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TMI Blog2024 (4) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... residence of Sh. Arvind Kejriwal, petitioner herein, who is the Chief Minister of the State of Delhi. After the search, he was served with grounds of arrest and was arrested on the same day at 09:05 PM by the Directorate of Enforcement in connection with ECIR No. HIU-II/14/2022 regarding his involvement in the offence of money laundering with regard to Delhi Excise Policy 2021-2022. After arrest, petitioner was produced before the learned Special Judge (PC Act) CBI-09 (MP/MLA Cases), Rouse Avenue Courts, Delhi ('learned Special Court'), where the Directorate of Enforcement had sought his custody for the purpose of interrogation which was granted vide order dated 22.03.2024. 2. During the hearing of the present case, this Court was informed that after filing of the present petition, the learned Special Court was pleased to further extend remand of the petitioner to custody of the respondent vide another order dated 28.03.2024 till 01.04.2024. The present petition came up for hearing before this Court initially on 27.03.2024 when the petitioner was running in custody of the Directorate of Enforcement by a judicial order. The Court is informed that the petitioner herein has now been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy of GNCTD was at the stage of formulation or drafting, the accused persons had hatched a criminal conspiracy, in furtherance of which some loopholes had intentionally been left or created in the policy, which were meant to be utilised or exploited later on. Further, huge amount of money was paid as kickbacks in advance to the public servants involved in commission of the alleged offences and in exchange of undue pecuniary benefits to the conspirators involved in the liquor trade. As alleged, kickbacks of around Rs. 20-30 crores in advance were paid to accused Sh. Vijay Nair, Sh. Manish Sisodia and some other persons belonging to the ruling political party in Delhi, and the other public servants involved in conspiracy by some persons in the liquor business from South India ('South Group') and these kickbacks were found to have been returned back to them subsequently out of the profit margins of wholesalers holding L-l licences and also through the credit notes issued by the L-1 licensees to the retail zone licensees ('L-7Z') related to the South liquor lobby. It is further alleged that as a result of criminal conspiracy, a cartel was formed between three components of the said pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner directly hampers the level playing field of free and fair elections to be conducted throughout the nation as the petitioner is a member of the leading opposition party i.e., the Aam Aadmi Party and his arrest directly violates his right to campaign in the upcoming Lok Sabha Elections. Further, the timing of the arrest ensures that Sh. Kejriwal is unable to participate in democratic activities and the effort is to try and disintegrate his Party before even the first vote is cast. Sh. Singhvi argues that the same is pretty evident from the fact that the first summons issued against Sh. Kejriwal by the Directorate of Enforcement was in October, 2023 and he was arrested on 21.03.2024 which reeks of mala fide and it directly damages the basic structure and the level playing field. As argued, the PMLA is sought to be employed to create a non-level playing field for the impending General Elections scheduled to be held from 19.04.2024. 10. Sh. Singhvi, learned Senior Counsel for the petitioner argues that the Directorate of Enforcement had sent nine (09) summons to the petitioner herein under Section 50 of the PMLA over a protracted period of 6 months. The first summon was sent on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apart from the fact that the necessity to arrest is occasioned by ulterior motives, the only object is to humiliate, insult Sh. Kejriwal and to disable him from campaigning in the present case, as argued by Sh. Singhvi. Moreover, it is submitted that the replies given to the summons of the Directorate of Enforcement were very detailed. It is further argued that in the facts and circumstances of the present case, Sh. Kejriwal cannot be said to be a flight risk and there can be no material that can be tampered with by Sh. Kejriwal after one and half years, after the case was actually registered. 12. Sh. Singhvi, learned Senior Counsel for the petitioner further argues that the application of remand of the Directorate of Enforcement itself says that they need to find, one and a quarter year later of the registration of FIR by the CBI and six months after the first summon was issued to Sh. Kejriwal, the role of Sh. Kejriwal which is totally outrageous and that this practice cannot continue. In this regard, reliance has been placed on V. Senthil Balaji v. State 2023 SCC OnLine SC 932, wherein the Hon'ble Apex Court had held that to effect an arrest, an officer authorized has to assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forcement for his grant of bail on medical reasons, which was just a back pain, on 08.05.2022. It is this argued that the barter of liberty for statement under Section 50 of PMLA is writ large on the very face of it and is a very alarming concern. Similarly, statement of co-accused Buchi Babu is completely hearsay without any material or evidence. Moreover, hearsay evidence cannot be relevant evidence as per Kalyan Kumar Gogoi v. Ashutosh Agnihotri (2011) 2 SCC 532. It is argued that as regards the statement of one Sh. C. Arvind, he in no manner has alleged anything against the petitioner with respect to his role in proceeds of crime. It is also vehemently argued that the Directorate of Enforcement has used a selective approach in relying upon statements i.e., the statements which favour the prosecution have been relied upon and the ones which don't, have been kept in the list of un-relied documents. This approach directly violates principles of natural justice, and Article 14 and 21 of the Constitution of India. 14. Sh. Singhvi, learned Senior Counsel also argues that the species called approver, in our history, whether for good motives or bad motives, the courts have dealt with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Representation of Peoples Act, 1951 cannot be held to be a company as the Directorate of Enforcement alleges on grounds of arrest. Further, there is no specific role or act under Section 3 of PMLA establishing that the petitioner is liable vicariously. 