Arvind Kejriwal Connected With Proceeds Of Crime By Actively Assisting Making Of Delhi Liquor Policy : ED Tells Supreme Court

By assisting the formulation of the Delhi liquor policy which allegedly enabled liquor companies to recoup the bribes paid as profits, Delhi Chief Minister Arvind Kejriwal is "directly and indirectly" involved in the process connected with the "proceeds of crime", said the Directorate of Enforcement (ED) in its affidavit filed in the Supreme Court.

The affidavit is filed in response to the petition filed by Kejriwal challenging his arrest by the ED in the money laundering case connected with the alleged liquor policy scam. The central agency said that Kejriwal was "instrumental" in formulating the policy which allowed an "exorbitant margin" of 12% (from the previous 5%) for the wholesale license holder. The ED alleged that this decision was taken "arbitrarily" and without any discussion in the Group of Ministers and inputs from the excise officials. Further, a decision was taken to allot license to anyone who was ready to pay the license fee of Rs 5 crore. ED alleged that the "action of giving the wholesale license only on payment of fixed license fee to everybody was not only arbitrary but also malafide".

Elaborating on the case against Kejriwal, the ED said.

"Proceeds of crime is not restricted to the bribe amount of Rs. 100 crore, it also includes the profit generated by the bribe giver to the tune of 12%. Rs 100 crores is the bribe amount, the petitioner made a policy which facilitated the recovery of bribes paid. Rs. 192 crores were recovered by the bribe-giver (Indospirits) in the garb of wholesale profit. The policy which fixed 12% wholesaler's profit enabled recovery of the bribe paid, thereby projecting tainted recouped bribe amount as untainted wholesaler's profit. This is how the petitioner was directly and indirectly involved in the process or activity connected with proceeds of crime by actively assisting in making a policy which would enable the recoupment of bribe by bribe- givers in the garb of wholesale profits."

Kejriwal also vicariously liable as the head of the Aam Aadmi Party

In addition, the ED alleged that Rs 45 crores,  parts of the proceeds of the crime, was utilised by the Aam Aadmi Party (AAP) for Goa elections, and since Kejriwal is the national convenor of the party, he is vicariously liable for the offence committed by the AAP. In this regard, the ED relied upon Section 70 of the Prevention of Money Laundering Act to contend that a political party, as an "association of people", can be brought under the PMLA.

"Taking advantage of the fact that he was also the CM of Delhi, he used the said post to facilitate the offence of money laundering punishable u/s 4 of PMLA by the "company" i.e. AAP and therefore, without prejudice to his role and liability for the direct commission of the said offence, he is also vicariously liable for the offence committed by the AAP, being the National Convenor of the said party and because of his role & active involvement in the day to day affairs and the conduct for the business of AAP,"

The ED contended that it had sufficient reasons and materials to arrest Kejriwal as per Section 19 of the PMLA and hence the arrest cannot be questioned as illegal. It also refuted the argument that the arrest was to prevent Kejriwal from campaigning for the Lok Sabha elections. In this regard, it mentioned that Kejriwal had skipped nine summonses served on him since October 30, 2023.

"The arrest of a person, however high he may be, for commission of offence based on material, can never violate the concept of free and fair elections," ED said. "If the aforesaid argument is accepted, politicians who are criminals would be granted immunity from arrest on the ground that he is required to canvass in the election," it added.

The ED also stated that Kejriwal was not cooperating with the investigation and did not share the password of his mobile phone during the search and custody. It further alleged that over 170 mobile phones were changed/destroyed by 36 persons (accused and other persons involved) to destroy digital evidence.

Kejriwal has approached the Supreme Court challenging the April 9 judgment of the Delhi High Court which rejected his challenge to the ED arrest made on March 21. On April 15, the Supreme Court (bench comprising Justices Sanjiv Khanna and Dipankar Datta) issued notice to the ED on Kejriwal's petition and listed the matter in the week commencing from April 29.

Case Title: ARVIND KEJRIWAL v. DIRECTORATE OF ENFORCEMENT., SLP(Crl) No. 5154/2024