Delhi Excise Policy case: How the tables turned for the accused in Supreme Court

The Delhi Excise Policy case has been in the headlines for more than a year. Months after the investigative agencies made high-profile arrests in the case, the Supreme Court over the past few weeks passed a series of landmark decisions to release the political leaders on bail..The case arose in 2022 when the Central Bureau of Investigation (CBI) registered a First Information Report (FIR) alleging that the Delhi Excise Policy of 2021-22 was manipulated to facilitate monopolisation and cartelisation of liquor trade in Delhi.The probe agency said that the Aam Aadmi Party (AAP) and its leaders received kickbacks from liquor manufacturers due to manipulation of the policy. The Enforcement Directorate (ED) also later registered a case under the Prevention of Money Laundering Act (PMLA) in the matter..What followed was a series of arrests of opposition leaders, criticised by some quarters as being politically motivated..Delhi Chief Minister (CM) Arvind Kejriwal, former Deputy CM Manish Sisodia, Member of Parliament (MP) Sanjay Singh, Bharat Rashtra Samithi (BRS) leader K Kavitha and AAPs former communications in-charge Vijay Nair spent considerable time in jail as the the Rouse Avenue Court and the repeatedly Delhi High Court denied them bail.What was often cited by these courts while rejecting bail was the stringent bail conditions under the PMLA. As an example of the general attitude of courts towards granting bail in such cases, a Delhi court in another case had said during a hearing "ED matters main kaun si bail hoti hai (where is the question of bail in ED matters)?"..In stark contrast to the repeated rejection of bail in multiple rounds of litigation before the courts below, the Supreme Court granted them relief. In doing so, the apex court also sent a message to the courts below that bail is the rule even for charges under special laws that have stringent bail conditions.Even if it did not delve much into the merits of the allegations against the accused while granting them relief, the top court grilled the investigating agencies on evidence and procedure during the hearings that lasted many hours. .Here is a look at what the Supreme Court held in sharp contrast to the High Court and trial court, in each accused's case..Arvind Kejriwal .Kejriwal, who is the first sitting CM to find himself behind bars, was arrested by the ED on March 21, just ahead of the Lok Sabha elections.He first failed to get any stay on the repeated summons issued to him by the ED. On the same day that the High Court refused to grant him any interim protection from arrest, the ED took him into custody.Just a few weeks later, the High Court on April 9 upheld his arrest. In a strongly-worded 105-page order, Justice Swarna Kanta Sharma said that Kejriwal was actively involved in the use of proceeds of crime and that the ED had been left with little option but to arrest him..On the contrary, the top court on July 12, while granting interim bail to the Delhi CM in the ED case, did not focus much on his role in the alleged crime or his conduct during the investigation. Instead, it discussed in detail the ED’s power to arrest under PMLA and the procedural safeguards that must be undertaken.On the legality of the arrest, Justice Sharma of High Court had concluded that the ED had sufficient material to have ‘reasons to believe’ that he was guilty of money laundering to justify his arrest under Section 19 of PMLA.The Supreme Court Bench of Justice Sanjiv Khanna and Justice Dipankar Datta, however, found the ‘reasons to believe’ and the contents of the ‘grounds of arrest’ furnished to Kejriwal to be identical..It considered Kejriwal’s argument that while forming the ‘reasons to believe’ against him, the ED had selectively referred to the implicating material and ignored the exculpatory material.“Undoubtedly, the opinion of the officer is subjective, but formation of opinion should be in accordance with the law. Subjectivity of the opinion is not a carte blanche to ignore relevant absolving material without an explanation. In such a situation, the officer commits an error in law which goes to the root of the decision making process, and amounts to legal malice,” the Court said.After Kejriwal’s counsel pointed out the lack of “necessity to arrest” in his case, the Court referred to a larger bench the following question: whether an accused under PMLA can challenge his arrest on the ground of “need and necessity to arrest”..In the meantime, Kejriwal was ordered to be released since he had spent over 90 days in jail. However, days before he was given the relief by the top court, Kejriwal on June 26 had been taken into custody by