TMI Blog2023 (7) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... r if a person is involved in any process or activity connected with the proceeds of crime, including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money laundering. Therefore, it is not necessary to attribute section 3 of the PMLA that the alleged person must have acquired or in possession of the proceeds of the crime. If a person has actually been involved in any process or activity connected with the proceeds of crime, it would be sufficient to prosecute him under Section 3 of PMLA. The present case is very peculiar in nature and may not have any parallel factual matrix. In brief, the allegations in the predicate offence is that the conspiracy was hatched between the political head and certain persons which included an individual allegedly representing the government with the manufacturer, liquor wholesaler and retailer. The conspiracy allegedly was hatched to introduce a new excise policy to benefit certain individuals who had given advance kickbacks to the AAP. The present case arises out of an alleged conspiracy wherein the government framed an excise policy with a malafide intention to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Petitioner : Mr. Vikram Chaudhari, Sr. Advocate through v/c and Mr. Shri Singh, Mr. Sumer Singh Boparai, Mr. Sidhant Saraswat, Mr. Gurfateh Singh Khosa, Mr. Varun Bhati, Mr. Prabhneer Swaini, Mr. Suyash Goverdhan and Ms. Srishti Khanna, Advs. For the Respondent : Mr. Zoheb Hossain, Special counsel for ED with Mr. Vivek Gurnani, Mr. Kartik Sabharwal and Mr. Baibhav, Advs. JUDGMENT DINESH KUMAR SHARMA, J: A. Factual Matrix 1. The present order shall dispose of the bail application no. 906/2023 of Abhishek Boinpally titled as Abhishek Boinpally vs Directorate of Enforcement . The bail applications filed by petitioner Abhishek Boinpally was dismissed by the learned Special Judge, PC Act , CBI-09 vide order dated 16.02.2023. 2. Briefly the facts as stated by Enforcement Directorate are as under: 5. An FIR No. RC0032022A0053 dated 17.08.2022 was registered by CBI, ACB, New Delhi against Sh. Manish Sisodia, Deputy Chief Minister, GNCTD of Delhi and others under Section 120B r/w 477A of Indian Penal Code, 1860 and Section 7 of Prevention of Corruption Act, 1988 for irregularities in framing and implementation of the excise policy of GNCTD of Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, New Delhi. M/s Radha Industries is being managed by Shri Dinesh Arora. That Shri Arun Ramchandra Pillai used to collect undue pecuniary advantage from Shri Sameer Mahendru, MD. M/s Indospirit for onward transmission to accused public servant through Shri Vijay Nair. A person named Arjun Pandey has once collected huge cash amount of about Rs.2-4 crores from Shri Sameer Mahendru on behalf of Shri Vijay Nair. d. M/s Mahadev Liquors, a proprietorship firm was granted L-1 License. Sh. Sunny Marwah is the authorized signatory of the firm. Sh. Sunny Marwah is also director in companies/firms being managed by family of Late Sh. Ponty Chadha. That Sh. Sunny Marwah is in close contact with accused public servants and has been regularly giving undue pecuniary advantage to them. 9. The predicate agency i.e., the CBI has filed a chargesheet dated 25.11.2022 with respect to their investigation done in the above-mentioned FIR no RC0032022A0053 dated 17.08.2022 in the Special Court, New Delhi. The cognizance of the same has been taken vide order dated 15.12.2022. 10. The gist of the CBI chargesheet is as under: a. The CBI has filed chargesheet in respect of the subject FIR on 24.11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh, Delhi on 20.09.2021 in which the employees of M/s Pernod Ricard India Pvt Ltd, Sh. Abhishek Boinpally, Sh. Arun R Pillai, Sh. Sameer Mahandru, Sh. Magunta Srinivasulu Reddy, Sh Sharad Reddy and others were present. f. When these persons applied for L1 license under the name of Indo Spirits Marketing Pvt Ltd, there were certain complaints mentioning cartelisation and EMD cross funding against Indospirits and Khao Gali and its promoter Sh Sameer Mahandru. The Excise officials issued a SCN but only partially covered the issues in the complaint with an intention of deliberately favouring the entity. That, the license of Indospirits was issued in conspiracy of Sh Vijay Nair, Sh Dinesh Arora, Sh Sameer Mahandru and the Excise officials. g. That. Sh Sameer Mahandru formed a cartel through his entities Khao Gali, Indospirit Marketing Pvt Ltd. In violation of the Excise Policy 2021-22. That, the excise officials granted L1 license to Indospirits without properly processing the file and collecting the requisite documents as well as without properly addressing the complaint against M/s Indospirits in lieu of Rs 30 lakh bribe taken by Sh Narender Singh from. Sh Sameer Mahandru and on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under PMLA is being conducted by the Directorate for tracing out Proceeds of Crime generated and laundered due to the alleged irregularities in the formulation and implementation of the