Holding

Section 45 of the PMLA does not demand a positive finding of innocence; bail may be granted on tentative findings based on broad probabilities, provided the court applies its mind.

Summary

Manish Sisodia, former Deputy Chief Minister of Delhi, appealed to the Supreme Court seeking bail in prosecutions under the Prevention of Corruption Act, 1988, the Indian Penal Code and an enforcement case under the Prevention of Money‑Laundering Act, 2002. The Court examined the scope of bail under s.45 of the PMLA, holding that a positive finding of innocence is not required and that bail decisions may be based on broad probabilities. It also analysed the elements of an offence under s.3 of the PMLA, particularly the notions of ‘person’, ‘process or activity’ and ‘product’, and the relevance of constructive possession. While acknowledging the appellant’s prolonged detention, the Court noted the prosecution’s assurance of a speedy trial and the lack of a clear legal challenge to the material allegations. Consequently, the Court declined to grant bail but permitted a fresh application if the trial is delayed or circumstances change. The appeals were dismissed, leaving the trial court to proceed on the merits.

Issues considered

The applicability and interpretation of Section 45 of the Prevention of Money‑Laundering Act, 2002 to bail applications.
Whether a positive finding of non‑commission of an offence under the PMLA is required to grant bail.
The scope of Section 3 of the PMLA, especially the meaning of ‘person’, ‘process or activity’ and ‘product’ and the concept of constructive possession.
The interplay between the constitutional right to speedy trial under Article 21 and bail in economic offences.
The relevance of the charges under the Prevention of Corruption Act, 1988 and the Indian Penal Code to the bail decision.

Legislation cited

Code of Criminal Procedure, 1973s. 436A, s. 439, s. 482
Indian Penal Code, 1860s. 120B, s. 201, s. 420
Prevention of Corruption Act, 1988s. 12, s. 7, s. 7A, s. 8
Prevention of Money Laundering Act, 2002s. 3, s. 436A, s. 45, s. 50

Subjects

bailPrevention of Money Laundering ActPrevention of Corruption ActIndian Penal Codespeedy trialArticle 21constructive possessioneconomic offencespolicy makingmoney laundering

Judgment

[2023] 15 S.C.R. 480 : 2023 INSC 956

CASE DETAILS

MANISH SISODIA
v.
CENTRAL BUREAU OF INVESTIGATION
(Criminal Appeal No(s). 3352 of 2023)
OCTOBER 30, 2023
[SANJIV KHANNA AND S.V.N. BHATTI, JJ.]

HEADNOTES
Issue for consideration: The two appeals are ﬁled by the appellant-
former Deputy Chief Minister of Delhi seeking bail in the prosecutions
arising from a case registered by the CBI under the Prevention of Corruption
Act, 1988 and the Penal Code, 1860; and enforcement case ﬁled by the
Directorate of Enforcement, under the Prevention of Money Laundering
Act, 2002.
Prevention of Money Laundering Act, 2002 – s.45 – Requirement
for grant of bail under:
Held: Referring to s.45 of the PML Act, in Vijay Madanlal Choudhary
it was held that provision does not require that to grant bail, the court must
arrive at a positive ﬁnding that the applicant has not committed an oﬀence
under the PML Act – Section 45 must be construed reasonably as the intent
of the legislature cannot be read as requiring the court to examine the issue
threadbare and in detail to pronounce whether an accused is guilty or is
entitled to acquittal – Further, an order on an application for bail is passed
much before the end of trial and sometimes even before commencement of
trial – Lastly, it is trite, that for the purpose of considering an application
for bail, although detailed reasons are not necessary to be assigned, and,
therefore, the evidence need not be weighed meticulously, a tentative ﬁnding
should be recorded on the basis of broad probabilities – The order granting
bail must demonstrate application of mind at least in serious cases where
the applicant has been granted or denied bail – The ﬁndings recorded by the
Court for grant or refusing bail being tentative, will not have any bearing
on the merits of the case, and the trial court would proceed and decide the
480
MANISH SISODIA v. CENTRAL BUREAU OF 481
INVESTIGATION

case on the basis of evidence produced during trial without in any manner
being prejudiced thereby. [Para 8]
Prevention of Money Laundering Act, 2002 – s.3 – Contours of:
Held: On dissection of the main part of s.3, it is held that it postulates
three ‘p’s, namely, the person, the process or activity, and the product – The
process or activity consists of six parts- concealment, possession, acquisition,
use, projecting or claiming the proceeds of crime as untainted property – The
product, that is, the proceeds of the crime, has been deﬁned in Section 2(u)
of the PML Act, as a property derived or obtained directly or indirectly by
a person as a result of criminal activity relating to a scheduled oﬀence or
the value of such property – As far as ‘person’ is concerned, it means those
who directly or indirectly attempt to indulge; those who knowingly assist, or
those who are knowingly a party, or those who are actually involved – On
the above interpretation, this court held in Y. Balaji v. Karthik Desari and
Another that the oﬀence u/s. 3 of the PML Act includes both the persons
who commit the predicate or schedule oﬀence and third party launderers.
[Para 16]
Prevention of Money Laundering Act, 2002 – Prevention of
Corruption Act, 1988 – Bail sought by the appellant:
Held: There is one clear ground or charge in the complaint ﬁled under
the PML Act, which is free from perceptible legal challenge and the facts
as alleged are tentatively supported by material and evidence – The facts as
alleged, which it is stated establish an oﬀence u/s. 3 of the PML Act and the
PoC Act., These are: (1) In a period of about ten months, during which the
new excise policy was in operation, the wholesale distributors had earned
Rs. 581,00,00,000 (rupees ﬁve hundred eighty one crores only) as the ﬁxed
fee; (2) The one time licence fee collected from 14 wholesale distributors
was about Rs.70,00,00,000 (rupees seventy crores only); (3) Under the old
policy 5% commission was payable to the wholesale distributors/licensees;
(4) Under the old policy 5% commission was payable to the wholesale
distributors/licensees; (5) The diﬀerence between the 12%; minus 5%
of the wholesale proﬁt margin plus Rs.70,00,00,000/-; it was submitted,
would constitute proceeds of crime, an oﬀence punishable under the PML
Act – The proceeds of crime were acquired, used and were in possession
of the wholesale distributors who have unlawfully beneﬁtted from illegal
482 SUPREME COURT REPORTS [2023] 15 S.C.R.

gain at the expense of the government exchequer and the consumers/
buyers – Charge-sheet ﬁled by the CBI also alleged, inter-alia, that existing
policy was changed to facilitate and get kickbacks and bribes from the
wholesale distributors – The policy was framed to the desire and satisfaction
of the liquor group – The commission/fee earlier ﬁxed at minimum 5%
was enhanced to ﬁxed fee at 12% payable to wholesale distributor – The
appellant was aware that three liquor manufacturer have 85% share in the
liquor market – Policy favoured and promoted cartelisation – The excess
amount of 7% commission/fee earned by the wholesale distributors of
Rs.338,00,00,000/- (rupees three hundred thirty eight crores only) constitute
an oﬀence as deﬁned u/s. 7 of the PoC Act, relating to a public servant being
bribed. (As per the DoE, these are proceeds of crime) – This amount was
earned by the wholesale distributors in a span of ten months – This ﬁgure
cannot be disputed or challenged – Therefore, the Court not inclined to give
bail at this stage. [Paras 21, 24 and 25]
Constitution of India – Art.21 – Detention or jail before being
pronounced guilty of an oﬀence should not become punishment without
trial:
Held: If the trial gets protracted despite assurances of the prosecution,
and it is clear that case will not be decided within a foreseeable time, the
prayer for bail may be meritorious – While the prosecution may pertain to
an economic oﬀence, yet it may not be proper to equate these cases with
those punishable with death, imprisonment for life, ten years or more like
oﬀences under the Narcotic Drugs and Psychotropic Substances Act, 1985,
murder, cases of rape, dacoity, kidnaping for ransom mass violence, etc. –
Neither is this a case where 100/1000s of depositors have been defrauded
– The allegations have to be established and proven – The right to bail in
cases of delay, coupled with incarceration for a long period, depending on
the nature of the allegations, should be read into s.439 of the Code and s.45
of the PML Act – The reason is that the constitutional mandate is the higher
law, and it is the basic right of the person charged of an oﬀence and not
convicted, that he be ensured and given a speedy trial – When the trial is
not proceeding for reasons not attributable to the accused, the court, unless
there are good reasons, may well be guided to exercise the power to grant
bail – This would be truer where trial would take years. [Para 28]
MANISH SISODIA v. CENTRAL BUREAU OF 483
INVESTIGATION

