The former Delhi Deputy CM Manish Sisodia was charged with money laundering by the Enforcement Directorate (ED), but the Supreme Court said on Thursday, 5 October, that without proof of bribery, it might be difficult to take action against him.
A bench comprising Justices Sanjiv Khanna and SNV. Bhatti also emphasised that Section 3 of the Prevention of Money Laundering Act (PMLA) does not criminalise the generation of money.
Section 3 of PMLA states that anyone who directly or indirectly indulges in or assists in any process related to crime proceeds and projects them as untainted property is guilty of money laundering.
"We understand that there is a policy change. Everyone will support policies good for their business. Pressure groups are always there. Policy changes, even if wrong, without money consideration, will not matter. It's the money part that makes it an offence," noted Justice Khanna while hearing the Additional Solicitor General SV Raju's submission on behalf of the ED.
Further, responding to the Supreme Court's question of "How will you establish money laundering by Sisodia factually and legally?" ASG Raju said that the question is whether Sisodia was not directly or indirectly involved in illegal activity or processes. His policy triggered bribes, which served as criminal proceeds, the counsel alleged. He contended that "activity" in this context refers to making a policy that results in the generation of money.
As the proceedings carried forward, Justice Khanna pointed out that money generation is not an offence under the PMLA's Section 3, to which ASG Raju mentioned that money cannot be used unless it exists. Khanna acknowledged this may be a limitation but also asked Raju about the ED's approach to bringing Sisodia under the PMLA case.
The bench said, "Money laundering is a separate offence. How will you establish Sisodia's involvement. You have to show that he is in possession of the property. He may be aware it was used. But he never came into physical possession. The acquisition is by somebody else. The use is by somebody else. The projection that it was tainted money is by somebody else."
Justice Khanna stated that PMLA will be activated after the proceeds of the crime are given or paid, noting that the generation of money is not included in PMLA.
Justice Khanna ruled that conspiracy is not incorporated under PMLA. The ASG argued that the Delhi liquor policy was created to benefit wholesalers who paid bribes and that the policy was modified to allow specific persons to be wholesalers.
The bench was informed that Sisodia used the Signal app for communication, making their messages untraceable. They were asked if there was any evidence of Sisodia discussing bribery with Vijay Nair and if such discussions would be admissible in court.
"Isn't the statement (by an approver) hearsay? It is an inference but has to be based on evidence. In cross-examination, this will fall flat in two minutes."Supreme Court
Before adjourning the court for the day, Justice Khanna told Sisodia's advocate, Abhishek Manu Singhvi, "Normally we don't go so deep in bail matters but they have pointed out several issues that, according to them disclose a criminal offence. The second part is with regard to PMLA. The only question in that is whether Section 3 can be invoked or not."
The court hearing will resume next Thursday, i.e., 12 October.
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