Delhi HC Rejects Arvind Kejriwal Plea Challenging ED Arrest And Remand In Excise Policy Case

What definitely came as a big body blow and bolt from the blue to the high hopes and huge expectations nurtured by the Chief Minister of Delhi – Mr Arvind Kejriwal of getting bail from the Delhi High Court, we witnessed how on April 9, 2024 the Delhi High Court in its notable judgment in W.P.(CRL) 985/2024 & CRL.M.A. 9427/2024 and cited in Neutral Citation No.: 2024:DHC:2851 that was reserved on April 3, 2024 dismissed a plea that had been filed by the Delhi Chief Minister Mr Arvind Kejriwal who had challenged his arrest by the Enforcement Directorate (ED) in connection with the Delhi Excise Policy case as well as the remand order that had been passed by the Trial Court sending him to ED custody. We must note that this learned judgment was passed by the Single Judge Bench comprising of Hon’ble Ms Justice Swarana Kanta Sharma who reserved the judgment after hearing arguments at length from both sides on April 3. Mr Kejriwal will now challenge it in the Apex Court.

To recapitulate, Mr Kejriwal was arrested by the ED on March 21 in a money laundering case that pertained to the Delhi Excise Policy of 2021. He was then produced before Delhi’s Rouse Avenue Court which remanded him to ED custody till March 28. He has been in judicial custody since April 1. On April 1, he was remanded to judicial custody till April 15. He then opted to challenge his arrest and remand before the Delhi High Court.

At the very outset, this learned judgment authored by the Single Judge Bench comprising of Hon’ble Ms Justice Swarana Kanta Sharma of Delhi High Court sets the ball in motion by first and foremost putting forth in para 1 that, “On 21.03.2024, a search was conducted by the Directorate of Enforcement at the official residence of Sh. Arvind Kejriwal, petitioner herein, who is the Chief Minister of the State of Delhi. After the search, he was served with grounds of arrest and was arrested on the same day at 09:05 PM by the Directorate of Enforcement in connection with ECIR No. HIU-II/14/2022 regarding his involvement in the offence of money laundering with regard to Delhi Excise Policy 2021-2022. After arrest, petitioner was produced before the learned Special Judge (PC Act) CBI-09 (MP/MLA Cases), Rouse Avenue Courts, Delhi (‘learned Special Court’), where the Directorate of Enforcement had sought his custody for the purpose of interrogation which was granted vide order dated 22.03.2024.”

As we see, the Bench discloses in para 2 that, “During the hearing of the present case, this Court was informed that after filing of the present petition, the learned Special Court was pleased to further extend remand of the petitioner to custody of the respondent vide another order dated 28.03.2024 till 01.04.2024. The present petition came up for hearing before this Court initially on 27.03.2024 when the petitioner was running in custody of the Directorate of Enforcement by a judicial order. The Court is informed that the petitioner herein has now been remanded to judicial custody by the learned Special Court vide order dated 01.04.2024 till 15.04.2024.”

To be sure, the Bench observes in para 3 that, “The present petition under Article 226 and 227 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973 (‘Cr.P.C.’) challenges the arrest of the petitioner by Directorate of Enforcement on the ground that the arrest was in violation of Section 19 of Prevention of Money Laundering Act, 2002 (‘PMLA’) and it has been prayed that the arrest order dated 21.03.2024 and the proceedings pursuant thereto be declared illegal, non-est, arbitrary and unconstitutional. Further, it is prayed that the order vide which the petitioner was remanded to custody of Directorate of Enforcement be also quashed on the grounds of it being passed in a mechanical and patently routine manner.”

For clarity, the Bench clarifies in para 4 that, “Before proceeding further, this Court would clarify at this stage itself that the present petition is not an application seeking grant of bail, but release on ground of arrest of petitioner being illegal and in violation of principles laid down by the Hon’ble Supreme Court in case of Pankaj Bansal v. Union of India 2023 SCC OnLine SC 1244.”