17. Thus, it is argued that the present writ petition deserves to be allowed. Therefore, the arrest of the petitioner be declared illegal, arbitrary, non-est and the consequent remand order dated 22.03.2024 be set aside and the petitioner be released. SUBMISSIONS ON BEHALF OF THE DIRECTORATE OF ENFORCEMENT 18. Sh. S.V. Raju, learned Additional Solicitor General ('ASG') appearing on behalf of the Directorate of Enforcement has raised certain preliminary objections in relation to the writ petition in question. It is submitted that the present writ petition has been argued by the learned Senior Counsel for the petitioner as if it is a petition for bail and quashing of the ECIR. It is stated that the petitioner vide the present writ petition is challenging his arrest in accordance with Section 19 of PMLA and the first remand order passed by the learned Special Court i.e., order dated 22.03.2024. However, at present there are three re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rements of Section 19(1) and 19(2) of PMLA as well as Article 22(1) and (2) of the Constitution of India have been complied with by the Directorate of Enforcement. It is argued that the petitioner was arrested on 21.03.2024 at 09:05 PM, and the grounds for his arrest were informed and furnished to him in writing. Moreover, the written grounds of arrest running into 28 pages were served upon the petitioner at 9:05 PM, and the receipt of the same was duly acknowledged by the petitioner in writing. It is further stated that the intimation of arrest was also given to the wife of the petitioner and his lawyers. It is submitted that the arrest of the present petitioner was made following all procedures prescribed under the law in the presence of two independent witnesses who have signed the arrest memo, arrest order, intimation of arrest and inventory of personal search memo. Furthermore, medical examination of the petitioner was duly conducted as per the directions of the Hon'ble Supreme Court, and medical reports were duly produced before the learned Special Court. It is also submitted that in compliance with Section 19(2) of PMLA, the material as required was duly forwarded to the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely Rs. 45 Crores which were part of the amount received from the South Group were used in the election campaign of Aam Aadmi Party in Goa in the year 2021-22. This is supported by statements of various persons engaged in the election campaign activities of Aam Aadmi Party in Goa, and have revealed that cash payments were made to them for their work done as Survey workers, Area managers, Assembly managers etc. These persons have also revealed that these payments were made to them in cash, and were managed by one Sh. Chanpreet. These persons and activities related to the election campaign were overall managed by Sh. Vijay Nair and Sh. Durgesh Pathak, Aam Aadmi Party, MLA in Delhi. This shows the utilisation of proceeds of crime. This is also corroborated by one of the Candidates of Aam Aadmi Party in Goa Elections in 2022 who received funds for election expenses in cash from Aam Aadmi Party volunteers in Goa. 24. Sh. S.V. Raju further argues that there is independent evidence corroborating the statements of the approvers, and since cash transactions are involved in the present offence, the attendant circumstances become relevant. It is argued that veracity of statements of approver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttee & National Executive, so the petitioner is ultimately responsible for the funds being used in the election expenses including their generation. As the petitioner not only was the brain behind Aam Aadmi Party but also controls its major activities, he is also involved in demands of kickbacks which have inter-alia generated proceeds of crime. He further argues that the Directorate of Enforcement has recorded statements under Section 50 PMLA of members of the Aam Aadmi Party who very categorically stated that the petitioner herein is the National Convenor and is overall incharge of the party. 27. Sh. S.V. Raju lastly submits that the investigation qua the petitioner herein is at a very nascent stage and that there are certain statements recorded under Section 50 of PMLA which have not been mentioned in the grounds of arrest by the Directorate of Enforcement for the sake of confidentiality as investigation against the petitioner is still going on. In this regard, reliance has been placed on Pankaj Bansal v. Union of India & Ors (supra). 28. Therefore, considering the above arguments, the present writ petition is strongly opposed by the Directorate of Enforcement and it is argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Code of Criminal Procedure, 1973 (2 of 1974), and accordingly the officers authorised under this Act are empowered to arrest an accused without warrant, subject to the fulfilment of conditions under section 19 and subject to the conditions enshrined under this section." (Emphasis supplied) iii. Judicial Precedents Qua Exercise of Power Under Section 19 of PMLA 33. The Hon'ble Apex Court, while dealing with constitutional validity of certain provisions of PMLA and the procedure followed by Directorate of Enforcement, in case of Vijay Madanlal Choudhary v. Union of India 2022 SCC OnLine SC 929, had made the following observations: "322. Section 19 of the 2002 Act postulates the manner in which arrest of person involved in money-laundering can be effected. Sub-section (1) of Section 19 envisages that the Director, Deputy Director, Assistant Director, or any other officer authorised in this behalf by the Central Government, if has material in his possession giving rise to reason to believe that any person has been guilty of an offence punishable under the 2002 Act, he may arrest such person. Besides the power being invested in high-ranking officials, Section 19 provides f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons for the belief regarding involvement of the person in the offence of money laundering and, further, such reasons have to be recorded in writing and while effecting arrest, the grounds of arrest are to be informed to that person..." JURISPRUDENCE OF REMAND UNDER CRIMINAL LAW 36. Since the present petition also seeks setting aside of remand order dated 22.03.2024 on the ground that the same was passed by the learned Special Court in a patently mechanical and routine manner, it will be relevant to take note of the legislative framework and judicial precedents on the issues as to what is remand of an accused, the power of Courts to remand an accused to the custody of police, and the essentials to be considered for grant of remand in cases under PMLA. Power of Remand under Section 167 of Cr.P.C. 37. Relevant portion of Section 167 of Cr.P.C. reads as under: "167. Procedure when investigation cannot be completed in twenty-four hours.- (1) Whenever any person is arrested and detained in custody, and it appears that the investigation cannot be completed within the period of twenty-four hours fixed by section 57, and there are grounds for believing that the accusation or inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .-For the avoidance of doubts, it is hereby declared that, notwithstanding the expiry of the period specified in paragraph (a), the accused shall be detained in custody so long as he does not furnish bail. Explanation II.