TMI Blog2023 (7) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... rovides that this condition is in addition to the limitations imposed under Section 439 of the Code of Criminal Procedure, 1973 or any other law for the time being in force on granting of bail. It is settled proposition Section 45 PMLA do not impose 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. 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 an 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 - The present case is very peculiar in nature and may not have any parallel factual matrix. In brief, the allegation in the predicate offence was that the conspiracy was hatched between the political head and certain persons which included an individual allegedly repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e extremely serious in nature. The alleged conspiracy has been well spun and there are prima facie credible materials on record. This Court also does not find any illegality or perversity in the order of learned Trial Court. Learned Special Judge has correctly gone through the entire material and has given an opinion which seems to be in accordance with law. There is no reason to interfere in the bail order. Bail application dismissed. - HON'BLE MR. JUSTICE DINESH KUMAR SHARMA For the Petitioner : Ms. Rebecca Memmon John, Sr. Adv. with Mr. Samudra Sarangi, Ms. Nitya Jain, Ms. Alisha Luthra and Mr. Pravir Singh, Advs. For the Respondent : Mr.S.V.Raju, learned ASG with Mr. Zoheb Hossain, Special counsel for ED with Mr. Vivek Gurnani and Mr.Kartik Sabharwal, Advocates JUDGMENT DINESH KUMAR SHARMA,J : A. FACTUAL MATRIX CRL.M.A. 11089/2023 The present application has been moved seeking early hearing. For the reasons stated in the application, the application is allowed. BAIL APPLN. 1178/2023 1. The present order shall dispose of the bail application no. 1178/2023 of ―Vijay Nair vs Directorate of Enforcement‖. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Amit Arora, Director of M/s Buddy Retail Pvt. Limited, 1402, Tower-15, Vipul Greens, Gurgaon. Haryana, Shri Dinesh Arora Rio Plot No.-139, III Floor. Block-A. Gujrawala Town, Phase-I. Delhi. Shri Arjun Pandey are close associates of Shri Manish Sisodia and are actively involved in managing and diverting the undue pecuniary advantage collected from Liquor Licensees to accused public servants. That Shri Sameer Mahendru, MD. M/s Indospirits has transferred an amount of one crore to account no. 10220210004647 of M/s Radha Industries maintained with UCO Bank. Rajendra Place, 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 famil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd through messages and conversations over phone as well as in person that M/s Pernod Ricard India Pvt Ltd should not give its wholesale distributorship to M/s Brindco Sales Pvt. Limited as M/s Diageo is going to award its wholesale distributorship to M/s Brindco Sales Pvt. Limited. e. That, Shri Sameer Mahandru introduced Shri Arun R. Pillai and Shri Abhishek Boinpally as potential investors in Indo Spirits who have a backing of Sh. Magunta Srinivasulu Reddy of Balaji Group and Sh Sharad Reddy of Aurobindo Pharma. In this regard, a meeting was held at hotel Taj Mansingh, 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 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pernod Ricard India Pvt Ltd as well as the officers of Excise Department of GNCT of Delhi to get the distributorship of M/s Pernod Ricard India Pvt Ltd and L1 license for M/s Indo Spirits for which the same was not entitled. 11. Since the Section 120B of the Indian Penal Code, 1860 and Section 7 of the Prevention of Corruption Act. 1988 are scheduled offences under the Prevention of Money Laundering Act (PMLA), 2002, the Directorate of Enforcement has initiated an investigation in the matter by recording an ECIR No. ECIR/HIU-II/14/2022 on 22.08.2022. The investigation 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 inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wholesale distribution business to the accused M/s Indo Spirits (L1 wholesaler), which is a part of the Super Cartel including Sh. Abhishek Boinpally. e. Sh Vijay Nair, who has orchestrated this entire scam is not an ordinary worker of the AAP but a close associate of Sh Arvind Kejriwal, the CM of Delhi and was closely interacting with the Dy CM for the Excise policy related matters. Sh Vijay Nair, as per his statement under section 50 of PMLA, 2002 functions from the camp office of Sh Arvind Kejriwal, CM, Delhi. Further, Sh Vijay Nair, since 2020, has been residing in 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bogus invoices. k. These kickbacks were paid in advance to the AAP leaders through Vijay Nair by the South Group as a part of agreement between the South Group and the AAP leaders. Against the kickbacks paid, the south group secured uninhibited access, undue favours, attained stakes in established wholesale businesses and multiple retail zones (over and above what was allowed in the policy). In one of the ways to recover/recoup the kickbacks given by the South Group, partners of the South group were given 65% stakes in Indo Spirits in collusion with the accused Sh Sameer 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 Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us operandi for recovering the kickback paid in advance by the South group, monies in the form of outstanding from the ostensible sales from the wholesale of Indo Spirit to Retail of the South group with an understanding that the outstanding was not to be recovered and the amount will be shown as recoverable in the books of account. Sh Sarath Reddy's controlled entities owed over Rs. 60 Cr (approx.) to Indo Spirits, which is shown as outstanding but was not meant to be recovered as part of the conspiracy. p. The retail business was lucrative and the turnover was huge 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. 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. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfined to the extent of the media role out of the Excise Policy highlighting the benefits and clarifying the facts regarding the same to the public at large. It has been submitted that the petitioner had no role to play in the drafting of the Excise Policy or had any contribution in relation to the framing of the Excise Policy itself. It was submitted that initially, the petitioner was arrested in the predicate offence by the CBI on 27.09.2022 and while the petitioner was in custody, he was arrested by E.D. on 30.11.2023. The petitioner was granted bail in the predicate offence on 14.11.2022. In the original complaint filed by E.D. the petitioner was not named as an accused. However, the E.D. filed a supplementary complaint wherein the petitioner was named as an accused. 9. Learned senior counsel for the petitioner submitted that the case of the E.D. rest upon the conspiracy amongst the south group which includes individuals from Hyderabad (Arun Pillai, Abhishek Boinpally, Sharath Reddy) who were interested in joining the liquor business in Delhi.; Liquor Industry Players which includes representatives of prominent Liquor Manufacturer (Manoj Rai and Benoy Babu- Pernod Ricard) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 13. It was further stated by Dinesh Arora in his statement that Vijay Nair influenced the excise department officials to resolve the license-related issues being faced by Indospirits i.e. Sameer Mahendru. 14. Learned senior counsel for the petitioner submitted that there is not even a shred of evidence produced by the E.D. that INR 100 Cr was received on behalf of Vijay Nair. It has been submitted that to the best statement of Dinesh Arora speaks of the movement of INR 20 - 30 Cr from Hyderabad to Delhi. 15. It has further been submitted that even as per the statement of Dinesh Arora that he never handled any currency. His best case is that he received calls from Abhishek Boinpally or Lupin, who gave him a phone number and currency number. These calls were neither recorded nor has Dinesh Arora been able to show any digital evidence confirming the same. 16. Learned senior counsel for the petitioner further submitted that Dinesh Arora merely goes on to further state, that he wrote down the phone number/currency number on a piece of paper and handed it over to Rajesh Joshi or Sudhir. These pieces of paper were never recovered from either Dinesh Arora or Rajesh Joshi or S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nair contacted him to resolve the Indospirits licensing issue on which he denied to have spoken to Vijay Nair on the subject. 24. Ms. Rebecca John, learned senior counsel further submitted that the ED has conveniently resorted to shifting their stances on who is the ―kingpin / sole decision maker‖ of the Delhi Excise Policy based on which bail application they are opposing. 25. Learned senior counsel for the petitioner submitted that the petitioner had no role at all in policy drafting, formulation, framing, or implementation. Learned senior counsel for the petitioner further submitted that even after filing the supplementary complaint on 06.01.2023 naming the petitioner as an accused, the ED has sought to interrogate further examine the applicant vide orders dated 17.03.2023 and 02.05.2023. 26. It has further been submitted that the investigation qua petitioner Vijay Nair is still not complete and the complaints and supplementary complaints have been filed piecemeal in nature. It has been submitted that the supplementary complaint was filed only to defeat the statutory right of bail. 27. The petitioner has placed reliance on Thwaha Fasal v. Union of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely Sh. Dinesh Arora and Sh. Abhishek Boinpally and this fact was mentioned in the statement of Dinesh Arora, dated October 1, 2022. 32. Sh. Zoheb Hossain, learned special counsel for the E.D. submitted that it has also surfaced in the investigation that petitioner- Vijay Nair used a highly discreet Signal app and directed others to communicate with him only on that Signal app. 33. Sh. Zoheb Hossain, learned special counsel for the E.D. submitted that the petitioner-Vijay Nair has played a prominent role in making Indospirit as a wholesale distributor of PRI against kickbacks to APP leaders. It has been submitted that Indospirits in fact was a vehicle for recouping the kickbacks paid (the profit generated by the Indospirits wholesale business) by the South Group to Vijay Nair. 34. Sh. Zoheb Hossain, learned special counsel for the E.D. submitted that there is also material on the record that Vijay Nair received Rs. 1.50 Cr. (1,50,00,000/-) from M/s. Tarshame Mittal without any actual services also a fraudulent contract was drawn up to cover up this transaction as an afterthought and therefore, an irresistible conclusion is drawn that Sh. Vijay Nair has received these f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Crime and the scope and ambit of Section 3 of PMLA, it has been laid down in Vijay Madanlal Chaudhary (supra) wherein it has been held as under: 263. Coming to Section 3 of the 2002 Act, the same defines the offence of money-laundering. The expression money-laundering , ordinarily, means the process or activity of placement, layering and finally integrating the tainted property 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 project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also observed that the Constitution of India and the enactments made by Parliament must necessarily be understood in the context of the present-day scenario and having regard to the international treaties and convention as our constitution takes note of the institutions of the world community which had been created. In Apparel Export Promotion Council v. A.K. Chopra, the Court 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 legislativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guilty of such offence and that he is not likely to commit any offence while on bail. It is also pertinent to mention here that Section 45 also provides that this condition is in addition to the limitations imposed under Section 439 of the Code of Criminal Procedure, 1973 or any other law for the time being in force on granting of bail. It is settled proposition Section 45 PMLA do not impose 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 material 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 requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations. 