Delhi Excise Policy Case: PMLA Appellate Tribunal Upholds ₹24.25 Cr Attachment Of Properties Of Gautam Malhotra, Companies

The PMLA Appellate Tribunal (Appellate Tribunal under SAFEMA) has upheld the attachment of properties linked to Diamond Liquors Pvt. Ltd., Gautam Malhotra, and Gautam Wines Pvt. Ltd., rejecting their challenge to the attachment of Rs. 24.25 crore in a case arising from allegations of kickbacks and cartelization under the Delhi Excise Policy 2021 to 22.

A coram led by Chairman Justice Munishwar Nath Bhandari, along with Member G. C. Mishra, found that the funds were not incidental but were used to give shape to the alleged conspiracy, placing them within the ambit of the Prevention of Money Laundering Act, 2002.

The case traces back to a CBI FIR registered in August 2022 against former Delhi Deputy Chief Minister Manish Sisodia and others. The agency alleged a conspiracy involving kickbacks of around Rs. 100 crore from private players tied to the framing and rollout of the Excise Policy 2021 to 22, which, according to the prosecution, led to undue benefits and cartelization in the liquor trade.

As recorded in the order, Gautam Malhotra is alleged to have paid Rs. 2.5 crore in bribes as part of the kickback arrangement and earned profits of Rs. 6.9 crore through cartelized operations. It was further alleged that Rs. 24.25 crore was invested in Nova Garments Pvt. Ltd., now known as Diamond Liquors Pvt. Ltd., through related entities, resulting in control over retail liquor operations, which was barred under the policy. A further Rs. 0.49 crore was allegedly received through excess credit notes from Brindco Sales Pvt. Ltd.

The Enforcement Directorate issued a provisional attachment order on July 3, 2023, which was later confirmed by the Adjudicating Authority on December 20, 2023. The present appeals were limited to the challenge against the attachment of Rs. 24.25 crore.

Before the tribunal, the appellants argued that the amount was not derived from any scheduled offence but was only used in the alleged conspiracy and therefore could not be treated as proceeds of crime. They relied on the argument that just as a vehicle used in a crime is not treated as proceeds of crime, the investment too should not be attached.

They also contended that the alleged bribe of Rs. 2.5 crore could not be treated as proceeds of crime in their hands and that any action should have been directed against the recipients.

The Enforcement Directorate, on the other hand, maintained that the investment was central to the conspiracy. It argued that the funds were routed through multiple entities to gain control over liquor operations in violation of the policy and were projected as untainted transactions.

Agreeing with the agency, the tribunal pointed to the wide definition of property under the law and observed, “We find that the explanation to the definition of Section 2(1)(v) of the Act of 2002 categorically clarifies that property includes property of any kind used in the commission of an offence under this Act or any of the scheduled offenses."

On the question of bribes, the tribunal said the argument of the appellants missed a key point. Giving a bribe is itself a punishable offence under the Prevention of Corruption Act, 1988, and once there is intent to pay a bribe, the money becomes linked to proceeds of crime.

Finding no merit in the challenge, the tribunal dismissed the appeals and confirmed the attachment, holding that there was no reason to interfere with the earlier order.

For Appellants: Advocate Raghav Khanna appeared for Diamond Liquors Pvt. Ltd., while Senior Advocate Manu Sharma, along with Advocates Nishant Bishnoi and Raghav Khanna, represented Gautam Malhotra. Advocate Chaitanya Hegde and Advocate Raghav Khanna appeared for Gautam Wines Pvt. Ltd.

For Respondent (Enforcement Directorate): Special Counsel Zoheb Hossain was assisted by Panel Counsel Vivek Gurnani and Advocate Kanishk Maurya.