Delhi excise policy case: Is Kejriwal not out of the woods yet?

Arvind Kejriwal

• Delhi HC stays trial court remarks against CBI in excise case
• Proceedings in money laundering case deferred by Delhi HC
• CBI challenges discharge of Kejriwal, Sisodia and 21 others

Did our AI summary help?

The legal battle over the Delhi excise policy case is far from over for Aam Aadmi Party leaders Arvind Kejriwal and Manish Sisodia.

The Delhi High Court on Monday stayed adverse remarks made by a trial court against the Central Bureau of Investigation (CBI) and its investigating officer while discharging 23 accused in the case, including Kejriwal and Sisodia. The court also issued notices to all discharged accused and directed that proceedings in the connected money laundering case be deferred until it decides the CBI’s challenge to the trial court verdict.

The order came during the hearing of a criminal revision petition filed by the CBI against the February 27 decision of a special court that had discharged all accused in the case linked to the now-scrapped Delhi Excise Policy 2021–22.

The matter is being heard by Justice Swarna Kanta Sharma.

Staying remarks against CBI

During the hearing, the High Court indicated that it would suspend the critical observations made against the investigating agency and its officer in the trial court judgment.

According to Bar and Bench, Justice Sharma said, “I will pass an order of stay with regard to whatever remarks and statements are made against the investigating agency and officer. I will ask the trial court to postpone the hearing of the PMLA case to a date after the hearing before this court.”

The High Court subsequently issued notices to all discharged accused and asked them to file responses to the CBI’s revision plea.

The court also directed the trial court to postpone proceedings in the Enforcement Directorate’s money laundering case under the Prevention of Money Laundering Act until the High Court decides the matter.

CBI challenges discharge order

The CBI approached the High Court after a special court discharged all 23 accused on February 27, ruling that the prosecution’s claims did not stand up to judicial scrutiny.

Appearing for the agency, Solicitor General Tushar Mehta said the CBI was not seeking an immediate stay on the discharge order but wanted clarity that the ruling would not affect the separate money laundering probe being conducted by the Enforcement Directorate.

According to Bar and Bench, Mehta told the court: “It's a peculiar way in which the discharge has taken place. I understand that the stay of the judgment would mean that the trial takes place. I would not ask for that, but this is a CBI case based on which the ED case is proceeding.”

Calling the case one of the most significant corruption investigations in the capital, he said: “This is one of the biggest scams in the history of the capital of this nation and in my opinion a national shame.”

Allegations of bribery and conspiracy

The CBI argued that its investigation uncovered detailed evidence of a conspiracy linked to the formulation and implementation of the Delhi excise policy.

The agency told the court that witness statements, including those recorded under Section 164 of the Criminal Procedure Code, outlined how alleged kickbacks were arranged and distributed.

According to Bar and Bench, Mehta said the statements detailed “how the conspiracy was hatched, how the bribe was paid, and to whom the bribe was paid”.

He also referred to alleged payments linked to political activity, claiming that between Rs 19 crore and Rs 100 crore in bribes were paid in return for policy favours. Of this, he said Rs 44.5 crore was transferred through hawala channels and routed to Goa to fund election campaigns.

Background of the case

The case dates back to 2022, when the CBI registered an FIR alleging irregularities in the Delhi excise policy after a complaint by Delhi Lieutenant Governor Vinai Kumar Saxena.

Investigators alleged that loopholes were deliberately created in the policy to benefit certain liquor licensees and enable cartelisation of the liquor trade in the national capital. The Enforcement Directorate later launched a parallel probe under money laundering laws.

Over the course of the investigation, 23 individuals were named as accused. Several political leaders, including Kejriwal and Sisodia, spent months in custody before securing relief from the Supreme Court of India after lower courts declined bail.

However, the special court presided over by Judge Jitendra Singh discharged all the accused, holding that the prosecution’s theory relied heavily on approver statements and speculative inferences.

In its revision plea, the CBI argued that the discharge order was legally flawed and based on a selective reading of the evidence. The agency also criticised the trial court’s direction for departmental action against the investigating officer.

During the hearing, Mehta described the ruling as “an order of acquittal without trial”.

“This is turning criminal law on its head,” he argued, adding that approver testimony does not require corroboration at the stage of framing charges and should be tested during trial through cross-examination.

With the High Court now examining the CBI’s challenge, the legal battle in the excise policy case is set to continue, leaving the future of the trial court’s discharge order uncertain.