ARVIND KEJRIWAL vs DIRECTORATE OF ENFORCEMENT

2024-04-09 Information

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 03.04.2024
Decided on: 09.04.2024
+ W.P.(CRL) 985/2024 & CRL.M.A. 9427/2024
ARVIND KEJRIWAL ….. Petitioner
Through: Dr. Abhishek Manu Singhvi, Mr. Vikram Chaudhari, and Mr. Amit Desai, Senior Advocates with Mr. Vivek Jain, Mohd. Irshad, Mr. Rajat Bhardwaj, Mr. Karan Sharma, Mr. Rajat Jain, Mr. Mohit Siwach, Mr. Kaustubh Khanna, Mr. Rishikesh Kumar, Mr. Shailesh Chauhan, Mr. Sadiq Noor, Mr. Mehul Prasad, Ms. Priyanka Sarda, Ms. Sheenu Priya and Ms. Princy Sharma, Advocates.

versus
DIRECTORATE OF ENFORCEMENT ….. Respondent
Through: Mr. S.V. Raju, learned ASG with Mr. Zoheb Hossain, Special Counsel for ED, Mr. Annam Venkatesh, Mr. Arkaj Kumar, Mr. Vivek Gurnani, Mr. Hitarth Raja, Ms. Abhipriya Rai, Mr. Kartik Sabharwal, Mr. Vivek Gaurav, Mr. Agrimaa Singh, Mr. Kanishk Maurya and Mr. Ritumbhara Garg, Advocates for ED along with Ms. Bhanupriya Meena, DD, Mr. Gaurav Saini, ALA and Mr. S.K. Sharma, IO for ED.

CORAM:
HON’BLE MS. JUSTICE SWARANA KANTA SHARMA
J U D G M E N T
INDEX TO THE JUDGMENT
EXORDIUM 4
FACTUAL BACKGROUND 5
SUBMISSIONS ON BEHALF OF SH. ARVIND KEJRIWAL 8
SUBMISSIONS ON BEHALF OF THE DIRECTORATE OF ENFORCEMENT 15
ISSUES IN QUESTION 22
RELEVANT LAW UNDER PMLA TO ADJUDICATE THE ISSUES IN QUESTION 23
The Power To Arrest Under PMLA 23
i. Section 19 of PMLA 23
ii. Ingredients of Section 19 of PMLA 23
iii. Judicial Precedents Qua Exercise of Power Under Section 19 of
PMLA 24
JURISPRUDENCE OF REMAND UNDER CRIMINAL LAW 26
Power of Remand under Section 167 of Cr.P.C. 26
Remand in cases under PMLA 30
ANALYSIS & FINDINGS 34
I. MATERIAL AGAINST THE PETITIONER COLLECTED BY
THE DIRECTORATE OF ENFORCEMENT 34
The Role of Petitioner in Formulation of Delhi Excise Policy 2021-22 34
The Role of Petitioner in Demanding Kickbacks & Petitioners Meetings with the South Liquor Lobby 36
Petitioners Association with Co-accused Vijay Nair 39
Role of Petitioner, as National Convenor of Aam Aadmi Party, in Utilisation of Proceeds of Crime 40
Applicability of Section 70 of PMLA 44
Proceeds of Crime 49
II. ARGUMENT REGARDING STATEMENTS OF WITNESSES AND APPROVERS BEING UNRELIABLE AND UNTRUSTWORTHY 56
Significance of a Statement Recorded under Section 50 of PMLA 56
Can the Statement of an Approver be Brushed Aside at the Stage of Arrest and Remand of an Accused? 58
III. WHETHER THE ARREST OF THE PETITIONER IS IN VIOLATION OF DIRECTIONS OF HONBLE SUPREME COURT IN CASE OF PANKAJ BANSAL VS. UNION OF INDIA? 67
Contention regarding there being no fresh material collected by the respondent since October, 2023 69
IV. WHETHER THE REMAND ORDER DATED 22.03.2024 HAS BEEN PASSED IN MECHANICAL AND ROUTINE MANNER? 71
Why was Remand Sought by the Directorate of Enforcement and Remand Granted by the Special Court in this Case? 74
V. TIMING OF ARREST VIS-A-VIS THE CONDUCT OF PETITIONER OF NOT JOINING INVESTIGATION FOR SIX MONTHS DESPITE SERVICE OF 09 SUMMONS 78
Conduct of the Petitioner 79
Replying to Summons issued under Section 50 of PMLA cannot amount to Joining Investigation 88
Whether Petitioner was entitled to Special Privileges for the purpose of complying with Summons issued under Section 50 of PMLA? 89
Timing of Arrest and the Argument of Level Playing Field 94
Was there any Necessity to Arrest the Petitioner? 97
i. Impact of Non-joining of Investigation by the Petitioner on the
Trial of Co-accused Persons 98
ii. Not Joining Investigation as a Contributory Factor 99
CONCLUSION 101
The State is static, the Governments are at the will of the People. 101
State is an Entity and Not Confined to a Person. 102
Courts are concerned with Constitutional Morality and not Political
Morality 104
The Decision 105

