The draft GoM Report on new excise policy,as retrieved from
the computer under the control of the appellant - Manish Sisodia
was typed/uploaded on 15.03.2021 and was last modifi ed at 11.27
a.m. The wholesalers were entitled to a minimum 5% commission
on the landed price. As no upper limit was prescribed, the
manufacturers and wholesale distributors could negotiate and
settle for a higher commission.

Big manufacturers with high market share and turnover, would
not have agreed to a commission higher than 5%, or commission
at the @ 12% of the landed cost.

A liquor group from Hyderabad stayed in Delhi from 16.03.2021
to 18.03.2021. Arun Pillai, Abhishek Boinpally, and Sarath
Reddy from the liquor group had several meetings with Vijay
Nair, who was the middleman, a member of the AAP, and a close
confi dant of the appellant - Manish Sisodia. He was residing in
a government bungalow allotted to a Cabinet Minister, who was
a part of GOM.23 The agenda of the meetings were to decide
changes in the excise policy,to enable them to earnsuper-profi ts
in return for kickbacks.
21 Statement of Rahul Singh dated 03.03.2023, under Section 161 of the Code.
22 Excise Commissioner of NCT of Delhi, who had replaced Rahul Singh.
23 Reliance is placed upon statements made by Arun Pillai, Butchi Babu and Dinesh
Arora. Reliance is also placed on screenshots found in the phone of Manoj Rai, an
employee of Pernod Ricard.
493
o
On the evening of 16.03.2021, Abhishek Boinpally and
Butchi Babu, who were staying at Hotel Oberoi, travelled
to another Oberoi hotel in Civil Lines, where they met Vijay
Nair, who was staying in a close proximity. The travel to the
Oberoi Hotel in Civil Lines is established by an invoice24,
call record details and statement of an employee of the
Oberoi.25
o
A print/photocopy of a 36page document was made on
16.03.2021 at Hotel Oberoi, Civil Lines, Delhi.26
o
The document/print was taken by VijayNair, and handed
over to the appellant - Manish Sisodia. The appellant -
Manish Sisodia gave 'the print' to his secretary C. Arvind.
o
The altered GoM report dated 18.03.2023 consists of
36 pages, if one excludes the index and the title page.
Reference is made to the statement of C. Arvind dated
16.02.2023, under Section 164 of the Code.
o
Screenshots of WhatsApp chats of Butchi Babu dated
20.03.2021, which is prior to submission of the GoM report
to the Cabinet on 22.3.2022, refers to the creation of the
new post of the Director, Wholesale Operation. Based on
the print/document prepared by the liquor group, the GoM
report to the Cabinet was modifi ed to create this post.
o
Further, the minimum wholesaler fee of 5% under the draft
dated 15.03.2021, was modifi ed to mandatory and fi xed fee
of 12% in the altered GoM report submitted to the Cabinet.

The GoM did not meet between 15.03.2021 and 19.03.2021.
There are neither any deliberations/discussions nor any
noting/ calculations by the GoM for increasing the wholesale
commission/ fee from 5% to 12%.Reliance is placed on the
statement of Arava Gopi Krishna under Section 164 of the Code.
24 On 16.03.2021, Rs. 3,000/- had been billed under the description, "Logistic Charges".
25 Statement of Ibrahim Magdum dated 03.02.2023, under Section 161 of the Code.
26 On 16.03.2021, Rs. 360/- had been billed under the description, "Print/Photocopy".
MANISH SISODIA v. CENTRAL BUREAU OF
INVESTIGATION [SANJIV KHANNA, J.]
494
SUPREME COURT REPORTS
[2023] 15 S.C.R.
Reliance is also placed on the statement of Sanjay Goel, dated
11.04.2023, under Sections 50(2) and 50(3) of the PML Act.

The appellant - Manish Sisodia was unable to provide any
rational explanation for increasing the commission from 5% to
12%.27 He had stated that even under the old regime there was
no calculation for the 5% margin.

The appellant - Manish Sisodia had used his infl uence for grant of
wholesale licence to Indo Spirit, a fi rm in which the liquor group
had substantial interest. Reliance is placed on the statements
made under Section 164 of the Code by Arava Gopi Krishna,
and C. Arvind, dated 16.02.2023. Reliance is also placed on the
statement of Dinesh Arora, dated 24.11.2022, recorded under
Section 306 of the Code.

License to Indo Spirit was granted inspite of existing complaints
of cartelisation against the partners of Indo Spirit, namely,
Sameer Mahendru and his wife. The complainant was asked to
take back his complaint.28

The license fee payable by the wholesale distributor was fi xed
at Rs.5,00,00,000/-(rupees fi ve crores only). The license fee was
deliberately not fi xed on the turnover, to facilitate and at the
behest of the liquor group.

Three big manufacturers held 85% market share. The entire
scheme was a pretence to recoup and get bribe and kickback
from the big wholesale distributors, who acted as the
middlemen and were entitled to fi xed commission @ 12% of
the landed price on the turnover,but were required to pay a
fi xed license fee of Rs.5,00,00,000/- (rupees fi ve crores only)
to the government.

