Delhi HC to hear CBI's challenge to Kejriwal, Sisodia discharge in excise case on Monday

The Delhi High Court will hear on Monday the CBI's petition challenging a trial court order that discharged AAP leaders Arvind Kejriwal and Manish Sisodia in the liquor policy case. Justice Manoj Jain will take up the agency's revision petition. He will also hear applications by the two leaders seeking dismissal of that petition.

Kejriwal is the former Delhi chief minister. Sisodia is the former deputy chief minister. A trial court discharged both and 21 others on February 27, ruling that the case was without basis. The CBI has asked the high court to set that order aside.

The excise policy

The case began with Delhi's 2021-22 excise policy. A group of ministers led by Sisodia and health minister Satyendra Jain drafted the reforms in February 2021. The policy took effect on November 17, 2021.

What it changed

The policy privatised the sale of liquor in Delhi. Government-run shops were replaced by stores operated under private licences. The annual licence fee rose from Rs 8 lakh to Rs 75 lakh.

Delhi was divided into 32 zones. Each zone held around 27 outlets. Private shops could offer discounts on the maximum retail price. They could also deliver liquor until 3 am.

The policy was withdrawn after Lieutenant Governor VK Saxena recommended a CBI probe. The government returned to the old model of government-run shops from September 1, 2022.

The probes

The CBI filed its first information report on August 19, 2022. It named Sisodia and 14 others. The Enforcement Directorate registered a separate money laundering case on August 22, 2022.

The Enforcement Directorate alleged that wholesalers received a guaranteed 12 percent profit margin in exchange for a 6 percent kickback to AAP ministers. It said a South Group of Hyderabad-based businesses paid Vijay Nair, the AAP communications in charge, Rs 100 crore in advance. K Kavitha, the BRS leader, and YSRCP MP Magunta Sreenivasulu Reddy were among those the agency named.

A Comptroller and Auditor General report estimated losses of Rs 2,026 crore from the policy. The report counted Rs 890 crore from licences that were not re-tendered and Rs 941 crore from exemptions to zonal licensees.

Arrests and bail

The CBI arrested Sisodia on February 26, 2023. The ED arrested him again on March 9, 2023. He spent 530 days in custody. The Supreme Court granted him bail in both cases on August 9, 2024.

The ED arrested Kejriwal on March 21, 2024. The CBI arrested him on June 26, 2024, while he was already in custody. He spent 156 days in custody. The Supreme Court granted him bail in the CBI case on September 13, 2024.

The February 27 discharge

Special Judge Jitendra Singh of the Rouse Avenue Court discharged all 23 accused on February 27. Kejriwal, Sisodia and Kavitha were among them. The order ran 598 pages and 1,133 paragraphs.

The judge held that the case relied on hearsay evidence. He found major procedural lapses and violations of constitutional principles. He wrote that the case was "wholly unable to survive judicial scrutiny" and stood "discredited in its entirety." He said the "theory of an overarching conspiracy" was "completely dismantled."

The court also ordered a departmental inquiry against the investigating officer. It found that charges were framed in the absence of material evidence.

The CBI's challenge

The CBI filed its revision petition the same day, within four hours of the discharge order. The petition calls the order "patently illegal, perverse and suffered from errors apparent on the face."

The agency contends that the trial court conducted a mini-trial at the stage of framing charges. It says the court read the material selectively and passed unwarranted remarks against the investigators.

Kejriwal and Sisodia have asked the high court to dismiss the petition. They say the CBI filed it with "unprecedented haste" and in the "most unserious manner." They call the petition "bare-shell" and "non-specific."

Their applications state that the CBI has not referred to a single paragraph of the discharge judgment to show perversity. The trial court heard the matter for more than three months before discharging the accused, the applications note.

The ED case

The money laundering case is tied to the CBI case. The Supreme Court ruled in Vijay Madanlal Chaudhary v. Union of India (2022) that a money laundering charge cannot survive if the accused is discharged in the underlying offence. The ED case cannot continue unless the discharge order is stayed.

Kejriwal is on interim bail in the money laundering case. The Supreme Court has referred the question of the need for his arrest to a larger bench.

What comes next

Justice Manoj Jain is listed to hear the matter on August 17 and 18. On July 16, he gave Kejriwal, Sisodia and Durgesh Pathak a final two weeks to respond to the CBI's petition.

The court may rule on the dismissal applications. It may hear the revision on merits. It may grant further time. A decision on whether the discharge stands or the case is revived could follow in the coming weeks.

(With inputs from PTI)