The Delhi High Court on Tuesday dismissed Delhi Chief Minister Arvind Kejriwal’s plea challenging his arrest by the Enforcement Directorate (ED) in a money laundering case related to the alleged Delhi excise policy scam.
Justice Swarana Kanta Sharma while pronouncing the verdict said that the AAP supremo was actively involved in the concealment of proceeds of crime, as per evidence advanced by the ED. She also recorded a prima facie finding that there was adequate material, including statements of approvers, involvement of middlemen and references that cash was handed over for expenditure in the 2022 Goa assembly elections.
On Wednesday, the Chief Minister appealed to the Supreme Court against the High Court’s ruling. While mentioning the plea for urgent listing before Chief Justice of India (CJI) D.Y. Chandrachud, senior advocate A.M. Singhvi appearing on behalf of Mr. Kejriwal said that the impugned ruling was passed on the basis of “unrelied documents” which were suppressed from him. In response, the Chief Justice assured that he would look into the plea on an immediate basis.
Here are the key takeaways from the High Court’s verdict.
ED’s evidence reveals that proceeds of crime was utilised by AAP in Goa elections
Addressing arguments advanced on behalf of Mr. Kejriwal that the ED does not contain sufficient evidence to justify his arrest under Section 19 of the Prevention of Money Laundering Act, 2002 (PMLA), the Court pointed out that the ED has relied upon a host of statements given by approvers and witnesses which prima facie reveal that Mr. Vijay Nair, former AAP communications in-charge, had received kickbacks to the tune of ₹100 crore from the “South Liquor Lobby” on behalf of the Chief Minister. The liquor lobby refers to a group of influential persons from South India who purportedly secured undue favours to establish wholesale businesses and paid the political party in return.
“Therefore, it emerges from the records produced before this Court, i.e., the statements of witnesses recorded by the Directorate of Enforcement, including the hawala operators as well as survey workers, area managers, assembly managers etc. engaged by the Aam Aadmi Party, corroborated with CDR analysis and material seized during IT raids, that amount of ₹45 crores which is allegedly the proceeds of crime in this case, was utilised by the Aam Aadmi Party in the Goa Elections 2024,” Justice Sharma outlined.
Refuting claims that no new evidence has been advanced by the ED, the Court pointed out that since the Chief Minister’s arrest, the agency has recorded new statements against him which prima facie incriminate him thereby meeting the threshold to arrest him under Section 19 of the PMLA.
A political party can be brought within the fold of PMLA
The Court agreed with the ED’s contention that a political party can be brought within the ambit of the PMLA and thus AAP can be impleaded as an accused in the case. To come to this conclusion, it analysed Section 70 of PMLA (offences by companies), and Sections 2(f) (political party) and 29A (Registration with the Election Commission of associations and bodies as political parties) of the Representation of Peoples Act, 1951.
“... this Court is of the opinion that the definition of ‘political party’ as per Section 2(f) of the Representation of Peoples Act is that a political party means an ‘association or body of individuals’. As per Explanation-1 of Section 70 of PMLA, a ‘company’ also means an ‘association of individuals,” the verdict elucidated.
Justice Sharma further pointed out that “there is sufficient material on record” which prima facie makes it clear that Mr. Kejriwal is in charge and responsible for the conduct of AAP and thus could be made vicariously liable for the affairs of the political party under Section 70(1) of the PMLA.
Reference was made to statements given by hawala operators, AAP Rajya Sabha MP ND Gupta and an anonymous AAP candidate who had contested the Goa elections in 2022 to arrive at this inference. She, however, clarified that Mr. Kejriwal would get an opportunity at a later stage of the trial to refute such a claim by proving either that he did not have any knowledge of the contravention, or that he had exercised due diligence to prevent the same.
Absence or non-recovery of proceeds of crime of “little value”
During the proceedings, senior advocate Abhishek Manu Singhvi, appearing for Mr. Kejriwal, argued that the ED had not succeeded in recovering any laundered money and thus there is no “money trail” to connect him with any proceeds of crime as lawfully required. Dismissing this contention, the Court observed that “the absence of or non-recovery of proceeds of crime in the case can be of little value or importance” as part of the money already stands spent in the Goa elections by AAP.
