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Synopsis

The Delhi High Court, on Monday, granted bail to Sameer Mahandru for his alleged involvement concerning now-defunct liquor excise policy. These observations were made in a petition seeking regular bail on grounds that “More than 11 months have passed since the dismissal of first regular Bail Application” and “The bail is also sought on medical condition of himself and his wife”.

The bench of Justice Neena Bansal Krishna reiterated that “Article 21 of the Constitution shall take precedence over the Twin Test and if the Trial would take long, the accused shall be entitled to Bail”. 

Advocate Dhruv Gupta, representing Mahandru contended that Mahandru's arrest and remand had procedural flaws and that the ongoing investigations were incomplete. He argued that the Enforcement Directorate (ED) had filed supplementary complaints piecemeal, aiming to delay his bail rights. Despite claims of completed investigations, supplementary complaints had been added, complicating the case.

Advocate Gupta argued that the ED had failed to establish the offense of money laundering as defined by law. Specifically, the ED needed to prove that the ‘proceeds of crime’ were directly linked to criminal activity. It was also contended that ED could not assume that any recovered property was automatically proceeds of crime without demonstrating this link. Advocate Gupta claimed that the ED had not met these requirements and, therefore, Mahandru should be granted bail. 

Furthermore, it was asserted there was no evidence linking Mahandru to the formulation or influence of the Delhi Excise Policy 2021-22. Mahandru refuted claims of involvement in facilitating Rs. 100 crore kickbacks or any conspiracy with the South Group members, including individuals like K. Kavitha and Sarath Reddy. He noted that he was approached only for investment purposes after the policy was finalized. He also challenged allegations regarding Indo Spirits' stake allocations and profit margins, asserting that these claims were baseless.

Special Public Prosecutor Zoheb Hossain, representing the Directorate of Enforcement, argued that the repeated bail applications, without any change in circumstances, should be rejected. It was further contended that bail in cases under the PMLA must satisfy the twin conditions of Section 45, which involve preventing tampering with evidence and influencing witnesses.

SPP Hussain argued that substantial evidence linked the accused to money laundering, and releasing him on bail could hinder further investigation and lead to evidence tampering or evasion of law. It was also mentioned that the investigation was complete and the prosecution complaint had been filed, with the ED complying with court directives. ED stressed that previous orders had already considered Mahandru’s medical condition and that further interim bail was unjustified. 

The court noted a preliminary review of Mahandru’s role in the case indicated that the criteria for establishing guilt in money laundering or potential offenses were weak. Even if the prosecution's case were accepted as strong, the recent Supreme Court judgments in Manish Sisodia v. Directorate of Enforcement (2024 INSC 595) emphasized that the right to liberty under Article 21 of the Indian Constitution is paramount, even when stringent provisions are included in special statutes. The court reiterated that if the State or prosecuting agency fails to ensure a speedy trial as guaranteed under Article 21, bail should not be opposed solely on the grounds of the offense's seriousness. 

The court, therefore, remarked that Article 21 would take precedence over the twin test of guilt. Given that the trial was unlikely to conclude soon, and the Mahandru had been in judicial custody since September 28, 2022, for nearly two years, he was at risk of having his right to liberty under Article 21 infringed upon and was thus entitled to bail.

Although the ED objected, alleging that the Mahandru were employing tactics to delay the trial by filing multiple applications, the court reiterated the Supreme Court Judgment that such applications were part of the accused's right to a fair trial and not necessarily indicative of delay tactics.

The court noted that Mahandru's lack of previous criminal involvement indicated no flight risk or likelihood of tampering with evidence, as most evidence was documentary in nature. Therefore, the bail application was granted, with the following conditions:

“I. The applicant is directed to be released forthwith on bail in connection with the ECIR No. HIU-II/14/2022 dated 22.08.2022, registered by the Directorate of Enforcement subject to furnishing a bail bond in the sum of Rs.10,00,000/-with two sureties of the like amount, to the satisfaction of the learned Trial Court. 
II. The applicant/accused shall appear before the Court as and when the matter is taken up for hearing.
III. The applicant/accused shall provide mobile number to the IO concerned which shall be kept in working condition at all times and he shall not change the mobile number, without prior intimate to the Investigating Officer concerned. 
IV. The applicant/accused shall not change his residential address and in case of change of the residential address, the same shall be intimated to this Court, by way of an affidavit. V. The applicant shall surrender his passport with the learned Special Court; 
VI. The applicant shall report to the Investigating Officer on every Monday and Thursday between 10-11 AM; and 
VII. The applicant shall not indulge in any criminal activity and shall not communicate with or come in contact with the witnesses. 
VIII. The applicant/accused shall not leave the country, without permission of this Court.
IX. The applicant shall not make any attempt to tamper with the evidence or influence the witnesses”. 

Case Title: Sameer Mahandru v Directorate Of Enforcement (2024:DHC:6933)