A Delhi court remanded Bharat Rashtra Samithi (BRS) legislator K. Kavitha to seven days’ custody of the Enforcement Directorate (ED) in a money laundering case related to the alleged Delhi liquor policy scam case.
Ms. Kavitha, daughter of former Telangana Chief Minister K. Chandrasekhar Rao, was arrested by the ED from her house in Hyderabad on Friday, hours after the Central agency searched the premises and interrogated her.
Before entering the court on Saturday afternoon, Ms. Kavitha termed the arrest as “illegal” and said she would fight it. She has been questioned by the agency over the past two years and she had also filed a plea against the ED’s summons in the Supreme Court, which has been listed for hearing on March 19.
Special Judge (Prevention of Corruption Act) M.K. Nagpal of the Rouse Avenue court ordered that Ms. Kavitha remain in ED custody till March 23. The ED had sought 10 days’ custody of Ms. Kavitha.
Senior Advocate Vikram Chaudhary who appeared for Ms. Kavitha called her arrest “blatant abuse of power”. He maintained that there is an effective stay on her arrest, at least until March 19, when the SC would hear her plea. “The Additional Solicitor-General [ASG] had given an assurance before the SC that the ED would not arrest my client until then,” said Mr. Chaudhary.
He further argued that Ms. Kavitha was arrested after sunset which wasn’t allowed as per law. “What prevented them from waiting for three days? The ED wants to overreach the Supreme Court of India?” Mr. Chaudhary asked.
Special Counsel Zoheb Hossain refuted the submissions made by Mr. Chaudhary and said the ED had given no statement before any court that coercive steps would not be taken against the accused. He added that the accused was arrested at 5.20 p.m., which was before sunset. The ED also maintained that the search at the BRS legislator’s residence would have concluded much earlier had around 20 people not barged in and created ruckus.
Justice Nagpal, however, questioned the ED’s urgency in making the arrest when the SC was due to hear her case. The ED’s counsel answered that the accused cannot presume interim relief unless there is an order. He maintained that her arrest was necessary due to the possibility of destruction of evidence as she had allegedly done the same in the past as well.
The ED’s submission before the court alleged that Ms Kavitha was linked to a “South Group” of liquor traders who “wanted larger roles” in the now scrapped 2021-22 Delhi excise policy. The agency claimed that one of the accused in the case, Vijay Nair, received kickbacks to the tune of at least ₹100 crore on behalf of Aam Aadmi Party (AAP) leaders from the same “South Group”, which was allegedly controlled by Sarath Reddy, Ms. Kavitha and Magunta Srinivasulu Reddy.
Ms. Kavitha has been giving false evidence “during recording of statements under Section 50 of PMLA, 2002”. When questioned about “stakes in M/s Indo Spirits, she denied having any share or stakes. However, WhatsApp chats between her CA Mr. Buchi Babu and Mr. Raghav Magunta clearly showed that she was getting 33% stakes in M/s Indo Spirits,” the ED’s application said.
The ED also said that Ms. Kavitha had indulged in frivolous litigation to delay the investigation and even in the writ petition filed in the SC had “made incorrect submissions”, the ED said.
ED also alleged that Ms. Kavitha tried to destroy evidence in her mobile phones. “The 10 devices were sent to NFSU for extraction and forensic examination. As per the report, at least 4 of these devices were formatted after issuance of summons to her on 11.03.2023 with a specific instruction to produce the digital devices used by her in the last 2 years,” the ED stated adding that the accused had actively destroyed the digital evidence to conceal her role and involvement in this scam.
The matter relates to an FIR filed by the Central Bureau of Investigation (CBI) based on a complaint by the Lieutenant-Governor of Delhi alleging multiple irregularities in the formation and implementation of the 2022 Delhi excise policy, which was subsequently withdrawn.
After the CBI case, the ED filed a case under the Prevention of Money Laundering Act, alleging that the money earned through the excise policy was diverted through “hawala” channels to be spent on the AAP’s campaign in Goa ahead of the State Assembly election in 2022.
Former Delhi Deputy Chief Minister Manish Sisodia and Rajya Sabha MP Sanjay Singh were arrested in connection with the case last year, and have been in judicial custody ever since. Delhi CM Arvind Kejriwal too was summoned in the same case and was bailed by a court here on Saturday.