the CBI.He then filed two pleas before the High Court - one challenging the legality of his arrest by CBI and another seeking bail.His arrest by CBI was upheld by the Delhi High Court. As regards his plea for bail, the High Court asked him to move the trial court for the same instead of directly approaching the High Court.He then moved the apex court against the High Court decision..On Friday, a Bench of Justices Surya Kant and Ujjal Bhuyan granted him bail, considering that the trial was unlikely to conclude in near future. In an apparent criticism of the High Court's decision to ask Kejriwal to first approach the trial court for bail even after issuing notice on his plea, the apex court said,"If an accused approaches the High Court directly without first seeking relief from the Trial Court, it is generally appropriate for the High Court to redirect them to the Trial Court at the threshold. Nevertheless, if there are significant delays following notice, it may not be prudent to relegate the matter to the Trial Court at a later stage. Bail being closely tied to personal liberty, such claims should be adjudicated promptly on their merits, rather than oscillating between courts on mere procedural technicalities."Interestingly, Kejriwal had also had been granted regular bail on June 20 by a trial court. However, the order was stayed by the High Court on June 25 on an appeal moved by the ED. The central agency’s plea is still pending. .CBI arrest of Arvind Kejriwal was only to frustrate bail in ED case: Justice Ujjal Bhuyan.Manish Sisodia.Sisodia was the first among the AAP leaders to be arrested in the case. He was taken into custody by the CBI on February 26, 2023 and then by the ED on March 9 that year.In the first and second round of his bail applications, he remained unsuccessful even in the Supreme Court. However, he was finally ordered to be released on August 9 this year, with the apex court saying,“We find that, on account of a long period of incarceration running for around 17 months and the trial even not having been commenced, the appellant has been deprived of his right to speedy trial.".The Court also took note of the fact that there are at least 493 witnesses in the cases registered by the ED and CBI. “The case involves thousands of pages of documents and over a lakh pages of digitised documents. It is thus clear that there is not even the remotest possibility of the trial being concluded in the near future,” it noted.In its decision, the Bench of Justice BR Gavai and Justice KV Viswanathan also found that both the trial court and the High Court had applied the stringent bail conditions under Section 45 of PMLA against Sisodia in ignorance of the top court’s observations on the right to bail in cases with delayed trial and long incarceration of accused..The top court also took strong exception to the trial court’s conclusion that Sisodia and other accused had been filing multiple applications to delay the matter.On the contrary, the Court found Sisodia to have filed only 13 applications in the CBI matter and 14 in the ED matter, some of which were for permission to meet his wife or sign the vakalatnama and other documents.“Most of the applications are for supply of missing documents and legible copies under Section 207/208 CrPC. Some of the applications are for inspection of the “un-relied upon documents”. It is pertinent to note that all these applications have been allowed by the learned trial court," the top court noted..The top court also disagreed with the Delhi High Court, which had observed that the accused persons had taken three months for inspection of documents not relied upon by the prosecution. “It is to be noted that there are around 69,000 pages of documents involved in both the CBI and the ED matters. Taking into consideration the huge magnitude of the documents involved, it cannot be stated that the accused is not entitled to take a reasonable time for inspection of the said documents. In order to avail the right to fair trial, the accused cannot be denied the right to have inspection of the documents," the Court made it clear. It went on to observe that trial courts and High Courts attempt to play safe in the matters of grant of bail. “It is high time that the trial courts and the High Courts should recognize the principle that “bail is rule and jail is exception,” it stressed..Sanjay Singh.The AAP leader was the first among the political leaders to get bail in the money laundering case after the ED said that it had no objection to his release.He was arrested on October 4, 2023. The trial court had rejected Singh’s bail plea on December 22. This was followed by rejection of his bail application by Justice Swarna Kanta Sharma of the Delhi High Court on February 9 this year.The ED’s concession on April 2 for his release came after a warning from the Supreme Court that it might have to make observations in Singh's favour while granting him bail. To avoid that, the ED had given its no objection for his bail..In a 39-page order, the High Court had relied upon the approver Dinesh Arora's statement to deny bail to Singh and rejected his argument that the same had been given under some threat.