SWARANA KANTA SHARMA, J.
EXORDIUM
1. On 21.03.2024, a search was conducted by the Directorate of Enforcement at the official 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 remanded to judicial custody by the learned Special Court vide order dated 01.04.2024 till 15.04.2024.
3. The present petition under Article 226 and 227 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.) challenges the arrest of the petitioner by Directorate of Enforcement on the ground that the arrest was in violation of Section 19 of Prevention of Money Laundering Act, 2002 (PMLA) and it has been prayed that the arrest order dated 21.03.2024 and the proceedings pursuant thereto be declared illegal, non-est, arbitrary and unconstitutional. Further, it is prayed that the order vide which the petitioner was remanded to custody of Directorate of Enforcement be also quashed on the grounds of it being passed in a mechanical and patently routine manner.
4. Before proceeding further, this Court would clarify at this stage itself that the present petition is not an application seeking grant of bail, but release on ground of arrest of petitioner being illegal and in violation of principles laid down by the Honble Supreme Court in case of Pankaj Bansal v. Union of India 2023 SCC OnLine SC 1244.

FACTUAL BACKGROUND
5. The brief background of the case is that the present case has been registered by the Directorate of Enforcement in relation to the predicate offence case registered by the Central Bureau of Investigation (CBI). On 17.08.2022, case bearing RC No. 0032022A0053 had been registered by the CBI for offences punishable under Section 120B read with Section 447A of the Indian Penal Code, 1860 (IPC) and Section 7 of Prevention of Corruption Act, 1988, (PC Act) on the basis of a complaint dated 20.07.2022 made by the Lieutenant Governor, GNCTD and the directions of competent authority conveyed by Director, Ministry of Home Affairs (MHA), Government of India, through letter dated 22.07.2022 and also based on some sourced information, in relation to the irregularities committed in framing and implementation of excise policy of GNCTD for the year 2021-2022. The CBI had filed a chargesheet dated 25.11.2022, cognizance of which was taken by the learned Special Court on 15.12.2022. Thereafter, on 25.04.2023 and 08.07.2023, two supplementary chargesheets had also been filed before the learned Special Court respectively, against a total of 16 accused persons. It is the case of CBI that while the excise policy 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-l 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 policy, i.e. liquor manufacturers, wholesalers and retailers, by violating provisions and the spirit of liquor policy, and all the conspirators had played an active role to achieve the illegal objectives of the said criminal conspiracy, result in huge losses to the Government exchequer and undue pecuniary benefits to the public servants and other accused involved in the said conspiracy.
6. The present ECIR No. ECIR/HIU-II/14/2022 was registered, as offences under Section 120B and Section 7 of the PC Act are scheduled offences under PMLA. The first prosecution complaint by the Directorate of Enforcement was filed on 26.11.2022 and the cognizance was taken by the learned Special Court on 20.12.2022. Thereafter, Directorate of Enforcement has filed five supplementary prosecution complaints before the learned Special Court.
7. The petitioner Sh. Kejriwal was first summoned under Section 50 of PMLA on 30.10.2023, to appear before the respondent on 02.11.2023. Total nine summons were issued to the petitioner during the period between October 2023 to March 2024, however, the petitioner had failed to join the investigation. The petitioner Sh. Kejriwal was arrested in relation to the present case on 21.03.2024 and was produced before the learned Special Court on 22.03.2024, whereby, he was remanded to custody of Directorate of Enforcement for a period of 6 days and it was then extended by four days vide order dated 28.03.2024.
8. The petitioner is before this Court challenging his arrest in the present case and assailing the order dated 22.03.2024 passed by the learned Special Court vide which he was remanded to custody of Directorate of Enforcement for a period of 6 days.

