TaxTMI 
TaxTMI 
2024 (4) TMI 535
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....e 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 in....
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....sons. 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-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 cart....
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....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 ....
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....nder 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. 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 ....
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....d 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 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 his....
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....r 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 learne....
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.... 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 Hon'ble Supreme Court, and medical reports were duly produced before the learned Special Court. It is also submitted that in com....
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....o 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, t....
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.... 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 arg....
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....ailable" 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 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 g....
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....ring 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 hour....
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....r 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'bl....
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....hich 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 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 ne....
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.... 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 Cr. PC., 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 u....
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....ove 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." ANALYSI....
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....ven 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 Babu's 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 & 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,....
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.... 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. ....
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....ad 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 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 vendo....
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....r Goa election campaign of Aam Aadmi Party, and further that he had received salary from Aam Aadmi Party in February 2022. He had also received salary from M/s Wizspk Communications and PR Ltd. which had been engaged by the Govt of NCT of Delhi. Moreover, he had also received funds from OML of Sh.Vijay Nair, and these facts are prima facie reflective of his relationship with the Aam Aadmi Party. 57. On examining the money trail, the Directorate of Enforcement has discovered that the statements of Sh. Ashok Patel, 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 ....
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....f Section 70 of PMLA, and the petitioner being its National Convenor would be incharge of and responsible for its business, thus, being liable under Section 70(1) of PMLA. Sh. Singhvi, on the other hand, had argued that this argument of the respondent was misplaced and liable to be rejected. 63. With regard to the aforesaid, it will firstly be appropriate to refer to Section 70 of PMLA, which reads as under: "70. Offences by companies. (1) Where a person committing a contravention of any of the provisions of this Act or 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 ....
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....ge of and responsible for the 'company' i.e. Aam Aadmi Party, and thus, as per Section 70(1) of PMLA, Sh. Kejriwal shall be deemed to be guilty of offences punishable under Section 4 of PMLA. 67. Reliance has also been placed on the statement dated 16.11.2023 of Sh. N.D. Gupta recorded under Section 50 of PMLA, member of Rajya Sabha and National Treasurer of Aam Aadmi Party, who has revealed that Sh. Arvind Kejriwal is the overall incharge of the Party. He has further revealed that no approval/sanction of the National Executive or the Political Affairs Committee is taken for deciding election expenses, and that 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 c....
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....d over by the investigating officer. The statement of 'X' recorded on 08.03.2024 mentions about the receipt of a cash amount of about 90 lakhs, payment of which was managed by the Aam Aadmi Party, Delhi office and the assurance which he had received from senior leaders of the party including the present petitioner Sh. Kejriwal that he need not worry about any expenses in relation to the election expenditure for Goa elections. 73. The various statements of Hawala operators recorded under Section 50 of PMLA reveal as to how cash amounts were received and sent for Goa Elections. The names and details of some survey workers, 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 suffic....
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..... • Under the old policy 5% commission was payable to the wholesale distributors/licensees. • The difference between the 12%; minus 5% of the wholesale profit margin plus Rs. 70,00,00,000/-; it is submitted, would constitute proceeds of crime, an offence punishable under the PML Act. The proceeds of crime were acquired, used and were in possession of the wholesale distributors who have unlawfully benefitted from illegal gain at the expense of the government exchequer and the consumers/buyers. Relevant portion of the criminal complaint filed by the DoE dated 04.05.2023, reads: "One of the reasons given by Sh Manish Sisodia is to compensate the wholesaler 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 pro....
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....ccordingly, a conspiracy was hatched to carefully draft the new policy, deviating from the expert opinion/views to create an eco-system to assure unjust enrichment of the wholesale distributors at the expense of government exchequer or the consumer. The illegal income (proceeds of crime, as per the DoE) would partly be recycled and returned in the form of bribes. • Vijay Nair, who was the middleman, a go-between, a member of AAP, and a co-confident of the appellant - Manish Sisodia, had interacted with Butchi Babu, Arun Pillai, Abhishek Boinpally and Sarath Reddy, to frame the excise policy on conditions and terms put forth and to the satisfaction and desire of the liquor group. • Vijay Nair and the members of the liquor group had 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 h....