Trial – Speedy trial – Assurance given by the Bar:
Held: In view of the assurance given at the Bar on behalf of the
prosecution that they shall conclude the trial by taking appropriate steps
within next six to eight months – Liberty granted to the appellant to move
a fresh application for bail in case of change in circumstances, or in case
the trial is protracted and proceeds at a snail’s pace in next three months.
[Para 29]
LIST OF CITATIONS AND OTHER REFERENCES
Vijay Madanlal Choudhary and Others v. Union of India and Other
(2022) SCC Online 929; Y. Balaji v. Karthik Desari and Another (2023)
SCC Online SC 645 – relied on.
Ravinder Singh v. State of Haryana [1975] 3 SCR 453 : (1975) 3 SCC
742; Mohan Lal v. State of Rajasthan (2015) 6 SCC 222 : [2015] 5 SCR 435;
Indian Medicines Pharmaceuticals Corporation Ltd. v. Kerala Ayurvedic
Cooperative Society Ltd. And Ors. 2023 SCC OnLine SC 5; Yashwant Sinha
and Ors. v. Central Bureau of Investigation [2019] 5 SCR 638 : (2019) 6
SCC 1; State of Uttar Pradesh v. Raj Narain [1975] 3 SCR 333 : (1975) 4
SCC 428; Doypack Systems (P) Ltd. v. Union of India [1988] 2 SCR 962 :
(1988) 2 SCC 299; P. Chidambaram v. Directorate of Enforcement (2020)
13 SCC 791 : [2019] 14 SCR 450; P. Chidambaram v. Central Bureau of
Investigation (2020) 13 SCC 337; Shri Gurbaksh Singh Sibbia and Others
v. State of Punjab (1980) 2 SCC 565 : [1980] 3 SCR 383; Sanjay Chandra
v. Central Bureau of Investigation (2012) 1 SCC 40 : [2011] 13 SCR 309;
Satender Kumar Antil v. Central Bureau of Investigation and Another
(2022) 10 SCC 51; Surinder Singh Alias Shingara Singh v. State of Punjab
(2005) 7 SCC 387 : [2005] 2 Suppl. SCR 1172; Kashmira Singh v. State of
Punjab [1978] 1 SCR 385 : (1977) 4 SCC 291; Pankaj Bansal v. Union of
India and Ors. (2023) SCC OnLine SC 1244; Arnab Manoranjan Goswami
v. State of Maharashtra and Others [2020] 11 SCR 896: (2021) 2 SCC
427 – referred to.
OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
3352 of 2023.
484 SUPREME COURT REPORTS [2023] 15 S.C.R.

From the Judgment and Order dated 30.05.2023 of the High Court of
Delhi at New Delhi in BA No.1097 of 2023.
With
Criminal Appeal No.3353 of 2023.
Appearances:
Dr. Abhishek Manu Singhvi, Sr. Adv., Vivek Jain, Mohd. Irshad, Rajat
Jain, Karan Sharma, Rishikesh Kumar, Rishabh Sharma, Amit Bhandari,
Abhinav Jain, Ms. Honey Kumbhat, Mohit Siwach, Siddhant Sahay, Advs.
for the Appellant.
S. V. Raju, ASG, Mukesh Kumar Maroria, Zoheb Hussain, Annam
Venkatesh, Ms. Sairica Raju, Arkaj Kumar, Digvijay Dam, Ms. Sweksha,
Ankit Bhatia, Vivek G., Ms. Manisha Dubey, Vinayak Sharma, Kshitiz
Agarwal, Ms. Shweta Desai, Arvind Kumar Sharma, Advs. for the
Respondent.
JUDGMENT / ORDER OF THE SUPREME COURT
JUDGMENT
SANJIV KHANNA, J.
Leave granted.
2. Rule of law means that laws apply equally to all citizens and
institutions, including the State. Rule of law requires an equal right to access
to justice for the marginalised. The rule also mandates objective and fair
treatment to all. Thirdly, rule of law is a check on arbitrary use of powers.
It secures legitimate exercise of power for public good.
3. This is precisely the reason why we had heard arguments at some
length in these two appeals ﬁled by the appellant – Manish Sisodia, former
Deputy Chief Minister of Delhi, who seeks bail in the prosecutions arising
from RC No. 0032022A00553, dated 17.08.2022, registered by the Central
Bureau of Investigation1, at CBI, ACB, New Delhi, under the Prevention of

1 For short, “CBI”.
MANISH SISODIA v. CENTRAL BUREAU OF 485
INVESTIGATION [SANJIV KHANNA, J.]

Corruption Act, 19882and the Indian Penal Code, 18603; and Enforcement
Case Information Report4 No. HIU-II/14/2022, dated 22.08.2022, ﬁled by
the Directorate of Enforcement5,under the Prevention of Money Laundering
Act, 20026.
4. CBI has ﬁled two chargesheets, dated 24.11.2022 and 25.04.2023,
wherein the appellant – Manish Sisodia is named and is facing trial for the
oﬀences under Sections 7, 7A, 8 and 12 of the PoCAct and Sections 120B,
201 and 420 of the IPC. DoE has ﬁled a criminal complaint dated 04.05.2023
against the appellant – Manish Sisodia for the oﬀences under Sections 3
and 4 of the PML Act.
5. A number of legal issues and questions were raised, and do arise,
for consideration, but we would refrain from delving into them in depth and
detail. However, there is a bounded discussion in the subsequent portion
of the judgment only for deciding the present appeals and the question as
to whether the appellant – Manish Sisodia is entitled to bail. Nevertheless,
for the purpose of record, we will delineate some of them:
(a) What is the scope and ambit of the constitutional protection under
Articles 74 and 163 of the Constitution of India on the decisions
taken by the Council of Ministers?
(b) Whether on interpretation of Section 3 of the PML Act, ‘the
act/process of generation’ or ‘the attempt to generate the
proceeds of crime’ falls within the ambit of the expressions
‘assist’, ‘acquisition’, ‘possession’ or ‘use’ under Section 3 of
the PML Act? If the answer is in aﬃrmative, what are the legal
consequences as per the Constitution of India, under the Code
of Criminal Procedure, 19737, the IPC, and the General Clauses
Act, 1897?

2 For short, “PoC Act”.
3 For short, “IPC”.
4 For short, “ECIR”.
5 For short, “DoE”.
6 For short, “PML Act”.
7 For short, “The Code”.
486 SUPREME COURT REPORTS [2023] 15 S.C.R.

(c) Whether a person can be prosecuted under the PML Act only
when there is material to show that he has indulged or assisted
in any activity/process of money laundering, albeit an activity/
process diﬀerent and separate from the scheduled oﬀence?
(d) Whether an accused, who allegedly has committed the scheduled
oﬀence, can be prosecuted under the PML Act, when the alleged
prime accused and the beneﬁciary of the proceeds of crime,
a juristic person, is not arrayed as an accused in the criminal
complaint ﬁled by the DoE?
(e) Whether Sections 45 and 50 of the PML Act should be read down
in view of the constitutional scheme and mandate of Article 20
of the Constitution of India?
6. On behalf of the appellant – Manish Sisodia, the following
submissions have been made:
 The appellant – Manish Sisodia has been in custody from
26.02.2023 in RC No. 0032022A00553 and from 09.03.2023 in
the ECIR No. HIU-II/14/2022.
 CBI had submitted charge-sheet on 25.04.2023 and the DoE had
ﬁled the criminal complaint on 04.05.2023 against the appellant
– Manish Sisodia.
 There are 294 witnesses and about 31,000 pages of documents in
the charge-sheet ﬁled by the CBI. There are 162 witnesses and
25,000 pages of documents in the prosecution complaints ﬁled
by the DoE.
 Arguments on charge have not commenced, and the trial will
take years.
 The new excise policy was validly adopted after due deliberation
by the Council of Ministers/Cabinet in larger and greater public
interest:
o Under the old excise policy there was an incentive to cheat
because of the very nature of liquor - fast selling and highly
MANISH SISODIA v. CENTRAL BUREAU OF 487
INVESTIGATION [SANJIV KHANNA, J.]

taxed. As per the Ravi Dhawan Committee8 Report dated
13.10.2020, the proﬁt margins could be up to 65-70%, as the
manufacturers were able to acquire retail licenses through
proxy ownership.
o As a check, wholesale licenses were not to be issued to a
manufacturer or retail licence holder, directly or to sister
concerns or related entities.
o 272 wards in 68 Assembly Constituencies were divided
into 30 zones. Each zone was to have 9-10 wards with a
maximum of 27 retail vends which were to be allotted on
the basis of auction. Each zone operator was to operate two
mandatory vends in each ward. The remaining vends were
freehold vends to be operated anywhere within that zone.
o Auction, with a reserve price equal to the existing license
fee plus sum of potential revenue, estimated VAT and
10% additional fee for increase on year to year ensured
maximization of revenue.
o The licence fee payable by the wholesaler was raised from
Rs.5,00,000/- (rupees ﬁve lakhs only) under the old policy
to Rs.5,00,00,000/- (rupees ﬁve crores only), which is an
increase of approximately 10,000%.
o The wholesalers were entitled to a standard distribution fee
at the rate of 12% of the landed price. The landed price or
the ex-distillery price was the lowest price as declared by
the manufacturer in any market in India.
o The standard distribution fee at the rate of 12%, though
higher than the fee under the old policy, was necessary to
cover the higher level of investment required, setting up
of quality checking system, etc. The fee of 12% had also
subsumed several other charges payable under the old
policy.