SUBMISSIONS ON BEHALF OF SH. ARVIND KEJRIWAL
9. Sh. Abhishek Manu Singhvi, learned Senior Counsel appearing on behalf of the petitioner argues that the timing of the arrest of the petitioner i.e., Sh. Arvind Kejriwal who is the sitting Chief Minister of Delhi, straightaway affects the level playing field in the upcoming Lok Sabha Elections 2024. Sh. Singhvi further contends that level playing field is just not a phrase of words but rather it has three vital components. Firstly, it is part of free and fair elections, secondly elections are part of democracy and thirdly democracy in turn is a part of basic structure of the Constitution of India. Thus, the timing of the arrest of the petitioner 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 30.10.2024 and the last summon was sent on 16.03.2024. The petitioner herein had preferred a Writ Petition before this Court and that the Honble Division bench of this Court did not grant ad-interim order staying all the summons under Section 50 of the PMLA sent by the Directorate of Enforcement to the petitioner in relation to the said ECIR, on 21.03.2024. However, the Directorate of Enforcement, on the very same day had arrested the petitioner at about 09:05 PM under Section 19 of PMLA without any justification. It is argued by Sh. Singhvi that at the stage of issuance of summons under Section 50 of PMLA, there existed no formal document indicative of likelihood of involvement of the petitioner herein as an accused of offence of money laundering as held in case of Vijay Madanlal Choudhary v. Union of India 2022 SCC Online SC 929. It is contended that it is only the information and evidence collected during the inquiry under Section 50 of PMLA, which may disclose commission of offence of money laundering and the involvement of the person so summoned under Section 50 of PMLA. In the present case, it is argued that the Directorate of Enforcement did not even collect any evidence at the stage of issuance of summons under Section 50 of PMLA which could have necessitated a formal accusation against the petitioner, let alone an arrest under Section 19 of PMLA. It is further argued there was no attempt to record statement of the petitioner under Section 50 of PMLA even at the residence of the petitioner. Sh. Singhvi states that this is the second unique feature of the present case.
11. Sh. Singhvi, learned Senior Counsel for the petitioner further contends that the allegations that Sh. Kejriwal did not respond to the summons of the Directorate of Enforcement is red herring, as Sh. Kejriwal has replied to all the nine summons issued by the Directorate of Enforcement. It is stated that the red herring that the Directorate of Enforcement has sent summons so many times, is no answer to saying that the Directorate of Enforcement has material to arrest Sh. Kejriwal. Further reliance has been placed on Pankaj Bansal v. Union of India 2023 SCC OnLine SC 1244, wherein the test of arrest has been kept at a higher pedestal as the investigating agency has to satisfy the threshold of necessity to arrest under Section 19 of PMLA, which has not been met in the present case. 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. Singhiv. 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 Honble Apex Court had held that to effect an arrest, an officer authorized has to assess and evaluate the materials in his possession and through such materials, he is expected to form reasons to believe that a person has been guilty of an offence under PMLA. However, in the present case, this exercise will be done after the arrest of Sh. Kejirwal which is violative of his fundamental rights.
13. Learned Senior Counsel for the petitioner vehemently contends that the statements which are being relied upon by the Directorate of Enforcement are of negligible evidentiary value to justify an arrest of Sitting Chief Minister of the Capital of India under Section 19 of PMLA, as it is trite law that statements of co-accused cannot be relied upon against Sh. Kejriwal as the same cannot be a starting point for ascertainment of guilt of an accused. In this regard, reliance has been placed on Surinder Kumar Khanna v. Directorate of Revenue Intelligence (2018) 8 SCC 271, Haricharan Kurmi v. State of Bihar AIR 1964 SC 1184 and on a very recent judgment by Co-ordinate Bench of this Court in the case of Sanjay Jain v. Directorate of Enforcement 2024 DHC 1900. The other statements on which the Directorate of Enforcement has relied upon are of the approvers who have made many contradictory statements earlier. Sh. Singhvi further submits that the statements relied upon by the Directorate of Enforcements such as of Mr. Raghav Magunta, who is son of an MP from Telugu Desam Party which is member of NDA alliance in the upcoming general elections (the ruling party) i.e. Sh. Magunta Srinivasulu Reddy, are not credible since the statements made by Sh. Raghav Magunta before his arrest by the Directorate of Enforcement does not implicate Sh. Kejriwal and out of total eight statements made by Raghav Magunta, no allegations were made in six such statements implicating Sh. Kejriwal. However, astonishingly when Raghav Magunta was granted bail on 18.07.2023 which was not opposed by the Directorate of Enforcement under Section 45 of the PMLA, he had made vague and blatant statements implicating Sh. Kejriwal. It is further argued that another astonishing fact which has been recently revealed is that Sh. Sarath Reddy has donated to the Ruling Party at Center via Electoral Bonds which is also an alarming concern. Further, Sh. Sarath Reddy was coerced to give a statement contrary to his earlier statements and thus by doing so, he had secured no objection of the Directorate of Enforcement 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 dont, 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 phrases like Jaichand and Trojan Horses. The history looks very harshly at these Jaichands and Trojan horses as they gave daga (betrayal) and it cannot be relied upon by the Directorate of Enforcement to suffice material in possession as per Section 19 of the PMLA.
15. It is also argued by Sh. Singhvi that the grounds of arrest given to Sh. Kejriwal alleged that Sh. Kejriwal had generated proceeds of crime to the tune of Rs 45 crores, but interestingly, there is no material on record to show the involvement of Sh. Kejriwal in the process or activity related to proceeds of crime, be it one of concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so. Moreover, there is no proof that Aam Aadmi Party had received any funds from South Group which was then utilised in Goa Elections. It is argued that this similar ground was raised during the bail application of Sh. Manish Sisodia and the same had been rejected by the Honble Supreme Court in Para 15 of its judgment i.e. Manish Sisodia v. CBI & Ors. 2023 INSC 956 while holding that there is no specific allegation of involvement of Sh. Manish Sisodia in the transfer of Rs. 45 crores, and likewise there is no specific allegations or act which has been alleged by the Directorate of Enforcement against Sh. Kejriwal and therefore, there is no offence which is made out under Section 3 of PMLA. Further, the allegation in grounds of arrest relating to the role of petitioner in policy formulation does not in any manner show involvement of the petitioner in any crime much less a crime of money laundering. It is stated that the Excise Policy was made in a transparent manner after deliberation with various secretaries/officers of Excise, Planning, Finance & Law department and thereafter approved by ministers and Honble LG of NCT of Delhi. It was an economic policy decision and not subject to review. The said allegation also does not relate to the Directorate of Enforcements investigation and goes beyond the remit of them investigating it.