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....y the Hon'ble Apex Court in Manish Sisodia v. CBI & Ors. (supra) the excess profit which had been earned due to the increase in margin from 5% to 12% i.e. Rs. 338 crores was the proceeds of crime. It is the case of prosecution that this increase in margin was formulated as a part of excise policy to grant favours to certain liquor groups in exchange of receiving kickbacks for funding the elections of Aam Aadmi Party, whose National Convenor is the present petitioner. 77. In a nutshell, once there is prima-facie material regarding laundering of the kickbacks on Goa Elections and the money being already spent for the said purpose in the year 2022 itself, the recovery in the year 2024 or non-recovery of any remaining amount will become clear only once prosecution complaint is filed. The Courts in all criminal cases wait for the chargesheet/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 b....
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....02. The same makes out a formidable case about the involvement of the appellant in commission of a serious offence of money laundering. It is, therefore, not possible for us to record satisfaction that there are reasonable grounds for believing that the appellant is not guilty of such offence..." (Emphasis Supplied) 81. Further, in case of Vijay Madanlal Choudhary (supra), the challenge to Section 50 of PMLA was rejected by the Hon'ble Apex Court and it was held that statements recorded under Section 50 of PMLA are not in violation of Article 20(3) of the Constitution of India. 82. The aforesaid legal propositions were also reiterated by the Hon'ble Apex Court in case of Tarun Kumar (Supra) with following observations: "15. In our opinion, there is hardly any merit in the said submission of Mr. Luthra. In Rohit Tandon vs. Directorate of Enforcement, 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 ....
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....rence between statement of a person which is recorded under Section 50 of PMLA by an officer of Directorate of Enforcement and the statement of an approver which is recorded under Section 164 of Cr.P.C. by a Judicial Magistrate. This can be explained in simple words by way of the following table: Statement of Witness recorded under Section 50 of PMLA Statement of Approver recorded under Section 164 of Cr.P.C. 1. Statement of a person is recorded under Section 50 of PMLA by an officer of Directorate of Enforcement for the purpose of collecting information in connection with any investigation or proceedings under the Act. Statement of an approver is recorded under Section 164 Cr.P.C. by a judicial Magistrate or Special Judge so authorised as per law, where the approver, who is a co-accused, expresses his willingness to disclose the truth about the offence or the 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 ....
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....tions based on their findings, the final decision lies with the Court of law which is based on established principles of jurisprudence of bail. These legal processes are integral components of the criminal justice system. Therefore, without challenging the said process, to hold that the statement of approvers and pardon granted to them was at the behest of the Directorate of Enforcement in this case will be questioning the judicial process which is governed by the law, and not by any government or investigating agency. 91. The law of approver is more than 100 years old (Section 337 of Code of Criminal Procedure, 1898 i.e. the old Code and Section 306 of the Code of Criminal Procedure, 1973 i.e. the new Code) and not one year old law to suggest as if enacted to falsely implicate the present petitioner and co-accused persons in this case. The law has been in existence even before the birth of many 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 ....
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.... have turned traitors, and further acknowledging that they were part of the same alleged plan which the Directorate of Enforcement alleges that the approver and the petitioner were part of. However, this Court will restrain from further dwelling into this argument. 96. Moreover, in addition to questioning the value of an approver's statement, Sh. Singhvi had also questioned the credibility of the statement of one of the witnesses Sh. Magunta S. Reddy, which had been recorded under Section 50 of PMLA as well as before the Magistrate under Section 164 of Cr.P.C, on the ground that his statement was recorded immediately prior to the hearing of bail application of his son Sh. Raghav Magunta and recently, Sh. Magunta S. Reddy has been given a ticket to contest the upcoming Lok Sabha Elections from the alliance of ruling party. Similarly, Sh. Singhvi had also argued that the statement of approver Sh. Sarath Reddy 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 elec....
