We May Consider Question Of Interim Bail For Arvind Kejriwal Because Of Elections : Supreme Court Tells ED

While hearing Delhi Chief Minister Arvind Kejriwal's plea challenging his arrest by the Enforcement Directorate in the Delhi Liquor Policy case, the Supreme Court on Friday (May 3) expressed that it might consider the question of interim bail for the purposes of Lok Sabha Elections if the hearing gets delayed.  

The bench of Justices Sanjiv Khanna and Dipankar Datta heard the arguments this afternoon for about two hours and adjourned further hearing till next Tuesday (May 7).

"It appears we can't complete today. We will post it on Tuesday morning itself. Mr Raju one more thing. If it is going to take time, it does appear it may take time, we may then consider the question of interim bail because of the elections. We may hear on that part because of elections," Justice Khanna said to Additional Solicitor General SV Raju while winding up today's arguments.

Raju then asked the Court to take note of the statements made by AAP MP Sanjay Singh after getting bail from the Supreme Court. "Look at the kind of statements he is making," he said.  

Justice Khanna clarified that the Court is merely putting the ED on notice about the intention to consider the plea for interim bail and not expressing any opinion. "We are not commenting on it either way, we may or may not grant," the judge said.

"Just one thing more. Please also take instructions. Because of the position he holds, whether he should be signing official files," Justice Khanna added.

During the hearing, Justice Khanna also asked about the dates of elections in Delhi and was informed that they are scheduled on May 23.

Today's hearing saw Senior Advocate Dr Abhishek Manu Singhvi continuing his submissions from the previous day for Kejriwal. During the latter half of the hearing, ASG SV Raju started arguments for the ED.

A brief account of the hearing is given below.

Kejriwal was not an accused till arrest : Singhvi 

Singhvi stated that it was the stand of the ED itself that a person summoned under Section 50 of the Prevention of Money Laundering Act (PMLA) does not assume the character of an accused automatically.

Even as per the summons issued by the ED on March 16, Kejriwal was not an accused. "So it is clear that I'm not in a position of accused till 16 March. What changed drastically (when he was arrested on March 21)?," Singhvi exclaimed. To buttress this argument, he stated that ED had no new material in its possession and that all the documents/statements it relied upon were from 2023.

"As per their own understanding, till 16 March, I was not an accused. How do they show the necessity to arrest on 21 March to a court? All evidence on which I am arrested is pre-2023 end. Every material is as on July, 2023," he submitted.

He relied on the Supreme Court's judgment in the Senthil Balaji case which held that non-compliance with the provisions of Section 19 PMLA will vitiate the arrest. He also reiterated the submission that the ED has concealed statements which exculpated Kejriwal.

Bench doubts the argument that political party is not covered under Section 70 PMLA

Apart from implicating Kejriwal for assisting the formulation of Delhi liquor policy - which allegedly enabled liquor companies to recoup bribes as profits - in his capacity as the Chief Minister, ED also alleged that he is vicariously liable as the chief of the Aam Aadmi Party, to which a part of the proceeds of the crime was allegedly diverted. The agency relied on Section 70 of the PMLA to implicate the political party.

Singhvi contended that a political party will not come under Section 70 PMLA as it specifically mentions "company". Company is defined in the section to mean "any body corporate and includes a firm or other association of individuals". He argued that Section 70 was intended to deal with corporates and a political party cannot be regarded as an "association of individuals."

However, the bench expressed difficulty in accepting this argument. "It is a little difficult...a society is also an association of individuals. Can it be said that a society won't come under the provision?" Justice Khanna said.

Observations in Manish Sisodia case judgment applicable to Kejriwal : Singhvi

Responding to a query raised by the bench on the last day, Singhvi submitted that Kejriwal's case is covered by the favorable findings made by the Supreme Court in the judgment which denied bail to Delhi Deputy Chief Minister Manish Sisodia. Last day, Justice Khanna had pointed out that in Manish Sisodia case judgment, the Court had made certain favorable comments as well as adverse findings and asked which would cover Kejriwal.

Singhvi stated that the comments made by the Court in paragraph 15 of the Manish Sisodia case judgment are applicable to Kejriwal. In that paragraph, the Court had observed :

"Prima facie, there is lack of clarity, as specific allegation on the involvement of the appellant – Manish Sisodia, direct or indirect, in the transfer of Rs. 45,00,00,000 (rupees forty five crores only) to AAP for the Goa elections is missing."

Court asks ED about the threshold for arrest

The Court pointed out to ASG Raju that as per the Vijay Madanlal Choudhary judgment, there is a higher threshold for arrest as per Section 19 PMLA. "Vijay Madanlal Choudhary says that the threshold for arrest under Section 19 is even higher than the Customs Act," Justice Khanna said.

Raju however replied that the investigating officer need not consider every material and need only consider the relevant materials to form the "reasons to believe" that the person is guilty for exercising the power of arrest. If all materials are to be recorded, it will result in a voluminous record making the process cumbersome, which could not be intention of the law.

"Some things are irrelevant...he does not have to consider everything.... otherwise chargesheet cannot be filed within 60 days at all.. The writing will run into thousands of pages even if one or two line is to be written about each material," ASG said. At this juncture, Justice Datta asked if it would be a proper exercise of power to brush aside materials merely because "papers will pile up". "I am saying if it is relevant to consider, you must. But it's not for someone else to say you should have considered this," ASG said.

Justice Khanna further posed a query to the ASG regarding the argument of the petitioner that exculpatory statements were excluded and hence the Investigating Officer did not consider all materials.

"The objection raised is the objectivity becomes flawed when exculpatory material is excluded," Justice Khanna said.

ASG countered by saying that this was not a case of "no material" or "extraneous materials." He argued that the jurisdiction of the Court to examine if the officer properly exercised the power of arrest is very limited. The Court cannot sit in judgment over the materials relied upon by the Investigating Officer. The ASG stated that the view of the investigating officer is fortified by the remand orders passed by the Special Judge and the judgment of the Delhi High Court. He highlighted that before the arrest, the Delhi High Court, after seeing the materials, had refused to grant Kejriwal interim protection from arrest.

Court asks if Kejriwal can be prosecuted when there are no adjudication proceedings against AAP

The bench pointed out that Kejriwal was not an accused in the predicate offence under the Prevention of Corruption Act, which is being handled by the CBI. It also noted that there were no adjudication proceedings against AAP under Section 8 PMLA over the alleged proceeds of crime. So, in this backdrop, could Kejriwal be proceeded against, the bench asked.

"He is still not being prosecuted by the CBI. He has not yet been chargesheeted by the CBI. If the AAP party is the main accused, till adjudication proceedings are initiated against AAP, can you proceed against him?" Justice Khanna remarked.

Claiming that it was possible, ASG said that confiscation proceedings can be initiated even without adjudication. Further, confiscation can be based solely on conviction.

Background

Kejriwal had petitioned the Supreme Court in April this year, after his writ petition challenging the ED arrest was dismissed by the Delhi High Court on April 9. Notice came to be issued on his plea on April 15, with the matter being directed to be listed in week commencing April 29. Subsequently, when the top Court website showed next date of hearing as May 6, Singhvi mentioned the matter before a Justice Khanna-led Bench on April 26.

After the mentioning, the matter was listed on April 29, when Senior Advocate AM Singhvi led arguments on behalf of the AAP chief and questioned the necessity and timing of his arrest. When the matter was heard on the next day, ie April 30, Singhvi alleged that ED withheld the material favoring Kejriwal. During this hearing, the court posed 5 queries to ASG SV Raju, appearing for the agency, which were to be answered today.

For a detailed background, click here.

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