All Persons Arrested In The Delhi Liquor Policy Case Get Bail, Except One

The Supreme Court yesterday granted bail to Delhi CM Arvind Kejriwal in the CBI case registered in connection with the alleged liquor policy scam, paving the way for the release of another politician arrested in the case.

Notably, the decision was preceded by other persons accused in the liquor policy case getting bail over the past few months. These include Abhishek Boinpally (Hyderabad businessman), Sanjay Singh (Aam Aadmi Party MP), Manish Sisodia (former Delhi Deputy CM), K Kavitha (BRS Leader), Vijay Nair (AAP's former communications-in-charge), Raghav Magunta (son of MP Magunta Srinivasulu Reddy) and Sarath Chandra Reddy (Director, Aurobindo Pharma).

A perusal of the decisions in some of these cases would show that the Courts were persuaded to grant bail, taking into consideration the period of the accused's pre-trial incarceration and the likelihood of trial in the liquor policy case not being completed anytime soon. Insofar as the arrest and detention of certain political leaders, the Supreme Court further rendered suspect the motives of CBI/ED and called into question the fairness of their investigation.

Following Kejriwal's bail order, it is reported that only one accused viz. Amandeep Dhall remains in custody.

Let's have a look at what the Courts said in the above cases.

♦ Benoy Babu (Granted bail by SC in the money laundering case)

On December 8, 2023, a bench of Justices Sanjiv Khanna and SVN Bhatti granted bail to Benoy Babu, the regional Manager of Pernod Ricard India, in the money laundering case. The court considered the fact that he had undergone 13 months of incarceration and that the trial in the case had not even commenced.

During the hearing, Justice Khanna orally remarked that there appeared to be contradictions between the allegations of CBI and ED as regards Babu. The judge further said that a person could not be indefinitely kept behind bars as an undertrial.

The bench also observed that Babu was not an accused in the CBI case, and rather, was a prosecution witness.

♦ Abhishek Boinpally (Granted interim bail by SC in the money laundering case)

On March 20, 2024, a bench of Justices Sanjiv Khanna and Dipankar Datta granted interim bail to Abhishek Boinpally, a Hyderabad business, in the money laundering case.

He was first arrested by the CBI in October, 2022. However, one month later, he got bail in the CBI case from a Delhi Court. This relief was short-lived as at the same time, ED's plea to take him into custody for five days was allowed by the Special Court. Thereafter, he remained incarcerated.

Although Boinpally was granted interim bail by the Supreme Court for a period of 4 weeks, the order has been extended from time to time. As such, he continues to remain free from pre-trial detention.

♦ Sanjay Singh (Granted bail by SC in the money laundering case)

On April 2, a bench of Justices Sanjiv Khanna, Dipankar Datta and PB Varale granted bail to AAP MP Sanjay Singh in the money laundering case, following a concession by the ED.

When ED said it had no objection to grant of bail to Singh in "peculiar facts of the case", the Court ordered his release, clarifying that nothing was being expressed on merits.

During the hearing, after observing that there were 9 exculpatory statements made by approver-Dinesh Arora and no money had been recovered from Singh, the Bench had asked ED whether further custody of Singh was required. Further, ASG SV Raju (appearing for ED) was asked to consider the implications of an order being passed in favor of Singh on merits, which would have attracted findings from the Court insofar as Section 45 PMLA was concerned.

"You have kept him in custody for 6 months. Dinesh Arora has not initially implicated him. Later on, in a statement, he does. No money has been recovered, the trace of money is not there because it was long back. Fact of the matter is money has not been recovered. Please keep in mind that if we are [...] with him, we are required to record in terms of section 45 that he has prima facie not committed an offense. That could have its own ramifications in trial", observed Justice Khanna.

In this backdrop, ED gave a concession and Singh obtained bail.

Singh was arrested by ED on October 4, 2023, following searches at his residence in Delhi. The agency alleged that an employee of businessman Dinesh Arora delivered Rs. 2 crores to Singh's house on two occasions.