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.... is other material collected by the investigating agency also which has been placed before this Court and discussed in preceding paragraphs which reveals the role of the present petitioner in the alleged Delhi Excise Policy scam. 102. This Court is further of the opinion that merely because the approver has chosen to reveal some new facts at a later stage, only after initially concealing them including the role of Sh. Kejriwal, the same cannot be a ground to disregard their statements completely. This is because an accused may realise his or her mistake at a later stage and may offer to state the true facts in exchange for securing pardon as per the law. 103. For example, consider a case where an accused initially denies involvement in a crime but later, upon reflection and perhaps upon advice from legal counsel, decides to cooperate with authorities and disclose the accurate details of the incident. Similarly, one often 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 ....
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....A by way of a letter dated 22.03.2024. 108. As regards the 'material in possession' of the Directorate of Enforcement on the basis of which there were 'reasons to believe' that petitioner was 'guilty' of offence of money laundering for the purpose of Section 19 of PMLA, this Court has already taken note of this material in the detailed discussion above. There are statements of witnesses (including approvers) namely Sh. C. Arvind, Sh. Buchi Babu, Sh. Maguntra S. Reddy, Sh. Raghav Magunta, Sh. Sarath Reddy, Sh. Vijay Nair recorded under Section 50 of PMLA and Section 164 of Cr.P.C., as well as other material such as entry register of the office of the petitioner, which reflect that the petitioner was allegedly personally involved in formulation of the Delhi Excise Policy 2021-22, and prima-facie in process of demanding kickbacks from the South Group in exchange of favours. Similarly, material has also been collected by the Directorate 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 Wh....
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....the petitioner was 'guilty of offence of money laundering' in terms of Section 19 of PMLA, and the need to interrogate the petitioner and confront him with the statements of witnesses, and other material as well as digital evidence, coupled with the conduct of petitioner of not joining investigation pursuant to service of nine summons for a period of six months, necessitated the arrest of petitioner Sh. Arvind Kejriwal. 114. Therefore, prima facie, the mandatory provisions of Section 19 of PMLA have been satisfied by the Directorate of Enforcement while arresting the petitioner Sh. Kejriwal, in compliance of judgment of Pankaj Bansal (supra), and there is material at this stage which points out towards the guilt of the petitioner for commission of offence of money laundering. IV. WHETHER THE REMAND ORDER DATED 22.03.2024 HAS BEEN PASSED IN MECHANICAL AND ROUTINE MANNER? 115. The second prayer sought by the petitioner Sh. Kejriwal pertains to quashing 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 al....
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....ced before the court, this court is of the opinion that provisions of Section 19 of PMLA have been substantially complied with." 118. Further, the learned Special Court has also referred to the material collected by the Directorate of Enforcement against the petitioner in the impugned remand order and the relevant portion of the remand order dated 22.03.2024 reads as under: "31. Further, as stated above, the investigation conducted so far revealed the involvement of accused Arvind Kejriwal in the conspiracy of in formulation and implementation of the Excise Policy 2021--22 with a view to favour certain persons as also his involvement in seeking kickbacks from businessmen in exchange of favour to be granted to what is being referred to as the 'South group' and in collusion with co-accused Vijay Nair, Manish Sisodia and other members/representatives of the 'South group'. In this regard, material by way of statements of C. Arvind, the then Secretary of co-accused 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....
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....ed by the Special Court in this Case? 119. A perusal of the remand application dated 22.03.2024 reveals that the Directorate of Enforcement had sought the remand of Sh. Kejriwal on the following grounds: i. The petitioner is required to be interrogated with respect to his role and the statements of witnesses etc. to unearth the remaining proceeds of crime and for this purpose, it is imperative to have custodial interrogation as the petitioner was non-cooperative in investigation and was defying the summons under Section 50 of the PMLA. ii. Digital devices seized during the search have to be extracted and the data has to be confronted with the petitioner. iii. The petitioner is required to be confronted with voluminous material/records seized which is only possible in the custodial interrogation. iv. The petitioner needs to be interrogated with respect to other associates/entities involved in the Kickbacks given by South Group to the Aam Aadmi Party and its leaders. v. The petitioner needs to be interrogated to identify the complete modus operandi of the offence. 120. The learned Special Court in the impugned remand order dated 22.0....
