TMI Blog2023 (7) TMI 1314X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated with some other amounts of proceeds of crime and the total proceeds being attributed to him are stated to be around Rs. 563 crores. The accused persons 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. There is sufficient material on the record that the petitioner was indulging or knowingly assisting in process or activity connected with the proceeds of crime and it cannot be said that there are reasonable grounds for believing that petitioner is not guilty of such offence and he is not likely to commit any offence well. It was allegedly a well spun conspiracy to generate P.O.C. In such cases every person who is connected with any process or activity relating to P.O.C. cannot avoid his/her responsibility. The allegations are very serious in nature. Bail application dismissed. - HON'BLE MR. JUSTICE DINESH KUMAR SHARMA For the Petitioner : Mr. Mukul Rohatgi, Sr. Advocate, Mr. Siddharth Luthra, Sr. Advocate with Ms. Ranjita Rohatg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Manoj Rai, Ex-employee of M/s Pernod Ricard, Sh. Amandeep Dhall, Owner of M/s Brindco Spirits Sh. Sameer Mahendru. Owner of M/s Indo Spirits are actively involved in irregularities in framing and implementation of excise policy of GNCTD of Delhi for the year 2021-22. b. Some of the L-1 Licence holders are issuing credits notes to retail vendors with an ab-initio intention to divert the funds as undue pecuniary advantage to Public Servants. In furtherance to this, they are showing false entries in their books of accounts to keep their record straight. c. 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 manage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collected from the wholesale businesses would be divided in half between Sh Vijay Nair and Sh Abhishek Boinpally. c. That. in pursuance to the said conspiracy, the money amounting to Rs. 20 to 30 crores was sent to Sh. Vijay Nair and his team between July to September 2021 in cash through hawala channels. Sh. Abhishek Boinpally used to call Sh. Dinesh Arora and tell him a phone number and currency note number, which he used to forward to the team of Vijay Nair and inform Shri Vijay Nair. d. Sh. Vijay Nair instructed the employees of Pernod Ricard India Pvt. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hishek Boinpally has investment and interest in M/s Andra Prabha Publications Pvt Ltd and M/s India Ahead News. j. Therefore, it is clearly revealed that Sh. Vijay Nair hatched a conspiracy with Sh. Dinesh Arora, Sh. Abhishek Boinpally, Sh. Arun R Pillai, Sh. Sameer Mahandru, Sh Mootha Gautam. Sh Kuldeep Singh, DC and Sh Narender Singh, AC and in pursuance of the same by using his position in the ruling party at Delhi took advance money of Rs 20-30 crores from Sh. Abhishek Boinpally through Sh. Dinesh Arora and in lieu of the same influenced the officers of M/s 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said document. d. Due to the policy framework, where one manufacturer could only choose one wholesaler gave the manufacturers' a very critical position to decide the profits of the wholesale businesses. Though the manufacturers seemingly were supposed to take this crucial decision on their own as per their choice, but, this investigation has revealed that Pernod Ricard (one of the Accused), one of the biggest manufacturers in the country, also a subject of the ongoing investigation, was in fact directed by and conspired with Sh Vijay Nair to give their 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese funds were used in the election campaign of the AAP for Goa Assembly elections 2022. Cash payments to the tune of Rs. 70 lacs were made to the volunteers who were part of the survey teams. Sh Vijay Nair himself has told certain persons involved in the campaign related work to receive the payments in cash. Advertisment/hoarding related work were directed to raise only part of the claims in the bill and receive the remaining in cash. These part cash payments were managed through Hawala Channels. Teams led by Sh Vijay Nair have directed certain firms to even issue 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 stak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tually got illegally diverted into ostentatious profits to the wholesalers including the accused M/s Indo Spirits, which was used to recoup the kickbacks paid in advance by the South group. o. The South Group directly and indirectly controlled 9 retail zones, which included 5 retail zones of Sh Sarath Reddy (accused no). In some cases the control was via financing of the EMD (Earnest Money Deposit) for the L7 tender process. ostensible investments, relatives/dummies/proxies. Apart from the direct profits accruing from the wholesale business of Indo Spirits, modus 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /added as an accused in the Supplementary Prosecution Complaint dated 06.01.2023 filed by the E.D. 8. Learned senior counsel for the petitioner submitted that the Petitioner is not guilty of money laundering as defined in Section 3 read with Section 2(1)(u) of the Act. It has been submitted that no money in any form or manner has been given to the Petitioner by anybody and the Petitioner has accordingly not laundered any money. 9. Reliance has been placed on Vijay Madanlal Chaudhary V/s Union of India reported in 2022 SCC Online SC 929 wherein it was held that it is only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime. 10. Learned senior counsel for the petitioner further submitted that a conjoint reading of Section 3 of PMLA with Section 2(1)(u) of the PMLA shows that the Section 2(1)(u) defines PoC as that property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence. It was submitted that therefore, first there must be scheduled offence, from which proceeds of crime must be gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Excise Policy even before it was announced became viral. It has been submitted that obtaining and being privy to the Policy is not either PoC or laundering thereof. It has further been submitted that the Petitioner officially attended meetings called by the Delhi Government where various stakeholders were present. 