16. Sh. Singhvi, learned Senior Counsel further argues that Petitioner cannot be held vicariously liable for a specific offence under Section 3 of PMLA by virtue of Section 70 of PMLA, which only relates to companies. It is further argued that Aam Aadmi Party which is a political party under Section 2(f) of 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 remand orders passed by the learned Special Court i.e. order dated 22.03.2024 whereby the petitioner was remanded to six days custody of the Directorate of Enforcement, the second one, i.e., order dated 28.03.2024, whereby the petitioner was further remanded to four days of custody of the Directorate of Enforcement, and thirdly order dated 01.04.2024, whereby the petitioner was remanded to Judicial Custody till 15.04.2024. In this regard, it is submitted that at present his custody is pursuant to the third remand order dated 01.04.2024, which has not been challenged before this Court and even if that order had been challenged, it would be invalid as per Para 6 of order dated 01.04.2024 whereby the petitioner and his counsel before the learned Special Court has categorically stated that they did not oppose the prayer of the Directorate of Enforcement seeking judicial custody remand of the petitioner. Therefore, the present case is a clear case of acquiescence and waiver. He argues that on this very ground alone, the petition ought to be rejected, since, even if the earlier orders are bad in law, unless the subsequent orders are set aside, the petitioner is not entitled to any relief. Sh. S.V. Raju, learned ASG further argues that the remand order under challenge i.e., order dated 22.03.2024 as well as the subsequent remand orders dated 28.03.2024, and 01.04.2024 challenged are reasoned orders.
19. Sh. S.V. Raju, learned ASG appearing on behalf of Directorate of Enforcement argues that the first prayer in the main petition is akin to habeas corpus and that the present petition is in fact a bail application in the guise of a writ petition, and has been filed by the petitioner to overcome the rigours of Section 45 of PMLA. In support of the said argument, learned ASG places reliance on the decision of Honble Supreme Court in Serious Fraud Investigation Office v. Rahul Modi (2019) 5 SCC 266, and State of Maharashtra v. Tasneem Rizwan Siddiquee (2018) 9 SCC 745.
20. Sh. S.V. Raju further contends the fact that the offence of money laundering has taken place is beyond any doubt as the learned Special Court has taken cognizance in all five prosecution complaints and in those cognizance orders there are categorical findings that an offence of money laundering has prima-facie been committed.
21. Sh. S.V. Raju, learned ASG further argues that all the procedural requirements 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 Honble 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 learned adjudicating authority of PMLA following due procedure as prescribed under law vide letter dated 22.03.2024, and an acknowledgment in this regard was also received. It is also submitted that the petitioner was produced before the learned Special Court, on 22.03.2024 at 2:00 P.M. i.e. well within 24 hours of the arrest. Further, the copy of the remand application was duly given to the petitioner and that his team of lawyers was present before the learned Special Court to oppose the remand application. Therefore, it is evident from the very record that the Directorate of Enforcement had complied with all the necessary conditions as per law and the judgment of Honble Supreme Court in Pankaj Bansals case (supra).
22. Sh. S.V. Raju, learned ASG appearing on behalf of Directorate of Enforcement further submits that the Directorate of Enforcement has sufficient reasons to believe on the basis of material in their possession which demonstrated that the applicant is guilty of the offence of money laundering as the petitioner herein is the kingpin and key conspirator of the Delhi Excise Policy Scam in collusion with other co-accused persons. The petitioner was involved in the conspiracy of formulation of the Excise Policy 2021-22 to favour certain persons and is also involved in demanding kickbacks from liquor businessmen in exchange of favours. The same is evident from the statement of Sh. C. Arvind dated 07.12.2022 recorded under Section 50 of PMLA (the then Secretary of Sh. Manish Sisodia i.e., other co-accused persons), statement of Sh. Buchi Babu dated 23.02.2023, statement of Sh. Magunta S. Reddy dated 16.07.2023 recorded under Section 50 of PMLA and his statement dated 17.07.2023 recorded under Section 164 of Cr.P.C, statement of Sh. Raghav Reddy dated 26.07.2023 recorded under Section 50 of PMLA and his statement dated 27.07.2023 recorded under Section 164 of Cr.P.C and the statement of Sh. Sarath Reddy dated 25.04.2023 recorded under Section 50 of PMLA. It is argued that the petitioner was actively involved in the use of proceeds of crime which was generated through the formulation of the Excise Policy, in the Goa Election campaign of the Aam Aadmi Party of which the present petitioner is the Convenor and the ultimate decision maker.
23. Sh. S.V. Raju, also argues that as per investigation conducted so far, the proceeds of crime of about approximately 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 approvers cannot be gone into in the present writ petition as it is well settled law that the question of credibility and reliability of witnesses can only be tested during the trial. Reliance in this regard has been placed on the decision of the Honble Supreme Court in Satish Jaggi v. State of Chhattisgarh & Ors. (2007) 11 SCC 195.
25. Sh. S.V. Raju vehemently argues that the petitioner was given multiple opportunities to cooperate with the investigation being conducted by the Directorate of Enforcement. In the present case, a total of nine (09) summons dated 30.01.2023, 18.12.2023, 22.12.2023, 12.01.2024, 31.01.2024, 14.02.2024, 21.02.2024, 26.02.2024 and 16.03.2024 under Section 50 PMLA had been sent to the petitioner but he chose to intentionally disobey the said summons and did not join the investigation. It is also argued that it is trite law that an accused cannot dictate the manner in which investigation has to be conducted by the investigating agency. Therefore, the argument that the petitioner could have been questioned through Video Conferencing for the purpose of recording statement under Section 50 PMLA, should be rejected on the very face of it.
26. It is also argued that the most important point of consideration at this stage is that Aam Aadmi Party is the major beneficiary of the proceeds of crime generated from the Delhi Excise Policy 2021-22. It is stated that part of the proceeds of crime to the tune of cash of Rs. 45 crores approx. has been utilised in the election campaign of Aam Aadmi Party in Goa Assembly Elections, 2022. It is argued that in this manner, Aam Aadmi Party has committed the offence of money laundering through the petitioner herein and the offences thus are squarely covered by Section 70 PMLA. To support the said contention, it is stated by learned ASG that Aam Aadmi Party is a political party comprising of association of individuals registered under Section 29-A of the Representation of People Act, 1951. As under Section 29-A of the Act, only an association or body of individual citizens of India can make an application for registration as a political party and since APP is an association of such individuals it got itself registered under the RP Act. It is stated that the petitioner is liable to be prosecuted under Section 70 PMLA also as he is the National Convenor of Aam Aadmi Party and a member of Political Affairs Committee & 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 that the petition is liable to be dismissed.

