Why has CBI arrested Arvind Kejriwal and what happens next? | Explained

Initially arrested on money laundering charges by the ED in the excise policy case, Arvind Kejriwal is now in CBI’s custody on corruption charges. How does the CBI’s case differ from the ED’s? What legal remedies can the Delhi CM avail now?

Updated - June 28, 2024 09:51 am IST

Published - June 27, 2024 09:38 pm IST

Delhi Chief Minister Arvind Kejriwal is taken to the Rouse Avenue Court in New Delhi on June 27, 2024.

Delhi Chief Minister Arvind Kejriwal is taken to the Rouse Avenue Court in New Delhi on June 27, 2024. | Photo Credit: ANI

A Delhi Court on June 26 sent Delhi Chief Minister Arvind Kejriwal to the CBI’s custody for three days, hours after the agency arrested him in a corruption case related to the alleged excise policy scam. Special judge Amitabh Rawat cited the investigation’s findings, Mr. Kejriwal’s alleged role, and the need to confront him with evidence as reasons for the decision. He however cautioned the agency to not be “overzealous”.

The day also saw the Chief Minister withdraw his petition from the Supreme Court challenging the interim stay imposed by the Delhi High Court on bail granted by a trial Court in a money laundering case related to the same liquor policy. Mr. Kejriwal’s counsel, senior advocate A.M. Singhvi, apprised the top court that he would return with a fresh challenge against the final verdict of the High Court wherein the bail order was stayed for not adequately appreciating the evidence advanced by the ED. Special judge Niyay Bindu in the impugned order had highlighted the ED’s failure to procure any direct evidence linking Mr. Kejriwal with the proceeds of the crime.

ED and CBI cases

The Delhi Excise policy 2021-2022 was introduced in November 2021 to revolutionise the liquor retail landscape in the capital. It aimed to maximise revenue for the region, combat the sale of counterfeit alcohol, and enhance the consumer experience. However, following allegations of procedural irregularities, the policy was scrapped on August 1, 2022. Soon after, the federal law enforcement agencies — the CBI and the ED began probing the commission of an alleged scam. While the ED is investigating the alleged money trail, the CBI’s remit has been to investigate corruption and bribery charges against public servants.

On March 21, Mr. Kejriwal was arrested by the ED on money laundering charges under the Prevention of Money Laundering Act, 2022 (PMLA). In May, the agency filed its first charge sheet naming the Chief Minister as well as the Aam Admi Party (AAP) as accused in the case. In the nearly 200-page document — the eighth in a series of charge sheets filed by the ED since November 2022, the agency claimed that Mr. Kejriwal was directly involved in formulating the excise policy and demanded kickbacks to the tune of ₹100 crore from the “South Liquor Lobby”.  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. Additionally, the ED accused the Chief Minister of utilising ₹45 crore of laundered money in AAP’s 2022 Goa election campaign.

In July 2022, Lieutenant Governor V.K. Saxena recommended a CBI probe into alleged irregularities surrounding the formulation of the excise policy. This marked the beginning of the agency’s involvement leading to the registration of a corruption case under the Prevention of Corruption Act, 1998 (PC Act). Although Mr. Kejriwal was interrogated by the CBI in April, he has not been impleaded as an accused in the case. The agency has so far filed four charge sheets against 17 accused persons including former Delhi Deputy Chief Minister Manish Sisodia and Bharat Rashtra Samithi legislator K. Kavitha.

Also read: Delhi liquor excise policy case | CBI files supplementary charge-sheet against Manish Sisodia and three others

In fact, while seeking Mr. Kejriwal’s remand, ASG S.V. Raju argued before a Delhi Court on March 22 that “one need not be an accused in the predicate offence to be an accused under PMLA”. The PMLA contains a list of scheduled offences which are also called predicate offences. The essence of the ED’s argument is that even if the Chief Minister has not been arrayed as an accused in the predicate offence i.e. the corruption case under the PC Act, he can be booked for the offence of money laundering with respect to the “proceeds of crime” derived from the case.

However, if Mr. Kejriwal is acquitted or discharged under the predicate offence then the money laundering case under the PMLA ceases to exist. This has been affirmed by the Supreme Court in a catena of decisions such as Vijay Madanlal Choudhary v. Union Of India (2022) and Pavana Dibbur v. The Directroate of Enforcement (2023).