8 For short, “R.D. Committee”.
488 SUPREME COURT REPORTS [2023] 15 S.C.R.

 The new policy was drafted in a transparent manner after
deliberation at diﬀerent levels by Secretaries/Oﬃcers of the
Excise, Planning, Finance and Law departments. The revenue
generation was projected at 12%.
 Comments from general public were invited. Around14,671
e-mails were received. The comments were considered. As per
the prosecution,6 e-mails were planted/prompted. This assertion
to establish a criminal oﬀence relying on 0.04% e-mails is
assumptive and overweening.
 The policy was sent to the Lieutenant Governor9 of the National
Capital Territory10 of Delhi for comments and recommendation.
The LG gave his recommendation on some aspects. The Cabinet
had considered and accepted the recommendations.
 The new excise policy report prepared by the GoM was accepted
by the Excise Department and the Cabinet of the NCT of Delhi. It
was uploaded on the website on 05.07.2021. It was implemented
only on 17.11.2021.
 Proceeds of crime is the core ingredient for the oﬀence of money
laundering, which expression is required to be construed strictly,
as held in Vijay Madanlal Choudhary and Others v. Union of
India and Others11. The oﬀence under the PML Act has nothing
to do with the criminal activity, subject matter of the scheduled
oﬀence. PML Act penalises indulging in activity/process relating
to the proceeds of the crime, derived or obtained as a result of
that crime.
 Allegation regarding kickback of Rs.100,00,00,000 (rupees one
hundred crore only), and a portion of it being used for funding
the Aam Aadmi Party12, for its election campaign in Goa, is

9 For short, “LG”.
10 For short, “NCT”.
11 (2022) SCC Online 929.
12 For short, “AAP”.
MANISH SISODIA v. CENTRAL BUREAU OF 489
INVESTIGATION [SANJIV KHANNA, J.]

a concocted story unsupported by any legal and admissible
evidence and material. The money trial is unproven and false.
 Co-accused Rajesh Joshi and Gautam Malhotra have been granted
bail for the oﬀence under the PML Act on the ground that there
was no documentary evidence to show that proceeds of crime
were used for the election purposes.
 To establish the money trail and payment of bribe/kickback of
Rs.100,00,00,000 (rupees one hundred crore only), the DoE has
relied upon the statements made by co-accused or approvers.
These statements are hearsay and do not in any manner implicate
or connect the appellant – Manish Sisodia with the transfer and
use of the proceeds of the crime.
 The statements of co-accused or other witnesses relied upon
by the DoE were extracted and forced by a threat of arrest, as
in the case of Magunta Sreenivasulu Reddy, Butchi Babu and
Manoj Rai. Some of the co-accused like Arun Pillai and Sameer
Mahendru have retracted from their statements.
 Raghav Magunta, son of a Member of Parliament of the ruling
party in Andhra Pradesh, was forced to make the statement dated
27.07.2023, which is contrary to his earlier statement dated
16.09.2022.
 Statements obtained from Dinesh Arora, an approver, is weak
evidence and in this regard, reliance is placed upon Ravinder
Singh v. State of Haryana13.
 Statement of Dinesh Arora dated 12.07.2023 is contrary to his
earlier statement made on 09.04.2023.
 Allegations regarding the appellant – Manish Sisodia’s
involvement in the grant of licence to Indo Spirit is make belief
and a false assertion. Statements obtained from the oﬃcers of
the Excise Department under Section 164 of the Code,namely,

13 (1975) 3 SCC 742.
490 SUPREME COURT REPORTS [2023] 15 S.C.R.

Suman, Sachin Solanki and Arava Gopi Krishna do not implicate
the appellant – Manish Sisodia.
 The appellant – Manish Sisodia, in his statement dated
14.03.2023, has stated that he had not instructed the Excise
Commissioner to expedite the clearance of Indo Spirit’s license.
 Interaction and communications between the private parties
viz. business of Indo Spirit was independent, and without any
interference, knowledge and participation of the appellant –
Manish Sisodia.
 Vijay Nair was not associated with the appellant – Manish
Sisodia. There are also contradictions in the statements made by
C. Arvind, under Section 50 of the PMLA, dated 07.12.2022,
and the one under Section 164 of Cr.P.C., dated 16.02.2023.
 Allegation regarding destruction of the cabinet ﬁle is nothing but
making a mountain out of a molehill. The three legal opinions,
two by former Chief Justices of India and one by a Law Oﬃcer,
on merits or demerits of the old policy, were benign, and of no
consequence and relevance. The allegation is also contrary to
the contemporaneous records maintained by DoE.
7. The CBI and DoE have submitted as under:
 Under the old excise policy:
o There was no concept of private wholesaler and no concept
of zones.14
o The distributor/wholesaler was entitled to 5% proﬁt margin.
o The retail trade was primarily undertaken by four
corporations of the Government of NCT of Delhi.
 R.D. Committee Report dated 13.10.202015 recommended:
o Gradual withdrawal of government presence.

14 As per the appellant–Manish Sisodia, under the old liquor policy there were private
whole-sellers, which assertion prima-facie appears to be correct.
15 The Expert Committee headed by Ravi Dhawan was constituted on 04.09.2020.
MANISH SISODIA v. CENTRAL BUREAU OF 491
INVESTIGATION [SANJIV KHANNA, J.]

o Wholesale operation under one government entity.
o Three models were examined: (i) existing model, (ii)
licenses vide lottery system, and (iii) licenses to limited
entities.
o Licenses vide lottery system was recommended since
auctioning licenses to limited entities could lead to
cartelisation.
 The R.D. Committee Report dated 13.10.2020 was not preferred
by the appellant – Manish Sisodia. Reliance is placed upon the
statement of C. Arvind16 dated 16.02.2023 under Section 164 of
the Code, and Rahul Singh17 dated 03.03.2023 under Section 161
of the Code. The appellant – Manish Sisodia had not accepted
the report because of ulterior reasons.
 A conspiracy was entered viz. the new excise policy to enable
supersize proﬁts for wholesale distributors in return for kickbacks
and bribes. To start with:
o Public comments were invited to the R.D. Committee
Report dated 13.10.2020. Some public comments vide
emails were prompted by the appellant – Manish Sisodia
to inﬂuence the decision making process. The emails18,
statement of Zakir Khan19 dated 29.03.2023 recorded under
Section 161 of the Code, and screenshots of WhatsApp
chats of Kartikey Azad and Zakir Khan establish the motive.
Thus, a facade of transparency and openness in policy
making was created.
o Rahul Singh20 supports the charge. He was asked to prepare
a cabinet note in a particular manner with comments and
suggestions of the stakeholders and public. The appellant –

16 Posted as Secretary to appellant – Manish Sisodia between July, 2019 to June, 2022.
17 Erstwhile Excise Commissioner of NCT of Delhi.
18 Emails shared by interns of the Delhi Minorities Commission as public comments to
the R.D. Committee Report.
19 Chairperson of the Delhi Minorities Commission.
20 Erstwhile Excise Commissioner of NCT of Delhi.
492 SUPREME COURT REPORTS [2023] 15 S.C.R.