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....ner. Further, at that stage, the Directorate of Enforcement would not have known that Sh. Kejriwal exercising his right of not disclosing the password of his mobile phones, will not disclose it to them and for extracting the data and confrontation with the same, they will have to seek some other remedy. 124. It is also crucial to note that despite service of 09 summons over a period of six months, the petitioner had failed to come forward for the purpose of recording his statement under Section 50 of PMLA, or for the purpose of being confronted with the material collected by the investigating agency during the course of investigation i.e. to participate in the inquiry. Therefore, the investigating agency had no other option but to seek his custody through remand from the court of law to make him join the investigation and answer questions which needed to be asked such as confrontation with the statements and documents etc. to conclude investigation. 125. Therefore, this Court observes that the contention regarding remand order having been passed in mechanical and routine manner is without any merit, considering the observations made by the learned Special Court including ensu....
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.... 130. It is to be noted carefully that Sh. Kejriwal was not summoned for the first time after General Elections were declared in India or the Model Code of Conduct came into existence, but the first summon was sent to him as far back as in October, 2023. It was the petitioner himself who had chosen not to join the investigation, but had sent replies to all the summons. 131. Thus, this Court takes into consideration the conduct of the petitioner in relation to his non-cooperation with the investigating agency, which is visible by the fact that he failed to join investigation despite being served with nine summons. The conduct of the petitioner in this regard has been summarised in the form a table, as follows: S.No. Summons Required Date of appearance Reasons Cited by Sh. Arvind Kejriwal for Not Joining Investigation 1. 30.10.2023 (First Summons) 02.11.2023 Reply given by petitioner on 02.11.2023 • The summons is not clear as to the capacity in which the petitioner is being called. • The summons fails to provide details in relation to the ECIR. • The summons appears to be motivated and issued for extraneous consider....
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....50 of PMLA. 5. 31.01.2024 (Fifth Summons) 02.02.2024 Reply given by petitioner on 02.02.2024 • The petitioner is pre-occupied in the budget preparations for GNCTD, which will be presented in the Assembly session starting from 15.02.2024. 6. 14.02.2024 (Sixth Summons) 19.02.2024 Reply given by petitioner on 19.02.2024 • The budget Session of the Delhi Legislative Assembly is presently going on, and will continue till the first Week of March. 7. 21.02.2024 (Seventh Summons) 26.02.2024 Reply given by petitioner on 26.02.2024 • The presence of the petitioner in the Legislative Assembly as an MLA and the Chief Minister is important to respond to various issues raised by Hon'ble MLAs. • Further, the petitioner been asked to reply in the Assembly on the motion of thanks to the Hon'ble LG's address. 8. 26.02.2024 (Eighth Summons) 04.03.2024 Reply given by petitioner on 04.03.2024 • The presence of the petitioner as an MLA and the Chief Minister is important to respond to various issues raised by Hon'ble MLAs. • Further, the petitioner has to be prese....
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....of Hon'ble Supreme Court has categorically laid down that when a person is called by Directorate of Enforcement under Section 50 of PMLA by sending a summon, such person has to appear before the concerned authority. 136. In case of Vijay Madanlal Choudhary (supra), the Hon'ble Supreme Court had discussed the scope of Section 50 of PMLA and the power to issue summons therein, by way of following observations: "425. Indeed, sub-section (2) of Section 50 enables the Director, Additional Director, Joint Director, Deputy Director or Assistant Director to issue summon to any person whose attendance he considers necessary for giving evidence or to produce any records during the course of any investigation or proceeding under this Act. We have already highlighted the width of expression 'proceeding' in the earlier part of this judgment and held that it applies to proceeding before the Adjudicating Authority or the Special Court, as the case may be. Nevertheless, sub-section (2) empowers the authorised officials to issue summon to any person. We fail to understand as to how Article 20(3) would come into play in respect of process of recording statement pursuant to such summon wh....