-If any question arises whether an accused person was produced before the Magistrate as required under clause (b), the production of the accused person may be proved by his signature on the order authorising detention or by the order certified by the Magistrate as to production of the accused person through the medium of electronic video linkage, as the case may be..." 38. Thus, Section 167(2) of Cr.P.C. authorises the detention of an arrestee beyond 24 hours and empowers the Magistrate to remand an accused to police custody, though not exceeding the period of 15 days. 39. In case of Satender Kumar Antil v. CBI (2022) 10 SCC 51, the Hon'ble Apex Court had discussed the object and importance of Section 167(2) of Cr.P.C., and relevant portion of the decision reads as under: "39. Section 167(2) was introduced in the year 1978, giving emphasis to the maximum period of time to complete the investigation. This provision has got a laudable object behind it, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, permitted limited police custody." 41. In V. Senthil Balaji (supra), the Hon'ble Apex Court emphasised that the power under Section 167(2) of Cr.P.C. is to be exercised after applying judicial mind and passing a reasoned order. The observations in this regard read as under: "53. ...While authorizing the detention of an accused, the Magistrate has got a very wide discretion. Such an act is a judicial function and, therefore, a reasoned order indicating application of mind is certainly warranted. He may or may not authorize the detention while exercising his judicial discretion. Investigation is a process which might require an accused's custody from time to time as authorised by the competent Court. Generally, no other Court is expected to act as a supervisory authority in that process. An act of authorisation pre-supposes the need for custody. Such a need for a police custody has to be by an order of a Magistrate rendering his authorisation. 54. The words "such custody as such Magistrate thinks fit" would reiterate the extent of discretion available to him. It is for the Magistrate concerned to decide the question of custody, either be it judicial or to an investigatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to play when a remand is made of an accused person to an authority under the PMLA, 2002. It is his bounden duty to see to it that Section 19 of the PMLA, 2002 is duly complied with and any failure would entitle the arrestee to get released. The Magistrate shall also peruse the order passed by the authority under Section 19(1) of the PMLA, 2002. Section 167 of the CrPC, 1973 is also meant to give effect to Section 19 of the PMLA, 2002 and therefore it is for the Magistrate to satisfy himself of its due compliance. Upon such satisfaction, he can consider the request for custody in favour of an authority, as Section 62 of the PMLA, 2002, does not speak about the authority which is to take action for non-compliance of the mandate of Section 19 of the PMLA, 2002. A remand being made by the Magistrate upon a person being produced before him, being an independent entity, it is well open to him to invoke the said provision in a given case. To put it otherwise, the Magistrate concerned is the appropriate authority who has to be satisfied about the compliance of safeguards as mandated under Section 19 of the PMLA, 2002. *** 69. The interplay between Section 19(1) of the PMLA, 2002 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t fails to discharge this duty in right earnest and with the proper perspective, as pointed out hereinbefore, the order of remand would have to fail on that ground and the same cannot, by any stretch of imagination, validate an unlawful arrest made under Section 19 of the Act of 2002. 18. In the matter of Madhu Limaye was a 3-Judge Bench decision of this Court wherein it was observed that it would be necessary for the State to establish that, at the stage of remand, the Magistrate directed detention in jail custody after applying his mind to all relevant matters and if the arrest suffered on the ground of violation of Article 22(1) of the Constitution, the order of remand would not cure the constitutional infirmities attaching to such arrest." ANALYSIS & FINDINGS I. MATERIAL AGAINST THE PETITIONER COLLECTED BY THE DIRECTORATE OF ENFORCEMENT 45. One of the main grounds on which the petitioner Sh. Kejriwal has sought the declaration of his arrest as illegal and arbitrary is that there was no material in the possession of the Directorate of Enforcement which can lead to an inference that the petitioner is guilty of offence of money laundering under the provisions of PMLA, either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Buchi Babu claimed that Sh. Vijay Nair had sent these provisions in relation to the new excise policy yet to be introduced to him and to Sh. Arun Pillai. The Role of Petitioner in Demanding Kickbacks & Petitioner's Meetings with the South Liquor Lobby 48. It is also the case of Directorate of Enforcement that the petitioner had demanded kickbacks from the 'South Group' in exchange of awarding favours to them in the formulation and implementation of the Excise Policy 2021-22. A. In support of this claim, reliance has been placed on the statement of Sh. Magunta Srinivasulu Reddy, recorded on 16.07.2023 under Section 50 of PMLA and on 17.07.2023 under Section 164 of Cr.P.C. wherein he had revealed that during March 2021, he had sought a meeting with the petitioner Sh. Kejriwal regarding liquor business in Delhi, and the office of the petitioner had communicated to Sh. Magunta S. Reddy that he could meet him on 16.03.2021 at 04:30 PM. During the meeting, Sh. Kejriwal had informed him that Ms. K. Kavitha, had already approached him for carrying out liquor business in Delhi and had offered to pay Rs. 100 crores to Aam Aadmi Party, and that Sh. Magunta Reddy could talk to her about th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.2023. D. In the statement dated 25.04.2023 recorded under Section 50 of PMLA, Sh. Sarath Reddy had revealed that he had expressed his desire to Sh. Arun Pillai that he wished to meet the top officials of Delhi Government including Sh. Arvind Kejriwal and Sh. Manish Sisodia, and Sh. Arun Pillai had assured him that he would arrange the meeting through Sh. Vijay Nair. He had further revealed that in July-August 2021, upon arriving in Delhi, he was picked up in a black SUV near the Oberoi Hotel and was taken to a government bungalow, which Sh. Vijay Nair claimed, was close to the residence of the present petitioner. Upon reaching there, Sh. Sarath Reddy had a 10-minute meeting with Sh. Kejriwal i.e. the petitioner herein, during which Sh. Kejriwal had assured him of Sh. Vijay Nair's capabilities in handling any issues related to their business, which means liquor business. The discussion also touched upon the new liquor policy, which Sh. Kejriwal mentioned would be beneficial for all parties involved. It will be crucial to note at this stage that Sh. Vijay Nair as per statements of all the witnesses and approvers was a person who was in touch with all concerned from whom kickbac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se to Sh. Manish Sisodia, Sh. Sudhir is linked to Vijay Nair, and Sh. Rajesh Joshi owns M/s Chariot Productions Media Pvt Ltd, which handled Aam Aadmi Party's Goa election campaign. 