His arrest followed accusations made by Arora, who later turned approver in both the ED and CBI cases.

♦ Manish Sisodia (Granted bail by SC in both corruption and money laundering cases)

On August 9, a bench of Justices BR Gavai and KV Viswanathan granted bail to former Delhi Deputy CM Manish Sisodia in the corruption and money laundering cases. Taking note of Sisodia's long pre-trial incarceration and the fact that the trial in the cases had not even commenced, the bench opined that he had been deprived of his right to speedy trial.

"We find that on account of long incarceration running around 17 months and trial having not been commenced, the appellant has been deprived of the right to speedy trial".

The Court noted that there was "not even remotest possibility of trial being completed" in the near future considering there were 495 witnesses and thousands of documents running into lakhs of pages. To keep Sisodia under custody for an unlimited period of time in the hope of a speedy completion of trial would result in a grave violation of the fundamental right to personal liberty under Article 21, it said.

Further, the Court opined that Sisodia had "deep roots in the society" and hence he was not a flight risk. Also, most of the evidence in the case is documentary in nature, which has already been collected; hence there is no possibility of tampering. As regards the apprehension of influencing or intimidating witnesses, the Court said that conditions could be imposed.

In the judgement, the Court reiterated that prolonged incarceration and the delay in the trial should be read into Sections 439 of the Code of Criminal Procedure and 45 of the Prevention of Money Laundering Act.

Besides, it called out the prosecuting agencies' contradictory stands, as on one hand, they said that they were ready to expedite the trial, but on the other hand, on June 4, they sought one month's time to file supplementary chargesheet. In this regard, the Court referred to the statement of the agencies recorded in the October 2023 judgment that the trial would be complete within 6-8 months.

Sisodia was arrested by CBI and ED on February 26 and March 9, 2023 respectively.

♦ K Kavitha (Granted bail by SC in both corruption and money laundering cases)

On August 27, 2024, a bench of Justices BR Gavai and KV Viswanathan granted bail to BRS leader K Kavitha in the money laundering and corruption cases. It was noted that the prosecution complaints/chargesheets had already been filed and further custody of the leader, who had already spent over 5 months in jail, was no longer necessary.

The court also observed that the trial in both cases was unlikely to complete soon, since there were about 493 witnesses to be examined and documentary evidence ran into nearly 50,000 pages. The observation in Manish Sisodia's case, that undertrial custody should not be turned into a punishment, was reiterated.

Kavitha was arrested by ED on March 15 and had been under custody since then. The CBI had arrested her while she was in judicial custody in the ED case.

During the hearing of Kavitha's case, the Court also questioned the fairness of the prosecution agencies (CBI/ED) and criticized their selective approach in treating some accused as approvers.

"Prosecution has to be fair. A person who incriminates himself has been made a witness! Tomorrow you pick up anyone as you please? You cannot pick and choose any accused. What is this fairness? Very fair and reasonable discretion!", remarked Justice Gavai.

♦ Vijay Nair (Granted bail by SC in the money laundering case)

On September 2, a bench of Justices Hrishikesh Roy and Justice SVN Bhatti granted bail to AAP's former communications-in-charge Vijay Nair in the money laundering case. It was noted that Nair had been in custody for approximately 23 months and the trial had not even commenced.

Relying on the decision in Manish Sisodia's case, the bench opined that the principle of "bail is the rule, jail an exception" would be defeated if Nair remained in custody without trial.

On facts, it was noted that Dinesh Arora, an accused who turned approver, had implicated Nair in his 12th statement, although earlier statements did not do so. About 40 individuals had been added as accused, and the prosecution intended to examine about 350 witnesses.

The Court remarked that extension of incarceration as an undertrial, without commencement of trial, could not be justified, especially when the maximum sentence possible upon conviction was seven years.

