Delhi High Court Denies Bail To BRS Leader K Kavitha In CBI, ED Cases Relating To Alleged Liquor Policy Scam

The Delhi High Court on Monday denied bail to BRS leader K Kavitha in the money laundering and corruption cases related to the alleged liquor policy scam. 

Justice Swarana Kanta Sharma rejected Kavitha's pleas seeking bail in the cases registered by Central Bureau of Investigation (CBI) and Enforcement Directorate (ED).

Kavitha is presently under judicial custody in both CBI and ED cases.

The court observed that K Kavitha was prima facie one of the main conspirators in the criminal conspiracy hatched in relation to formulation and implementation of Delhi Excise Policy 2021-22.

It further said that she was prima facie involved in payment of kickbacks, establishing M/s Indo Spirit for recoupment of kickbacks and in various other processes and activities relating to proceeds of crime.

“To conclude, the twin conditions under Section 45 of PMLA are not fulfilled in the present case, so as to entitle the applicant to grant of bail in case registered by Directorate of Enforcement,” the court said.

It further said that Kavitha did not fulfill the triple test for grant of bail.

While noting that Kavitha is a highly qualified and well-accomplished person and has made significant contributions to politics and social work but the court cannot lose sight of serious allegations levelled by the prosecution and the evidences collected during investigation.

“Thus, Smt. K. Kavitha cannot be equated to a vulnerable woman who may have been misused to commit an offence, which is the class of women for whom the proviso to Section 45 of PMLA has been incorporated, as held by the Hon‟ble Apex Court in case of Saumya Chaurasia (supra). Accordingly, this Court is of the considered opinion that Smt. K. Kavitha is not entitled to the benefit of proviso to Section 45 of PMLA,” the court said.

Apart from entire proceedings leading to her arrest in the corruption case, Kavitha has also challenged, by way of a separate petition, the trial court order allowing the CBI to interrogate her while she was in judicial custody in ED case. It is her case that the order was passed without issuing any notice to her or putting her to show cause.

Kavitha also challenged the trial court order granting permission to the CBI to arrest her as well as the orders remanding her to police and judicial custody.

Kavitha was denied bail by the trial court in the money laundering as well as the corruption case registered by the CBI on May 06.

Kavitha was arrested on the evening of March 15 by the ED. She was in judicial custody when the CBI arrested her. This was after CBI got permission from court to interrogate Kavitha in jail.

AAP leaders Manish Sisodia and Sanjay Singh are also accused in the ED case. While Sisodia continues to remain in jail, Singh was recently granted bail by the Supreme Court pursuant to a concession given by the ED.

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 agency alleged that Kavitha along with other members of the South Group namely Sarath Reddy, Raghav Magunta and Magunta Srinivasulu Reddy, conspired with top Aam Aadmi Party leaders and gave them kickbacks to the tune of Rs. 100 Crore and in exchange, got undue favours in the formulation and implementation of the excise policy.

ED had also alleged that Kavitha orchestrated a deal with the Delhi Chief Minister and then Deputy Chief Minister, wherein she along with other members of the South Group paid them kickbacks through a string of intermediaries and middlemen.

On the other hand, CBI alleged that Sarath Reddy participated in the liquor business in Delhi under the excise policy on Kavitha's assurance that she has contacts in the Delhi Government and she would help him in the business.

It further alleged that in November-December 2021, Kavitha asked Sarath Chandra Reddy to pay Rs. 25 crores at the rate of Rs. 5 crores per zone for the 05 retail zones allotted to him, as she had claimed that she herself had paid Rs.100 crores as upfront money to Aam Aadmi Party through Vijay Nair for getting favourable provisions in Excise Policy.

CBI also alleged that Kavitha was required to be examined in connection with the evidence surfaced during the further investigation of the case in respect of her involvement in the criminal conspiracy regarding formulation and implementation of the Excise Policy.

Title: K Kavitha v. CBI, ED

Citation: 2024 LiveLaw (Del) 735

Click Here To Read Order