54. Upon scrutinising the vendors of M/s Chariot Productions involved in outdoor campaigning of Aam Aadmi Party, it was discovered that several vendors had received payments 'partly in cash and partly through bills'. For instance, M/s. Grace Advertising, whose employee was Sh. Islam Qazi had disclosed in statements dated 12.12.2022 and 23.12.2022 that he had made an invoice for only a partial amount as the remainder was paid to him in cash. Further, he had facilitated the engagement of another vendor, M/s. Sparks Entertainment, with M/s. Chariot Productions, thereby informing one Sh. Aaron Schubert D'souza that payments by the Aam Aadmi Party would be made both in cash and through bills. Furthermore, Sh. Islam Qazi admitted to receiving Rs 6.29 lakhs via hawala operators in Mumbai. Subsequent investigations revealed that Sh. Anand Vyas and Sh. Anil Patel served as the Angadiyas in Mumbai, who had provided Rs 4.25 lakhs and Rs 2.45 lakhs in cash to Sh. Islam Qazi, respectively. Sh. Anil Patel disclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, Sh. Kiran Bhai Patel, and Sh. Jagdish Sharma revealed that funds transferred to Goa originated from four routes: approximately Rs. 12 crore from Sh. Ashok Chandu Bhai of M/s Asheel Corporation (Angadiya), Rs. 7.1 crore from Sh. Devang Solanki of M/s KS Enterprise (Angadiya), Rs. 16 crore from Kirti Amba Lal (Angadiya), and Rs. 7.5 crore from M/s Neelkanth (Angadiya), with an additional Rs. 2 crore from M/s Ma Ambey (Angadiya), which is corroborated by the statements of witnesses recorded under Section 50 of PMLA. 58. Further, Sh. Ashok Chandu Bhai of M/s Asheel Corporation had allegedly received approximately Rs. 12 crore from Sh. Rajesh Joshi, owner of M/s. Chariot Productions and Sh. Damodar Prasad Sharma, an employee of Chariot. 59. One Sh. Devang Solanki had disclosed about receiving Rs. 7.1 crore from Sh. Arvind Singh, who was associated with M/s India Ahead News Channel, owned by Sh. Gautam Mootha and co-owned by Sh. Abhishek Boinpally of the South Group. Further, analysis of CDR has confirmed communication between Sh. Arvind Singh and Sh. Devang Solanki, Sh. Chanpreet Singh, and Sh. Prince Kumar. 60. The individuals associated with M/s Kirti Amba Lal, M/s Neelkanth, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any rule, direction or order made thereunder is a company, every person who, at the time the contravention was committed, was in charge of and was responsible to the company, for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. *** Explanation 1.-For the purposes of this section,- (i) "company" means any body corporate and includes a firm or other association of individuals; and (ii) "director", in relation to a firm, means a partner in the firm. Explanation 2.-For the removal of doubts, it is hereby clarified that a company may be prosecuted, notwithstanding whether the prosecution or conviction of any legal juridical person shall be contingent on the prosecution or conviction of any individual." 64. Secondly, it would also be appropriate to reproduce relevant provision of the Representation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat prabhari or state Incharge makes these expenses. He has further revealed that the National Convenor is the one who decides as to who shall head the state elections for their party. 68. Thus, on the basis of this material, it is the case of Directorate of Enforcement that Sh. Kejriwal has been intrinsically involved in the entire conspiracy of the Delhi Excise Policy Scam wherein the proceeds of crime were used in the election campaign of Aam Aadmi Party for Goa Assembly elections, and all these activities were not only done with his knowledge but also with his active collusion. 69. Therefore, suffice it to say that it is a matter of arguments and trial which may be taken up at the time of framing of charge, or any other appropriate stage. This Court notes that there is sufficient material on record with regard to Sh. Kejriwal being the National Convenor of the Aam Aadmi Party, and in view of the statement of Sh. N.D. Gupta recorded on 16.11.2023, and other sufficient material on record in light of statements of the Hawala operators and the statement of one of the Aam Aadmi Party candidates 'X' who has contested the Goa elections in the relevant year, recorded under Section 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... area managers, assembly managers and Aam Aadmi Party candidate are not being mentioned in this order since investigation is still pending, evidence is still being collected and mentioning of the statements in detail may be detrimental to the interest of the petitioner Sh. Kejriwal and the investigating agency at a later stage. 74. Thus, this Court having gone through the documents and the statements handed over to it by Directorate of Enforcement for the purpose of passing of this order to reach a conclusion as to whether Directorate of Enforcement had sufficient material in its possession for the arrest and remand of Sh. Kejriwal including the evidence regarding the money trail, and also having gone through the material as mentioned in the preceding paragraph reaches a conclusion that once the proceeds of crime which were allegedly received in the form of kickbacks through the South Group were spent on Goa Elections, which is corroborated by the statements of the approver who has allegedly given kickbacks for Goa Elections and the statements of Hawala operators and the candidate of Aam Aadmi Party itself regarding receipt of cash amount through Hawala channels and meeting the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er for increased license fee from Rs 5 lacs to Rs. 5 Cr. During this policy period, 14 LI licences were given by Excise Department, by raising the license fee for LI to Rs. 5 Cr in the entire period of operation of the Delhi Excise Policy 2021-22, the Govt. has earned Rs. 75.16 Cr from the license fee of LI (as per Excise department communication dated 11.04.2023) (RUD 34). On the other hand the excess profit earned by the wholesalers during this period is to the tune of Rs. 338 Cr. (7% additional profit earned due to increase from 5% to 12%, Rs. 581 Cr being the total profit of LI as informed by Excise department). Therefore there 1s no logical correlation between the license fee increase and the profit margin increase. Whereas this excess profit margin benefit could have been passed on to the consumers in form of lower MRP. Contrary to the claim that the policy was meant to benefit the public or the exchequer, it was rather a conspiracy to ensure massive illegal gains to a select few private players/individuals/entities." 