Supreme Court Seeks CBI/ED Response On BRS Leader K Kavitha's Plea For Bail In Liquor Policy Case

The Supreme Court on Monday (August 12) issued notice to the CBI and the ED on Bharat Rashtra Samithi leader K Kavitha's pleas for bail in the money laundering and corruption cases related to the alleged Delhi liquor policy scam.

A bench of Justices BR Gavai and KV Viswanathan passed the order upon hearing Senior Advocate Mukul Rohatgi (for Kavitha) who argued that she has been in jail since 5 months and the chargesheet/prosecution complaint in both the ED and CBI cases have been filed.

Referring to the judgments passed in the cases of Manish Sisodia, Prabir Purkayastha and Arvind Kejriwal, Rohatgi further submitted that Kavitha's case stood covered by the Supreme Court's judgments. He made reference to the proviso of Section 45 PMLA to also urge that Kavitha is entitled to bail as a woman.

When Justice Gavai pointed out the High Court's observation that Kavitha is an education woman and also a politician, Rohatgi countered that "the Legislature does not say that if you are a member of Parliament, you cease to be a woman". Justice Gavai, however, observed that the finding is about Kavitha not being a "vulnerable" woman.

Be that as it may, the court issued notice to the prosecution agencies (CBI and ED). When a request was made for interim bail, the bench declined saying "not without hearing (the other side)".

The matter is listed for consideration on August 20.

Kavitha has filed the present petitions challenging Delhi High Court's judgment dated July 1, 2024, whereby her pleas for bail in the liquor policy cases (registered by CBI and ED) were dismissed.

She was arrested by the Enforcement Directorate on March 15. While she was under the agency's custody, the Central Bureau of Investigation was granted permission by the trial court to interrogate her in jail.

Thereafter, Kavitha was arrested by CBI as well. When she approached the trial court for bail in the CBI and ED cases, the pleas were rejected (on May 6).

Thereafter, Kavitha moved the Delhi High Court, however her pleas were dismissed with an observation that she was prima facie one of the main conspirators in relation to formulation and implementation of Delhi Excise Policy 2021-22.

The High Court 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.

While noting that Kavitha is a highly qualified and well-accomplished person who has made significant contributions to politics and social work, the High Court opined that it could not lose sight of serious allegations levelled by the prosecution and the evidence collected during investigation.

Holding that Kavitha did not fulfill the triple test for grant of bail, it added, “...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".

Notably, Kavitha has also filed a writ petition before the Supreme Court challenging her arrest by the ED in the liquor policy case. The Court issued notice on the same on March 22 and tagged it with the batch of petitions seeking reconsideration of the Vijay Madanlal Choudhary judgment. On this date, the Court also said that Kavitha will have to approach the trial Court for bail. Pursuant to this, she had approached the trial Court and Delhi High Court (as mentioned above), but relief was denied.

Aam Aadmi Party leaders Arvind Kejriwal, Manish Sisodia and Sanjay Singh are also accused in the liquor policy case. While Sisodia and Singh have been granted bail by the Supreme Court, Kejriwal continues to remain in custody in the CBI case. He has however been granted interim bail by the Supreme Court in the ED case.

What are the allegations?

As per ED, the excise policy was implemented by the AAP-led Delhi government 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 alleges that Kavitha, alongwith other members of the South Group, namely Sarath Reddy, Raghav Magunta and Magunta Srinivasulu Reddy, conspired with top AAP leaders and gave them kickbacks to the tune of Rs. 100 crores. In exchange, she got undue favors in the formulation and implementation of the excise policy.

ED also claims that Kavitha orchestrated a deal with Delhi CM Arvind Kejriwal and former Deputy Chief Minister Manish Sisodia, whereunder she (along with other members of the South Group) paid them kickbacks through a string of intermediaries and middlemen.

As far as CBI's case is concerned, it is 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 would help him in the business.

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

Case Title: KALVAKUNTLA KAVITHA Versus DIRECTORATE OF ENFORCEMENT, SLP(Crl) No. 10778/2024 (and connected matter)