ISSUES IN QUESTION
29. The issues for consideration in the present case are as under:
(i) Whether the arrest of petitioner is illegal and arbitrary and whether the arrest order dated 21.03.2024, and the consequent remand order dated 22.03.2023 passed by learned Sessions Court, are in violation of the decision of Honble Apex Court in case of Pankaj Bansal (supra) and thus, liable to be set aside?
(ii) Whether the petitioner is entitled to be released from custody in view of his arrest and remand order being illegal ?

RELEVANT LAW UNDER PMLA TO ADJUDICATE THE ISSUES IN QUESTION
The Power To Arrest Under PMLA
i. Section 19 of PMLA
30. Since the present petition challenges the arrest of the petitioner, it will be essential to consider the mandate of Section 19 of PMLA. The relevant portion of Section 19 reads as under:
19. Power to arrest.
(1) If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession, reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.

ii. Ingredients of Section 19 of PMLA
31. The following ingredients can be culled out from the reading of Section 19(1) of PMLA:
i. The officer concerned must have some material in his possession
ii. On the basis of such material, the officer should have a reason to believe that any person has been guilty of an offence punishable under PMLA
iii. Such reasons should be recorded in writing by the officer concerned
iv. The person so arrested should be informed of the grounds of arrest

32. The compliance of these conditions is mandatory, which is also fortified by the explanation added to Section 45 of PMLA, which provides as under:

45. Offences to be cognizable and non-bailable.
***
Explanation. For the removal of doubts, it is clarified that the expression “Offences to be cognizable and non-bailable” shall mean and shall be deemed to have always meant that all offences under this Act shall be cognizable offences and non-bailable offences notwithstanding anything to the contrary contained 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 fulfillment 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 Honble 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. Subsection (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 for inbuilt safeguards to be adhered to by the authorised officers, such as of recording reasons for the belief regarding the involvement of person in the offence of money-laundering. That has to be recorded in writing and while effecting arrest of the person, the grounds for such arrest are informed to that person. Further, the authorised officer has to forward a copy of the order, along with the material in his possession, in a sealed cover to the Adjudicating Authority, who in turn is obliged to preserve the same for the prescribed period as per the Rules

34. Further, in case of V. Senthil Balaji v. The State represented by Deputy Director 2023 SCC OnLine SC 934, the Honble Apex Court has explained the mandate of Section 19 of PMLA by way of following observations:
To effect an arrest, an officer authorised has to assess and evaluate the materials in his possession. Through such materials, he is expected to form a reason to believe that a person has been guilty of an offence punishable under the PMLA, 2002. Thereafter, he is at liberty to arrest, while performing his mandatory duty of recording the reasons. The said exercise has to be followed by way of an information being served on the arrestee of the grounds of arrest. Any non-compliance of the mandate of Section 19(1) of the PMLA, 2002 would vitiate the very arrest itself. Under sub-section (2), the Authorised Officer shall immediately, after the arrest, forward a copy of the order as mandated under sub-section (1) together with the materials in his custody, forming the basis of his belief, to the Adjudicating Authority, in a sealed envelope. Needless to state, compliance of sub-section (2) is also a solemn function of the arresting authority which brooks no exception.