22. The charge-sheet under the PoC Act includes offences for unlawful gains to a private person at the expense of the public exchequer. Reference in this rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meetings on different dates, including 16.03.2021, and had prepared the new excise policy, which was handed over to Vijay Nair. Thereupon, the commission/fee, which was earlier fixed at minimum of 5%, was enhanced to fixed fee of 12% payable to wholesale distributor. * The appellant - Manish Sisodia was aware that three liquor manufacturers have 85% share in the liquor market in Delhi. Out of them two manufacturers had 65% liquor share, while 14 small manufacturers had 20% market share. As per the term in the new excise policy - each manufacturer could appoint only one wholesale distributor, through whom alone the liquor would be sold. At the same time, the wholesale distributors could enter into distribution agreements with multiple manufacturers. This facilitated getting kickbacks or bribes from the wholesale distributors having substantial market share and turnover. * The licence fee payable by the wholesale distributor was a fixed amount of Rs. 5,00,00,000/- (rupees five crores only). It was not dependant on the turnover. The new policy facilitated big wholesale distributors, whose outpour towards the licence fee was fixed. The policy favoured and promoted cartelisation. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgesheet/prosecution complaints to be filed and the entire evidence being placed before it against an accused before giving a finding on a prima-facie case for the purpose of cognizance, charge or final acquittal at the appropriate stages of trial and not when the investigation against an accused has begun and chargesheet/prosecution complaint is yet to be filed. A different criteria cannot be adopted in the present case for the said purpose. 78. To summarise, the material which has been encapsulated hereinabove reveals that Sh. Arvind Kejriwal had allegedly conspired with other persons and was involved in the formulation of Delhi Excise Policy 2021-22, in the process of demanding kickbacks from the South Group, as well as in generation, use and concealment of proceeds of crime. He is allegedly involved in the offence of money laundering in two capacities. Firstly, in his personal capacity as he was involved in formulation of the Excise Policy and in demanding kickbacks. Secondly, in his capacity as the National Convenor of Aam Aadmi Party as per Section 70(1) of PMLA, for use of proceeds of crime of Rs. 45 crores in the election campaign of Aam Aadmi Party in Goa Elections 2022, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forcement, a three Judge Bench has categorically observed that the statements of witnesses/ accused are admissible in evidence in view of Section 50 of the said Act and such statements may make out a formidable case about the involvement of the accused in the commission of a serious offence of money laundering ..." 83. At the present stage of deciding the writ petition challenging arrest on the parameters of Section 19 of PMLA, when the investigation qua the petitioner is not even complete and prosecution complaint has not been filed, this Court would take into consideration the material collected by the investigating agency including statements of witnesses recorded under Section 50 of PMLA, and keep into consideration that it has been held by the Hon'ble Apex Court that statements under Section 50 of PMLA can make out a strong prima-facie case of money laundering against an accused. Can the Statement of an Approver be Brushed Aside at the Stage of Arrest and Remand of an Accused? 84. Sh. Singhvi, learned Senior Counsel for the petitioner, during the course of arguments, had questioned the credibility of the statements of approvers in the present case. It was one his arguments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conspiracy. 2. A person whose statement is recorded under Section 50 of PMLA may or may not be an accused. An approver is always an accused who is granted pardon by the concerned Trial Judge, who appears as a witness for the prosecution during trial. 3. The proceedings under Section 50 of PMLA are solely by the prosecuting agency without any interference of a Court of law. The proceedings of recording statement of approver and granting of pardon are judicial proceedings with no interference of the investigating agency. 88. This Court therefore holds that, the contents of above paragraph would lead to a conclusion that to doubt and cast aspersions regarding the manner of granting of pardon or recording statement of approver amounts to casting aspersions on the judicial process, since granting of pardon or recording of statement of approver is not the domain of investigating agency. It is a judicial process wherein a judicial officer follows the provisions of Section 164 of Cr.P.C. for recording the statement of an approver and also for granting or not granting pardon to such approver. It will be useful to mention that before recording the confession of an approver, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of us who are reading the judgment and the one who is writing it. The law on approver as well as the law on its evidentiary value has been tested by the Privy Council and the Hon'ble Supreme Court in innumerable cases, and has not been struck down to be unconstitutional till date by any Court of law. The present case is neither the first nor the last case wherein the approver's statements have been recorded or have been relied upon by the prosecution. 92. Trials have taken place, are taking place and have ended in conviction or acquittal in which approver's statements have been recorded and relied upon by prosecution. 93. Further, the question of non-supply and reliance of some earlier statements of the approvers cannot arise at this stage as the documents are not to be supplied at the stage of remand or arrest but at the appropriate stage of trial under Section 207 Cr.P.C., when as a matter of right, the accused will be entitled to all the documents and statements as per law, whether relied or unrelied. Thus, the argument that the Directorate of Enforcement has selectively relied upon the later statements of the approvers and not the earlier ones wherein the petitioner was not n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is also not reliable since it has recently been discovered that he had paid an amount of Rs. 60 crores approximately to the ruling party at Centre through electoral bonds. 97. 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. 98. This Court also wonders as to whether it can, while deciding the present petition seeking declaration of arrest of petitioner as illegal, put fetters on a witness, who is not an accused, to contest elections and question his credibility without there being any material to suggest that his statement is prima facie unreliable or untrustworthy, especially when to the contrary, the Directorate of Enforcement has collected material which corroborates the presence of the said witness Sh. Magunta S. Reddy at the office of the petitioner herein on the date and time as mentioned by the witness in his statement. 99. Whether Sh. Magunta S. Reddy or Sh. Sarath Reddy gave statements out of their own free will and the reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ften sees cases where an accused contests a case for several years on its merits but later apologises to the complainant after realising his mistake or acknowledging his wrongdoing. These instances demonstrate that individuals may evolve in their understanding of their actions and the legal consequences thereof, and these developments even otherwise are covered within the framework of the judicial process and the law of the country. III. WHETHER THE ARREST OF THE PETITIONER IS IN VIOLATION OF DIRECTIONS OF HON'BLE SUPREME COURT IN CASE OF PANKAJ BANSAL VS. UNION OF INDIA? 