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.... IPC and Section 7(a) of P.C. Act; (III) FIR No. 02 2022 dated 05.02.2022 registered by V&AC, Theni under Sections 7, 13(c), 13(1)(d)(1), 13(1)(a) r/w 13(2) and 12 of P.C. Act, Sections 120(B), 167, 379, 409, 465, 468, 471, 477 r/w 109 of IPC and Sections 7, 8(1), 13(1)(a) r/w 13(2) and 12 of PC Act, as amended; (IV) FIR No. 68/2023 dated 25.04.2023 registered by Murappanadu Police Station, Thoothukudi District, under Section 449, 332, 302 and 506(2) of IPC, and since some of the offences of the said FIRs are scheduled offences under PMLA, the same would be the investigation/proceeding under the PMLA, and the District Collectors or the persons to whom the summons are issued under Section 50(2) of the Act are obliged to respect and respond to the said summons. (Emphasis supplied) 138. This Court therefore holds that it is clear from the reading of Section 50 of PMLA and the aforesaid decisions that the power conferred upon the authorities by virtue of Section 50 of PMLA empowers them to summon 'any person' whose attendance may be crucial either to give some evidence or to produce any records during the course of investigation or proceedings under PMLA. ....
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....ferencing, or by sending him a questionnaire or by visiting his residence to record his statement for the purpose of investigation in the present case. 142. In this Court's opinion, at the outset, this contention raised on behalf of the petitioner is bound to be rejected since the investigating agencies, under the Indian Criminal Jurisprudence, cannot be directed to conduct investigation in accordance with convenience or dictates of a person. The investigation has to take its own course, and in case, the investigating agency would be directed to visit the house of every such person for the purpose of investigation, in that case, the very purpose of investigation would be lost and would end in chaos. 143. This is not a mere opinion of this Court, but the law laid down by the Hon'ble Apex Court in catena of judgments. To refer to a few of such judgments, this Court takes note of the decision of Hon'ble Supreme Court in case of Himanshu Kumar v. State of Chhattisgarh 2022 SCC Online SC 884, in which it has observed that the accused cannot dictate the manner in which an investigation has to be conducted. The relevant portion of the decision reads as under: "51. In Romila....
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....f law which exists as on date, there is no separate treatment or protocol which any investigating agency is to follow for the purpose of summoning or questioning of a common man or a Chief Minister of a State. 147. Further, this Court holds that this Court would not lay down two different categories of laws, one for common citizens, and the other granting special privilege to be extended by investigating agency to a Chief Minister or any other person in power only on the basis of being in that public office since that public office is enjoyed by that public figure due to the mandate of the public. In the recent case of Amanatullah Khan v. Directorate of Enforcement 2024 SCC OnLine Del 1658 also, this Bench had observed that there cannot be different set of rules regarding investigation qua 'classes' and 'masses' and that an MLA or a public figure is not above the law of land. The relevant observations of the decision are extracted hereunder for reference: "BEYOND PRIVILEGE: UPHOLDING ACCOUNTABILITY OF PUBLIC FIGURES 74. This Court cannot allow a new jurisprudence or different sets of rules to prevail regarding investigation qua 'classes' & 'masses' by each time....
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....ched any Court challenging the summons issued by the Directorate of Enforcement or for seeking any protection from arrest, till filing a petition before the Hon'ble Division Bench of this Court on 19.03.2024. Thus, Sh. Kejriwal himself did not challenge the nine summons issued to him over a period of six months in any Court of law till the filing of aforesaid petition before this Court. In case Sh. Kejriwal was aggrieved by the summons sent by the Directorate of Enforcement or desired that he should be investigated by the Directorate of Enforcement in the manner that he wanted them to interrogate him by extending special facilities to him by virtue of him being the sitting Chief Minister, and distinguishing him from a common man, he should have approached a Court of law. The competent Court of law could have examined his prayer of being interrogated at his home or through a questionnaire or video-conferencing also. 149. Needless to say, the Directorate of Enforcement is not dealing with one case but thousands of cases have been investigated in the past since PMLA came into force. Since the year 2002 when the PMLA came into force, the investigating agency has not extended any spe....
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....djournment and time in a case filed by Directorate of Enforcement i.e. Complaint Case bearing No. 02/2024 before the learned ACMM, Rouse Avenue Courts, Delhi, regarding willful defiance of summons issued under Section 50 of PMLA. This case is still pending wherein cognizance has been taken against him vide order dated 07.02.2024. The said case is not about validity of the summons nor any order has been passed nor any relief has been granted directing Sh Kejirwal not to join investigation or grant of bail. It is noteworthy that even after filing of the said complaint case for non-compliance of summons by Directorate of Enforcement in the month of January/February, 2024 before the concerned Trial Court, the petitioner did not join the investigation. Further summons were again sent by the Directorate of Enforcement to Sh. Kejriwal on 14.02.2024, 21.02.2024, 26.02.2023 and 16.03.2024 as there was no stay of proceedings nor any direction to not summon the petitioner by the said Court. 153. The petitioner Sh. Kejriwal had also not preferred to file any application seeking pre-arrest bail in the present ECIR, even though he had mentioned in his reply dated 18.01.2024 sent to the Direct....