Excise policy 2021-22. Further, ED has filed a Prosecution Complaint dated 26.11.2022 arraying Sameer Mahandru and others as accused before the Hon'ble Special Court (PMLA). The Ld. Court has taken cognizance of the same vide its order dated 20.12.2022. Thereafter, 1st Supplementary Prosecution Complaint dated 06.01.2023 has been filed against Sh. Abhishek Boinpally and others before the Hon'ble PMLA Court. During the investigation, several searches have been conducted, statements have been recorded. ED has provisionally attached properties to the tune of Rs. 76.54 crores vide PAO No. 02/2023 dated 24.01.2023. The investigation done by ED has revealed as under: a. PMLA investigation done so far has revealed that, the Delhi Excise Policy, 2021-22 was created by the top leaders of the AAP to continuously generate and channel illegal funds to themselves. The extent of involvement and abatement done by the leaders of the AAP of the criminal activities undertaken by the accused further substan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Govt bungalow allotted to a Cabinet Minister of Delhi Govt, Sh Kailash Gehlot, part of GoM of Excise Policy 2021-22. Sh Vijay Nair, does not have any other residence in Delhi. Irony being, Sh Gehlot lives at another private residence in Najafgarh. f. Sh Vijay Nair had arranged meeting of the owner/controller of Indo Spirits Sh Sameer Mahandru, with Sh Arvind Kejriwal, CM, Delhi and when that didn't materialise, he arranged a video call through facetime on his phone for Sh Sameer and Sh Arvind Kejriwal, where Sh Arvind said to Sh Sameer that, Vijay is his boy and that Sh Sameer should trust him and carry on with him. These facts are relevant to mention so as to establish the abatement of his actions in relation to the Excise Policy scam, by the political leaders of the AAP. g. Sh Vijay Nair, is Incharge of Media and Communication for the AAP, had no role in the Delhi Govt. in fact acted as a broker/liaison/middlemen on behalf of the top leaders of the AAP for getting bribes/kickbacks from various stakeholders in the Delhi Liquor business in exchange of favourable outcomes (policy changes) in the Excise Policy of 2021-22, which was being drafted at that time. He even th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eer Mahandru. The South group controlled these stakes in Indo Spirits, through false representation, concealment of true ownership and proxies i.e. Sh Arun Pillai and Sh Prem Rahul. This partnership formation was directed by Sh Vijay Nair on the assurance of giving the wholesale business of Pernod Ricard to Indo Spirits. l. The gravity and depth of this criminal conspiracy is such that to grant L1 wholesale license to Indo Spirits despite various complaints highlighting Sameer's and Indospirit Marketing Pvt Ltd's role in cartelisation, when Sameer submitted a fresh application in a different name of Indo Spirits, the Dy CM, Delhi, Sh Manish Sisodia himself directed the Excise Commissioner to grant the license on priority. m. Pernod Ricard, is one of the accused in the instant case, which through Sh Benoy Babu and others, in conspiracy with the super cartel and Sh Vijay Nair gave their wholesale business to Indo Spirits. The Excise Policy 2021-22 required the manufacturers to register their brands at the Lowest EDP net of all discount/commission/rebate of any nature whatsoever, however, Pernod Ricard by way of conspiracy has got their price fixed without deducting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on daily basis. Further, the retail sales were in cash and not credit based, meaning thereby the generation of funds/recovery of the purchase cost was immediate. Thus, there was no valid reason for not repaying the outstanding towards the wholesaler either on the same day or soonest after. q. Another novel method of recovery of the kickbacks was through passing of Credit Notes. Ordinarily the credit notes are passed to the person who had direct nexus with or has sold the goods, however, in this business, the manufacturers were giving credit notes to the retailers with whom they had no direct transactions with. Further, there was no apparent reason to give credit notes to businesses which are minting money with MRP being 3 times of the cost and having profit margin of 185% approx. The fact that the credit notes were an eyewash to transfer money illegally to pay kickbacks is evident from the fact that the ostensible reason of volume based credit notes was bogus and credit notes have been passed in an inconsistent manner considering the sale volume. For example, Pernod Ricard has not given any credit notes to M/s Adharv Enterprises (not a favoured L7) against the volume of 19,080 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d he had mistakenly named Rajesh Sharma. It has been submitted that therefore the statement of Dinesh Arora lacks credibility. It is further been submitted that similar allegations of transferring money from Dinesh Arora to Vijay Nair were leveled against one Rajesh Joshi on the basis of similar statements. The trial court rejected such