Delhi Excise scam: Court dismisses bail pleas of five accused, cites possibility of evidence tampering

A city court on Thursday dismissed the bail applications of five accused in a Delhi excise policy-related money laundering case, noting it was not possible to hold they will make no attempt to tamper with the evidence if released.

Special Judge M K Nagpal denied the relief to Vijay Nair, Sameer Mahendru, Sharath Reddy, Abhishek Boinpally and Benoy Babu, saying that further investigation, including the role of other persons involved in commission of alleged offences and to trace the complete trail of ill-gotten money, was still pending.

"Keeping in view their (accused) conduct as reflected on record it will not be possible for this court to hold that they will make no attempt to tamper with the evidence of this case in case they are permanently released on bail as serious allegations of tampering with evidence by way of destruction or change of their mobile phones various times have already been made by the ED against them...

"And further even the specific allegations of destruction of digital data have also been levelled against the accused Reddy," the judge said.

The court said the fact that the accused were involved in a case of economic offence could not be "totally ignored as the economic offences have been held to be constituting a class apart as the same tend to destroy the economic fabric of the nation".

Further, the above fact assumes more importance when the accused is found to be involved in a case of money laundering as the Prevention of Money Laundering Act imposes certain restrictions on powers of the court to release an accused on bail in such a case, the judge said.

The court further rejected the argument made by Reddy and Babu that they are not accused in the scheduled offences case of CBI, terming it "without any merits".

The judge said the oral and documentary evidence brought on record by the ED were enough to infer the existence of a criminal conspiracy between the accused.

The judge observed that apart from the statements of the accused and witnesses, documentary evidence, including WhatsApp chats, cell phone locations, record of bank transactions relating to transfer etc. of proceeds of crime, hotel meetings held between the accused at different places and some digital data and other records of the entities belonging to the accused persons, were also on record.

Besides, the statement of approver Dinesh Arora in the corruption case being probed by the CBI was another piece of incriminating evidence throwing light upon the entire modus-operandi adopted by the accused persons, and his statement to some extent "tends to corroborate the other oral and documentary evidence which have been collected and placed on record by the investigating agency".

The judge observed that though the individual proceeds of crime being attributed to the accused persons was shown by the ED on a much higher side and even the amount of losses allegedly suffered by the government exchequer was said to be highly exaggerated and a major part thereof may not be attributable to the conduct of accused persons, "the same cannot be made a ground to enlarge the applicants on bail".

The court said serious allegations have been levelled against them of being part of a criminal conspiracy to bribe public servants in politics or otherwise and holding different offices and positions in Delhi for causing undue advantages or favours to certain persons in the liquor lobby against the payment of huge kickbacks in advance.

"Keeping in view the totality of facts and circumstances and the above discussion, this court is of the considered opinion that none of the applicants/accused deserves to be released on bail in this case at this stage of proceedings as the allegations made against them are quite serious and relate to commission of an economic offence of money-laundering defined by Section 3 and made punishable by Section 4 of the PMLA. Hence, their bail applications are being dismissed," the judge said.

Regarding the role of Vijay Nair, the court observed there was prima facie evidence to show he had emerged as the "sutradhar" (one who holds the strings in a play) of the entire criminal conspiracy that came into existence between various accused persons, some of whom are yet to be identified, in connection with formulation and implementation of the above excise policy.

"Though he was only the Media and Communication In-charge of the AAP, but it has been revealed during investigation of this case that he was actually representing the AAP and GNCTD in different meetings that took place with the stakeholders in liquor business at different places.

"His participation in the meetings in this capacity is to be viewed in light of the facts that he was residing in the official accommodation allotted to a senior Minister of the AAP and once he is even alleged to have presented himself as an OSD in the Excise Department of GNCTD and further that none from the Government or AAP officially participated in these meetings," the judge observed.

He was the person to whom the alleged kickback amount of Rs 100 crore was delivered by the south liquor lobby, the court said, adding he was also alleged to have played an important role in the entire scheme of repayment and recouping of the above kickback.

"He is, thus, alleged to be associated with generation and laundering of total proceeds of crime amounting to around Rs 615 crore, including the kickback amount of Rs 100 crore," the court said.

Regarding the allegations against Mahendru, the court noted “It can be said in view of the above discussion and material placed before the court that he was the center or base point around which the above criminal conspiracy evolved and he played the most vital role in formation of the cartel and in ensuring repayment of the kickback amount." About the role of Reddy, the court said the evidence collected so far clearly reveal his active involvement not only in payment of the kickback of around Rs 100 crore, but also in ensuring repayment or recouping thereof being a part of the said cartel.

The court noted the accused was alleged to be one of the main components of the South liquor lobby, along with others namely K Kavitha, Magunta Srinivasulu Reddy and Raghav Magunta etc. which had given the kickback of Rs 100 crore to co-accused Nair for the leaders of AAP and other public servants.

It was at their instance only that the above provision of 12 per cent profit margin got incorporated in the policy, the court noted.

The bench noted the submission made by the ED that Reddy was also associated with generation and laundering of proceeds of crime of Rs 146.9 crore and Rs 199.2 crore transferred by him in the bank accounts of his proxy entities namely -- M/S Avantika and M/S Organomixx (both accused in the case) and the excess cash collection of Rs 41.13 crore by his retail entities.

Regarding Abhishek Boinpally, the court noted he was prima facie one of the representatives of the South group in the cartel and played an active role in payment of the kickback as well as its recoupment.

"He met the co-accused Vijay Nair and others as a representative of the south lobby in connection with excise policy formulation and it was he through whom at least Rs 20–30 crore out of the kickback amount are alleged to have been transferred to Delhi from south and delivered to the co-accused Vijay Nair and his team," the judge noted.

About Benoy Babu, the court said the oral and documentary evidence suggested that he was the brain behind the decision taken by accused company Pernod Ricard for furnishing corporate guarantees of Rs 200 crore for the loans availed by other members of the cartel from HSBC bank and this was considered to be an investment to take control of the retail liquor business and to achieve highest market share in sale of liquor brands by the company.

The money laundering case stems from a CBI FIR.

Delhi Deputy Chief Minister Manish Sisodia and other excise department officials were named as accused in the CBI and the ED FIRs. P