35. In case of Pankaj Bansal (supra), the Honble Apex Court while reiterating the principles laid down in case of Vijay Madanlal Choudhary (supra) has made the following observations on the scope of Section 19 of PMLA:
14. In Vijay Madanlal Choudhary (supra), It was noted that Section 19 of the Act of 2002 prescribes the manner in which the arrest of a person involved in money laundering can be effected. It was observed that such power was vested in high-ranking officials and that apart, Section 19 of the Act of 2002 provided inbuilt safeguards to be adhered to by the authorized officers, such as, of recording reasons 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 information is wellfounded, the officer in charge of the police station or the police officer making the investigation, if he is not below the rank of sub-inspector, shall forthwith transmit to the nearest Judicial Magistrate a copy of the entries in the diary hereinafter prescribed relating to the case, and shall at the same time forward the accused to such Magistrate.
(2) The Magistrate to whom an accused person is forwarded under this section may, whether he has or has not jurisdiction to try the case, from time to time, authorise the detention of the accused in such custody as such Magistrate thinks fit, for a term not exceeding fifteen days in the whole; and if he has no jurisdiction to try the case or commit it for trial, and considers further detention unnecessary, he may order the accused to be forwarded to a Magistrate having such jurisdiction:
Provided that
(a) the Magistrate may authorise the detention of the accused person, otherwise than in the custody of the police, beyond the period of fifteen days, if he is satisfied that adequate grounds exist for doing so, but no Magistrate shall authorise the detention of the accused person in custody under this paragraph for a total period exceeding,
(i) ninety days, where the investigation relates to an offence punishable with death, imprisonment for life or imprisonment for a term of not less than ten years;
(ii) sixty days, where the investigation relates to any other offence, and, on the expiry of the said period of ninety days, or sixty days, as the case may be, the accused person shall be released on bail if he is prepared to and does furnish bail, and every person released on bail under this sub-section shall be deemed to be so released under the provisions of Chapter XXXIII for the purposes of that Chapter;
(b) no Magistrate shall authorise detention of the accused in custody of the police under this section unless the accused is produced before him in person for the first time and subsequently every time till the accused remains in the custody of the police, but the Magistrate may extend further detention in judicial custody on production of the accused either in person or through the medium of electronic video linkage;
(c) no Magistrate of the second class, not specially empowered in this behalf by the High Court, shall authorise detention in the custody of the police.
Explanation I.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, which is to ensure an expeditious investigation and a fair trial, and to set down a rationalised procedure that protects the interests of the indigent sections of society. This is also another limb of Article 21. Presumption of innocence is also inbuilt in this provision. An investigating agency has to expedite the process of investigation as a suspect is languishing under incarceration. Thus, a duty is enjoined upon the agency to complete the investigation within the time prescribed and a failure would enable the release of the accused. The right enshrined is an absolute and indefeasible one, inuring to the benefit of suspect.

40. In Satyajit Ballubhai Desai v. State of Gujarat (2014) 14 SCC 434, the Hon’ble Apex Court had explained the role of a Magistrate while passing an order under Section 167(2) of Cr.P.C. by way of following observations:
9. Having considered and deliberated over the issue involved herein in the light of the legal position and existing facts of the case, we find substance in the plea raised on behalf of the appellants that the grant of order for police remand should be an exception and not a rule and for that the investigating agency is required to make out a strong case and must satisfy the learned Magistrate that without the police custody it would be impossible for the police authorities to undertake further investigation and only in that event police custody would be justified as the authorities specially at the magisterial level would do well to remind themselves that detention in police custody is generally disfavoured by law. The provisions of law lay down that such detention/police remand can be allowed only in special circumstances granted by a Magistrate for reasons judicially scrutinised and for such limited purposes only as the necessities of the case may require. The scheme of Section 167 of the Criminal Procedure Code, 1973 is unambiguous in this regard and is intended to protect the accused from the methods which may be adopted by some overzealous and unscrupulous police officers which at times may be at the instance of an interested party also. But it is also equally true that the police custody although is not the be-all and end-all of the whole investigation, yet it is one of its primary requisites particularly in the investigation of serious and heinous crimes. The legislature also noticed this and, has therefore, 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 accuseds 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 investigating agency or to any other entity in a given case.
Remand in cases under PMLA
42. In case of Vijay Madanlal Choudhary (supra), the Honble Apex Court had observed that it is the obligation of the officer concerned to produce the arrestee before the Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be, within 24 hours and such production is to comply with the requirement of Section 167 of Cr.P.C. The relevant portion of the decision is extracted hereunder:

“322. …Not only that, it is also the obligation of the authorised officer to produce the person so arrested before the Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be, within twenty-four hours. This production is also to comply with the requirement of Section 167 of the 1973 Code. There is nothing in Section 19, which is contrary to the requirement of production under Section 167 of the 1973 Code, but being an express statutory requirement under the 2002 Act in terms of Section 19(3), it has to be complied by the authorised officer.

