Mere Commercial Gain By Private Party Under Govt Policy Can't Trigger Prosecution Sans Proof Of Corruption: Delhi Court In Liquor Policy Case

While dismantling the corruption case related to the alleged liquor policy scam today, a Delhi Court said that mere financial loss to the State or commercial gain to a private party under the State policy does not furnish basis for criminal prosecution especially when evidence of corruption or unlawful enrichment is absent.

“Even if a policy does not yield the desired outcome or because a private participant secures an advantage from operating within the policy framework,” Special Judge Jitendra Singh of Rouse Avenue Courts added.

The Court discharged Aam Aadmi Party supremo Arvind Kejriwal, Manish Sisodia, Telangana Jagruthi founder K Kavitha and 20 others in the CBI case.

The judge said that a deviation from policy intent, or the securing of a commercial advantage within the contours of the policy framework, does not, by itself, attract criminal liability.

The Court was of the view that the prosecution under the IPC, the Prevention of Corruption Act, or any other penal statute require presence of specific acts satisfying the statutory ingredients of an offence.

"The consequences flowing from such conduct ordinarily lie in the regulatory and administrative sphere. These may include cancellation or suspension of licences, withdrawal of policy-based privileges, imposition of penalties, or recovery of undue gains realised contrary to the terms of the licence or the policy. These are matters governed by administrative and contractual principles regulating the relationship between the State and the licensee, and not by the criminal law,” the Court said.

It emphasised that criminal culpability can arise only where the material discloses clear elements of fraud, forgery, bribery, quid pro quo, misappropriation, collusive abuse of official position, or any other act squarely covered by a penal provision.

“The threshold for invoking criminal jurisdiction remains the existence of a culpable act that falls within the four corners of a penal statute; anything short of that is a matter for administrative regulation and not criminal adjudication,” the Court said.

It added that policy formulation is inherently experimental and that a policy may succeed or fail, and failure by itself is not evidence of criminality.

The judge observed that profit earned by private participants is not illegal per se and it becomes suspect only when it is shown to flow from collusion, undue favour, or manipulation of process.

“Criminal prosecution is justified only where the material discloses either a conscious and deliberate violation of mandatory procedure coupled with dishonest intent, or dishonest or collusive intent camouflaged behind formal procedural compliance. In the absence of these elements, the domain of policy-making remains a matter of governance, not criminal liability,” the Court said.

"Profit earned by private participants is not illegal per se; it becomes suspect only when it is shown to flow from collusion, undue favour, or manipulation of process," it added.