104. The prayer in the present petition itself mentions that the challenge to the arrest of the petitioner is on the anvil of judgment of Hon'ble Supreme Court in case of Pankaj Bansal (supra). In case of Pankaj Bansal (supra), the Hon'ble Supreme Court has inter alia held that the grounds of arrest must be communicated in writing to the person being so arrested through exercise of powers under Section 19 of PMLA, and failure to do so would render the arrest illegal. 105. Insofar as the compliance with the aforesaid directions and the mandate of Section 19 of PMLA is concerned, this Court notes that it is an ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Enforcement, in the form of statements of witnesses of hawala operators, one candidate of Aam Aadmi Party and some survey workers, area managers, assembly managers, who had worked with the Aam Aadmi Party during the Goa Election 2022, alongwith WhatsApp chats between several persons, and other material collected through raids of Income Tax, which reflect that the kickbacks which were received from South Group were utilised by Aam Aadmi Party for funding Goa Elections 2022, whose National Convenor is the present petitioner. Contention regarding there being no fresh material collected by the respondent since October, 2023 109. One of the grounds mentioned in the petition states that from October 2023 till the arrest of petitioner in March 2024, the investigating agency has not collected any new material whatsoever and the material which was relied upon to summon the petitioner for the first time in October 2023 is now being relied upon to arrest him also. 110. Having gone through the records of the case including the case file handed over by the investigating officer, this Court is of the opinion that this argument of the petitioner is misconceived as the Directorate of Enfor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uashing and setting aside of the remand order dated 22.03.2024 as the same has been passed in a patently routine and mechanical manner by the learned Special Court. 116. In the initial discussion in this judgment, this Court has already referred to the law governing remand of an accused, ordinarily, and also in cases under PMLA. In case of V. Senthil Balaji (supra), the Hon'ble Supreme Court has emphasised that the Court has a wide discretion for remanding an accused to the custody of investigating agency, and such discretion must be exercised by passing a reasoned order, including ensuring compliance of Section 19 of PMLA in cases where arrest has been made under the provisions of PMLA. Further, the Hon'ble Supreme Court had observed in case of Pankaj Bansal (supra) that the remand orders which had been challenged therein reflected total failure on part of the learned Trial Court in discharging its duty since the remand order did not even record the finding that the Court had perused the grounds of arrest and that there was proper compliance of Section 19 of PMLA, and the Trial Court therein had merely noted that the custodial interrogation of the accused was required in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Manish Sisodia, Butchibabu and Magunta Srinivas Reddy, Raghav Magunta and P. Sarath Chandra Reddy recorded U/S 164 Cr.P.C. are also on record. Further, as revealed by co-accused Vijay Nair during investigation, he lived in a government bungalow, officially alloted to a Cabinet Minister close to the bungalow of the accused and is alleged to have received kickbacks to the tune of Rs. 100 crores from the 'South group' on behalf of the accused, in exchange for grant of favours in group of M/s. Indo Spirits, even retail zones and L-1 licences. 32. Further, there are allegations of proceeds of crime of approximately Rs. 45 crores having been allegedly received as part of the bribe from the South group and used in the election campaign of AAP in Goa assembly elections 2021-22. The examination of vendors engaged for out door campaign revealed that they were made payment partly in cash as revealed through various chats between the vendors. 33. ED has further claimed that the examination of money trail reveals that the money which was transferred to Goa came from four routes through different 'Angadiyas' and the statements of various persons engaged in the elections campaign activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terrogated to identify the complete modus operandi of the offence. 120. The learned Special Court in the impugned remand order dated 22.03.2024, while allowing the request of Directorate of Enforcement and granting it six days remand of the petitioner, had observed as under: "38. Therefore, in view of the above facts and circumstances, the above named accused is hereby remanded to the custody of ED till 28.03.2024 for the purposes of his detailed and sustained interrogation with respect to his role and to unearth the remaining proceeds of crime and for confronting him with data retrieved from digital devices and material seized during investigation..." 121. In case of CBI v. Vikas Mishra (2023) 6 SCC 49, the Hon'ble Supreme Court has observed that the right of custodial interrogation / investigation is a very important right in favour of the investigating agency to unearth the truth. 122. This Court has already noted in the preceding discussion that it has gone through the entire case file produced before this Court by the Investigating officer. In the present case, the Directorate of Enforcement had sought to exercise its right to interrogate the petitioner in its custody sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al and routine manner is without any merit, considering the observations made by the learned Special Court including ensuring due compliance of Section 19 of PMLA, taking note of material available against the petitioner and the need for his custodial interrogation. 126. Though not argued before this Court on behalf of the petitioner, this Court still deems it crucial to note that though the present petition was filed challenging the first remand order dated 22.03.2024 passed by the learned Special Court, however, the remand of petitioner Sh. Kejriwal had thereafter been extended vide order dated 28.03.2024 wherein the petitioner himself had submitted before the learned Special Court that he was ready and willing to cooperate with the investigating agency and he had no objection if the custody remand was extended further. 127. Moreover, at this point of time, the petitioner is not in the custody remand of Directorate of Enforcement, rather is in judicial custody by virtue of order dated 01.04.2024 which has neither been challenged till date, nor any application has been filed seeking bail in the present case. The learned Senior counsel for the petitioner had not raised any object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pears to be motivated and issued for extraneous considerations. * The said summons have been issued at the behest of ruling party at the Centre * i.e. BJP * There are elections in five states in the month of November 2023, and the petitioner is the star campaigner of the AAP, and has official commitments. 