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....shown that there is a necessity to arrest the person who is allegedly involved in the offence of money laundering. 158. In this regard, a reference can be made to the decision of Hon'ble Supreme Court in case of Vijay Madanlal Choudhary (supra) wherein while explaining the mandate of Section 19 of PMLA and the scope of powers of arrest, the Hon'ble Supreme Court had expressed that the requirement on part of authorised officer to forward the copy of arrest order and material in his possession to the adjudicating authority was to ensure fairness and accountability of the officer in forming an opinion regarding the necessity of arrest. The relevant observations in this regard reads as under: "322. ...This safeguard is to ensure fairness, objectivity and accountability of the authorised officer in forming opinion as recorded in writing regarding the necessity to arrest the person being involved in offence of money-laundering..." 159. The aforesaid observations of the Hon'ble Apex Court in case of Vijay Madanlal Choudhary (supra) were reiterated in case of V. Senthil Balaji (supra), and Pankaj Bansal (supra) and it was observed that it is necessary for the officer concern....
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....nd for his arrest. However, the repeated non-compliance of summons for over a period of six months by the petitioner was indeed a contributing factor in his arrest. Had the petitioner joined investigation pursuant to issuance of summons under Section 50 of PMLA, he could have given his version before the investigating agency against the material which it had collected. 164. It was also argued before this Court that the petitioner was arrested straightaway without even recording any of his statement under Section 50 of PMLA. This Court wonders as to how Directorate of Enforcement could have recorded the statement under Section 50 of PMLA of Sh. Kejriwal when he did not present himself before the investigating agency for the said purpose on nine occasions. After not presenting himself before the investigating agency on nine occasions, he cannot now turn back and argue that his statement has not been recorded under Section 50 of PMLA when it was he himself who refused to present himself before the Directorate of Enforcement that was calling him for exactly the same purpose for the last six months. 165. However, considering the fact that the Directorate of Enforcement was in poss....
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....ding the actions of both the state and its representatives. In upholding the mandate of the law, Courts prioritise the welfare of the people and the interests of the nation as a whole, ensuring that justice serves the greater good of society. 171. It is essential to recognize that democracy and the democratic process are not contingent upon any single factor or individual but are rooted in a broader framework of legal principles and civic values. While political dynamics may fluctuate, the underlying principles of democracy remain steadfast, anchored in the rule of law and the protection of individual rights. In this context, the judiciary plays a crucial role in upholding democratic ideals, ensuring that legal principles prevail over political considerations and that justice is administered fairly and impartially to all. State is an Entity and Not Confined to a Person 172. In judicial proceedings where the State is one of the parties involved, the State represents an entity that transcends an individual person or a government or a political party. 173. This Court observes that political considerations and equations cannot be brought before a Court of law as they are no....
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.... 178. Courts, as the custodians of justice, are primarily concerned with only upholding constitutional morality rather than getting into the issue of political morality of the parties, as the issue of political morality is their concern and this Court cannot form any judgment about the same. Constitutional morality and political morality represent distinct paradigms that guide decision-making in their respective domains. Constitutional morality is rooted in the principles enshrined within the Constitution, emphasising the protection of individual rights, adherence to the rule of law, and the promotion of justice for all, whereas in contrast, political morality may be shaped by partisan interests, ideological agendas, or populist sentiments, often fluctuating with changing political dynamics. 179. When adjudicating legal disputes, the Courts are duty-bound to interpret laws and assess the actions of investigating agencies in alignment with constitutional and legal norms, irrespective of political considerations. By following constitutional morality, Courts uphold the integrity of legal institutions and ensure that justice is dispensed impartially, free from the influence of po....