The Supreme Court of India, on 30 October 2023, dismissed the regular bail applications of former Delhi Deputy Chief Minister Manish Sisodia in both the CBI and ED cases connected to the alleged Delhi excise policy irregularities. The Bench of Justice Sanjiv Khanna and Justice S.V.N. Bhatti held that the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 were not satisfied and that the gravity of the allegations warranted continued custody.
Background
Sisodia was arrested by the Central Bureau of Investigation on 26 February 2023 in connection with alleged irregularities in the formulation and implementation of the Delhi Excise Policy 2021-22, which was subsequently withdrawn by the Delhi Government. The Enforcement Directorate subsequently arrested him in a money laundering case predicated on the CBI FIR, alleging that the proceeds of the corruption offence were laundered through a network of entities.
The prosecution's case centred on allegations that the excise policy was designed to benefit specific licensees in exchange for kickbacks estimated at approximately Rs 338 crore, which were allegedly routed through intermediary entities and shell companies. Sisodia, as the minister holding the excise portfolio, was alleged to have been the principal beneficiary and architect of the alleged criminal conspiracy.
Sisodia had been in judicial custody for over eight months at the time of the bail hearing, having been denied bail by the trial court and the Delhi High Court in both the CBI and ED matters.
Key Holdings
The Court addressed the bail applications on the following grounds:
Twin conditions under Section 45 PMLA: The Court held that Sisodia had not satisfied the twin conditions prescribed under Section 45 of the PMLA — that there are reasonable grounds for believing that the accused is not guilty of the offence, and that the accused is not likely to commit any offence while on bail.
Prima facie case established: The Court observed that the prosecution had tentatively established the transfer of approximately Rs 338 crore, constituting a prima facie case of the gravity that militated against bail at this stage.
Trial timeline directed: While denying bail, the Court directed that the trial in both cases be completed within six to eight months, recognising that the prolonged incarceration of the accused must be balanced against expeditious trial completion.
Liberty to re-apply: The Court granted Sisodia liberty to apply for bail again after three months if the trial did not proceed at a satisfactory pace, effectively linking the bail determination to trial progress.
Implications for Practitioners
This order illustrates the stringent threshold that Section 45 PMLA imposes on bail applications in money laundering cases. Defence practitioners seeking bail under PMLA must present material demonstrating reasonable grounds for believing in the accused's innocence — a burden significantly heavier than the general bail standard under Section 439 CrPC, where the court primarily examines flight risk, evidence tampering, and gravity of offence.
The Court's approach of denying bail while imposing trial timelines represents an increasingly common judicial strategy for balancing personal liberty against the severity of economic offences. Practitioners on both sides should note that failure to adhere to the six-to-eight-month trial completion timeline creates a reopening of the bail question — effectively creating a conditional refusal rather than an absolute denial.
For those representing accused persons in economic offence cases, the linkage between bail outcomes and trial progress underscores the importance of cooperative trial conduct. Demonstrating willingness to facilitate expeditious trial proceedings can strengthen subsequent bail applications when court-imposed timelines are not met by the prosecution.