Why the Supreme Court gave bail to AAP’s Sanjay Singh

What are the ED’s charges against Sanjay Singh?

In its application seeking Singh’s custody, the ED had labelled Singh a “key conspirator”. Although he is not an accused in the excise scam case itself, which is being pursued by the Central Bureau of Investigation (CBI), the ED accused Singh of laundering “proceeds of crime” from the alleged scam. Simply put, like Delhi Chief Minister Arvind Kejriwal, Singh is not accused of corruption, but only of money laundering.

Section 3 of the Prevention of Money Laundering Act (PMLA) makes concealment of tainted funds also an offence.

In its remand application, the ED had said: “Sanjay Singh has exploited and gained illegal money/ kickbacks, which is ‘proceeds of crime’ generated from the liquor policy (2021-22) scam… (He) has been part of the conspiracy of collecting kickbacks from liquor groups… (He) has a close relationship with Dinesh Arora since 2017 as revealed by Dinesh Arora as well as from his call records.”

Dinesh Arora is a businessman whom the ED had earlier accused of being a “conduit for kickbacks” between the “South group” (a set of accused individuals from southern India) and the AAP.

The ED had claimed that Arora had told investigators that he spoke to many restaurant owners at Sanjay Singh’s behest, and had “arranged cheques amounting to Rs 82 lakh for collection of party funds for the upcoming elections”. The ED had also alleged that Arora had given Rs 2 crore in cash to Singh through the MP’s associate Sarvesh Mishra, who also was accused under the PMLA.

Arora turned approver in the CBI case in November 2022, and got bail. In July 2023, Arora was arrested by the ED, but he became an approver in the ED case as well. As a result, the case against Singh virtually rests on the veracity of Arora’s statements.

What is Singh’s defence?

Singhvi pointed out to the court that Arora’s statements that allegedly implicate Singh were made in his tenth statement while nine previous statements did not mention Singh. He also argued that in the five months since Singh had been arrested, the ED had not established any trail of evidence. For example, if Arora gave Rs 2 crore to Singh, those “proceeds of crime” must be recovered by the ED. Other aspects of Arora’s statements must also be corroborated by the other witnesses, Singhvi said.

The ED also alleged that Singh received proceeds of crime worth Rs 2 crore from the other co-accused, Sameer Mahendru and Abhishek Boinpally, through approver Arora. Singhvi argued that Mahendru had stated that he did not give any bribes.

Why did the ED not oppose Singh’s bail?

While Singhvi was arguing, Justice Khanna observed that the ED would have to respond to why the agency had not attached any property. An attachment would show the existence of the tainted funds.

However, the ED sought to make a “concession” and not oppose Singh’s bail. An argument on merits would have meant that the court would have had an opportunity to consider whether ED can prima facie make a case against an accused without establishing any money trail.