Manish Sisodia reprimanded Rahul Singh for annexing the
opinion of legal experts in the cabinet note.21 C. Arvind’s
statement dated 16.02.2023 under Section 164 of the Code
is similar.
o The appellant – Manish Sisodia, had issued directions to
Sanjay Goel,22 to prepare a note without the opinion of legal
experts. Reliance is placed on the statement of Sanjay Goel
dated 17.01.2023 under Section 161 of the Code, and the
letter dated 02.02.2023 by the appellant – Manish Sisodia
to the Excise Commissioner.
 The draft GoM Report on new excise policy,as retrieved from
the computer under the control of the appellant – Manish Sisodia
was typed/uploaded on 15.03.2021 and was last modiﬁed at 11.27
a.m. The wholesalers were entitled to a minimum 5% commission
on the landed price. As no upper limit was prescribed, the
manufacturers and wholesale distributors could negotiate and
settle for a higher commission.
 Big manufacturers with high market share and turnover, would
not have agreed to a commission higher than 5%, or commission
at the @ 12% of the landed cost.
 A liquor group from Hyderabad stayed in Delhi from 16.03.2021
to 18.03.2021. Arun Pillai, Abhishek Boinpally, and Sarath
Reddy from the liquor group had several meetings with Vijay
Nair, who was the middleman, a member of the AAP, and a close
conﬁdant of the appellant – Manish Sisodia. He was residing in
a government bungalow allotted to a Cabinet Minister, who was
a part of GOM.23 The agenda of the meetings were to decide
changes in the excise policy,to enable them to earnsuper-proﬁts
in return for kickbacks.

21 Statement of Rahul Singh dated 03.03.2023, under Section 161 of the Code.
22 Excise Commissioner of NCT of Delhi, who had replaced Rahul Singh.
23 Reliance is placed upon statements made by Arun Pillai, Butchi Babu and Dinesh
Arora. Reliance is also placed on screenshots found in the phone of Manoj Rai, an
employee of Pernod Ricard.
MANISH SISODIA v. CENTRAL BUREAU OF 493
INVESTIGATION [SANJIV KHANNA, J.]

o On the evening of 16.03.2021, Abhishek Boinpally and
Butchi Babu, who were staying at Hotel Oberoi, travelled
to another Oberoi hotel in Civil Lines, where they met Vijay
Nair, who was staying in a close proximity. The travel to the
Oberoi Hotel in Civil Lines is established by an invoice24,
call record details and statement of an employee of the
Oberoi.25
o A print/photocopy of a 36page document was made on
16.03.2021 at Hotel Oberoi, Civil Lines, Delhi.26
o The document/print was taken by VijayNair, and handed
over to the appellant – Manish Sisodia. The appellant –
Manish Sisodia gave ‘the print’ to his secretary C. Arvind.
o The altered GoM report dated 18.03.2023 consists of
36 pages, if one excludes the index and the title page.
Reference is made to the statement of C. Arvind dated
16.02.2023, under Section 164 of the Code.
o Screenshots of WhatsApp chats of Butchi Babu dated
20.03.2021, which is prior to submission of the GoM report
to the Cabinet on 22.3.2022, refers to the creation of the
new post of the Director, Wholesale Operation. Based on
the print/document prepared by the liquor group, the GoM
report to the Cabinet was modiﬁed to create this post.
o Further, the minimum wholesaler fee of 5% under the draft
dated 15.03.2021, was modiﬁed to mandatory and ﬁxed fee
of 12% in the altered GoM report submitted to the Cabinet.
 The GoM did not meet between 15.03.2021 and 19.03.2021.
There are neither any deliberations/discussions nor any
noting/ calculations by the GoM for increasing the wholesale
commission/ fee from 5% to 12%.Reliance is placed on the
statement of Arava Gopi Krishna under Section 164 of the Code.

24 On 16.03.2021, Rs. 3,000/- had been billed under the description, “Logistic Charges”.
25 Statement of Ibrahim Magdum dated 03.02.2023, under Section 161 of the Code.
26 On 16.03.2021, Rs. 360/- had been billed under the description, “Print/Photocopy”.
494 SUPREME COURT REPORTS [2023] 15 S.C.R.

Reliance is also placed on the statement of Sanjay Goel, dated
11.04.2023, under Sections 50(2) and 50(3) of the PML Act.
 The appellant – Manish Sisodia was unable to provide any
rational explanation for increasing the commission from 5% to
12%.27 He had stated that even under the old regime there was
no calculation for the 5% margin.
 The appellant – Manish Sisodia had used his inﬂuence for grant of
wholesale licence to Indo Spirit, a ﬁrm in which the liquor group
had substantial interest. Reliance is placed on the statements
made under Section 164 of the Code by Arava Gopi Krishna,
and C. Arvind, dated 16.02.2023. Reliance is also placed on the
statement of Dinesh Arora, dated 24.11.2022, recorded under
Section 306 of the Code.
 License to Indo Spirit was granted inspite of existing complaints
of cartelisation against the partners of Indo Spirit, namely,
Sameer Mahendru and his wife. The complainant was asked to
take back his complaint.28
 The license fee payable by the wholesale distributor was ﬁxed
at Rs.5,00,00,000/-(rupees ﬁve crores only). The license fee was
deliberately not ﬁxed on the turnover, to facilitate and at the
behest of the liquor group.
 Three big manufacturers held 85% market share. The entire
scheme was a pretence to recoup and get bribe and kickback
from the big wholesale distributors, who acted as the
middlemen and were entitled to ﬁxed commission @ 12% of
the landed price on the turnover,but were required to pay a
ﬁxed license fee of Rs.5,00,00,000/- (rupees ﬁve crores only)
to the government.
 The manufacturers could appoint and enter into a distributorship
agreement with only one wholesale distributor. They were not

27 Statement of Manish Sisodia dated 07.03.2023, under Section 50(2) and 50(3) of the
PML Act.
28 Statement of Jagbir Sidhu dated 19.09.2022, under Section 161 of the Code.
MANISH SISODIA v. CENTRAL BUREAU OF 495
INVESTIGATION [SANJIV KHANNA, J.]

entitled to appoint multiple wholesale distributors. However,
the wholesaler could enter into a contract with more than one
manufacturer. New excise policy was clearly lopsided and
favoured the big wholesale distributors.
 Mahadev Liquor, a contender and wholesale distributor of
14 small manufacturers having about 20% market share, was
forced to surrender their licence since they were not ready to pay
kickbacks. Mahadev Liquor had business in Punjab and the state
machinery of Punjab Excise Department was used to arm-twist
them.29
 Pernod Ricard, the largest manufacturer, was directed to do
business through Indo Spirit. Reliance is placed upon evidence
collected from the mobile chats, including screenshots, as well
as statements of an employee30.
 The plea that the appellant – Manish Sisodia was not in
possession of the proceeds of the crime, should not be accepted
as the expression ‘possession’ includes constructive possession.
A person need not be in actual possession. When a person
exercises dominion or control over a thing, directly or indirectly,
through another person,he is in ‘possession’ over the said thing.
The appellant – Manish Sisodia was a key to the processes
and activities dealing with the proceeds of the crime and in
using proceeds of the crime. He had created aneco-system for
generating, concealing and projecting the tainted money, used
subsequently by AAP.
 The kickback or the proceeds of the crime of Rs.100,00,00,000
(rupees one hundred crore only) were received from the liquor
group, and used by the associates of the appellant – Manish
Sisodia and other leaders of AAP.

29 Statement of Jasdeep Kaur Chadha dated 23.08.2022 under Section 50(2) and 50(3) of
the PML Act.
30 Statement of Manoj Rai dated 31.12.2022, under Sections 50(2) and 50(3) of the PML
Act.
496 SUPREME COURT REPORTS [2023] 15 S.C.R.

o Portions of these proceeds of crime were used in the Goa
election campaign through multiple persons and entities.
The attempt was to conceal the true nature of the proceeds
of the crime and to project them as untainted money.
o Part of the proceeds of crime of Rs.100,00,00,000 (rupees
one hundred crore only) were transferred through a complex
web of transactions through hawala route, which have
been traced in spite of erasure of digital and documentary
evidence.
 The appellant – Manish Sisodia was unable to produce his two
mobile phones out of three mobile phones used between the
period 01.01.2021 to 19.08.2022. Only one phone was seized
by the CBI on 19.08.2022, which was being used only since
22.07.2022. He has deliberately destroyed the evidence.
 The appellant – Manish Sisodia, given his power and political
clout, and being the main accused in the conspiracy, may have
the evidence destroyed, and the witnesses and documents may
be exposed.
 Dinesh Arora’s statement to the DoE dated 14.08.2023, under
Sections 50(2) and 50(3) of the PML Act, had revealed that he
had taken Rs. 2,20,00,000 (rupees two crore twenty lakhs only)
from Amit Arora, for the appellant – Manish Sisodia. This was
on account of favourable change and tweak in the new excise
policy.
Analysis
8. Referring to Section 4531 of the PML Act, in Vijay Madanlal

31 Section 45 reads:
“45. Oﬀences to be cognizable and non-bailable.—(1) Notwithstanding anything
contained in the Code of Criminal Procedure, 1973 (2 of 1974), 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
MANISH SISODIA v. CENTRAL BUREAU OF 497
INVESTIGATION [SANJIV KHANNA, J.]