Arguments

During the proceedings, CBI special public prosecutor DP Singh argued that the custodial interrogation of Mr. Kejriwal was necessary as the probe had reached a crucial stage. He also pointed out that the agency had refrained from arresting him earlier by referring to the period when the Chief Minister was granted interim bail by the top Court to campaign in the Lok Sabha polls. “We showed restraint... Now it is absolutely mandatory because now we want to conclude (the investigation) by July 3”, he asserted.

In the remand application, the agency called Mr. Kejriwal “one of the main conspirators of the criminal conspiracy” and alleged that Mr. Vijay Nair, AAP’s former communications-in-charge, was contacting various liquor manufacturers and traders and demanding undue gratification since March 2021. The CBI further claimed that Mr. Kejriwal had deposed during interrogation that the plan to privatise the retail liquor business was Mr. Manish Sisodia’s idea.

Countering this, the Chief Minister told the Court in person that the CBI was manipulating the media by spreading false information to create a wedge in the party leadership, especially between him and Mr. Sisodia. “I have never testified that Manish Sisodia is guilty in this matter. He is innocent and the entire AAP is innocent. I am innocent. The aim of such rumours that I have put all the onus on Sisodia is false and the agency is trying to malign us through the media,” he asserted.

Mr. Kejriwal’s lawyers also refuted the necessity of remand by pointing out that his name did not figure in any of the CBI chargesheets. They also challenged the legality of the arrest by highlighting that no Section 41 notice was given under the Code of Criminal Procedure (CrPC) to appear for questioning.

Remand order

While remandig Mr. Kejriwal to three days of CBI custody, Judge Rawat underscored, “Investigation is the prerogative of the investigating agency. There are certain safeguards provided in the law and at this stage, on the material on record, it cannot be said that the arrest is illegal”.

The Court also permitted the Chief Minister’s lawyer and wife to collectively meet him for an hour every day from 6 p.m. to 7 p.m. It also directed that Mr. Kejriwal should receive a medically prescribed diet or home-cooked food while in police custody. Additionally, he must be provided with prescribed medicines and a glucometer throughout the remand period.

Bail in corruption cases

Unlike the PMLA, the PC Act itself does not impose any stringent conditions for bail. An accused in a corruption case can move the trial Court for bail under the provisions of the CrPC. He or she is also entitled to anticipatory bail. However, as per a 2014 amendment, no accused shall be released on bail under the PC Act unless an opportunity has been provided to the public prosecutor to oppose the bail application.

In P. Chidambaram v. CBI (2019), the Supreme Court outlined the factors that should be considered while deciding a bail application under the PC Act. They are — (i) the nature of accusation and the severity of the punishment in the case of conviction and the nature of the materials relied upon by the prosecution; (ii) reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant or the witnesses; (iii) reasonable possibility of securing the presence of the accused at the time of trial or the likelihood of his abscondence; (iv) character, behaviour and standing of the accused and the circumstances which are peculiar to the accused; (v) larger interest of the public or the State and similar other considerations.

In 2022, the top Court in Satender Kumar Antil v. CBI called upon the Union government to consider the feasibility of enacting a separate bail law to streamline the grant of bail. It reiterated that the right to bail flows from Article 21 of the Constitution and urged courts to abide by the cardinal principle that “bail is the rule and jail is the exception”.

What happens next?

Senior advocate Sanjay Hedge told The Hindu that Mr. Kejriwal has a better chance of securing statutory bail in the CBI case compared to the ED case as the stringent conditions under Section 45 of the PMLA are not applicable in the former. However, he pointed out that the trial Court is likely to entertain a bail application only after the conclusion of the remand hearings. “If the CBI were to seek additional police custody, the trial Court is likely to take into account the fact that the agency has so far not named the Chief Minister in any of its chargesheets,” Mr. Hedge added.

Mr. Kejriwal’s fresh plea challenging the Delhi High Court’s stay on bail in the money laundering case is likely to come up for hearing soon before the Supreme Court “It is hard to predict whether the Court will uphold the stay order. It can however also direct the High Court to hear ED’s main challenge to the bail order as soon as possible”, the senior counsel said.

Moreover, the AAP supremo’s challenge to the legality of his arrest in the ED case is pending before the top Court. A Bench of Justices Sanjiv Khanna and Dipankar Datta had reserved its verdict in the case on May 17. It is likely to be pronounced once the Court reopens after vacation in July.

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