Supreme Court Grants Bail To K Kavitha In Liquor Policy Case, Questions Fairness Of CBI/ED Investigation

The Supreme Court on Tuesday(August 27) granted bail to Bharat Rashtra Samithi leader K Kavitha in the money laundering and corruption cases related to the alleged Delhi liquor policy scam

A bench comprising Justices BR Gavai and KV Viswanathan, during the hearing, questioned the fairness of the prosecution agency (CBI/ED) and criticised 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!!" Justice Gavai observed during the hearing.  Justice Gavai warned Additional Solicitor General of India SV Raju that the Court would make such observations in the order if he continued to oppose the bail on merits. ASG at this point, after arguing for nearly an hour, refrained from making further submissions. He at one point of time even said that he would concede to bail after taking instructions. However, refusing to adjourn the hearing, the bench proceeded to dictate the order.

Observations in the order

In the order, the bench noted that the investigation is complete and chargesheet/prosecution complaint has been filed in both the CBI and ED cases. Hence, the custodial interrogation of the petitioner, who has been behind the bars for over five months, is no longer necessary.  Also, the trials in both cases are unlikely to be completed soon since there are about 493 witnesses to be examined and the documentary evidence runs to nearly 50,000 pages. The bench reiterated its observation in the Manish Sisodia judgment that the undertrial custody should not be turned into a punishment.

The bench further said that the proviso to Section 45(1) of the Prevention of Money Laundering Act entitles a woman to special consideration in the matter of bail. The Supreme Court criticised the observations made by the Delhi High Court that the proviso to Section 45 PMLA do not apply to a woman of high status.

"The Court therefore puts a caution that the Courts while deciding such matters would exercise the discretion judiciously. The Court does not say in Saumya Chaurasia case that merely because a woman is highly educated, or sophisticated or a Member of Parliament or a Member of Legislative Assembly, she should be denied the benefit to proviso to Section 45(1).

We therefore find that the learned single bench totally misdirected herself while denying the benefit of Section 45(1) of the PML Act.,” the Court said while setting aside the impugned judgment.

The Court allowed the release of Kavitha on bail in both cases on furnishing bonds for Rs 10 lakhs each. The Court further directed the deposit of passport and that she should not attempt to influence or intimidate the sureties.

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

Arguments

Senior Advocate Mukul Rohatgi, for Kavita, pointed out that the co-accused in the case, Manish Sisodia has been granted bail.  He added that chargesheet and prosecution complaints have been filed by the Central Bureau of Investigation(CBI) and the Enforcement Directorate (ED) respectively. She has spent five months in the ED case and four months in the CBI case under custody. Pointing out that the total number of witnesses is 493 cumulatively in both cases and a total number of documents is about 50,000 pages, Rohatgi said that the trial is unlikely to conclude in the near future. He also stated that she is an ex-MP and a present Member of the Legislative Council and hence, there was no chance that she will flee from justice and go anywhere.

Rohatgi also questioned the High Court's reasoning that she was not a "vulnerable woman" and hence was not entitled to the benefit of the proviso to Section 45 of the Prevention of Money Laundering Act. "The normal practice is that women do get bail," Rohatgi submitted.

Justice Gavai at this point said, "You are not a vulnerable woman, you are an ex-MP and MLC." 

Rohatgi at this point stated that no recovery has been made from Kavita. Regarding the allegation that she threatened a witness, Rohatgi said, "It is my word against them."

Addressing the contention that she changed her mobile phone to destroy evidence, Rohatgi said that she was summoned for the first time in March 2024 and the phone was changed four months ago.

Citing the judgment in the Manish Sisodia's case, he said that it laid down two milestones - that bail is the rule and that when there is a delay in trial, bail should be considered.

Additional Solicitor General SV Raju, for the CBI and the ED, said that when she was summoned, her phone was found to have been formatted to erase all call records, FaceTime data etc.

At this juncture, Justice Viswanathan said,  "Phone is such a private thing, would anyone share the details with anyone? People delete messages. I have the habit of deleting group messages. These school and college groups post many messages. Let us see the normal human conduct. Any one in this room would do.."

ASG argued that it was not a regular formatting or a deletion of sensitive data but the formatting of the entire data which would amount to tampering with the evidence.

"You are arguing from the reverse. What is the material to show she is involved in the crime?" Justice Gavai asked the ASG.

Justice Gavai also asked the ASG whether any distinction can be drawn between an ordinary woman and a woman of high status while considering the applicability of proviso of Section 45 PMLA. ASG said that status of a person can have no relevance and it is the role in the crime which matters.

Regarding the issue of phone formatting, Justice Viswanathan asked whether this act alone could lead to any inference of criminality.  "You have any independent data to show that there was any incriminating evidence? Otherwise this would only show that the cellphone was formatted," Justice Viswanathan asked.

ASG replied that Call Detail Records(CDR) show her interactions with the other accused. "There are other evidence from other phones which corroborate that she has done this (formatting) to conceal," ASG said.

Justice Viswanathan, pointing out that the date of the message with the co-accused was 27 October 2020, asked when the liquor policy came into effect. When Rohatgi said that the policy was for the year 2021-2022, ASG said that the discussions took place in 2020 itself.

When ASG referred to statements of co-accused Arun Pillai, Justice Viswanathan asked if the incriminating statements of a co-accused could be relied on solely to implicate someone else in the absence of independent evidence. ASG replied that there is independent evidence. He referred to the statements of certain individuals such as Magunta Srinivasulu Reddy, recorded by the judicial magistrate under Section 164 CrPC.

Rohatgi said that all these witnesses have turned approvers and their statements, prior to turning approvers, did not name Kavitha. Rohathi added that all these statements are discussed in the order granting bail to Arvind Kejriwal. "You say Kejriwal is the kingpin, say Sisodia is the kingpin, then I am the kingpin!" Rohatgi said. "There is no other evidence apart from these tainted statements of the approvers," he asserted.

"Approvers' statements also need corroboration," Justice Viswanathan said.

Disapproving the prosecution's approach in treating some of the accused persons as approvers, Justice Gavai said, "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!!"

Kavitha has approached the Supreme Court 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.  

Case Title : KALVAKUNTLA KAVITHA Versus DIRECTORATE OF ENFORCEMENT | SLP(Crl) No. 10778/2024 & KALVAKUNTLA KAVITHA v. CENTRAL BUREAU OF INVESTIGATION |SLP(Crl) No. 10785/2024 

Citation : 2024 LiveLaw (SC) 614

Click here to download the judgment