Supreme Court Grants Interim Bail To Arvind Kejriwal In PMLA Case; Refers Plea Challenging ED Arrest To Larger Bench

In a significant development, the Supreme Court on Friday (July 12) granted interim bail to Delhi Chief Minister Arvind Kejriwal in the case registered by under the Prevention of Money Laundering Act (PMLA) over the liquor policy case, while referring his petition challenging the arrest by the Enforcement Directorate (ED) to a larger bench.

A bench comprising Justices Sanjiv Khanna and Dipankar Datta referred Kejriwal's petition to a larger bench to examine the question whether the need or necessity of arrest must be read as a condition into Section 19 of the Prevention of Money Laundering Act.

Kejriwal will however remain in custody since he was arrested by the CBI under the Prevention of Corruption Act in relation to the same liquor policy case on June 25.

Reading the excerpts from the judgment in open court, Justice Khanna held that the "reasons to believe" for arrest meet with the parameters of S.19 of the PMLA, which gives the power of arrest to ED officers. "However, having said so, we have raised an additional ground which relates to the need and necessity of arrest...we felt that this issue whether the ground of need and necessity of arrest must be read into Section 19, especially in view of the doctrine of proportionality. We have referred those questions to the larger bench," Justice Khanna said.

"We have also held that mere interrogation does not allow you to arrest. That is not a ground under S.19," Justice Khanna added.

Interim bail granted to Kejriwal; Court leaves it to Kejriwal to take a call on stepping down as CM

While referring the matter to the larger bench, the present bench chose to grant him interim bail considering his incarceration so far. The bench clarified that the question of interim bail can be modified by the larger bench.

"As we are referring the matter to the larger bench, despite our findings on "reasons to believe", we consider whether interim bail should be granted to Arvind Kejriwal, given the fact that the right to life and liberty is sacrosanct and Arvind Kejriwal has suffered incarceration for 90 days and questions referred to above require intense consideration by a larger bench. We direct that Arvind Kejriwal be released on interim bail in connection with the case.

We are conscious that Arvind Kejriwal is an elected leader and the Chief Minister of Delhi, a post holding importance and influence. We have referred to the allegations. While we do not give any directions as we are doubtful whether a Court can direct an elected leader to step down or not to function as a Chief Minister or a Minister, we leave it to Arvind Kejriwal to make a call. The larger bench, if deemed appropriate, can frame questions and decide the conditions that can be imposed in such cases."

The Court clarified that the observations in the judgment cannot be construed as findings on the merits of the allegations. Application for regular bail can be decided on its own merits.

A bench of Justices Sanjiv Khanna and Dipankar Datta delivered the verdict, after having reserved judgment in the case on May 17, 2024.

Also Read - Supreme Court Directs Kejriwal To Not Visit CM Office While On Interim Bail, Says He May Decide Whether To Step Down From CM Post

Questions referred to the larger bench :

(a) Whether the “need and necessity to arrest” is a separate ground to challenge the order of arrest passed in terms of Section 19(1) of the PML Act?

(b) Whether the “need and necessity to arrest” refers to the satisfaction of formal parameters to arrest and take a person into custody, or it relates to other personal grounds and reasons regarding necessity to arrest a person in the facts and circumstances of the said case?

(c) If questions (a) and (b) are answered in the affirmative, what are the parameters and facts that are to be taken into consideration by the court while examining the question of “need and necessity to arrest”?

Background 

Kejriwal was arrested by ED on March 21, after the Delhi High Court refused to grant him interim protection earlier in the day. He remained in custody thereafter, until the Supreme Court granted him the benefit of interim release (for the purposes of Lok Sabha elections) on May 10. The same expired on June 2.

The Delhi CM had initially approached the Delhi High Court challenging ED's arrest. However, his plea was dismissed on April 9. Aggrieved by the same, he moved the top Court, which issued notice on his plea on April 15. 

The eventful hearings in the case witnessed Senior Advocate AM Singhvi lead arguments on behalf of Kejriwal. Besides questioning the necessity and timing of the leader's arrest, the senior counsel alleged that ED withheld material favoring him. After hearing Singhvi, the court posed 5 queries to ASG SV Raju, appearing for ED, which were sought to be answered by him on subsequent occasions.

Throughout the proceedings, ED's case remained that there was "direct" evidence to show that Kejriwal demanded Rs. 100 crores, which went to AAP for Goa election expenses. It was further asserted that apart from vicarious liability as the head of AAP, Kejriwal was also directly liable as the person who played a key role in formulating the excise policy.

At the time when the parties were heard on the question of interim bail to Kejriwal, the bench questioned ED's timing of arrest, noting that the ECIR was registered in August, 2022, but Kejriwal came to be arrested about 1.5 years later (before elections). Ultimately, the interim relief was granted and Kejriwal temporarily released from jail. He surrendered back on June 2.

Thereafter, on June 20, the Delhi CM came to be granted bail in the ED case by a Delhi Court, based on a view that ED failed to give any direct evidence against him in respect of the proceeds of crime.

This order was stayed by the Delhi High Court on June 25, with an observation that the Vacation Judge passed it without going through ED's entire material and the same reflected “perversity”. On the very same day, CBI arrested Kejriwal under the Prevention of Corruption Act in relation to the Liquor Policy case.

It is worthwhile to mention that two days ago, a Delhi Court took cognizance of the 7th supplementary prosecution complaint filed by ED, which names Kejriwal and the Aam Aadmi Party.

In another crucial development, Kejriwal has challenged before the Delhi High Court his arrest by CBI and 3 days of police remand. He has also filed a plea seeking bail in the CBI case. Both matters are fixed for hearing on July 17.

Other detailed reports on the judgment can be read here.

Case Title: Arvind Kejriwal v. Directorate of Enforcement, SLP(Crl) 5154/2024