Choudhary (supra), the three Judges’ Bench has opined that the provision
does not require that to grant bail, the court must arrive at a positive ﬁnding
that the applicant has not committed an oﬀence under the PML Act. Section
45 must be construed reasonably as the intent of the legislature cannot be
read as requiring the court to examine the issue threadbare and in detail to
pronounce whether an accused is guilty or is entitled to acquittal. Further,
an order on an application for bail is passed much before the end of trial and
sometimes even before commencement of trial. Lastly, it is trite, that for
the purpose of considering an application for bail, although detailed reasons
are not necessary to be assigned, and, therefore, the evidence need not be
weighed meticulously, a tentative ﬁnding should be recorded on the basis
of broad probabilities. The order granting bail must demonstrate application
of mind at least in serious cases where the applicant has been granted or
denied bail. The ﬁndings recorded by the Court for grant or refusing bail
being tentative, will not have any bearing on the merits of the case, and

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:
Provided that a person, who, is under the age of sixteen years, or is a woman or is sick
or inﬁrm or is accused either on his own or along with other co-accused of money-
laundering a sum of less than one crore rupees, may be released on bail, if the Special
Court so directs:
Provided further that the Special Court shall not take cognizance of any oﬀence
punishable under Section 4 except upon a complaint in writing made by—
(i) the Director; or
(ii) any oﬃcer of the Central Government or a State Government authorised in writing
in this behalf by the Central Government by a general or special order made in this
behalf by that Government.
(1-A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973
(2 of 1974), or any other provision of this Act, no police oﬃcer shall investigate into
an oﬀence under this Act unless speciﬁcally authorised, by the Central Government by
a general or special order, and, subject to such conditions as may be prescribed.
(2) The limitation on granting of bail speciﬁed in sub-section (1) is in addition to the
limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law
for the time being in force on granting of bail.
Explanation.—For the removal of doubts, it is clariﬁed that the expression ‘Oﬀences
to be cognizable and non-bailable’ shall mean and shall be deemed to have always
meant that all oﬀences under this Act shall be cognizable oﬀences and non-bailable
oﬀences notwithstanding anything to the contrary contained in the Code of Criminal
Procedure, 1973 (2 of 1974), and accordingly the oﬃcers authorised under this Act are
empowered to arrest an accused without warrant, subject to the fulﬁlment of conditions
under section 19 and subject to the conditions enshrined under this section.
498 SUPREME COURT REPORTS [2023] 15 S.C.R.

the trial court would proceed and decide the case on the basis of evidence
produced during trial without in any manner being prejudiced thereby.
9. We have copiously referred to the assertions, arguments and
contentions of both sides, and in terms of the mandate in Vijay Madanlal
Choudhary (supra), we will be examining the allegations and the legal
position to form our tentative opinion. However, we must notice and take
on record at some aspects upfront.
10. First, the assertion that Rs. 2,20,00,000 (rupees two crores twenty
lakhs only) was paid as bribe to the appellant – Manish Sisodia by Amit
Arora, through middleman Dinesh Arora, is not a charge or an allegation
made in the chargesheet ﬁled by the CBI. It may be diﬃcult to regard the
alleged payment as a ‘proceed of crime’ under the PML Act.
11. Secondly, it has been submitted by the DoE that AAP is a trust and
is a “person” under Section 2(1)(s) of the PML Act. Being a juristic person,
it acts through natural persons. The assertion made is that a portion of the
proceeds of crime were used for the purpose of the artiﬁcial judicial person
to fund the election in Goa. The DoE has stated at the Bar, and in the written
submissions, that once the quantum of amount used in the election in Goa
is ascertained, a decision to consider AAP as an accused under Section 3
will be taken. It is stated by the DoE that the matter in this regard is being
processed. In the written submissions, the DoE states:
“...some of the PoC (Proceeds of Crime) has been used for the purpose
of artiﬁcial juridical person through its oﬃce bearers in the election
funding of the AAP in Goa as well for the beneﬁt of oﬃce bearers as
indicated above. Once the quantum of amount used for election in Goa
is ascertained a decision to consider AAP as accused under Section 3
read with Section 70 of the PMLA (PML Act) shall be taken at that
point of time.”
12. Thirdly, the assertion in the complaint ﬁled with the DoE that
kickback of Rs.100,00,00,000 (rupees one hundred crore only) was
actually paid by the liquor group is somewhat a matter of debate. However,
there is an assertion, and the DoE has relied on evidence and material,
that a portion thereof,that is, Rs. 45,00,00,000 (rupees forty ﬁve crores
only) was transferred through Hawala for the Goa election and used by
MANISH SISODIA v. CENTRAL BUREAU OF 499
INVESTIGATION [SANJIV KHANNA, J.]

AAP, a political party, which is a juristic person.32 AAP is not being
prosecuted. The charge that the appellant – Manish Sisodia is vicariously
liable in terms of Section 70 of the PML Act cannot be alleged and has
not been argued.33
13. Fourthly, the contention of the DoE that generation of proceeds
of crime is itself‘ possession’ or ‘use’ of the ‘proceeds of crime’, prima
facie, appears to be unclear and not free from doubt in view of the ratio
in Vijay Madanlal Choudhary (supra). Further,the DoE’s contention that
‘generation’ amounts to possession and the expression ‘possession’ includes
constructive possession, for which reliance is placed upon Mohan Lal v.
State of Rajasthan34, is not assured.
14. On the other hand, the appellant – Manish Sisodia relies on
paragraphs 251, 269 and 270 of Vijay Madanlal Choudhay (supra), to
contend that money laundering is an independent oﬀence regarding the
process or activity connected with the proceeds of crime derived as a
result of criminal activity relating to or in relation to a scheduled oﬀence.
It is submitted that Vijay Madanlal Choudhry (supra) has held that PML
Act is an independent and distinct Act which deals with oﬀences relating
to only proceeds of crime, and not with the crime itself which generates
the proceeds of the crime.In particular, paragraph 406 in Vijay Madanlal
Choudhary (supra) states:
“406…The fact that the proceeds of crime have been generated as
a result of criminal activity relating to a scheduled oﬀence, which
incidentally happens to be a non-cognisable oﬀence, would make no
diﬀerence. The person is not prosecuted for the scheduled oﬀence by
invoking provisions of the 2002 Act, but only when he has derived
or obtained property as a result of criminal activity relating to or in
relation to a scheduled oﬀence and the indulges in process or activity
connected with such proceeds of crime...”

32 We are not commenting on the material and evidence relied by the DoE or CBI.
33 See – Aneeta Hada v. Godfather Travels and Tours Private Limited, (2012) 5 SCC
661, and Sharad Kumar Sanghi v. Sangita Rane, (2015) 12 SCC 781.
34 (2015) 6 SCC 222.
500 SUPREME COURT REPORTS [2023] 15 S.C.R.