43. Similarly, in V. Senthil Balaji (supra), the Honble Apex Court has analysed the interplay between Section 167 of Cr.P.C. and Section 19 of PMLA and has held that the Magistrate or Court concerned is duty bound to apply its mind to ensure that provisions of Section 19 have been complied with by the prosecuting agency. The relevant observations in this regard are as under:
INTERPLAY BETWEEN SECTION 19 OF THE PREVENTION OF MONEY LAUNDERING ACT, 2002 AND SECTION 167 OF THE CODE OF CRIMINAL PROCEDURE, 1973:
67.We have already touched upon the mandatory function that a Magistrate is to undertake while dealing with a case of remand. He is expected to do a balancing act. As a matter of rule, the investigation is to be completed within 24 hours and therefore it is for the investigating agency concerned to satisfy the Magistrate with adequate material on the need for its custody, be it police or otherwise. This important factor is to be kept in mind by him while passing the judicial order. We reiterate that Section 19 of the PMLA, 2002, supplemented by Section 167 of the CrPC,1973 does provide adequate safeguards to an arrested person. If Section 167 of the CrPC, 1973 is not applicable, then there is no role for the Magistrate either to remand or otherwise.
68.Such a Magistrate has a distinct role 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 Section 167 of the CrPC, 1973, as discussed, would facilitate the application of the latter after the conclusion of the former. One cannot say that Section 167(2) of the CrPC, 1973 is applicable to an authority when it comes to arrest but not to custody.
70.An external aid would be required only when there is a lacuna, especially when the provisions are pari materia. We are conscious of the fact that in certain statutes like Foreign Exchange Regulation Act, 1973 and the Customs Act, 1962, etc. there is an express provision which confers the powers of police officers upon the authorised officers for the purpose of arrest and then custody to the police. That does not mean that there is no power under the PMLA, 2002 read with the CrPC, 1973 to the Authorised Officer to seek custody. There is a fallacy in the said argument. One cannot apply Section 167(2) of the CrPC, 1973 in piecemeal. There cannot be an application of the provision only for an arrest but not for custody. Such an argument is also dangerous from the point of view of an arrestee as the benefit conferred under the proviso to Section 167(2) of the CrPC, 1973 will not be available. Vijay Madanlal Choudhary (supra):
88. …This production is also to comply with the requirement of Section 167 of the 1973 Code. There is nothing in Section 19, which is contrary to the requirement of production under Section 167 of the 1973 Code, but being an express statutory requirement under the 2002 Act in terms of Section 19(3), it has to be complied by the authorised officer. …

