Delhi CM Arvind Kejriwal's ED Arrest In Liquor Policy Case Valid: Delhi High Court

The Delhi High Court on Tuesday dismissed the plea moved by Chief Minister Arvind Kejriwal challenging his arrest by the Enforcement Directorate (ED) in the money laundering case related to the alleged liquor policy scam case.

Justice Swarana Kanta Sharma upheld his arrest and subsequent remand holding that ED was able to place enough material, statements of approvers and AAP's own candidate stating that Kejriwal was given money for Goa elections.

"Material collected by ED reveals that Kejriwal conspired and was involved in formulation of excise policy and used proceeds of crime. He is also allegedly involved in personal capacity in formulation of policy and demanding kickbacks and secondly in the capacity of national convenor of AAP," the judge said while pronouncing the order in open court.

It thus held that rigours of section 70 PMLA are attracted in this case. Section 70 penalises offences by companies. It provides that when a company contravenes the PMLA, every person who at the time the contravention was in charge of conduct of business of the company will be deemed to be guilty.

Kejriwal had argued that he cannot be held vicariously liable since AAP is not a company but a political party registered under the Representative of Peoples Act.

Court also said that all mandate of law laid down in Pankaj Bansal case was followed by the central probe agency. The magistrate court order remanding Kejriwal to custody was also reasoned order.

On Kejriwal's arguments challenging the timing of arrest ahead of General elections, the Court said, "Petitioner has been arrested in money laundering case and court has to examine his arrest and remand as per law irrespective of timing of elections." It held that challenge timing of arrest, in the absence of any mala fide on part of ED, is not sustainable.

Significantly, Kejriwal's counsel had also questioned the veracity of statements given against Kejriwal by approvers. It was argued that the statements were given in exchange for their release and ticket to contest elections.

The Court however made it clear that approvers' statements are recorded by the Court and not by the probe agency. Thus it held,

"To cast aspersion on the manner of recording statements of approver would amount to casting aspersions on the judicial process. The law of approver is more than 100 years old. It is not a one year old law to suggest as if it was enacted to falsely implicate the petitioner."

It added, "Who gives tickets for contesting election or who purchases electoral bonds is not the concern of the court."

Court also said that Kejriwal will be permitted to cross-examine the witnesses (including approvers) at the appropriate stage. "On the question of non supply of documents and earlier statements (of approvers), I've said that you're entitled to inspect documents at the appropriate stage of trial. However, this is not the stage."

Kejriwal is currently in judicial custody. He was arrested on the night of March 21. On March 22, the trial court remanded him to six days of ED custody, which was extended by further four days. On April 01, he was remanded to judicial custody till April 15.

Senior Advocate Abhishek Manu Singhvi appeared for Kejriwal. ASG SV Raju represented ED.

Senior Advocate Abhishek Manu Singhvi appearing for Kejriwal argued that the central probe agency did not comply with Section 50 PMLA which empowers it to issue summons, collect evidence, etc.

He contended that ED forced the approvers Raghav Magunta, Sarath Reddy and Magunta Reddy to make statements against Kejriwal. He further alleged that two approvers even have links with the ruling party.

Responding to the plea, ED had said that Kejriwal is the kingpin and the key conspirator of the excise scam and there were reasons to believe on the basis of material in its possession that he was guilty of the offence of money laundering.

ED also alleged that the Aam Aadmi party was the “major beneficiary” of the proceeds of the crime and has committed the offence through Kejriwal.

“The Aam Aadmi Party (AAP) is the major beneficiary of the proceeds of crime generated in the Delhi Liquor Scam. Sh Arvind Kejriwal was and is not only the brain behind the AAP but also controls its major activities, he was also one of the founding members and was also involved in the decision making of the policy as evident from the statements of the witnesses,” the response said.

Also Read: Delhi High Court Reserves Verdict On Arvind Kejriwal's Plea Challenging ED Arrest In Liquor Policy Case

About the Case

Kejriwal had skipped nine summons issued to him by ED. Aam Aadmi Party leaders Manish Sisodia and Sanjay Singh are also accused in the case. While Sisodia remains in judicial custody, Singh was recently granted bail by the Supreme Court.

Following his arrest, Kejriwal had promptly moved an urgent petition before the Supreme Court challenging his arrest. However, the same was withdrawn later.

Moreover, he has previously moved the Delhi High Court (division bench) challenging the summons issued to him by the central probe agency. He has also filed an application seeking interim protection. The matter is fixed for hearing on April 22.

Kejriwal skipped the summons, claiming that they were illegal.

It is ED's case that the excise policy was implemented as part of a conspiracy to give wholesale business profit of 12 percent to certain private companies, although such a stipulation was not mentioned in the minutes of meetings of Group of Ministers (GoM).

The Central agency has also claimed that there was a conspiracy that was coordinated by Vijay Nair and other individuals along with South Group to give extraordinary profit margins to wholesalers.

Nair was acting on behalf of Chief Minister Arvind Kejriwal and Manish Sisodia, according to the agency.

Case Title: ARVIND KEJRIWAL v. DIRECTORATE OF ENFORCEMENT

Citation: 2024 LiveLaw (Del) 424

Political Party Can Be Brought Under PMLA, Kejriwal Would Be Liable For Affairs Of AAP Under Section 70(1): Delhi High Court

Click here to read the order