Liquor Policy: Delhi Court Remands BRS Leader K Kavitha To ED Custody Till March 23

A Delhi Court on Saturday remanded Bharat Rashtra Samithi (BRS) leader K Kavitha to Enforcement Directorate (ED) custody till March 23 in the money laundering case connected with the alleged liquor policy scam.

Special judge MK Nagpal of Rouse Avenue Courts passed the order after Kavitha was produced by ED following her arrest yesterday in the case.

ED had sought 10 days of remand for Kavitha. She was arrested yesterday evening by the ED hours after the agency and the Income Tax department conducted searches at her Hyderabad residence.

As per the arrest memo, Kavitha, daughter of former Telangana chief minister K Chandrashekar Rao and a Telangana Legislative Council member, was arrested by the central probe agency at 5:20 pm from her residence at Banjara Hills in Hyderabad.

“The arrest is illegal. We will fight it in court,” K Kavitha said today as she was produced inside the courtroom.

Senior Advocate Vikram Chaudhary appearing for Kavitha made preliminary submissions against the arrest and submitted that the arrest is a “blatant abuse of power and authority.”

He alleged that the ED violated its oral assurance or undertaking given to the Supreme Court in September last year that the central probe agency will not summon Kavitha “till the next date of hearing” in her plea against summons.

“Your entire action is wrong. It is a vexatious arrest,” Chaudhary said while adding the ED had withdrawn its oral undertaking which was not recorded in the order by the Apex Court.

“An undertaking given to the court which is not explicitly recorded because we believe that status of each of us counsels are par higher and statement is good enough. This undertaking was withdrawn,” Chaudhary said.

He added: “….at the end of the day, assuming there is some doubt or clarity, who decides this? What prevented them from waiting for 3 days and get an order from the Supreme Court. You wanted to overreach the Supreme Court. The basic courtesy demanded you get a clarification. But you become the judge, jury and executioner, it's the worst thing.”

On the other hand, special counsel Zoheb Hossain appearing for ED contended that no statement was given to any court, including the Supreme Court, that the probe agency will not take any “no coercive action.”

“They had two distinct prayers. One for quashing of summons and another seeking no coercive action. No statement was ever made that anyone has ever said that there will be no coercive action. The statement made in September was that whenever we are going to issue summon, we will issue it after 10 days. Please don't go exclusively by newspaper reports,” he said.

Hossain added that newspaper reports cannot be reliable sources to show as to what transpired in a court hearing and that when there is no explicit judicial order, Kavitha cannot presume an interim relief in her favour.

“Today my lords have to test whether section 19 [of PMLA] requirements are fulfilled in the absence of any written order. There is no written interim protection in their favour. It's admitted that no coercive action was sought in the prayers. There is no order granting no coercive action in their favour… An undertaking cannot be stretched beyond what it is. There is no breach of any undertaking given to the Supreme Court,” he said.

He further submitted that ED has reliable statements of individuals to prove Kavitha's role in receiving kickbacks and that the probe agency is going to summon those persons for confrontation with the BRS leader on Monday.

“4 out of 5 devices [seized] formatted immediately after we issue first summon. One phone has scanty material and scanty data which shows that the earlier phones were recently formatted and attempted to be disposed of. There is destruction of evidence. We are also summoning two people to confront them with her on Monday who gave statements,” he said.

In the remand application, ED alleged that Kavitha is “one of the kingpins, a key conspirator and beneficiary” of the excise policy scam. 

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

About the Case

In this case, the anti-money laundering agency has issued summons to K Kavitha as a part of its wider probe into the alleged financial irregularities surrounding the now-scrapped liquor policy and the role of a purported 'south liquor lobby'.

In March 2023, the ED summoned her to appear in person in Delhi for questioning. In the same month, the central agency's summons were challenged by the BRS leader.