2. 18.12.2023 (Second Summons) 21.12.2023 Reply given by petitioner on 20.12.2023 * The petitioner has to attend Vipassana Meditation course. * The timing of summons strengthens petitioner's belief that it is based on a propoganda. * The petitioner further re-iterated that it is not clear that in which capacity the petitioner is being called, and that the summons appears to be motivated. 3. 22.12.2023 (Third Summons) 03.01.2024 Reply given by petitioner on 03.01.2024 * The petitioner stated that he is held up in the Rajya Sabha Elections. It was also stated that filing of nominations will start from 03.01.2024, and voting will take place on 19.01.2024. * The petitioner further re-iterated that it is not clear that in which capacity the petitioner is being called, and that the summons appears to be motivated. It was also stated that the Directorate of Enforc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner on 16.03.2024 * The petitioner has challenged the summons given by the Directorate of Enforcement dated 16.03.2024, which is pending before the Hon'ble Delhi High Court. * The petitioner is presently occupied with his duties as Chief Minister of NCT of Delhi and also in planning, preparing, and campaigning for the General Elections of 2024. 132. This Court, therefore, notes that Sh. Kejriwal had sent a reply to every summon and the content of each reply can be summarised for easy understanding that: i. he was not informed as to why and in what capacity he was being summoned; ii. he was being summoned at the behest of ruling party at the centre i.e. BJP, to silence the voice of opposition; iii. he was busy with his schedule, being the Chief Minister of Delhi; iv. he could be questioned through video-conferencing or by sending a questionnaire. 133. In this regard, this Court is of the opinion that the Directorate of Enforcement is not required under the PMLA to inform the person to whom summons are being sent under Section 50 of PMLA as to in which capacity, the person is being called. 134. Further, this Court is of the opinion that there is no denying the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement and produce documents as may be required by virtue of sub-section (3) of Section 50 of the 2002 Act. The criticism is essentially because of sub-section (4) which provides that every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the IPC. Even so, the fact remains that Article 20(3) or for that matter Section 25 of the Evidence Act, would come into play only when the person so summoned is an accused of any offence at the relevant time and is being compelled to be a witness against himself. This position is well-established..." 137. The Hon'ble Apex Court in case of Directorate of Enforcement v. State of Tamil Nadu, SLP (Crl.) No. 1959-1963/2024, also explained the power to summon a person under Section 50 of PMLA and consequent duty of the person so summoned to respect and respond to the same. These observations are extracted hereunder: 5. Sub-section (3) of Section 50 thereof being relevant, reads as under:- "(3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation 139. Sh. Singhvi had defended the petitioner's conduct of not joining investigation pursuant to service of nine summons issued by the Directorate of Enforcement under Section 50 of PMLA, stating that there was no non-compliance by Sh. Arvind Kejriwal of the nine summons as he had responded to each and every summon by way of letters, and thus, no fault can be found with his conduct which necessitated his arrest by the Directorate of Enforcement. 140. The argument as to whether the conduct of Sh. Kejriwal of not joining investigation, despite service of nine summons, was a justifiable contributive cause necessitating his arrest, when tested in light of the judgments of the Hon'ble Supreme Court mentioned above will lead to a conclusion that any person to whom a summon is sent by a competent authority under PMLA is bound to appear before the said authority in person. In this Court's opinion, the argument that there was no non-compliance on behalf of Sh. Kejriwal since he had replied to all nine summons has to be rejected since replying to summons is not equivalent to joining investigation under Section 50 of PMLA as there is no procedure prescribed that replying to a summo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on its earlier decisions in Narmada Bai v. State of Gujarat, (2011) 5 SCC 79, Sanjiv Rajendra Bhatt v. Union of India, (2016) 1 SCC 1, E. Sivakumar v. Union of India, (2018) 7 SCC 365, and Divine Retreat Centre v. State of Kerala, (2008) 3 SCC 542. This Court observed: "30...the consistent view of this Court is that the accused cannot ask for changing the investigating agency or to do investigation in a particular manner including for court-monitored investigation." (Emphasis supplied) 144. In P. Chidambaram v. Directorate of Enforcement (2019) 9 SCC 24 also, the Hon'ble Supreme Court has held that: "66...there is a well-defined and demarcated function in the field of investigation and its subsequent adjudication. It is not the function of the court to monitor the investigation process so long as the investigation does not violate any provision of law. It must be left to the discretion of the investigating agency to decide the course of investigation. If the court is to interfere in each and every stage of the investigation and the interrogation of the accused, it would affect the normal course of investigation. It must be left to the investigating agency to proceed in its o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is for the public figure to find time and appear before the investigating agency, when so required as per the law, since the investigating agencies are also working for the State itself and are working towards public service being public servants. 76. Even the lawmakers should know that disobeying the law will get them caught up in legal consequences as envisaged under criminal law as any other common citizen without creating a special class for them as all citizens are equal in the eyes of law. This is more critical when such persons refuse to assist but rather resist the investigative process, especially the process which has not been struck down by a Court of law as illegal. 77. Undoubtedly, every such person as any other citizen of India is entitled to the protection of law, however, the law will also equally apply to him, subject to any privilege if at all, in a case applicable to him. Needless to say, the protection as per law which is available to all citizens is also available to such members and public figures. Their standing in lives or being an elected representative of the people does not create a class or elite class entitling them to different treatment being e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and the arbitrariness reflected in the manner and the timing of the arrest, and his arrest raises serious questions about 'the level playing field' in the upcoming Lok Sabha Elections 2024, for the reason of petitioner being not able to campaign for the elections. 