MANISH SISODIA VS. CENTRAL BUREAU OF INVESTIGATION

CITATION: 2023 INSC 956
DATE OF JUDGEMENT: 30 October 2023
BENCH: Justice Sanjiv Khanna and Justice Sarasa V. N. Bhatti

LEGAL ISSUE

[1]The main legal issue with which the Supreme Court dealt was whether the appellant, Mr. Manish Sisodia should have been given bail, essentially with respect to the criminal proceedings made by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED). Such proceedings involved a number of offences committed via the Indian Penal Code (IPC), Prevention of Corruption Act (PCA), and the Prevention of Money Laundering Act (PMLA). [2]In particular, the Court considered the applicability of Section 45 of the PMLA which defines offences in the act to be cognisable and non-bailable and applied principles of the precedent Vijay v Madanlal Choudhary, Union of India [2022] [INSC] [757]. In this case, there was the need to balance the severity of the prosecutions and the circumstantial evidence at the bail hearings and have the accused guaranteed the right to a timely trial and personal liberty in accordance with Article 21 of the Constitution

FACTUAL BACKGROUND

• [3]Manish Sisodia was the Deputy Chief Minister and Excise Minister of Delhi.
• He was arrested by the Central Bureau of Investigation (CBI) on 26 February 2023 and the Enforcement Directorate (ED) on 9 March 2023 in relation to the investigations of the Delhi Liquor Excise Policy of the 2021-22 financial year.
• CBI pressed two different charge sheets against the appellant, which were the Indian Penal Code (IPC) and the Prevention of Corruption Act (PCA), namely pursuing Sections 201(causing disappearance of evidence), 420 (cheating), and Sections 7, 7A, 8, 12 of the PCA (concerning bribery and unlawful profits).
• Simultaneously, the ED lodged a case as a criminal complaint in connection with the role of the appellant in money laundering under the Prevention of Money Laundering Act (PMLA); it is stated that illegal proceeds were laundered through bulky transactions and hawala.
• [4]These claims revolved around allegations that the appellant through his misuse of his office as a public servant introduced a new policy in the excise system which was favourable to some of the wholesale distributors.
• These distributors were accused of having made windfall profits by manipulating policies and it was claimed that they paid kickbacks and bribes.
• Both the Trial Court and the Delhi High Court had refused to grant the appellant bail and in a bid to get an interim relief, he addressed the Supreme Court.

ARGUMENTS ON BEHALF OF THE APPELLANT

Some of the points raised by the Appellant

• Custody and Timeline: On 26 February 2023 regarding the CBI case and 9 March 2023 regarding the ED case, the Appellant was in custody. It was charged by the CBI on 25 April 2023, and the ED on 4 May 2023. The trials are still in its infancy as the arguments on the charges begin and the trial proceedings are expected to take several years.
• [5]Nothing to do with the Decision-making Process:  In a statement dated 14 March 2023, the Appellant stated that he had not asked the Excise Commissioner to fast-track the process of granting licences to any particular distributor. Relationships among the parties in the business are held directly and without his interference, influence, or participation.
• Increase of Commission: The Appellant argued that he cannot explain the commission increase because he did not see a rational interpretation in this despite the fact that the calculation of commission was informal even during the former regime.
• Risk of Evidence Manipulation: With his status and influence the Appellant also showed fear of the possibilities of having witnesses and records being leaked or messed with in case bail was not granted. 
• Alleged Bribes: It was mentioned in the case that there were alleged payments of 2.2 crores supposedly on behalf of the Appellant which he disputed and denied any personal connection to. 
• Volume of Evidence: The Appellant emphasized the size of the case brought against him as the CBI witnesses were 294 and ED 162 as well as the amount of documents was more than 56,000 pages. According to him, the length of the court process was a violation of his right to quick trial and should be considered to receive bail.

ARGUMENTS ON BEHALF OF THE RESPONDENTS

The prosecution believed that the charges were grave and backed with facts: 

• [6]Illegal Gains and Laundering: Kickbacks of 100 million rupees were supposed to be paid to the associates of the appellant. Part of it, estimated to be ₹45 crore, is said to have been channelled to political campaigns including Goa elections, which demonstrates that there might be a misuse of the public office. 
• Readjusting the Policy: The new excise policy resulted in the un-proportional benefits of local distributors who were wholesale. By virtue of his position the appellant made a structure that facilitated such illegal gains at the expense of using the normal procedures. 
• Granted by Evidence: Despite the fact that, the case had not been fairly proved, the prosecution insisted that prima facie material served the charges, making the custodial detention and the denial of bail justified. 
• Conspiracy and Corruption: It was indicated through evidence that there was a determined effort to prepare the new policy in favour of the large distributors, cartelisation ability, and unwarranted financial benefits.

JUDGEMENTS AND RATIO DECIDENDI

[7]The denial of the granting of bail was found by the Supreme Court who established that the appellant had not met the required conditions as stipulated by Section 45 of the Prevention of Money Laundering Act (PMLA) to assume his innocence.

An initial evaluation of the evidence was sufficient to the bail stage and no more detailed examination was needed. The charges brought in the PMLA including money-laundering and indirect involvement in the proceeds of crime were initially supported by the material which is already in the record. The banning of bails did not fail the trial since all the facts and legal issues were to be heard in the Trial Court. The Court even allowed the appellant to reapply bail in case of any change of circumstances or when the trial was not progressing within three months. The interim bail can be requested in case of medical, personal, or family emergencies.

The Court highlighted:

• Right to Speedy Trial: Prolonged detention must be balanced against the accused’s fundamental right under Article 21.
• Assurance by CBI: The prosecution assured trial completion within six to eight months; failure to adhere could be grounds for renewed bail application.
• Interim Relief: Bail for emergencies was allowed, reinforcing that custody decisions are flexible in exceptional circumstances.

CRITICAL ANALYSIS

[8]The appellant argued that the excise policy was adopted after deliberation, the approval of the cabinet, and the recommendation of the experts which was to reduce cartelisation and also to simplify the procedure of wholesale licensing. In October 2020 the Ravi Dhawan Committee Report suggested a slow elimination of the government monopoly and establishment of regulated licensing. The 12% distribution fee in the new policy was used to meet operational expenses and quality checks and therefore replaced the old charges. The prosecution responded that the differences to the recommendations of the experts, forced surrender of the license and selective licensing was unlawful enrichment. There were findings that the appellant was knowledgeable and involved in creating a system of kickbacks and laundering of proceeds of crime. This ruling follows past decisions in the Prevention of Money-laundering Act that bail is unprecedented and depends upon a provisional determination of evidence, and at the same time acknowledges the right of the accused to freedom and fair trial by trial.

[1] https://indiankanoon.org/doc/20777541/

[2] https://www.scconline.com/blog/post/2023/10/30/supreme-court-no-bail-manish-sisodia-delhi-liquor-excise-policy-scam-case/

[3] https://www.courtkutchehry.com/pages/blog/manish-sisodia-vs-central-bureau-of-investigation-2023/

[4] https://www.livelaw.in/tags/manish-sisodia-v-central-bureau-of-investigation

[5] https://www.casemine.com/commentary/in/enhancing-the-rule-of-law-in-economic-offenses-and-bail-considerations:-analysis-of-manish-sisodia-v.-cbi-(2023-insc-956)/view

[6] https://testbook.com/constitutional-articles/manish-sisodia-vs-directorate-of-enforcement

[7] https://www.gojuris.in/newsdetail.aspx?newsid=6336

[8] https://www.scobserver.in/journal/a-game-of-snake-and-ladder-tracing-manish-sisodias-17-month-journey-to-bail/