Manas Dasgupta
NEW DELHI, Oct 5: Making some strong observations in the bail application case of the former Delhi deputy chief minister Manish Sisodia, the Supreme Court on Thursday remarked that the prosecution was faltering in establishing proof even as the central investigating agencies claimed that the ruling Aam Aadmi Party was paid a “kickback” of over Rs 100 crores which it used in the Goa Assembly elections last year.
“Where is the proof? Dinesh Arora (businessman) himself is the recipient. Where is the evidence? Except for statement of Dinesh Arora, is there any other evidence? The chain is not fully established. You (probe agency) have to establish a chain. The money has to flow from the liquor lobby to the person. We agree with you that it’s difficult to establish the chain because everything is done under wraps. But that’s where your competence comes in,” court said.
The Supreme Court heard two separate bail requests of Sisodia in the liquor policy case being probed by the Central Bureau of Investigation (CBI), and a money laundering case by the Enforcement Directorate (ED). Hearing the case on Thursday, the bench, comprising Justice Sanjiv Khanna and Justice SVN Bhatti, said the agencies’ case is that money had been received by Manish Sisodia and asked how it reached him from the so-called liquor group.
“You have taken two figures, ₹ 100 crore and ₹ 30 crore. Who paid them this? There can be so many people paying the money – not necessarily connected to liquor. Where is the proof? Dinesh Arora himself is the recipient. Where is the evidence? Except for the statement of Dinesh Arora, is there any other evidence,” Justice Khanna asked. “The chain has not been fully established,” the bench observed. Arora is an accused-turned-approver in the case, and was recently granted bail.
The ED and the CBI cases against the Aam Aadmi Party (AAP) government in Delhi was that by changing the liquor policy to favour some private companies, it caused the Delhi government to suffer a loss of Rs 2,873 crores.
According to the central agencies, A private firm allegedly paid ₹ 30 lakh as bribe to secure a wholesale liquor licence from the Delhi government, made ₹ 1,333 crore in sales in 13 months, and a profit of ₹ 192.8 crore in just eight months, before transferring ₹ 100 crore to Delhi’s ruling AAP as kickbacks. ₹ 33 crore was allegedly also sent to Arun Pillai, the reported frontman of Bharat Rashtra Samithi leader K Kavitha – the daughter of poll-bound Telangana Chief Minister K Chandrashekhar Rao.
Referring specifically to the flow of money and the charges against the AAP leader filed by the ED under the Prevention of Money Laundering Act (PMLA), Justice Khanna asked, “Manish Sisodia is not involved in all this. Vijay Nair (another accused) is there but Manish Sisodia is not in this part. How will you bring him under the money-laundering act?
“The money is not going to him. In case it is a company with whom he is involved, then we have vicarious liability. Otherwise, the prosecution falters. Money laundering is entirely a different offence,” the judge said.
Pointing out that, according to the agency, the case is not one of attempt but actual involvement, Justice Khanna remarked, “What is the activity connected with the proceeds of crime? This is not generation. PMLA deals with the process or activity connected with the proceeds of crime. So till the proceeds of crime come, the PMLA case doesn’t come.” The hearing has been adjourned till next week.
Mr Sisodia was arrested by the CBI in February and then by the ED the next month. Earlier in the day, the court clarified that the remark it made on Wednesday about making the AAP an ‘accused’ in the liquor policy case was “not to implicate any political party” and was just a legal question that it had raised. AAP Rajya Sabha MP Sanjay Singh was also arrested by the ED in connection with the case on Wednesday.
The party and Delhi Chief Minister Arvind Kejriwal have denied all allegations; Mr Kejriwal had on Wednesday pointed out “more than 1,000 raids” had failed to find evidence of wrongdoing. The AAP has also claimed a “political vendetta” ahead of elections. K Kavitha has also denied wrongdoing and has claimed the charges against her are on the basis of false statements.
Controversy over the revised policy erupted in July last year after a Delhi government official red-flagged “undue benefits” to liquor licence winners and a ₹ 144 crore rebate during the pandemic. A CBI inquiry authorised by Delhi Lieutenant Governor VK Saxena snowballed into a larger probe by the ED, and the liquor policy scam has since haunted the AAP.
The scam, the CBI alleges, began in June 2021 with a group of businessmen conspiring in Hyderabad to “enrich themselves” and their associates by using the Delhi government’s new liquor policy. The key figures in that group have been named as Vijay Nair, Abhishek Boinpally, Arun Pillai, and Sameer Mahendru. The CBI claims Mr Nair – who was arrested in September last year – met Mr Boinpally and Mr Pillai. The three allegedly agreed that a sum of ₹ 20 to 30 crore would be sent as “upfront money” to secure liquor licences from the Delhi government.
The group allegedly further agreed the sum would be returned to Mr Boinpally as a “65 per cent partnership” in the name of Arun Pillai – whom the ED claims represented a liquor cartel linked to Telangana politician K Kavitha – in Indospirit Group, a firm owned by Mr Mahendru. A further element of this alleged conspiracy is that half of the 12 per cent profit margin listed in the (now-scrapped) Delhi government liquor policy would be split between Mr Nair and Mr Boinpally.
The agreed ₹ 20-30 crore was sent via hawala channels and this transfer was coordinated by Dinesh Arora, who has since turned approver in this case, the CBI has told the court. Mr Arora is also the link to AAP leader Sanjay Singh’s arrest last night. Mr Arora claimed that it was the Rajya Sabha MP who introduced him to Manish Sisodia, who then was the excise minister.
The CBI has claimed the AAP government had received complaints against Indospirits but its Excise Department – headed then by Mr Sisodia – nevertheless approved its licence request. And it was for this the alleged bribe of ₹ 30 lakh was paid. The CBI has also claimed Mr Nair was contacted, via Mr Arora, to clear the licence award.
According to the CBI, the licence was awarded on November 5, 2021, and till September 2022, Indospirits made total sales of ₹ 1,333 crore and a net profit of ₹ 68 crore. According to the ED, Indospirits made a profit of ₹ 192.8 in just eight months. Of this, ₹ 100 crore was paid to the AAP and this money, the ED claims, was used in last year’s Goa Assembly election. ₹ 33 crore was allegedly paid to Arun Pillai.
The ED also claims a 32.5 per cent stake in Indospirits was held by Mugunta Srinivasulu Reddy, who is a Lok Sabha MP from Andhra Pradesh’s ruling YSR Congress Party. Mr Reddy allegedly secured two retail licences, according to the Enforcement Directorate, which claims he, Sarath Reddy (who held five) and Telangana lawmaker K Kavitha formed the “South Cartel”.
The AAP Rajya Sabha member Sanjay Singh, who was arrested by the ED on Wednesday, was also produced before the Rouse Avenue Court in Delhi on Thursday. The financial probe agency, which arrested Mr Singh after a nine-hour search of his residence, is seeking his custody for questioning in the case in which Sisodia is in jail.
“Two separate transactions have taken place. The total transaction amounts to ₹ 2 crore,” the ED’s lawyer said.
“Dinesh Arora’s employee said he had sent ₹ 2 crore to Sanjay Singh’s house. Apart from this, another crore was sent from Indospirit’s office to Sanjay Singh’s house,” the lawyer added. “Everything is a lie,” Sanjay Singh told the court.
“Dinesh Arora and Amit Arora were in the custody of the agencies for all these days. Now they have taken my name. I am saying, with folded hands, if there is any truth in any of this, give me the maximum punishment. But this is a case of vendetta,” he added.