oral statements and granted bail to Rajesh Joshi as there was no independent and cogent evidence against him on record. Learned senior counsel further submitted that petitioner Abhishek Boinpally and Mr. Gautam Mootha had an existing business relationship and were family friends. It has been submitted that Mr. Gautam Mootha and his companies had been receiving advances of big loans which they used to return time to time. It has been submitted that the loan/investment of Rs. 6.53 crores was advanced by the petitioner to Mr. Gautam Mootha between November 2020 to November 2021 and thus the period of loan/investment proceeds are alleged to be the generation of POC. It has further been submitted that the payment of Rs. 3.85 Crores made by Mr. Gautam Mootha to the petitioner is the partial repayment of loan/investment. The source from which the repayment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IANPL and APPL. Learned senior counsel submits that despite these statements ED attributed the payment to the petitioner without any basis 9. Learned senior counsel submitted that the allegation that the said payment of Rs. 1.7 Crore was made to secure the interest of the petitioner in the logo/IPR of IANPL and APPL is blatantly false. It was submitted that the petitioner had already purchased the logo of India ahead by making of Rs. 1.30 crore to APPL vide invoice bearing no. AP/21-22/03821A raised on 31.07.2021. Learned senior counsel submits that the allegation of conspiracy or the petitioner being a key player in the same is the matter of investigation/trial in the predicate offence and has no concerned with the PMLA case. It was submitted that the petitioner started managing the operation of the brands in Delhi on behalf of Sarath Reddy only in March after 2 out of 5 zones were surrendered by Mr. Sarath Reddy. Learned senior counsel submitted that the petitioner was only involved in the operations of the above said vends and drew no salary/monetary benefits. 10. Learned senior counsel submitted that the petitioner joined the operation of the firms after the two vends we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d uponUnion of India vs Dhami Sharasi (1995) 4 SCC 190 to emphasis his point that even twin conditions as postulated under Section 45(1) PMLA may not have any application if due process of law or procedure is not followed. C. Submissions on the behalf of Respondent/ED 15. Sh. Zoheb Hossain, learned special counsel for ED submitted that the petitioner Abhishek Boinpally is a key person involved in the conspiracy of and giving bribe/kickbacks to the tune of Rs. 100 crore by the South Group to Sh. Vijay Nair and he facilitated the payment of Rs. 100 core kickback to Sh. Vijay Nair. It has been submitted that the petitioner organised payment of this amount from the South Group through Dinesh Arora. 16. Sh. Zoheb Hossain submitted that Dinesh Arora in his statement dated 01.10.2022 stated that in a meeting that took place in June 2021 in ITC Kohinoor Hyderabad, Sh. Vijay Nair had told him to coordinate with the petitioner Abhishek Boinpally for bringing funds to the tune of Rs. 20-30 crores from Hyderabad to Delhi. 17. Sh. Zoheb Hossain submitted that this meeting has been confirmed by the hotel records which has duly been placed on the records. It has further been subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was by way giving excess credit notes (i.e. the credit notes which have not been backed by the manufacturer) of Rs. 4.35 crore from Indo Spirits to the 5 retail zones of Sarath Reddy exclusively (no other retail zones were given excess credit notes). It has been submitted that further huge outstanding of Rs. 60 crores of the 5 zones of Sarath Reddy was pending for payment by these 5 zones to Indo Spirits. It has been submitted that these amount of Rs. 4.35 crores and Rs. 60 crores are the proceeds of crime. It has been submitted that the recoupment of kickbacks is also money laundering. 21. Sh. Zoheb Hossain further submitted that the designated wholesaler Indo Spirits was not able to get L1 license from Delhi Excise Policy as there were some complaints against Indo Spirits group for cartelization and other violations. In this regard a writ petition was filed in the Hon ble Supreme Court in the name of Varun Chaudhary highlighting the violation by Indo Spirits Group (Indo Spirit Marketing private limited) making the Government of NCT a respondent. Sh. Zoheb Hossain submitted that in fact the petitioner threatened Sh. Jagbir Sadhu of DIAGEO to withdraw the complaint otherwise it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty in the formal economy of the country. However, Section 3 has a wider reach. The offence, as defined, captures every process and activity in dealing with the proceeds of crime, directly or indirectly, and not limited to the happening of the final act of integration of tainted property in the formal economy to constitute an act of money-laundering. This is amply clear from the original provision, which has been further clarified by insertion of Explanation vide Finance (No. 2) Act, 2019. Section 3, as amended, reads thus: 3. Offence of money-laundering.-Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including concealment, possession, acquisition or use and projecting or claiming] it as untainted property shall be guilty of offence of money-laundering. Explanation. -For the removal of doubts, it is hereby clarified that,- (i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that domestic Courts are under an obligation to give due regard to the international conventions and norms for construing the domestic laws, more so, when there is no inconsistency between them and there is a void in domestic law. This view has been restated in Githa Hariharan as a, as also in People's Union for Civil Liberties 82, and National Legal Services Authority v. Union of India. 266. In the Core Recommendations of the FATF referred to above, the same clearly mention that the word and in Section 3 of the 2002 Act would not be fully in line with the Vienna and Palermo Conventions. This doubt has been ably responded and elucidated by India to the international body by referring to the jurisprudence as evolved in India to interpret the word and as or in the context of the legislative intent - to reckon any (every) process or activity connected with the proceeds of crime constituting offence of money-laundering. To buttress the stand taken by India before the FATF, reliance has been justly placed on reported decisions of this Court amongst other Sanjay Dutt, which had occasion to deal with the expression arms and ammunition occurring in Section 5 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose an absolute restraint on the grant of bail and the court at this stage is to prima facie consider whether applying the standard of broad probabilities the material against the applicant would result in conviction. It is also a settled proposition that at this stage the Court is only required to examine the matter to find out whether the accused was possessed of the requisite mens rea. It is also no longer res integra that the court is not required to record a positive finding that the accused had not committed the offence under the Act. It is also a settled proposition that the court at this stage is not required to weigh the evidence meticulously. The court is only required to arrive at a finding on the basis of broad probabilities. It is also a settled proposition that the court is not required to hold a mini trial at this stage and is required to examine the case on the basis of broad probabilities. It is also to be kept in mind that while exercising the jurisdiction under Section 45 of PMLA, the court is required to take into consideration the limitations prescribed under Section 439 Cr.P.C. 28. In regard to the limitation under Section 439 Cr.P.C. in Kalyan Chandra Sar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be visited with a different approach in the matter of bail. The economic offence having deep-rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as a grave offence affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. 31. The bare reading of Section 3 of PMLA would make it clear if a person is involved in any process or activity connected with the proceeds of crime, including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money laundering. Therefore, it is not necessary to attribute section 3 of the PMLA that the alleged person must have acquired or in possession of the proceeds of the crime. If a person has actually been involved in any process or activity connected with the proceeds of crime, it would be sufficient to prosecute him under Section 3 of PMLA. The argument that the proceeds of crime have not been received or the proceeds of crime has not been recovered and therefore section 3 of the PMLA will not come into operation is totally fallacious and is liable to be reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to gain further undue advantage. He was also allegedly involved in the process or activity connected to the proceeds of crime. 34. The plea raised by the defence is the ED has no material other than an inconsistent and unreliable statement of either coaccused or the public servants. The defence has raised a plea that in absence of any independent corroboration or material on record to substantiate such statements under Section 50 PMLA, the court on the basis of probability should record a finding that accused persons are not guilty of such offence. The defence, during the course of their arguments, have repeatedly stated that the ED has cooked up the case merely on the basis of whims and fancies and there are contradictions in the testimonies of the witnesses. The defence has assailed the testimony of approver Dinesh Arora and has submitted that Dinesh Arora has made the statement under the influence of ED and to protect himself. It is also the case of the defence that the public servants who are under the direct control of Hon'ble LG, who is the complainant in the present case, have made their statements only to save their skin. 35. This court is fully conscious of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties in the formulating and drafting of the policy certainly points at mens rea. The jurisdiction of bail is a discretionary jurisdiction. But this discretion has to be exercised on the settled principles in a judicial manner. The court has to bring in its judicial experience to arrive at a conclusion, which should be rational and logical. It is pertinent to mention that the accused and complainant/prosecution are entitled to know the reasons on the basis of which their bail application has been decided, but at the same time such reason should not be detailed in such a manner that it may prejudice the trial. 