“In a nutshell, once there is prima-facie material regarding laundering of the kickbacks on Goa elections and the money being already spent for the said purpose in the year 2022 itself, the recovery in the year 2024 or non-recovery of any remaining amount will become clear only once prosecution complaint is filed,” the Court underscored. It also relied on various statements by hawala operators, assembly managers, and an anonymous candidate of AAP who contested the Goa polls to conclude that the ED had indeed unravelled evidence of a money trail.
Questioning the credibility of approvers amounts to casting aspersions on the judicial process
During the proceedings, the credibility of the statements of approvers was questioned by pointing out that although they had not implicated the Chief Minister in their initial statements, they had given incriminating statements subsequently in lieu of getting bail. The Court was specifically apprised that co-accused Raghav Magunta Reddy’s father joined an alliance of the ruling party after giving incriminating statements against Mr. Kejriwal. Similarly, it was contended that the statements extracted from Sarath Chandra Reddy as an approver are unreliable since data released by the Election Commission of India revealed that he had donated ₹66 crore through electoral bonds to the BJP.
Asserting that such a submission amounted to “casting aspersions on the judicial process,” Justice Sharma underscored that recording of statements of approvers is a judicial process under Section 164 of the Code of Criminal Procedure and that the investigating agency does not have any role to play in it. The law governing approvers “is more than 100 years old” and the Supreme Court till date has not struck down such a law to be unconstitutional, the judge noted.
“In this Court’s opinion, who gives tickets for contesting elections to whom or who purchases electoral bonds for what purpose is not the concern of this Court, as this Court is required to apply the law and the evidence before it as it is and in the context in which it has been placed before it”, the judge said.
Repeated non-compliance of summons a contributing factor in arrest
It was argued on behalf of the Chief Minister that the timing of the arrest, i.e., just before the upcoming general elections, defeats the principle of free and fair elections, which is an essential facet of a democracy. Addressing this, Justice Sharma pointed out that Mr. Kejriwal’s repeated non-compliance of summons for over 6 months was a contributing factor in his arrest and that the ED had no other option but to seek his custody to compel him to join the probe.
“It is to be noted carefully that Sh. Kejriwal was not summoned for the first time after General Elections were declared in India or the Model Code of Conduct came into existence, but the first summon was sent to him as far back as in October, 2023. It was the petitioner himself who had chosen not to join the investigation, but had sent replies to all the summons,” the Court highlighted.
Justice Sharma further asserted that Mr. Kejriwal is not entitled to any special privileges and that the protocol followed by an investigating agency remains the same — whether one is a common man or the Chief Minister of a State. She also took into consideration that the AAP supremo had not approached any court of law challenging the nine summons issued to him by the ED or for seeking any protection from arrest.
It was also pointed out that the Supreme Court, while rejecting the bail application of former Deputy Chief Minister Manish Sisodia, had directed the ED to take appropriate steps to ensure that the trial is concluded within 6-8 months. Thus, the Court opined that Mr. Kejriwal’s reluctance to join the probe was delaying the investigation and also adversely impacting the rights of other co-accused persons in judicial custody.
Replying to summons cannot amount to joining an investigation
Justice Sharma also rejected Mr. Kejriwal’s argument that there was no non-compliance since he had replied to all nine summons issued to him by the ED. Replying to the summons is not equivalent to joining an investigation since “there is no procedure prescribed that replying to a summon will suffice joining an investigation or any other proceeding as contemplated under Section 50 of PMLA”, she noted.
It was further pointed out that the replies sent by Mr. Kejriwal were “counter-questioning the investigating agency about its intent and authority to summon him to join the investigation” which only a court of law is competent to do.
Courts cannot be swayed by political considerations
While concluding, Justice Sharma emphasised that judges are bound by law and cannot delve into the realm of politics. “...this Court notes that the judiciary is tasked with interpreting laws and adjudicating matters before it based on the existing laws and precedents alone, rather than the political considerations,” she said.
She also underscored that the case is not a conflict between the Central government and Mr. Kejriwal but instead a legal case between him and the ED. As a result, it is crucial to solely focus on the merits of the case, the judge said.