44. In Nimmagadda Prasad v. CBI, (2013) 7 SCC 466, it was inter alia held as under: Economic offences constitute a class apart and need 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. 45. 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 an 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bail application of the accused person namely Mr.Vijay Nair who was arrested for the offence under Section 3 of the PMLA. The allegation against Vijay Nair is that though he did not hold any position in the government but he was representing the government and was interacting with all the stack holders including manufacturers, wholesalers and retailers. Mr.Vijay Nair was allegedly the face of the government and he received kickbacks from the south group. The south group was allegedly brought in by him for gaining the undue advantage. The allegation against him is also that he arm-twisted the various stack holders so as to remove any impediment or obstacle in the generation of proceeds of crime. The allegation against Manish Sisodia and Vijay Nair was also that M/s Indospirit was created as a special purpose vehicle to generate the proceeds of crime. 48. The plea raised by the defence is the ED has no material other than an inconsistent and unreliable statement of either co-accused 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e testimony of the witnesses. However, this court is fully conscious of the fact that at the stage of bail, the court cannot appreciate the evidence meticulously. This court at this stage, would restrain itself to make any comment further on this as the trial is yet to take place. 51. The option before this court is either to go into the meticulous examinations of the witnesses as being argued by the learned defence counsels or to take into account the statements recorded under Section 50 of PMLA by the ED. It is correct that the case of ED is based on the statements under Section 50 PMLA cannot be taken as gospel truth but at the same, the court has to take into account the probabilities and the legislative intent behind enacting Section 50 PMLA. The bare perusal of Section 50 makes it clear that these are deemed to be judicial proceedings. There are consequences for making a false statement or not complying to the summons under Section 50 of PMLA as provided under Section 63 of the PMLA. There statements under Section 50 PMLA cannot be brushed aside. 52. This court at this stage cannot go into the probative value of the witnesses nor can it meticulously examine those facts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etary General, International Spirits and Wines Association of India, (ISWAI) dated 05.12.20222 wherein it was stated that the petitioner expressed that the foreign players are very quiet while the Indian players are approaching and have offered funding to the party in lieu of maintaining status quo. The statement of Suresh Menon clearly indicates that the intention of the petitioner- Vijay Nair was mala fide since inception and he had the full authority to conceptualize the drafting and execution of the excise policy. 56. Mr. Sunil Duggal, ex-employee of Pernod Ricard in his statement dated 02.12.2022 also stated that petitioner Vijay Nair in one of the meeting has stated that the local manufacturers have offered to pay large amounts to the AAP leaders for favorable Excise Policy but there was no input or support from ISWAI. The reference can also be made to the statement of co-accused Benoy Babu dated 13.11.2022 whereby he stated that Vijay Nair and AAP functionary is meeting industry people and he wants to meet the manufacturers/wholesalers as well. 57. Similarly, Amandeep Dhall in his statement dated 29.10.2022 who stated that on 26.03.2021, he got a call from Sh Vijay Nai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back amount of Rs. 100 crores, Rs.192 crores being profit of M/s Indospirit around Rs. 200 crores being profit of A-12 company and the above excess credit notes and outstanding amount etc. 62. Learned Trial Court while considering the evidence on record observed that Vijay Nair had in fact emerged as the string holder of the entire criminal conspiracy hatched by the accused persons. The Court further observed that though it is not disputed that he was the Media and Communication incharge of AAP but at the same time it was revealed during the investigation that he was actually representing the AAP and GNCTD in different meetings that took place with the stakeholders in liquor business at different places. This was done to the extent that he has also allegedly represented himself as an OSD in the Excise Department of GNCTD and no one except him officially participated in these meetings. 63. Learned Trial court further observed that the evidence also suggests that the said meetings were in fact called by the Applicant Vijay Nair. He was instrumental at the stage of formulation of the policy itself with full authority and rights. He was further involved in meetings with represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in cases Navendu Babbar (Supra) and Ratul Puri (Supra) being relied upon on behalf of the applicant were also found to be of no help as no parity can be drawn between the facts of the above cases and of the present one as Navendu Babbar (Supra) was not a case under the PMLA and in the other case of Ratul Puri (Supra) the accused was not named in the scheduled offences case and even in the ED case he was prosecuted in the sixth supplementary complaint only and none of the other accused was in custody in the ED case. 67. As discussed above, the accused person in the present case acting in furtherance of the conspiracy circumvented the policy and got framed the policy in such a manner to continuously generate and channel illegal funds. The allegations are that deliberate loopholes were left to facilitate illegal and criminal activities. It has also come on the record that accused Vijay Nair was a close associate of Chief Minister, GNCT of Delhi and Sh. Manish Sisodia, Deputy Chief Minister. The investigation has further revealed that Vijay Nair arranged a video call through face time between Chief Minister, Government of NCT of Delhi and Sameer Mahendru where Chief Minister said t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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