The manufacturers could appoint and enter into a distributorship
agreement with only one wholesale distributor. They were not
27 Statement of Manish Sisodia dated 07.03.2023, under Section 50(2) and 50(3) of the
PML Act.
28 Statement of Jagbir Sidhu dated 19.09.2022, under Section 161 of the Code.
495
entitled to appoint multiple wholesale distributors. However,
the wholesaler could enter into a contract with more than one
manufacturer. New excise policy was clearly lopsided and
favoured the big wholesale distributors.

Mahadev Liquor, a contender and wholesale distributor of
14 small manufacturers having about 20% market share, was
forced to surrender their licence since they were not ready to pay
kickbacks. Mahadev Liquor had business in Punjab and the state
machinery of Punjab Excise Department was used to arm-twist
them.29

Pernod Ricard, the largest manufacturer, was directed to do
business through Indo Spirit. Reliance is placed upon evidence
collected from the mobile chats, including screenshots, as well
as statements of an employee30.

The plea that the appellant - Manish Sisodia was not in
possession of the proceeds of the crime, should not be accepted
as the expression 'possession' includes constructive possession.
A person need not be in actual possession. When a person
exercises dominion or control over a thing, directly or indirectly,
through another person,he is in 'possession' over the said thing.
The appellant - Manish Sisodia was a key to the processes
and activities dealing with the proceeds of the crime and in
using proceeds of the crime. He had created aneco-system for
generating, concealing and projecting the tainted money, used
subsequently by AAP.

The kickback or the proceeds of the crime of Rs.100,00,00,000
(rupees one hundred crore only) were received from the liquor
group, and used by the associates of the appellant - Manish
Sisodia and other leaders of AAP.
29 Statement of Jasdeep Kaur Chadha dated 23.08.2022 under Section 50(2) and 50(3) of
the PML Act.
30 Statement of Manoj Rai dated 31.12.2022, under Sections 50(2) and 50(3) of the PML
Act.
MANISH SISODIA v. CENTRAL BUREAU OF
INVESTIGATION [SANJIV KHANNA, J.]
496
SUPREME COURT REPORTS
[2023] 15 S.C.R.
o
Portions of these proceeds of crime were used in the Goa
election campaign through multiple persons and entities.
The attempt was to conceal the true nature of the proceeds
of the crime and to project them as untainted money.
o
Part of the proceeds of crime of Rs.100,00,00,000 (rupees
one hundred crore only) were transferred through a complex
web of transactions through hawala route, which have
been traced in spite of erasure of digital and documentary
evidence.

The appellant - Manish Sisodia was unable to produce his two
mobile phones out of three mobile phones used between the
period 01.01.2021 to 19.08.2022. Only one phone was seized
by the CBI on 19.08.2022, which was being used only since
22.07.2022. He has deliberately destroyed the evidence.

The appellant - Manish Sisodia, given his power and political
clout, and being the main accused in the conspiracy, may have
the evidence destroyed, and the witnesses and documents may
be exposed.