14. Learned senior counsel for the petitioner submitted that the M/s Indospirits was authorized by PRI on the basis of L1 license granted by the Excise Department. The appointment also can neither be termed as PoC and nor does it amount to money laundering. It has been submitted that the infact PRI had in his its comments to the Government had stated that the wholesaler should be a Government agency while the manufacturer and the retailer could be private persons. This plea of the PRI was accepted by the Expert Committee. However, the wholesaler was also made as a private party by the Government. 15. Learned senior counsel for the petitioner submitted that the petitioner is a mere employee in PRI and had no autonomy to take decisions solely at his end. It has been submitted that the E.D. has traversed beyond its jurisdiction as it cannot investigate allegations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ater on used for generating parking and use of proceeds of crime. 21. Sh. Zoheb Hossain, learned special counsel for the E.D. submitted that petitioner Benoy Babu was able to arrange and provide financial support to two companies (namely M/s Khao Gali and M/s Bubbly Beverages) who had no business at that time when Mr Benoy Babu chose them to give financial support, which were part of South Group and were expected to get L7 License. It has been submitted that the loan availed by M/s Bubbly Beverages even was further used for cross funding another entity of the South group. The financial support was in form of bank guarantee to these companies. It has been submitted that the financial support to other three companies were made in order to maximize control over retail market. It has been submitted that on the strength of the bank guarantees, the companies took loan of Rs.140 Crore and as per the record, these companies not only availed the loan, but have not repaid full loan till the investigation was taken up by CBI ED. 22. Sh. Zoheb Hossain, learned special counsel for the E.D. submitted that due to the financial support provided by Pernod Ricard, the 2 out these 5 companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undering. 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 and projecting it as untainted property shall be guilty of offence of money-laundering. 28. The 'proceeds of crime' has been defined under Section 2 (u) of PMLA, which reads as under: (u) proceeds of crime means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property 3 [or where such property is taken or held outside the country, then the property equivalent in value held within the country] 4 [or abroad]; 29. In this regard the proceeds of crime and the scope and ambit of Section 3 of PMLA has been well 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 countr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty in question as untainted property, the offence would be complete. This would undermine the efficacy of the legislative intent behind Section 3 of the Act and also will be in disregard of the view expressed by the FATF in connection with the occurrence of the word and preceding the expression projecting or claiming therein. This Court in Pratap Singh v. State of Jharkhand, enunciated that the international treaties, covenants and conventions although may not be a part of municipal law, the same be referred to and followed by the Courts having regard to the fact that India is a party to the said treaties. This Court went on to observe that the Constitution of India and other ongoing statutes have been read consistently with the rules of international law. It is 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind the constitutional limits. it would, therefore, be just to sustain the argument that the amendment of way or the explanation has been brought about already present words, only to clarity the any and including which manifests the true meaning of the definition and clarities the mist around its true nature. 30. Section 45 of PMLA provides that notwithstanding anything contained in the Code of Criminal Procedure, 1973, no person accused of an offence 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 satisfied that there are reasonable grounds for believing that he is not 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 twin conditions are in addition to the limitation under 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce. The Hon ble Supreme Court in the case of Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439 528 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 offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar 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. 33. 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 ec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Abhishek Boinapally, Mr.Sharad Reddy, Mr.Butchi Babu, Mr.Binoy Babu and others. This court is conscious of the fact that the investigation relating to the conspiracy to frame the excise policy allegedly with malafide intention and alleged misuse of official position was the subject matter of the CBI in which the charge-sheet has already been filed by the CBI. However, in view of the fact that allegedly the basic intention behind framing the new excise policy was to recoup the advance kickbacks and to further gain undue advantage from the excise policy, the facts are to be taken in totality. 36. Presently, this court is considering the bail application of the abovesaid accused person namely Mr.Benoy Babu, who was arrested for the offence under Section 3 of the PMLA. For the purpose of clarity Mr.Bonoy Babu was an employee of M/s Pernod Recard. Similarly, the allegations against Benoy Babu, an employee of M/s Pernod Recard is that he was also in a deep conspiracy from the stage of formulation of policy and extended corporate guarantee of 200 crores to enable the other stakeholders to generate the proceeds of crime. 