FACTUAL BACKGROUND

To put things in perspective, the Bench envisages in para 5 while dwelling on the facts of the case that, “The brief background of the case is that the present case has been registered by the Directorate of Enforcement in relation to the predicate offence case registered by the Central Bureau of Investigation (‘CBI’). On 17.08.2022, case bearing RC No. 0032022A0053 had been registered by the CBI for offences punishable under Section 120B read with Section 447A of the Indian Penal Code, 1860 (‘IPC’) and Section 7 of Prevention of Corruption Act, 1988, (‘PC Act’) on the basis of a complaint dated 20.07.2022 made by the Lieutenant Governor, GNCTD and the directions of competent authority conveyed by Director, Ministry of Home Affairs (‘MHA’), Government of India, through letter dated 22.07.2022 and also based on some sourced information, in relation to the irregularities committed in framing and implementation of excise policy of GNCTD for the year 2021-2022. The CBI had filed a chargesheet dated 25.11.2022, cognizance of which was taken by the learned Special Court on 15.12.2022. Thereafter, on 25.04.2023 and 08.07.2023, two supplementary chargesheets had also been filed before the learned Special Court respectively, against a total of 16 accused persons. It is the case of CBI that while the excise policy of GNCTD was at the stage of formulation or drafting, the accused persons had hatched a criminal conspiracy, in furtherance of which some loopholes had intentionally been left or created in the policy, which were meant to be utilised or exploited later on. Further, huge amount of money was paid as kickbacks in advance to the public servants involved in commission of the alleged offences and in exchange of undue pecuniary benefits to the conspirators involved in the liquor trade. As alleged, kickbacks of around Rs. 20-30 crores in advance were paid to accused Sh. Vijay Nair, Sh. Manish Sisodia and some other persons belonging to the ruling political party in Delhi, and the other public servants involved in conspiracy by some persons in the liquor business from South India (‘South Group’) and these kickbacks were found to have been returned back to them subsequently out of the profit margins of wholesalers holding L-l licences and also through the credit notes issued by the L-l licensees to the retail zone licensees (‘L-7Z’) related to the South liquor lobby. It is further alleged that as a result of criminal conspiracy, a cartel was formed between three components of the said policy, i.e. liquor manufacturers, wholesalers and retailers, by violating provisions and the spirit of liquor policy, and all the conspirators had played an active role to achieve the illegal objectives of the said criminal conspiracy, result in huge losses to the Government exchequer and undue pecuniary benefits to the public servants and other accused involved in the said conspiracy.”

Do note, the Bench notes in para 6 that, “The present ECIR No. ECIR/HIU-II/14/2022 was registered, as offences under Section 120B and Section 7 of the PC Act are scheduled offences under PMLA. The first prosecution complaint by the Directorate of Enforcement was filed on 26.11.2022 and the cognizance was taken by the learned Special Court on 20.12.2022. Thereafter, Directorate of Enforcement has filed five supplementary prosecution complaints before the learned Special Court.”

Simply put, the Bench then lays bare in para 7 that, “The petitioner Sh. Kejriwal was first summoned under Section 50 of PMLA on 30.10.2023, to appear before the respondent on 02.11.2023. Total nine summons were issued to the petitioner during the period between October 2023 to March 2024, however, the petitioner had failed to join the investigation. The petitioner Sh. Kejriwal was arrested in relation to the present case on 21.03.2024 and was produced before the learned Special Court on 22.03.2024, whereby, he was remanded to custody of Directorate of Enforcement for a period of 6 days and it was then extended by four days vide order dated 28.03.2024.”

Needless to say, the Bench states in para 8 that, “The petitioner is before this Court challenging his arrest in the present case and assailing the order dated 22.03.2024 passed by the learned Special Court vide which he was remanded to custody of Directorate of Enforcement for a period of 6 days.”

Be it noted, the Bench notes in para 113 that, “The cumulative effect of the material collected so far by the Directorate of Enforcement regarding the role of the petitioner, both in his personal capacity in formulation of Delhi Excise Policy 2021- 22 and demanding kickbacks from the South Group, and in his capacity as National Convenor of Aam Aadmi Party in utilisation of proceeds of crime during Goa Elections 2022, reflecting the ‘reasons to believe’ that the petitioner was ‘guilty of offence of money laundering’ in terms of Section 19 of PMLA, and the need to interrogate the petitioner and confront him with the statements of witnesses, and other material as well as digital evidence, coupled with the conduct of petitioner of not joining investigation pursuant to service of nine summons for a period of six months, necessitated the arrest of petitioner Sh. Arvind Kejriwal.”

It is worth noting that the Bench notes in para 114 that, “Therefore, prima facie, the mandatory provisions of Section 19 of PMLA have been satisfied by the Directorate of Enforcement while arresting the petitioner Sh. Kejriwal, in compliance of judgment of Pankaj Bansal (supra), and there is material at this stage which points out towards the guilt of the petitioner for commission of offence of money laundering.”