Paragraph 407 similarly states:
“407…the oﬀence under this Act in terms of Section 3 is speciﬁc to
involvement in any process or activity connected with the proceeds
of crime which is generated as a result of criminal activity related to
the scheduled oﬀence…”
15. In Mohan Lal (supra), the expression ‘possession’, it is held,
consists of two elements. First, it refers to corpus of physical control and
second it refers to the animus or intent which has reference to exercise of
self-control. In the context of narcotics laws, a person is said to possess
control over the substance when he knows the substance is immediately
accessible and exercises dominion or control over the substance. The power
and dominion over the substance is, therefore,fundamental. The stand of the
DoE as to the constructive possession, will be satisﬁed only if the dominion
and control criteria is satisﬁed. If the proceeds of crime are in dominion and
control of a third person, and not in the dominion and control of the person
charged under Section 3, the accused is not in possession of the proceeds
of the crime. It would be a diﬀerent matter, when an accused,though not in
possession, is charged for use, concealment or acquisition of the proceeds of
the crime, or projects or claims the proceeds of crime as untainted property.
The involvement of an accused may be direct or indirect. Prima facie, there
is lack of clarity,as speciﬁc allegation on the involvement of the appellant –
Manish Sisodia, direct or indirect, in the transfer of Rs. 45,00,00,000 (rupees
forty ﬁve crores only) to AAP for the Goa elections is missing.
16. This Court in Y. Balaji v. Karthik Desari and Another35, while
examining contours of Section 3 of the PML Act36, referred to the drafting

35 (2023) SCC Online SC 645.
36 Section 3 of the PML Act reads:
Section 3 of the PML Act reads:
“3. Oﬀence of money-laundering.—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 including its concealment,
possession, acquisition or use and projecting or claiming it as untainted property shall
be guilty of oﬀence of money-laundering.
Explanation.—For the removal of doubts, it is hereby clariﬁed that,—
(i) a person shall be guilty of oﬀence of money-laundering if such person is found to
have directly or indirectly attempted to indulge or knowingly assisted or knowingly is
MANISH SISODIA v. CENTRAL BUREAU OF 501
INVESTIGATION [SANJIV KHANNA, J.]

note on self-laundering contained in the U.N. Model Law 2009, which
states that the third party would be liable for money laundering even where
the fundamental principles of domestic law require that it will not apply to
persons who commit the predicate oﬀence. In some countries, constitutional
principles prohibit prosecuting a person both for money laundering and a
predicate oﬀence. However, in most common law countries, the fundamental
principles do not prohibit application of money laundering oﬀence to
self-launderers. On dissection of the main part of Section 3, it is held that
it postulates three ‘p’s, namely, the person, the process or activity, and
the product. The process or activity consists of six parts – concealment,
possession, acquisition, use, projecting or claiming the proceeds of crime as
untainted property. The product, that is, the proceeds of the crime, has been
deﬁned in Section 2(u) of the PML Act, as a property derived or obtained
directly or indirectly by a person as a result of criminal activity relating to
a scheduled oﬀence or the value of such property.37 As far as ‘person’ is
concerned, it means those who directly or indirectly attempt to indulge;
those who knowingly assist, or those who are knowingly a party, or those
who are actually involved. On the above interpretation, this court held that
the oﬀence under Section 3 of the PML Act includes both the persons who
commit the predicate or schedule oﬀence and third party launderers. 38

a party or is actually involved in one or more of the following processes or activities
connected with proceeds of crime, namely—
(a) concealment; or
(b) possession; or
(c) acquisition; or
(d) use; or
(e) projecting as untainted property; or
(f) claiming as untainted property,
in any manner whatsoever;
(ii) the process or activity connected with proceeds of crime is a continuing activity
and continues till such time a person is directly or indirectly enjoying the proceeds
of crime by its concealment or possession or acquisition or use or projecting it as
untainted property or claiming it as untainted property in any manner whatsoever.
37 Section 2(u) of the PML Act reads:
“‘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 or where such property is taken or held outside the country, then
the property equivalent in value held within the country or abroad;”
38 For the purpose of the present decision, we need not examine whether there is a conﬂict
in the ratio in Y. Balaji (supra) and the ratio in Vijay Madanlal Choudhary (supra).
502 SUPREME COURT REPORTS [2023] 15 S.C.R.

17. The judgment in Y. Balaji (supra), it is submitted by the appellant
– Manish Sisodia, does not speciﬁcally examine whether ‘generation’ will
be included in the six activities covered under the head ‘process or activity’.
The second ‘p’ must relate to the activity or process with the third ‘p’, that
is, the product, which is the proceeds of crime. However, we need not, in
the present case, deﬁnitively pronounce on the said aspects as these issues
and contentions will have to be examined threadbare by the trial court, or
in an appropriate case by this Court.
18. The oﬀence of conspiracy and abetment,in terms of Sections 120/
120B and Sections107/108 of the IPC, are not applicable to oﬀences under
the PML Act. At the same time, Section 3 of the PML Act is wide and
encompassing as it uses the words, “directly or indirectly”, with reference
to the person involved, and knowingly assists, or knowingly is a party in
an oﬀence in relation to the concealment, possession, acquisition, use,
projecting or claiming the proceeds of crime as untainted property.39
19. We must also record that the DoE has not urged and argued before
us the contention that the new liquor policy is vitiated on the ground that
retail vends had to be and were auctioned, though the R.D. Committee’s
Report dated 13.10.2020 has suggested retail vends should be allotted by
lottery.40 Normally, auction and allotment to the highest bidder would be
fair and beneﬁcial for revenue generation, though in certain circumstances
allotment by other modes may be more fair and better. 41 We will not go into

39 Scope and ambit of these words/expressions has not been examined by us.
40 Relevant portion of the R.D. Committee Report dated 13.10.2020 reads: “1.3.4…. The
lottery applications will be against the pool of all 846 vends and will be randomly
allotted in wards, NDMC area and airports…”In the written submissions ﬁled by the
prosecution several assertions have been made.
41 In Indian Medicines Pharmaceuticals Corporation Ltd. v. Kerala Ayurvedic
Cooperative Society Ltd. And Ors.,2023 SCC OnLine SC 5, this Court held that:
“17. This Court has consistently held that government contracts must be awarded by a
transparent process. The process of inviting tenders ensures a level playing ﬁeld for
competing entities. While there may be situations which warrant a departure from the
percept of inviting tenders or conducting public auctions, the departure must not be
unreasonable or discriminatory. In Centre for Public Interest Litigation v. Union of
India, the ‘ﬁrst-cum- serve’ policy was held to be arbitrary while alienating natural
resources. However, the Court observed that though auction is ‘preferred’ method of
allocation, it cannot be construed to be a constitutional requirement.”
MANISH SISODIA v. CENTRAL BUREAU OF 503
INVESTIGATION [SANJIV KHANNA, J.]

the said aspect. Neither are we examining whether this plea can be taken
by the DoE, in view of Articles 74(2)42 and 163(3)43 of the Constitution of
India, as this relates to the wisdom or merits of the choice that every elected
government has while formulating a policy.44 However, we should not be
understood to mean that no policy decision would fall foul as to be covered
as an oﬀence under Section 7 of the PoC Act. We shall subsequently examine
Section 7 of the PoC Act viz. the facts alleged. We need not go into the
questions in detail as the argument with reference to Article 163(3) has not
been speciﬁcally raised on behalf of the appellant – Manish Sisodia, though
the plea that the CBI, the DoE and the Court should not examine merits and
wisdom behind the choice of policy decision have been raised.
20. The appellant–Manish Sisodia, it is claimed, had deliberately
destroyed the two mobile phones so as to prevent any investigation. Further,
he had changed his mobile phone on 22.07.2022, the date on which the media
had covered the news of the complaint sent by the LG of NCT of Delhi to
the CBI for investigation. The appellant – Manish Sisodia states that people
do change mobile phones frequently, and old phones need not be retained.
Whether or not the allegation as to deliberate destruction of mobile phones
is correct would be decided post recording of evidence, but this would not
be a weighty factor for deciding the question of bail, given the period of
detention undergone by the appellant – Manish Sisodia.45

42 Article 74(2) of the Constitution of India reads: “…(2) The question whether any, and
if so what, advice was tendered by Ministers to the President shall not be inquired into
in any court.”
43 Article 163(3) of the Constitution of India reads: “…(3) The question whether any, and
if so what, advice was tendered by Ministers to the Governor shall not be inquired into
in any court.”
44 See In Yashwant Sinha and Ors. v. Central Bureau of Investigation, (2019) 6 SCC 1,
State of Uttar Pradesh v. Raj Narain, (1975) 4 SCC 428, Doypack Systems (P) Ltd.
v. Union of India, (1988) 2 SCC 299 and other cases.
45 See Section 201 of the IPC, which reads:
“201. Causing disappearance of evidence of oﬀence, or giving false information to
screen oﬀender.—Whoever, knowing or having reason to believe that an oﬀence has
been committed, causes any evidence of the commission of that oﬀence to disappear,
with the intention of screening the oﬀender from legal punishment, or with that
intention gives any information respecting the oﬀence which he knows or believes to
be false,
if a capital oﬀence.—shall, if the oﬀence which he knows or believes to have been
committed is punishable with death, be punished with imprisonment of either
504 SUPREME COURT REPORTS [2023] 15 S.C.R.