37. The plea raised by the defence is the ED has no material o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord to show that certain outsiders were actively participating from the stage of drafting and formulation of the policy. The reference to the statements of the witnesses have been made during the course of recording the submission of the learned defence counsels and learned counsel for ED. 39. The statements of the witnesses clearly indicates that some extraneous factors were working since the time of conceptualization, formulation and drafting of the excise policy. The allegation regarding generating of the emails in support of the excise policy also raises the red flag that everything was not being done in a transparent and bonafide manner. 40. This court at this stage, would restrain itself to make any comment further on this as the trial is yet to take place. 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 legislative intent b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collateral gave Pernod Ricard's distribution business to Sameer Mahandru's Indo Spirit. d. When Pernod Ricard hosted a diner at Taj Mansingh Delhi all members of super cartel were present in this meeting and the agenda of meeting was celebration of maximum retail zone and in principal agreement of Indo Spirit getting Pernod Ricard wholesale business. Sh Benoy Babu coordinated with Sh Arun Pillai (representative of South Group) for making Sh Sarath Reddy and Sh MSR the event hosted by Pernod Ricard. e. The role of Benoy Babu in the cartelization with retailers by making investment in the guise of corporate guarantee was Benoy Babu's brain child by granting financial assistance of 200 crore to select retailers including co-accused Khao Gali and Bubbly Beverages would ensure a larger market share. f. The fact that on 02.06.2021 a month before the announcement of excise policy a presentation was made by Benoy Babu, the plan to form cartel and control retail businesses was given as a slide and this was inserted on his specific instructions. g. Khao Gali is an accused in these complaints filed by ED and one of the successful retail bidders involved in the larger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bai to meet Vijay Nair in context of appointing M/s Indo spirits as M/s PRI distributors. It has also come on record that as per the policy no L1 wholesaler can hold L7 retail license. The E.D. s case is that Benoy Babu was fully aware that Sameer Mahendru is the actually beneficiary behind M/s Khao Gali and M/s Bubbly Beverages and despite that Binoy Babu in line with Vijay Nair directions facilitated the Pernod Ricard distribution business to Sameer Mahendru's Indospirits. The case of the E.D. is also that the Benoy Babu is directly involved in the generation of PoC of Rs.59.77 Cr which is the profit accrued to Pernod Ricard from the sales made to the retail zones of the cartel created via conspiracy with the South Group and Vijay Nair and with other companies to whom he provided financial support. Similarly, Benoy Babu was also directly and knowingly assisted in the generation of PoC of Rs. 163.5 Cr which is the enhanced profit of Pernod Ricard due to increase in market share as a result of conspiracy with co-accused Vijay Nair. 44. It is a matter of the record that petitioner Benoy Babu was not only in constant touch with Vijay Nair but also to south group. It is also re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom Aman Dhall. iv. Digital evidence in the form of WhatsApp chat between Arun Pillai and Benoy babu dated 04.09.2021, wherein Sh Arun Pillai has sought assistance from Benoy Babu for recruiting a CEO for the 5 zones of Sarath Reddy. v. Digital evidences in form of mail dated 20.05.2021 wherein Benoy Babuhas sent sensitive information like recommendation of changes by Hon'ble Lt. Governor to the policy and information regarding reworking of policy and submission to Hon'ble Lt. Governor for final approval to other employees of PRI and thereafter asked Pls ensure we keep information in this mail strictly confidential vi. Digital evidences in form of mail attaching the PPTs wherein it is mentioned that the Rs. 200 cr. (in the form of Corporate Guarantee) is an investment by Pernod Ricard in retail business. vii. The E.D. has also relied upon the statement of Dinesh Arora dated 18.11.2022 and statements of Arun Pillai dated 18.09.2022, 02.10.2022 and 08.12.2022 to highlight the role of petitioner Benoy Babu. 47. The Enforcement Directorate has alleged that Benoy Babu was playing a key role in ensuring that Pernod Ricard L1 license was given to Indospirits. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Benoy Baby was the signatory in the capacity of attorney of M/s Pernod Ricard to the documents pertaining to the grant of licenses to M/s Indospirit, and it was the applicant/accused who performed all the operations in respect to the appointment of wholesaler, furnishing corporate guarantees. Even though he was not the Director or major shareholder in the M/s Pernod Ricard, it was observed that in terms of the provisions contained under section 70 (2) of the PMLA he is equally liable for the offence of money laundering committed in the present case, apart from the company itself or any of its Directors, Secretaries or other Managers connected with the commission of the said offence, directly or indirectly. Further the Ld. Special Judge observed that like the other co-accused persons, the applicant/accused also came into the possession of the draft policy before its official publication and is alleged to have been instrumental in tampering with the evidence by way of destruction of his own mobile phones. Further, documentary evidence including call detail records and WhatsApp chats, etc. is also alleged to have surfaced, besides the other evidence, to show his involvement in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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