Dinesh Arora's statement to the DoE dated 14.08.2023, under
Sections 50(2) and 50(3) of the PML Act, had revealed that he
had taken Rs. 2,20,00,000 (rupees two crore twenty lakhs only)
from Amit Arora, for the appellant - Manish Sisodia. This was
on account of favourable change and tweak in the new excise
policy.
Analysis
8. Referring to Section 4531 of the PML Act, in Vijay Madanlal
31 Section 45 reads:
"45. Off ences to be cognizable and non-bailable.-(1) Notwithstanding anything
contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of
an off ence under this Act shall be released on bail or on his own bond unless-
(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 satisfi ed that there
497
Choudhary (supra), the three Judges' Bench has opined that the provision
does not require that to grant bail, the court must arrive at a positive fi nding
that the applicant has not committed an off ence under the PML Act. Section
45 must be construed reasonably as the intent of the legislature cannot be
read as requiring the court to examine the issue threadbare and in detail to
pronounce whether an accused is guilty or is entitled to acquittal. Further,
an order on an application for bail is passed much before the end of trial and
sometimes even before commencement of trial. Lastly, it is trite, that for
the purpose of considering an application for bail, although detailed reasons
are not necessary to be assigned, and, therefore, the evidence need not be
weighed meticulously, a tentative fi nding should be recorded on the basis
of broad probabilities. The order granting bail must demonstrate application
of mind at least in serious cases where the applicant has been granted or
denied bail. The fi ndings recorded by the Court for grant or refusing bail
being tentative, will not have any bearing on the merits of the case, and
are reasonable grounds for believing that he is not guilty of such off ence and that he is
not likely to commit any off ence while on bail:
Provided that a person, who, is under the age of sixteen years, or is a woman or is sick
or infi rm or is accused either on his own or along with other co-accused of moneylaundering a sum of less than one crore rupees, may be released on bail, if the Special
Court so directs:
Provided further that the Special Court shall not take cognizance of any off ence
punishable under Section 4 except upon a complaint in writing made by-
(i) the Director; or
(ii) any offi cer of the Central Government or a State Government authorised in writing
in this behalf by the Central Government by a general or special order made in this
behalf by that Government.
 (1-A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973
(2 of 1974), or any other provision of this Act, no police offi cer shall investigate into
an off ence under this Act unless specifi cally authorised, by the Central Government by
a general or special order, and, subject to such conditions as may be prescribed.
(2) The limitation on granting of bail specifi ed in sub-section (1) is in addition to the
limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law
for the time being in force on granting of bail.
Explanation.-For the removal of doubts, it is clarifi ed that the expression 'Off ences
to be cognizable and non-bailable' shall mean and shall be deemed to have always
meant that all off ences under this Act shall be cognizable off ences and non-bailable
off ences notwithstanding anything to the contrary contained in the Code of Criminal
Procedure, 1973 (2 of 1974), and accordingly the offi cers authorised under this Act are
empowered to arrest an accused without warrant, subject to the fulfi lment of conditions
under section 19 and subject to the conditions enshrined under this section.
MANISH SISODIA v. CENTRAL BUREAU OF
INVESTIGATION [SANJIV KHANNA, J.]
498
SUPREME COURT REPORTS
[2023] 15 S.C.R.
the trial court would proceed and decide the case on the basis of evidence
produced during trial without in any manner being prejudiced thereby.
9. We have copiously referred to the assertions, arguments and
contentions of both sides, and in terms of the mandate in Vijay Madanlal
Choudhary (supra), we will be examining the allegations and the legal
position to form our tentative opinion. However, we must notice and take
on record at some aspects upfront.
10. First, the assertion that Rs. 2,20,00,000 (rupees two crores twenty
lakhs only) was paid as bribe to the appellant - Manish Sisodia by Amit
Arora, through middleman Dinesh Arora, is not a charge or an allegation
made in the chargesheet fi led by the CBI. It may be diffi cult to regard the
alleged payment as a 'proceed of crime' under the PML Act.
11. Secondly, it has been submitted by the DoE that AAP is a trust and
is a "person" under Section 2(1)(s) of the PML Act. Being a juristic person,
it acts through natural persons. The assertion made is that a portion of the
proceeds of crime were used for the purpose of the artifi cial judicial person
to fund the election in Goa. The DoE has stated at the Bar, and in the written
submissions, 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
will be taken. It is stated by the DoE that the matter in this regard is being
processed. In the written submissions, the DoE states:
"...some of the PoC (Proceeds of Crime) has been used for the purpose
of artifi cial juridical person through its offi ce bearers in the election
funding of the AAP in Goa as well for the benefi t of offi ce bearers as
indicated above. Once the quantum of amount used for election in Goa
is ascertained a decision to consider AAP as accused under Section 3
read with Section 70 of the PMLA (PML Act) shall be taken at that
point of time."
12. Thirdly, the assertion in the complaint fi led with the DoE that
kickback of Rs.100,00,00,000 (rupees one hundred crore only) was
actually paid by the liquor group is somewhat a matter of debate. However,
there is an assertion, and the DoE has relied on evidence and material,
that a portion thereof,that is, Rs. 45,00,00,000 (rupees forty fi ve crores
only) was transferred through Hawala for the Goa election and used by
499
AAP, a political party, which is a juristic person.32 AAP is not being
prosecuted. The charge that the appellant - Manish Sisodia is vicariously
liable in terms of Section 70 of the PML Act cannot be alleged and has
not been argued.33
13. Fourthly, the contention of the DoE that generation of proceeds
of crime is itself' possession' or 'use' of the 'proceeds of crime', prima
facie, appears to be unclear and not free from doubt in view of the ratio
in Vijay Madanlal Choudhary (supra). Further,the DoE's contention that
'generation' amounts to possession and the expression 'possession' includes
constructive possession, for which reliance is placed upon Mohan Lal v.
State of Rajasthan34, is not assured.
14. On the other hand, the appellant - Manish Sisodia relies on
paragraphs 251, 269 and 270 of Vijay Madanlal Choudhay (supra), to
contend that money laundering is an independent off ence regarding the
process or activity connected with the proceeds of crime derived as a
result of criminal activity relating to or in relation to a scheduled off ence.
It is submitted that Vijay Madanlal Choudhry (supra) has held that PML
Act is an independent and distinct Act which deals with off ences relating
to only proceeds of crime, and not with the crime itself which generates
the proceeds of the crime.In particular, paragraph 406 in Vijay Madanlal
Choudhary (supra) states:
"406...The fact that the proceeds of crime have been generated as
a result of criminal activity relating to a scheduled off ence, which
incidentally happens to be a non-cognisable off ence, would make no
diff erence.