“The sanctity attached to a statement recorded under Section 164 of Cr.P.C., now termed as a statement of the approver, cannot be thrown at the threshold or disregarded for the purpose of consideration as to whether there is material on record, which within the parameters of PMLA, will disentitle the accused to grant of bail when tested on the anvil of Section 45 of PMLA to pass the test of twin conditions for grant of bail,” Justice Sharma had said.However, the Supreme Court remarked during the hearing that Arora had not implicated Singh in his initial statements..K Kavitha.The lawmaker from Telangana was arrested by the ED on March 15 this year, after which the CBI took her into custody on April 11. Like others, she did not get any relief from the trial court and the Delhi High Court.On August 27, the ED, represented by Additional Solicitor General (ASG) SV Raju, urged the top court to avoid elaborate discussions in the case as such observations may prejudice the trial. The request was accepted by the top court - the relief to Kavitha was then given on two grounds: the possibility of the trial not concluding in the near future and the PMLA’s pro-woman bail provision..In contrast, Justice Swarana Kanta Sharma at the High Court had observed that Kavitha cannot be equated to a vulnerable woman who may have been taken advantage of to commit an offence - the class of women for whom the proviso to Section 45 of the PMLA has been incorporated.The top court said the single-judge had erroneously observed that the pro-woman bail provision under PMLA was applicable only to the vulnerable.Justice Sharma had placed reliance on the top court’s observations in Saumya Chaurasia v. Directorate of Enforcement that “nowadays the educated and well placed women in the society engage themselves in the commercial ventures and enterprises, and advertently or inadvertently engage themselves in the illegal activities." In response to this, the Bench of Justices Gavai and Viswanathan said,“This Court in the case of Saumya Chaurasia (supra) does not say that merely because a woman is highly educated or sophisticated or a Member of Parliament or a Member of Legislative Assembly, she is not entitled to the benefit of the proviso to Section 45(1) of the PMLA.”.Vijay Nair.Nair was first arrested by the CBI in September 2022. After he was granted bail by the trial court on November 14 that year, he was taken into custody by the ED the same day. He then spent the next 22 months in jail as an undertrial. For this reason, he was released on September 2. If convicted, the maximum punishment he would face is seven years, but the trial - with 40 accused, 9 complaints and 350 prosecution witnesses - has little possibility of reaching finality in the near future, the Supreme Court noted. “The right of liberty guaranteed under Article 21 of the Constitution is a sacrosanct right which needs to be respected even in cases where stringent provisions are incorporated in the special enactments. In the case at hand, the petitioner has been in custody for over 22 months and his incarceration as an under-trial cannot be the mode of punishment in the case,” it said.The Court also took note of the fact that he had been implicated on the basis of the twelfth statement of a co-accused, who had turned approver for the prosecution..The High Court last year, while denying him bail, had relied on the witness statements and said it was almost impossible to have direct evidence in such type of cases.Justice Dinesh Kumar Sharma had also observed that Section 45 of the PMLA stipulates that bail can only be granted if the Court is of the opinion that the petitioner is not guilty of such offence.“I consider that in view of the seriousness and gravity of the case and the reasoned order of learned Trial Court, this Court is not able to persuade itself to form an opinion that the petitioner is not guilty of such an offence,” the Court had said while rejecting Nair’s bail plea..However, the top court said that the liberty guaranteed under Article 21 of the Constitution does not get annulled even for special statutes, where the bar for bail is set high.“Such statutes, in our opinion, cannot carve out an exception to the principle of bail being the rule and jail being the exception,” it said.