21. However, there is oneclear ground or charge in the complaint ﬁled
under the PML Act, which is free from perceptible legal challenge and the
facts as alleged are tentatively supported by material and evidence. This
discussion is equally relevant for the charge-sheet ﬁled by the CBI under
the PoC Act and IPC.We would like to recapitulate the facts as alleged,
which it is stated establish an oﬀence under Section 3 of the PML Act and
the PoC Act. These are:
 In a period of about ten months, during which the new excise
policy was in operation, the wholesale distributors had earned
Rs. 581,00,00,000 (rupees ﬁve hundred eighty one crores only)
as the ﬁxed fee.
 The one time licence fee collected from 14 wholesale distributors
was about Rs.70,00,00,000 (rupees seventy crores only).
 Under the old policy 5% commission was payable to the
wholesale distributors/licensees.
 The diﬀerence between the 12%; minus 5% of the wholesale
proﬁt margin plus Rs.70,00,00,000/-; it is submitted, would
constitute proceeds of crime, an oﬀence punishable under the
PML Act. The proceeds of crime were acquired, used and
were in possession of the wholesale distributors who have
unlawfully beneﬁtted from illegalgain at the expense of the
government exchequer and the consumers/buyers.46Relevant

description for a term which may extend to seven years, and shall also be liable to ﬁne;
if punishable with imprisonment for life.—and if the oﬀence is punishable with
imprisonment for life, or with imprisonment which may extend to ten years, shall be
punished with imprisonment of either description for a term which may extend to three
years, and shall also be liable to ﬁne;
if punishable with less than ten years’ imprisonment.—and if the oﬀence is punishable
with imprisonment for any term not extending to ten years, shall be punished with
imprisonment of the description provided for the oﬀence, for a term which may extend
to one-fourth part of the longest term of the imprisonment provided for the oﬀence, or
with ﬁne, or with both.
46 We wish to clarify that not all distributor licensees may be involved or have committed
an oﬀence under Section 3 of the PML Act. The ﬁgures quoted above relate to the 14
licensees, and have to be watered down/lowered to the sales made by the delinquent
whole-sale distributor licensees who are being prosecuted.
MANISH SISODIA v. CENTRAL BUREAU OF 505
INVESTIGATION [SANJIV KHANNA, J.]

portion of the criminal complaint ﬁ led by the DoE dated
04.05.2023, reads:
“One of the reasons given by Sh Manish Sisodia is to
compensate the wholesaler for increased license fee from
Rs 5 lacs to Rs. 5 Cr. During this policy period, 14 LI
licences were given by Excise Department, by raising
the license fee for LI to Rs. 5 Cr in the entire period of
operation of the Delhi Excise Policy 2021- 22, the Govt.
has earned Rs. 75.16 Cr from the license fee of LI (as per
Excise department communication dated 11.04.2023)
(RUD 34). On the other hand the excess proﬁt earned by
the wholesalers during this period is to the tune of Rs. 338
Cr. (7% additional proﬁt earned due to increase from 5%
to 12%, Rs. 581 Cr being the total proﬁt of LI as informed
by Excise department). Therefore there 1s no logical
correlation between the license fee increase and the proﬁt
margin increase. Whereas this excess proﬁt margin beneﬁt
could have been passed on to the consumers in form of
lower MRP. Contrary to the claim that the policy was
meant to beneﬁt the public or the exchequer, it was rather
a conspiracy to ensure massive illegal gains to a select few
private players/individuals/entities.”
22. The charge-sheet under the PoC Act includes oﬀences for unlawful
gains to a private person at the expense of the public exchequer. Reference
in this regard is made to the provisions of Sections 7, 7A, 8 and 12 of the
PoCAct.
23. Clauses (a) and (b) to Section 7 of the PoC Act47 apply: (a) when

47 Section 7 of PoC Act reads:
“7. Oﬀence relating to public servant being bribed.—Any public servant who,—
(a) obtains or accepts or attempts to obtain from any person, an undue advantage, with
the intention to perform or cause performance of public duty improperly or dishonestly
or to forbear or cause forbearance to perform such duty either by himself or by another
public servant; or
(b) obtains or accepts or attempts to obtain, an undue advantage from any person as a
reward for the improper or dishonest performance of a public duty or for forbearing to
perform such duty either by himself or another public servant; or
506 SUPREME COURT REPORTS [2023] 15 S.C.R.

a public servant obtains, accepts or intends to obtain from another person
undue advantage with the intent to perform or fail to improperly or to
forbear or cause forbearance to cause by himself or by another person; (b)
obtains or accepts or attempts to obtain undue advantage from a person as a
reward or dishonest performance of a public duty or forbearance to perform
such duty,either by himself or by another public servant. Explanation (2)
construes the words and expression,“obtains, accepts or attempts to obtain”,
as to cover cases where a public servant obtains, accepts or intends to
obtain any undue advantage by abusing his position as a public servant
or by using his personal interest over another public servant by any other
corrupt or illegal means. It is immaterial whether such person being a
public servant accepts or attempts to obtain the undue advantage directly
or through a third party.
24. On this aspect of the oﬀences under the PoC Act, the CBI has
submitted that conspiracy and involvement of the appellant – Manish Sisodia
is well established. For the sake of clarity, without making any additions,
subtractions, or a detailed analysis, we would like to recapitulate what is
stated in the chargesheet ﬁled by the CBI against the appellant – Manish
Sisodia:

(c) performs or induces another public servant to perform improperly or dishonestly a
public duty or to forbear performance of such duty in anticipation of or in consequence
of accepting an undue advantage from any person,
shall be punishable with imprisonment for a term which shall not be less than three
years but which may extend to seven years and shall also be liable to ﬁne.
Explanation 1.—For the purpose of this section, the obtaining, accepting, or the
attempting to obtain an undue advantage shall itself constitute an oﬀence even if the
performance of a public duty by public servant, is not or has not been improper.
Illustration.—A public servant, ‘S’ asks a person, ‘P’ to give him an amount of ﬁve
thousand rupees to process his routine ration card application on time. ‘S’ is guilty of
an oﬀence under this section.
Explanation 2.—For the purpose of this section,—
(i) the expressions ‘obtains’ or ‘accepts’ or ‘attempts to obtain’ shall cover cases where
a person being a public servant, obtains or ‘accepts’ or attempts to obtain, any undue
advantage for himself or for another person, by abusing his position as a public servant
or by using his personal inﬂuence over another public servant; or by any other corrupt
or illegal means;
(ii) it shall be immaterial whether such person being a public servant obtains or accepts,
or attempts to obtain the undue advantage directly or through a third party.”
MANISH SISODIA v. CENTRAL BUREAU OF 507
INVESTIGATION [SANJIV KHANNA, J.]

 The existing excise policy was changed to facilitate and get
kickbacks and bribes from the wholesale distributors by
enhancing their commission/fee from 5% under the old policy
to 12% under the new policy. Accordingly, a conspiracy was
hatched to carefully draft the new policy, deviating from the
expert opinion/views to create an eco-system to assure unjust
enrichment of the wholesale distributors at the expense of
government exchequer or the consumer. The illegal income
(proceeds of crime, as per the DoE) would partly be recycled
and returned in the form of bribes.
 Vijay Nair, who was the middleman, a go-between, a member of
AAP, and a co-conﬁdent of the appellant – Manish Sisodia, had
interacted with Butchi Babu, Arun Pillai, Abhishek Boinpally
and Sarath Reddy, to frame the excise policy on conditions and
terms put forth and to the satisfaction and desire of the liquor
group.
 Vijay Nair and the members of the liquor group had meetings on
diﬀerent dates, including 16.03.2021, and had prepared the new
excise policy, which was handed over to Vijay Nair. Thereupon,
the commission/fee, which was earlier ﬁxed at minimum of
5%, was enhanced to ﬁxed fee of 12% payable to wholesale
distributor.
 The appellant – Manish Sisodia was aware that three liquor
manufacturers have 85% share in the liquor market in Delhi.
Out of them two manufacturers had 65% liquor share, while
14 small manufacturers had 20% market share. As per the
term in the new excise policy - each manufacturer could
appoint only one wholesale distributor, through whom alone
the liquor would be sold. At the same time, the wholesale
distributors could enter into distribution agreements with
multiple manufacturers. This facilitated getting kickbacks
or bribes from the wholesale distributors having substantial
market share and turnover.
508 SUPREME COURT REPORTS [2023] 15 S.C.R.

