The Supreme Court on Wednesday asked the Enforcement Directorate (ED) to explain why the Aam Aadmi Party (AAP) — which, according to the federal anti-money laundering agency is the main beneficiary of alleged irregularities in the Delhi excise policy 2021-22 —was not made an accused in the case in which former Delhi deputy chief minister Manish Sisodia, among others, is facing trial.
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The observation by the court came while hearing appeals filed by Sisodia, seeking bail in separate cases being investigated by ED and the Central Bureau of Investigation (CBI) related to alleged irregularities in the policy.
A bench of justices Sanjiv Khanna and SVN Bhatti said, “We need clarity on this issue that as far as the money laundering offence is concerned, he (Sisodia) is named as one of the beneficiaries. Your whole case is that the political party is said to have benefitted from this. But they are not accused. How do you answer that?”
The matter was posted again for hearing on October 5 for ED to respond.
{{/usCountry}}The matter was posted again for hearing on October 5 for ED to respond.
{{/usCountry}}The comment by the bench came at a time when Sisodia’s lawyers – senior advocate Abhishek Manu Singhvi and advocate Vivek Jain – were on the verge of completing their submissions. ED, led by additional solicitor general (ASG) SV Raju, will give its response on Thursday.
The court’s query stumped both sides as this aspect was not argued by Sisodia. The bench told the law officer, “He (Sisodia) has not raised this point. We have put it directly to you. Whatever it is, you answer that tomorrow.”
Sisodia was arrested by CBI in connection with the excise policy in February, and by ED in March.
Singhvi took the court through the entire-decision making process that went behind framing the policy to show that this was not a decision taken by one individual, but was collectively decided at various levels, including officers in the excise department, the group of ministers, the Delhi cabinet, and the office of the lieutenant governor of Delhi.
“It was purely a policy decision involving 10 ministers, a host of government servants, and with LG in supervision of the policy. It is not an individual decision but an institutional one,” Singhvi said. He showed cabinet notes that went into formulating the draft policy, which was sent to the then LG, Anil Baijal, for his comments. Based on suggestions received from the LG office, a separate cabinet note was prepared incorporating the LG’s suggestions, that found expression in the final policy approved in November 2021.
The court raised apprehensions on whether the cabinet notes could be relied upon, in view of a constitution bench decision which bars consideration of cabinet notes and minutes. The court asked ASG Raju to find out if this bar will apply in the case of Delhi as well.
Advocate Vivek Jain, who assisted Singhvi, pointed out that the documents in question were part of the charge sheet submitted by CBI. He said that the effort is to bring to the court’s knowledge that the transaction alleged against Sisodia was drawn at different levels, forming part of a complete chain culminating in the birth of the policy. Since Sisodia handled the excise department, the new policy was released by him.
ED had alleged that Sisodia was involved in the generation of proceeds of crime of around ₹100 crore in the form of kickbacks received from the so called “South Group” to one of the co-accused, Vijay Nair, who is AAP’s communication in-charge.
Singhvi read through the entire evidence and said, “From the presentation of complaint till the charge sheet I am not named anywhere. Not one paisa money trail from the South lobby has been found. They (ED) say the accused are orchestrated by me, but nothing is found from my home or office.”
He also objected to the speed with which some of the accused in the case have been changing statements and get bail soon after they turn approvers and support the prosecution. “It deserves an enquiry how you get statement from arrestees. This is the grossest case I have seen where there is so close proximity between the date of arrest and release. Judges have to read between the lines as everything cannot be in black and white.”
Singhvi said that the new policy completely busted cartelisation and this was not liked by the existing liquor manufacturers, who wanted to continue with the old regime. The bench told Singhvi that the ED charge sheet alleged that the new policy raised the profit margin for liquor retailers and dealers from 5% to 12%. Singhvi explained that the new policy was suggested by an expert committee which fixed 5% as the minimum base with no top cap. This was followed by the decision of Group of Ministers (GoM) on March 19, 2021, which capped the profit margin at 12%.
“These are works in progress. There were massive leaks in the old policy due to evasion of excise duty which led to huge profit margins of up to 65%. In the new policy, the excise duty was subsumed in the licence fee, and since the licence fee was hiked substantially up to ₹5 crore, higher profit margin was offered,” Singhvi said.
The court was further informed that the revenue projections under the new policy projected an earning of ₹55 crore just from the licence fee itself. Prior to the policy, in 2019-20, the projected earnings from sales and licence fees put together was ₹69.15 crore.