44. Further, in Pankaj Bansal (supra), the Hon’ble Apex Court after taking note of its earlier decisions in cases of Vijay Madanlal Choudhary (supra) and V. Senthil Balaji (supra), and while dealing with the issue as to whether the remand order passed by the Sessions Court therein was liable to be set aside, had observed as under:
17. In terms of Section 19(3) of the Act of 2002 and the law laid down in the above decisions, Section 167 Cr. P.C. would necessarily have to be complied with once an arrest is made under Section 19 of the Act of 2002. The Court seized of the exercise under Section 167 Cr.P.C. of remanding the person arrested by the ED under Section 19(1) of the Act of 2002 has a duty to verify and ensure that the conditions in Section 19 are duly satisfied and that the arrest is valid and lawful. In the event the Court 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 in his individual capacity or as convenor of a political party.
46. In this regard, it will be crucial to refer to Section 19 of PMLA. Section 19 of PMLA provides that the officer arresting an individual must have some material in his possession on the basis of which the officer should have a reason to believe that the person being so arrested is guilty of an offence punishable under PMLA. It will therefore be crucial to take note of and examine the material which was in possession of the officer concerned in the present case on the basis of which Sh. Kejriwal was arrested.
The Role of Petitioner in Formulation of Delhi Excise Policy 2021-22
47. The case of the Directorate of Enforcement is that Sh. Arvind Kejriwal was allegedly actively involved in the drafting of the 2021-22 Excise Policy, which aimed to favour the South Group, and this collaboration involved Sh. Vijay Nair, Sh. Manish Sisodia, and the representatives from the South Group.
A. The Directorate of Enforcement has relied upon the statement of Sh. C. Arvind, former Secretary to Sh. Manish Sisodia, who had revealed on 07.12.2022 that in mid-March 2021, Sh. Sisodia had summoned him to Sh. Arvind Kejriwals official residence. There, along with Sh. Satyendar Jain, they had presented a 30-page draft document to him, stating it was the foundation for the final Group of Ministers (GoM) report. The document proposed granting wholesale licences to manufacturers agents, allowing one wholesaler licensee to distribute for multiple manufacturers, and fixing the wholesale profit margin at 12%. These points were not discussed in prior GoM meetings and were first seen in the document received at the petitioners residence. Sh. C. Arvind had complied with instructions, drafting the initial version based on this document, which was later finalised by the GoM and presented to the Cabinet on 22.03.2021.
B. Sh. Buchi Babu, CA of Ms. K. Kavitha, had given a statement on 23.02.2023 that Sh. Arun Pillai had collaborated with Sh. Vijay Nair on policy formulation, with Sh. Nair offering provisions favouring Ms. Kavitha. It was stated that Sh. Nair used to work for Sh. Arvind Kejriwal i.e. the petitioner herein, and Sh. Manish Sisodia. WhatsApp messages retrieved from Sh. Buchi Babus phone revealed certain Excise Policy provisions, two days before its finalisation by the GoM and Council of Ministers. Sh. 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 & Petitioners 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 the same. Subsequently, Sh. Magunta Reddy had met Ms. K. Kavitha on 20.03.2021, when she had asked for Rs. 50 crore. Due to his MP duties, Sh. Magunta Reddy had delegated negotiations to his son Sh. Raghav Magunta. Sh. Raghav had informed Sh. Magunta Reddy that they had agreed to pay Rs. 30 crore to Ms. Kavitha, of which Rs. 25 crore was paid to her associates Buchi Babu and Abhishek Boinpalli.
B. Sh. Raghav Magunta, part of the South Group, revealed in his statement dated 26.07.2023 recorded under Section 50 of PMLA and statement dated 27.07.2023 recorded under Section 164 of Cr.P.C. that he had facilitated a cash transfer of Rs. 25 crores to Sh. Abhishek Boinpally and Sh. Buchi Babu, as per an agreement between him, his father Sh. Magunta Reddy and Ms. K. Kavitha. This cash transaction took place in two instalments: Rs. 10 crores paid on 28.03.2021 and Rs. 15 crores paid in June 2021, both arranged by one Sh. Gopi Kumaran. Sh. Raghav further stated that his family, with a long-standing presence in the liquor business in South India, had been exploring opportunities in Delhis new excise policy and his father had met the petitioner Sh. Arvind Kejriwal in mid-March 2021 to find out business opportunities in the new Delhi Excise policy. It is stated that Sh. Kejriwal had offered support to his father Sh. Magunta Reddy in the new policy in exchange for funding for upcoming elections in Punjab and Goa, and had asked him to coordinate with Ms. K. Kavitha. He further disclosed that on 20.03.2021, his father Sh. Magunta Reddy had met Ms. K. Kavitha at her residence in Hyderabad and she had told him that Sh. Kejriwal had spoken to her and had asked her to collaborate with others for the upcoming Excise Policy, and in lieu of the same, Ms. K. Kavitha had asked his father to pay Rs. 50 crores out of Rs. 100 crores demanded by Sh. Kejriwal. He had also stated that Sh. Arvind Kejriwal wanted his father to be the face of new excise policy since he was a reputed businessman in South India. Sh. Raghav Magunta also disclosed in his statement that after subsequent discussions with Ms. K. Kavitha and Sh. Buchi Babu, payments totaling Rs. 25 crores were made, which were facilitated by Sh. Gopi Kumaran, and these funds were borrowed from uncle of Sh. Raghav Magunta i.e, Sh. Sudhakar Reddy.
C. Sh. Gopi Kumaran had corroborated the statement given by Sh. Raghav Magunta on 08.08.2023.
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 Nairs 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 kickbacks were demanded and received and he was an alleged link between the majority of the co-accused persons and the present petitioner Sh. Kejriwal.
Petitioners Association with Co-accused Vijay Nair
49. As per case of Directorate of Enforcement, co-accused Sh. Vijay Nair is a close associate of the petitioner Sh. Arvind Kejriwal. Though, admittedly he had no role or position in the Delhi Government or in Delhi Excise Department, but as per statements of all the witnesses and approvers he acted as a broker/liaison/ middleman on behalf of the top leaders of the Aam Aadmi Party for getting bribes/kickbacks from various stakeholders in the Delhi Liquor business in exchange of favourable outcomes i.e. the changes carried out in the new Excise Policy of 2021-22. It is also alleged that Sh. Vijay Nair had also threatened the stakeholders that the changes suitable/desired by them may not go through entirely if they do not concede to his demands.
50. Sh. Vijay Nair in his statement dated 18.11.2022 had admitted that he used to live in a government bungalow which was officially allotted to a Cabinet Minister Sh. Kailash Gehlot, without any official authorization, and this bungalow was situated close to the residence of the petitioner Sh. Kejriwal. He had also disclosed that he used to operate from the camp office of the present petitioner which is inside the official residence of present petitioner Sh. Arvind Kejriwal.
51. The statement of the approvers and the witnesses prima facie reveal during investigation, as alleged by the respondent, that Sh. Vijay Nair had received kickbacks to the tune of Rs.100 crores from the South Liquor Lobby, on behalf of the petitioner Sh. Kejriwal and Aam Aadmi Party.
Role of Petitioner, as National Convenor of Aam Aadmi Party, in Utilisation of Proceeds of Crime
52. As per the case of Directorate of Enforcement, the investigation had revealed that proceeds of crime of about Rs. 45 crores, which was part of the bribes received from South Group, was used in the election campaign of the Goa elections.
53. It was revealed by Sh. Dinesh Arora on 01.10.2022 in his statement that on the instructions of Sh. Vijay Nair, he had coordinated a transfer of sum of Rs. 31 crores via hawala transactions, along with Sh. Abhishek Boinpally, Sh. Rajesh Joshi, and Sh. Sudhir. Sh. Abhishek Boinpally represents the South Group, Sh. Dinesh Arora is close to