 The licence fee payable by the wholesale distributor was a ﬁxed
amount of Rs.5,00,00,000/- (rupees ﬁve crores only). It was
not dependant on the turnover. The new policy facilitated big
wholesale distributors, whose outpour towards the licence fee
was ﬁxed.

 The policy favoured and promoted cartelisation. Large wholesale
distributors with high market share because of extraneous reasons
and kickbacks, were ensured to earn exorbitant proﬁts.

 Mahadev Liquor, who was a wholesale distributor for 14 small
manufacturers, having 20% market share, was forced to surrender
the wholesale distributorship licence.

 Indo Spirit, the ﬁrm in which the liquor group had interest,
was granted whole distributor licence, in spite of complaints of
cartelisation etc. which were overlooked. The complainant was
forced to take back his complaint.

 The excess amount of 7% commission/fee earned by the
wholesale distributors of Rs.338,00,00,000/- (rupees three
hundred thirty eight crores only) constitute an oﬀence as deﬁned
under Section 7 of the PoC Act, relating to a public servant being
bribed. (As per the DoE, these are proceeds of crime). This
amount was earned by the wholesale distributors in a span of ten
months. This ﬁgure cannot be disputed or challenged. Thus, the
new excise policy was meant to give windfall gains to select few
wholesale distributors, who in turn had agreed to give kickbacks
and bribes.

 No doubt, VAT and excise duty was payable separately.
However, under the new policy the VAT was reduced to mere
1%.

 Vijay Nair had assured the liquor group that they would be made
distributor of Pernod Ricard, one of the biggest players in the
market. This did happen.
MANISH SISODIA v. CENTRAL BUREAU OF 509
INVESTIGATION [SANJIV KHANNA, J.]

25. In view of the aforesaid discussion and for the reasons stated, we
are not inclined to accept the prayer for grant of bail at this stage.
26. However, we are also concerned about the prolonged period of
incarceration suﬀered by the appellant – Manish Sisodia. In P. Chidambaram
v. Directorate of Enforcement48, the appellant therein was granted bail after
being kept in custody for around 49 days49, relying on the Constitution
Bench in Shri Gurbaksh Singh Sibbia and Others v. State of Punjab50,
and Sanjay Chandra v. Central Bureau of Investigation51, that even if the
allegation is one of grave economic oﬀence, it is not a rule that bail should
be denied in every case. Ultimately, the consideration has to be made on a
case to case basis, on the facts. The primary object is to secure the presence
of the accused to stand trial. The argument that the appellant therein was a
ﬂight risk or that there was a possibility of tampering with the evidence or
inﬂuencing the witnesses, was rejected by the Court. Again, in Satender
Kumar Antil v. Central Bureau of Investigation and Another52, this Court
referred to Surinder Singh Alias Shingara Singh v. State of Punjab53
and Kashmira Singh v. State of Punjab54, to emphasise that the right to
speedy trial is a fundamental right within the broad scope of Article 21 of
the Constitution. In Vijay Madanlal Choudhary (supra), this Court while
highlighting the evil of economic oﬀences like money laundering, and its
adverse impact on the society and citizens, observed that arrest infringes
the fundamental right to life. This Court referred to Section 19 of the PML
Act, for the in-built safeguards to be adhered to by the authorised oﬃcers to
ensure fairness, objectivity and accountability.55 Vijay Madanlal Choudhary
(supra), also held that Section 436A of the Code56 can apply to oﬀences

48 (2020) 13 SCC 791.
49 In P. Chidambaram v. Central Bureau of Investigation, (2020) 13 SCC 337, the
appellant therein was granted bail after being kept in custody for around 62 days.
50 (1980) 2 SCC 565.
51 (2012) 1 SCC 40.
52 (2022) 10 SCC 51.
53 (2005) 7 SCC 387.
54 (1977) 4 SCC 291.
55 See also Pankaj Bansal v. Union of India and Ors., 2023 SCC OnLine SC 1244.
56 436A of the Code reads:
“436-A. Maximum period for which an undertrial prisoner can be detained.—
510 SUPREME COURT REPORTS [2023] 15 S.C.R.

under the PML Act, as it eﬀectuates the right to speedy trial,a facet of the
right to life, except for a valid ground such as where the trial is delayed at
the instance of the accused himself. In our opinion, Section 436A should
not be construed as a mandate that an accused should not be granted bail
under the PML Act till he has suﬀered incarceration for the speciﬁed period.
This Court, in Arnab Manoranjan Goswami v. State of Maharashtra and
Others57, held that while ensuring proper enforcement of criminal law on
one hand, the court must be conscious that liberty across human eras is as
tenacious as tenacious can be.
27. The appellant – Manish Sisodia has argued that given the number
of witnesses, 294 in the prosecution ﬁled by the CBI and 162 in the
prosecution ﬁled by the DoE, and the documents 31,000 pages and 25,000
pages respectively, the fact that the CBI has ﬁled multiple charge sheets,the
arguments of charge have not commenced. The trial court has allowed
application of the accused for furnishing of additional documents, which
order has been challenged by the prosecution under Section 482 of the Code
before the High Court. It was stated at the Bar, on behalf of the prosecution
that the said petition under Section 482 will be withdrawn. It was also stated
at the Bar,by the prosecution that the trial would be concluded within next
six to eight months.

Where a person has, during the period of investigation, inquiry or trial under this Code
of an oﬀence under any law (not being an oﬀence for which the punishment of death
has been speciﬁed as one of the punishments under that law) undergone detention for
a period extending up to one-half of the maximum period of imprisonment speciﬁed
for that oﬀence under that law, he shall be released by the Court on his personal bond
with or without sureties:
Provided that the Court may, after hearing the Public Prosecutor and for reasons to
be recorded by it in writing, order the continued detention of such person for a period
longer than one-half of the said period or release him on bail instead of the personal
bond with or without sureties:
Provided further that no such person shall in any case be detained during the period
of investigation, inquiry or trial for more than the maximum period of imprisonment
provided for the said oﬀence under that law.
Explanation.—In computing the period of detention under this section for granting
bail, the period of detention passed due to delay in proceeding caused by the accused
shall be excluded.”
57 (2021) 2 SCC 427.
MANISH SISODIA v. CENTRAL BUREAU OF 511
INVESTIGATION [SANJIV KHANNA, J.]

28. Detention or jail before being pronounced guilty of an oﬀence
should not become punishment without trial. If the trial gets protracted
despite assurances of the prosecution, and it is clear that case will not be
decided within a foreseeable time, the prayer for bail may be meritorious.
While the prosecution may pertain to an economic oﬀence, yet it may
not be proper to equate these cases with those punishable with death,
imprisonment for life, ten years or more like oﬀences under the Narcotic
Drugs and Psychotropic Substances Act, 1985, murder, cases of rape,
dacoity, kidnaping for ransom, mass violence, etc. Neither is this a case
where 100/1000s of depositors have been defrauded. The allegations have to
be established and proven. The right to bail in cases of delay, coupled with
incarceration for a long period, depending on the nature of the allegations,
should be read into Section 439 of the Code and Section 45 of the PML
Act. The reason is that the constitutional mandate is the higher law, and
it is the basic right of the person charged of an oﬀence and not convicted,
that he be ensured and given a speedy trial. When the trial is not proceeding
for reasons not attributable to the accused, the court, unless there are good
reasons, may well be guided to exercise the power to grant bail. This would
be truer where the trial would take years.
29. In view of the assurance given at the Bar on behalf of the prosecution
that they shall conclude the trial by taking appropriate steps within next six
to eight months, we give liberty to the appellant – Manish Sisodia to move
a fresh application for bail in case of change in circumstances, or in case
the trial is protracted and proceeds at a snail’s pace in next three months. If
any application for bail is ﬁled in the above circumstances, the same would
be considered by the trial court on merits without being inﬂuenced by the
dismissal of the earlier bail application, including the present judgment.
Observations made above, re.: right to speedy trial, will, however, be
taken into consideration. The appellant – Manish Sisodia may also ﬁle an
application for interim bail in case of ill-health and medical emergency
due to illness of his wife. Such application would be also examined on its
own merits.
30. Recording the aforesaid, the appeals are dismissed. However, we
clarify that the observations made in this judgment, either way, are only
512 SUPREME COURT REPORTS [2023] 15 S.C.R.

for disposal of the present appeals, and these would not inﬂuence the trial
court on the merits of the case, which would proceed in accordance with
law, and decided on the basis of the evidence led. All disputed factual and
legal issues are left open.

Headnotes prepared by: Appeals dismissed.
Ankit Gyan