39. The issue to be examined is whether the petitioner has been able to fulfill the twin conditions as laid down under Section 45 of the PMLA. It is pertinent to mention here that the petitioner himself in his statement dated 17.09.2022 has admitted that he was going to run the retail zones for Sharad Chander Reddy. The petitioner has also stated that he had met Vijay Nair through Arun Pillai in or around July 2021. The petitioner has also further stated that he was running 3 retail zones of Sri Avantika, Organomixx and Trident. The petitioner in his statement dated 08.11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inent to mention here that in reply to question number 2 in the statement under Section 50 of PMLA dated 01.10.2022, Dinesh Arora had stated that during the conversation s petitioner expressed his anger by saying that even after giving advance 90-100 crore to Vijay Nair (for AAP /government) their shops are not opening on time. It also came in the testimony of Dinesh Arora dated 03.10.2022 that meeting was called by Vijay Nair in February 2022 at Habitat Centre for discussing and solving the problems faced by South Group in Delhi / Retail trade which was attended by Vijay Nair, Dinesh Arora, Arun Pillai, Arjun Pandey, petitioner Abhishek Boinpally and Chandan Reddy. It is also relevant to mention here that Mohit Gupta in his statement dated 14.12.2022 had stated who was regional sales manager in Pernod Ricard stated that he used to interact with petitioner for the operation issue for three zones run by the petitioner. Similarly Tanmay Vashith another senior officer of Pernod Ricard stated that he used to interact with the petitioner and seek his help for resolving issued and streamlining things within the zones. 43. It is also relevant to mention here that Jagbir Singh Sidhu who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do investment in October 2020. Sh. Gautam Mootha stated that, as some dispute has arisen he received money from the petitioner in his personal account. Sh. Gautam Mootha in his statement had also stated about the transaction regarding ZNPL and CDG broadcasting private limited. The case as set up by the ED is that the retail zones of Sarath Reddy were used for recoupment of advanced kickbacks given by South Group and one of the methods to recoup the kickback was by way of giving excess credit notes (i.e. the credit notes which have not been backed by manufacturer) of Rs. 4.35 crores from Indo Spirits to the 5 retail zones of Sarath Reddy exclusively. 46. It is also the case of the ED that huge outstanding amount of Rs. 60 crores of the 5 zones of Sarath Reddy was pending for payment by these 5 zones to Indo Spirits and therefore this amount of Rs. 4.35 crore and Rs. 60 crore are nothing but POC. It is that case of the ED that the recoupment of kickbacks are also money laundering. 47. The ED s case is that the petitioner knew it fully well that these retail zones were being used as part of the conspiracy to recoup the kickbacks and ensure that these retail zones run smoothly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d accused and also the Whatsapp chats between different persons. 51. Learned trial court has also inter alia held that he has assisted in recoupment of the kickback amount as evident from the fact that an amount of Rs. 3.85 crores out of the recouped kickbacks was transferred in his bank account from the account of Sh. Gautham Mootha and this transfer is found to have genesis in the amount of Rs. 33 crores which was transferred to the account of Sh. Arun Ramchandaran Pillai by Sameer Mahandru, out of the profits earned by Indo Spirit. This accused is even found connected with two other transfers for the amounts of Rs. 1 crore and 70 lakhs in accounts of M/S Andhra Prabha Publications and M/S India Ahead news respectively, which entities are alleged to be associated with him and even these amounts are stated to have been transferred towards recoupment of the kickbacks. Further, besides attending the above two meetings held in connection with formulation of the excise policy in May-June, 2021 in Gauri Apartments, Near Claridges Hotel and in hotel ITC Kohinoor at Hyderabad, he even attended the meeting held in February/April, 2022 in hotel Oberoi Maidens, Delhi to sort out the reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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