CONCLUSION

While upholding the time tested dictum that, “The State is static, the Governments are at the will of the People”, the Bench propounds in para 166 that, “While concluding this judgment, this Court holds that Judges are bound by law and not by politics. This Court also holds that judgments are driven by legal principles and not political affiliations.”

Most remarkably, the Bench expounds in para 168 that, “In this Court’s opinion, the Courts of law are one of the pillars of democracy. Judges, as custodians of justice, are bound by the law and not by political considerations. The independence of the judiciary not only refers to judgments independent of hidden or apparent biases but also independent of the effect of political affiliations of those who appear and are parties before them. The oath of a judge binds her to the Constitution through its words which always resound in her ears and are etched in her mind.”

Further, the Bench observes in para 169 that, “In this regard, this Court notes that the judiciary is tasked with interpreting laws and adjudicating matters before it based on the existing laws and precedents alone, rather than the political considerations. While adjudicating cases, the Courts are tasked with interpreting and applying the law, rather than delving into the realm of politics. While politics may influence governance, it is not the purview of the Courts to adjudicate political matters. Instead, the judiciary remains steadfast in its commitment to the principles of law and justice, independent of political considerations.”

Furthermore, the Bench hastens to add in para 173 that, “This Court observes that political considerations and equations cannot be brought before a Court of law as they are not relevant to the legal proceedings.”

Most significantly, the Bench mandates in para 174 that, “In the case at hand, it is important to clarify that the matter before this Court is not a conflict between the Central Government and the petitioner Sh. Arvind Kejriwal. Instead, it is a case between the petitioner Sh. Arvind Kejriwal and the Directorate of Enforcement. In such legal proceedings, it is crucial for the Court to maintain its focus solely on the legal merits of the case. Political factors or dynamics should not and have never influenced the court’s deliberations or decision-making process. The role of the Court is to impartially assess the evidence presented and apply the relevant laws to determine the outcome of the case. Any attempt to introduce political considerations into the proceedings would undermine the integrity of the legal process and could compromise the pursuit of justice. Therefore, it is essential for the court to remain vigilant in ensuring that the case is adjudicated based on legal principles and not influenced by extraneous factors.”

Adding more to it, the Bench pointed out in para 175 that, “Though Sh. Singhvi argued that he was not arguing politics but law, however, due to complexity of facts of the case which are intertwined with the political standing of the petitioner and the impending General elections, it was a difficult task. Despite the same, this Court has to adhere to its constitutional duty of applying law to the facts of a case, howsoever complex they may be sans the political equations between parties as the issue before this Court does not concern two political parties but an investigating agency on one hand and an alleged accused who happens to be a Chief Minister on the other hand.”

While sending a loud and clear message, the Bench holds in para 176 that, “The Courts have been and are better left untouched by political influences or interferences and their only and sole responsibility and duty is application of law enacted by the Parliament which is the will of the people.”

Plainly speaking, the Bench also then clearly maintains in para 180 that, “The petitioner or the respondent may find the Court to be excessively harsh or lenient in their cases, however, the Court has to dispassionately only keep its concern with application of law and decide the case before it accordingly. The Courts have to only perform their duty of application of law irrespective of the political or financial standing of any person before it. At the same time, keeping in mind a fair trial and hearing to an accused.”

As a corollary, the Bench holds in para 181 that, “In view of the aforesaid discussion, and for the reasons recorded by this Court in para nos. 104 to 114, this Court is of the opinion that the arrest of petitioner Sh. Arvind Kejriwal was not in contravention with the law laid down by the Hon’ble Apex Court in case of Pankaj Bansal (supra) in respect of Section 19 of PMLA. Similarly, for the reasons recorded in para nos. 115 to 127, the impugned remand order dated 22.03.2024 passed by the learned Special Court does not suffer from any infirmity or illegality.”

What’s more, the Bench then directs in para 182 that, “Consequently, since the arrest of the petitioner and the impugned remand order dated 22.03.2024 are held valid, the prayer seeking release of petitioner is also liable to be rejected.”

Quite naturally, the Bench then holds aptly in para 183 that, “Accordingly, the present petition stands dismissed along with pending applications.”

Finally and for sake of clarity, the Bench concludes by holding in para 184 that, “It is however clarified that nothing expressed hereinabove shall tantamount to an expression of opinion on the merits of the case during trial.”

Sanjeev Sirohi, Advocate,

s/o Col (Retd) BPS Sirohi,

A 82, Defence Enclave,

Sardhana Road, Kankerkhera,

Meerut – 250001, Uttar Pradesh.