151. As regards this argument, this Court is of the opinion that the petitioner herein has been arrested in a case of money laundering and had been presented before the learned Special Court, and the Courts have to examine his arrest and remand in context of the law concerning arrest and remand, irrespective of the timing of elections. In absence of any mala fide intention on part of Directorate of Enforcement apparent on record, accepting this argument would mean that in case the petitioner would have been arrested in October 2023 itself, his arrest would not have been challenged on ground of mala fides since elections were not declared at that point of time. In case this argument is accepted, it would amount to accepting that in case a person delays presenting himself before the investigating agency, he can take advantage of the same and later take a plea of mala fides since the time when the investigating agency a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or any interim relief in form of pre-arrest bail. 154. In such circumstances, there was nothing that barred Directorate of Enforcement within the parameters of law to have searched his residence under Section 17 of PMLA and to have arrested him under Section 19 of PMLA, moreso since he was not joining investigation since October 2023 despite being given repeated opportunities and the Directorate of Enforcement was in possession of material against him regarding which he was being requested to appear before it repeatedly. 155. Therefore, this Court is of the opinion that to hold that the timing was chosen by the investigating agency will be accepting a misplaced argument. It was the petitioner himself who had delayed the investigation to the point of time of his arrest, when the Courts had refused to grant him relief from arrest, or from joining investigation. Therefore, there is nothing before this Court to reach a conclusion that the timing of arrest was deliberate by the Directorate of Enforcement, and that conduct of Sh. Kejriwal was not responsible for a situation in which there was no other option other than to arrest to make him join the investigation. 156. The contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an assurance that they shall take appropriate steps to ensure that the trial is concluded within a period of 6-8 months. 161. In this Court's opinion, due to non-joining of investigation by the petitioner, the co-accused persons who are already in judicial custody, were also impacted since his non-joining has in a way delayed the investigation since October, 2023, and all this while, the Directorate of Enforcement was constantly trying to get the petitioner to join investigation as his name was mentioned in many statements of the witnesses including the approvers. The Directorate of Enforcement needed to question Sh. Kejriwal as the witnesses, approvers, and the record pointed out that his name and role had figured in many statements which warranted his investigation. It was Sh. Kejriwal who himself delayed joining investigation for the last about six months on one pretext or the other. This Court is also of the opinion that the other co-accused(s) who are in judicial custody even their incarceration and each day in jail was prolonged due to delay caused in joining investigation by Sh. Kejriwal, as well as causing delay in conclusion of investigation, as a consequence of which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that Judges are bound by law and not by politics. This Court also holds that judgments are driven by legal principles and not political affiliations. 167. Learned Senior Counsel appearing on behalf of the petitioner had argued that the arrest made by the Directorate of Enforcement was mala fide, and made at the time of elections, and thereby seriously compromising 'free and fair elections' and thus, also affecting 'democracy' which in turn is 'basic structure' of the Constitution of India. 168. In this Court's opinion, the Courts of law are one of the pillars of democracy. Judges, as custodians of justice, are bound by the law and not by political considerations. The independence of the judiciary not only refers to judgments independent of hidden or apparent biases but also independent of the effect of political affiliations of those who appear and are parties before them. The oath of a judge binds her to the Constitution through its words which always resound in her ears and are etched in her mind. 169. In this regard, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons or decision-making process. The role of the Court is to impartially assess the evidence presented and apply the relevant laws to determine the outcome of the case. Any attempt to introduce political considerations into the proceedings would undermine the integrity of the legal process and could compromise the pursuit of justice. Therefore, it is essential for the court to remain vigilant in ensuring that the case is adjudicated based on legal principles and not influenced by extraneous factors. 175. Though Sh. Singhvi argued that he was not arguing politics but law, however, due to complexity of facts of the case which are intertwined with the political standing of the petitioner and the impending General elections, it was a difficult task. Despite the same, this Court has to adhere to its constitutional duty of applying law to the facts of a case, howsoever complex they may be sans the political equations between parties as the issue before this Court does not concern two political parties but an investigating agency on one hand and an alleged accused who happens to be a Chief Minister on the other hand. 176. The Courts have been and are better left untouched by political in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the reasons recorded by this Court in para nos. 104 to 114, this Court is of the opinion that the arrest of petitioner Sh. Arvind Kejriwal was not in contravention with the law laid down by the Hon'ble Apex Court in case of Pankaj Bansal (supra) in respect of Section 19 of PMLA. Similarly, for the reasons recorded in para nos. 115 to 127, the impugned remand order dated 22.03.2024 passed by the learned Special Court does not suffer from any infirmity or illegality. 182. Consequently, since the arrest of the petitioner and the impugned remand order dated 22.03.2024 are held valid, the prayer seeking release of petitioner is also liable to be rejected. 183. Accordingly, the present petition stands dismissed along with pending applications. 184. It is however clarified that nothing expressed hereinabove shall tantamount to an expression of opinion on the merits of the case during trial. 185. This Court places on record its appreciation for the elaborate arguments addressed by Sh. Abhishek Manu Singhvi, learned Senior Counsel for the petitioner and Sh. S.V. Raju, learned ASG appearing for the respondent, and their respective legal teams in Court and in their respective offices, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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