Other accused persons granted bail by the trial Court/High Court

♦ Buchi Babu

On 6 March, 2023, a Delhi court granted bail to Buchi Babu, a Hyderabad-based Chartered Accountant, in the corruption case. As per CBI, Buchi Babu played a key role in representing the South Group in the liquor policy 'scam'.

♦ Rajesh Joshi and Gautam Malhotra

On 6 May, 2023, a Delhi Court granted bail to accused-Rajesh Joshi and Gautam Malhotra in the money laundering case.

Granting bail to Joshi, the court said that he was not in the liquor business and admittedly was also not a participant in any of the meetings which allegedly took place between co­-accused persons in connection with formulation/implementation of the excise policy.

With respect to Malhotra, the Court opined that he could not be said to have become part of the conspiracy with a free consent to commit the alleged offences in the CBI case or money laundering case.

“the applicant Gautam Malhotra also cannot be considered to be a flight risk as he belongs to a family having well established liquor manufacturing business in the State of Punjab and also selling their liquor brands in other States and his father is also stated to be a senior politician in the State of Punjab,” the court said.

♦ P Sarath Chandra Reddy

On 8 May, 2023, the Delhi High Court granted bail on medical grounds to P Sarath Chandra Reddy in the money laundering case.

Reddy, a Director at Aurobindo Pharma, was arrested by ED in November, 2022. Although he initially sought bail on merits, his health condition deteriorated and various documents were produced to show that he was sick and infirm.

ED, on its part, gave a no-objection to the grant of bail, if the court was satisfied with the medical record. In this backdrop, the Court granted bail to Reddy, observing that right to live with dignity under Article 21 of the Constitution of India included right to live a healthy life. Subsequently, Reddy was granted pardon by the Special court.

♦ Raghav Magunta

On 10 August, 2023, the Delhi High Court granted bail to Raghav Magunta, son of MP Magunta Srinivasulu Reddy, in the money laundering case. The relief came as ED did not oppose the bail plea, saying he was "cooperating in the investigation". Two months later, Raghav Magunta was granted pardon by the Special Court.

♦ Amit Arora

On 20 August, 2024, the Delhi High Court granted interim bail on medical grounds to Amit Arora, director of Gurugram-based company Buddy Retail Pvt. Ltd., in the money laundering case. This order was extended on August 30, when the High Court heard arguments and reserved orders. Till pronouncement of the final order, Arora will remain on interim bail.

Arora was arrested by the ED on November 29, 2022. As per allegations, he was a close associate of Manish Sisodia, actively involved in managing illicit money collected from liquor licensees.

♦ Sameer Mahendru and Chanpreet Singh

On September 9, the Delhi High Court granted bail to businessman Sameer Mahendru and AAP volunteer Chanpreet Singh Rayat in the money laundering case.

ED had arrested Rayat alleging that he managed cash funds for AAP campaign for the 2022 Goa Assembly elections. Mahendru, on the other hand, was arrested on September 28, 2022, on the allegations that he was one of the major beneficiaries of the violations in the excise policy.

♦ Arun Ramchandran Pillai

On September 11, the Delhi High Court granted bail to Hyderabad-based business Arun Ramchandran Pillai in the money laundering case. Referring to the Supreme Court's decision in Manish Sisodia's case, it was observed that the "triple test" for grant of bail was satisfied by Pillai.

The High Court further said that Pillai has "deep roots in the society", is not a flight risk, has a business based in India and is not likely to abscond from the country. It was also noted that the chargesheet in the CBI case (predicate offence) was filed without Pillai's arrest and he had been admitted to bail in the CBI case in February 2023.

The trajectory of Arvind Kejriwal v. ED, CBI

Sitting Chief Minister of Delhi-Arvind Kejriwal was arrested by ED on March 21, after the Delhi High Court refused to grant him interim protection earlier in the day. He remained in custody thereafter, until the Supreme Court granted him the benefit of interim release (for the purposes of Lok Sabha elections) on May 10. The same expired on June 2.

