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After Sisodia, SC grants bail to Kavitha in excise case
The Supreme Court granted bail to BRS leader K Kavitha in the Delhi excise policy case, criticizing the CBI and ED for basing their case on inferences rather than solid evidence.
NEW DELHI The Supreme Court on Tuesday granted bail to Bharat Rashtra Samithi (BRS) leader K Kavitha in the Delhi excise policy case, while delivering a stern reprimand to the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) over the fairness of their investigation and questioning the agencies for basing their entire case on inferences rather than solid, incriminating evidence.
A bench of justices Bhushan R Gavai and KV Viswanathan granted bail to Kavitha on grounds that the investigation was complete, the trial was likely to be delayed due to the extensive number of witnesses and documents, and that, as a woman, she was entitled to special treatment under Section 45(1) of the Prevention of Money Laundering Act (PMLA).
“Investigation is complete and charge sheet has been filed. The custody of the appellant (Kavitha) is not necessary. She has been behind bars for five months. The likelihood of trial being concluded in near future is impossible. As said in various pronouncements of this court, under-trial custody should not turn into a punishment,” the bench said in its order.
Kavitha, an MLC and daughter of former Telangana chief minister K Chandrashekar Rao, was arrested by ED on March 15 and by CBI almost a month later in connection with the alleged irregularities in the now-scrapped Delhi liquor policy of 2021-22. The case had drawn significant political attention, with Kavitha being accused of playing a central role in paying an alleged bribe of ₹100 crore to the Aam Aadmi Party (AAP) and its leaders, including Delhi chief minister Arvind Kejriwal and former deputy chief minister Manish Sisodia, in lieu of receiving benefits for private liquor businessmen from the southern part of India – a consortium termed the “South Group”.
The reprieve for Kavitha came a fortnight after the same bench granted bail to Sisodia by a judgment that held that the former deputy CM’s long incarceration of 17 months and his continued detention in a case where there was no hope of trial ending anytime soon impinged on his fundamental right to liberty and speedy trial under Article 21 of the Constitution.
Kavitha had referenced Sisodia’s judgment in her plea. Pertinently, a different bench in the top court is seized of petitions by Kejriwal, seeking invalidation of his arrest by CBI on June 26 and the grant of bail. The petition by Kejriwal, who has been granted interim bail by the Supreme Court in the ED case but remains incarcerated due to his continued detention in the CBI case, has also relied extensively on the reasoning of the top court in Sisodia’s case.
BRS working president KT Rama Rao thanked the SC for granting bail to his sister and party MLC, Kavitha. “Thank You Supreme Court. Relieved. Justice prevailed,” he posted on X.
Questioning the agencies’ selective approach in treating some accused as approvers to build a prosecutable case, the bench on Tuesday commented: “The prosecution has to be fair. Someone who incriminates himself has been made a witness and others are being prosecuted based on his statement...Tomorrow you pick anyone as you please? You cannot pick and choose any accused...You are not being fair.” The court was referring to a statement of Sharat Chandra Reddy, who was initially arrested as an accused, but he later turned approver and claimed that he participated in the Delhi liquor business under the new policy on Kavitha’s assurances.
Referring to Arun Pillai, a key witness who retracted his statement, the bench further pointed out that the agencies were relying on his previous, self-incriminating statement while ignoring his retraction. “You cannot pick and choose statements that suit your case,” it said.
The court further questioned the prosecution’s reliance on negative inferences, particularly regarding the allegations that Kavitha had destroyed evidence by formatting her mobile phones. “You are making a negative inference without any substantive proof. People do delete messages. It is normal human conduct,” remarked the bench, adding that the agencies needed to present solid evidence rather than speculative conclusions.
While additional solicitor general (ASG) SV Raju, representing the agencies, read out statements of witnesses and other evidence to persuade the bench against granting bail to Kavitha, the court’s criticism reached a peak as it warned the ASG that continued arguments could lead to the court making formal observations on the impartiality of the investigation.
“If you argue further, we will have to comment on the unfair conduct of your investigating agency,” cautioned the bench, compelling Raju to backtrack.
Denying bail to her on July 1, the Delhi high court had referred to certain incriminating statements of other witnesses, including Reddy in the case. It also held that Kavitha, being well-educated and of significant political stature, did not qualify for the exemption from rigorous bail standards under PMLA typically afforded to “vulnerable” women.
The Supreme Court on Tuesday decisively rejected the high court’s reasoning, describing it as “perverse” and likely to set a dangerous precedent that could bind future cases in the wrong direction.
“If this Delhi high court order is allowed to remain, these perverse observations would mean no educated woman can ever get bail. It would apply at least to all courts within the jurisdiction of Delhi. What is this? On the contrary, we say that courts should not differentiate between an MP and a common man, but here the high court is finding an artificial discretion not there in the statute,” said the bench.
The hearing before the bench was marked by intense scrutiny of the prosecution’s case. Senior counsel Mukul Rohatgi, representing Kavitha, argued that she had been unjustly held in custody for over five months despite a lack of direct evidence linking her to the alleged crime. He pointed out the enormity of the case files, which include 493 witnesses and 50,000 pages of documents, making it clear that the trial would not conclude anytime soon.
Rebutting, ASG Raju said that there were sufficient documentary evidence to refuse bail to Kavitha owing to her pivotal role in a conspiracy to manipulate the now-scrapped Delhi liquor policy of 2021-22 to benefit private liquor retailers. The law officer also tried to argue that she was a person of influence, prompting the high court to deny her the benefit under Section 45(1) of the PMLA.
But the bench questioned the rationale behind denying bail to Kavitha, particularly given that the investigation had been completed in both the CBI and ED cases, and the charge sheets had been filed. It further noted that the Delhi high court had denied her bail by distinguishing between “vulnerable women” and women of higher stature — a distinction that the statute does not have between women. “A woman is a woman. The law does not distinguish between vulnerable women and others,” it observed.
During the proceedings, the bench expressed concern over the prosecution’s approach, particularly the selective treatment of individuals based on their statements and the lack of independent evidence to corroborate the allegations. “You cannot start your case on inferences. There has to be independent evidence to connect your inferences with criminality,” said the court, rejecting the agencies’ plea to reject her bail plea.
Quashing the high court order, the bench ordered Kavitha’s immediate release on bail, subject to the fulfilment of conditions including the submission of a ₹10 lakh bail bond in the two cases, surrender of her passport and a commitment not to tamper with evidence or influence witnesses. The court underscored that its observations were limited to the bail proceedings and would not impact the merits of the trial.
The Supreme Court’s harsh words for CBI and ED are likely to have significant implications, not only for the ongoing prosecution in the excise policy case but also for the broader conduct of the agencies in high-profile cases, especially in relation to the selective treatment of witnesses and reliance on inferences rather than direct evidence.
Moreover, the Supreme Court’s stance on the interpretation of Section 45(1) of the PMLA, concerning the rights of women accused, could serve as a corrective measure, ensuring that statutory protections for women are upheld without arbitrary distinctions.
