The Supreme Court on Tuesday asked the Central Bureau of Investigation (CBI) and Directorate of Enforcement (ED) to show that in the alleged Delhi excise policy scam the coloured money originating from the Telangana based liquor group reached former Delhi Chief Minister Manish Sisodia – who is under incarceration since February 26, 2023 and has approached the top court for bail in both the cases.

Sisodia was arrested in the case by the CBI on February 26, 2023 and by the Enforcement Directorates on March 9, 2023.

Observing that nowhere it has been shown that money coming from “liquor group” based in Telangana reached Sisodia, Justice Sanjiv Khanna heading a bench also comprising Justice S.V.N. Bhatti told the Enforcement Directorate, “You have to establish the chain (money originating from liquor group in Telangana reaching Sisodia). We are not satisfied.  I agree, both of us agree (Justice Khanna and Justice Bhatti) that it is difficult to establish the chain”.

The bench asked the Additional Solicitor General S.V. Raju to show the money trail from the liquor group to the petitioner (Manish Sisodia). All your submission does not show any money reaching Sisodia. The bench said that everything seems to be happening between different players allegedly involved but nowhere reaching Sisodia.

As Additional Solicitor General S.V. Raju appearing for both the CBI and the ED told the bench that money originating from the liquor group travelled from Mumbai to Goa where it exchanged hands, Justice Khanna asked, “Why liquor group based in Telangana would require the money (to go) from Mumbai to Goa.”

On a number of issues that were argued by the ED today, the bench appeared not satisfied. At one point, in the course of the arguments, ASG Raju referred to certain amounts that were transacted, Justice Khanna observed, “These are very miniscule amounts.”

Pointing to the legal and factual aspect of the issue being argued by the ASG Raju for the ED, the bench said, “How will you establish money laundering by Sisodia factually and legally? … He may be aware it may be used, as per your case, but he never came in actual physical possession.”

At another point when ASG Raju referred to certain lobbies or pressure groups that were active while the excise policy was being formulated, Justice Khanna described it as a normal thing to happen in such situations.

Justice Khanna said, “We understand there is a policy change and everybody wants a change that will be beneficial for them. That will be there. If we say special groups are discriminatory … without money consideration, it will not make out an offence … If we go to that extent, there will be no pressure groups or even vested interests when a policy decision is taken then … Some pressure and conflict will always be there. Of course, bribes cannot be accepted.

The court was not convinced when ASG Raju referred to Section 3 of the Prevention of Money Laundering Act, 2002, to allege generation of proceeds of crime, abetment and conspiracy against Sisodia, the bench said generation of proceeds of crime, abetment and conspiracy are not covered under the Section 3 of the PMLA.

Section 3 of PMLA which deals with the ‘Offence of money-laundering’ says, that 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.

ASG Raju will address the bench on this aspect of his case on October 12 – the next date of hearing.

Concluding his argument that had commenced yesterday – Wednesday, October 4 – senior advocate Abhishek Manu Singhvi, appearing for Sisodia, urged the court to grant bail to Sisodia as there was nothing that directly points fingers at him.  He referred to several judgments of the top court to buttress the grant of bail to the former Chief Minister of Delhi and the Aam Aadmi Party leader.

Taking the bench through evidence, Singhvi said, “These are all allegations. Some of them are hearsay but none of them implicate the petitioner. Vijay Nair is not an associate of the petitioner.”

Manish Sisodia has moved the Supreme Court for bail both in CBI and ED cases in the alleged irregularities in the Delhi Excise Policy case.  He has challenged Delhi HC order rejecting his bail plea.

The Delhi High Court denied him bail in both the matters. In its order passed on July 3, 2023, in the ED case, the High Court had stated that inter alia it was of the view that in view of the high political positions held by the accused and his position in the party in power in Delhi, the possibility of influencing the witnesses cannot be ruled.

In February 26, 2023, Sisodia was arrested by the CBI for alleged irregularities in the framing and implementation of Delhi’s new excise policy. The policy was withdrawn amid allegations of foul play by the Opposition. He is currently in judicial custody.