The Delhi CM had initially approached the Delhi High Court challenging ED's arrest. However, his plea was dismissed on April 9. Aggrieved by the same, he moved the top Court.

The eventful hearings in the case witnessed questions being raised on the necessity and timing of the leader's arrest, as well as allegations that ED withheld material favoring him.

ED's case remained that there was "direct" evidence to show that Kejriwal demanded Rs. 100 crores, which went to AAP for Goa election expenses. It was further asserted that apart from vicarious liability as the head of AAP, Kejriwal was also directly liable as the person who played a key role in formulating the excise policy.

At the time when the parties were heard on the question of interim bail to Kejriwal, the bench questioned ED's timing of arrest, noting that the ECIR was registered in August, 2022, but Kejriwal came to be arrested about 1.5 years later (before elections). Ultimately, the interim relief was granted and Kejriwal temporarily released from jail. He surrendered back on June 2.

Thereafter, on June 20, the Delhi CM came to be granted bail in the ED case by a Delhi Court, based on a view that ED failed to give any direct evidence against him in respect of the proceeds of crime. This order was stayed by the Delhi High Court on June 25, with an observation that the Vacation Judge passed it without going through ED's entire material and the same reflected “perversity”. On the very same day, CBI arrested Kejriwal under the Prevention of Corruption Act in relation to the liquor policy case.

Subsequently, in July, a Delhi Court took cognizance of the 7th supplementary prosecution complaint filed by ED, which named Kejriwal and the Aam Aadmi Party.

On July 12, the Supreme Court granted Kejriwal interim bail in the money laundering case, while referring his petition challenging ED arrest to a larger bench. However, he continued to remain in judicial custody due to his arrest by the CBI.

Challenging the CBI arrest and seeking bail, Kejriwal moved the Delhi High Court. On August 5, the High Court dismissed his plea challenging CBI arrest, but insofar as bail was concerned, liberty was given to approach the trial Court. Aggrieved by the High Court order, Kejriwal approached the Supreme Court.

On August 14, the Supreme Court issued notice on the plea, but clarified that it was not granting interim bail to Kejriwal. When the matter came up on August 23, the hearing was adjourned at CBI's request for time to file a counter.

Yesterday, Kejriwal was finally granted bail in the CBI case. However, the Court dismissed his challenge to the arrest made by CBI.

Grant of bail to Kejriwal in CBI case

When the Supreme Court was called on to decide Kejriwal's challenge to CBI arrest and plea for bail, it had the benefit of the decisions rendered in the above-mentioned cases. As is apparent from the two separate, concurring judgments rendered in the matter, the opinions of two coordinate benches of the court (regarding necessity and timing of arrest, as well as the unlikelihood of trial completing soon) had a bearing on the issues.

In the backdrop of political leaders like Manish Sisodia (who was incarcerated for over 17 months) and K Kavitha (who was incarcerated for over 5 months) having been granted bail in both the corruption and money laundering cases simultaneously, the Court was to decide whether or not to grant Kejriwal bail also from a standpoint where he had already secured an interim bail order in his favor from the Court in the money laundering case.

This weighed particularly with Justice Bhuyan, who opined that Kejriwal's further detention by the CBI could not continue, when he had been granted bail under the more stringent PMLA for the same predicate offense.

Other findings in abovementioned cases - that chargesheets had already been filed, that "there is not even remotest possibility of trial being completed in the near future", and that most of the evidence in the case is documentary in nature (which is already seized) also seemingly lent support to Kejriwal's case.

Be that as it may, the top Court dismissed the leader's challenge to the CBI arrest, holding that there was no "procedural infirmity", even as Justice Bhuyan questioned the necessity and timing of his arrest.

The verdict has put to rest litigations over the CBI case, however, Kejriwal's arrest in the ED case, and the question whether he should continue on interim bail in the case, are still pending consideration.

(The author is a Desk Editor/Supreme Court Correspondent at LiveLaw. She can be reached at debby@livelaw.in)