Observations made by trial court on CBI in excise case 'erroneous', says Delhi HC

Justice Swarana Kanta Sharma also stayed till March 16 the trial court’s February 27 order.

Observations made by a trial court while discharging former Delhi chief minister Arvind Kejriwal and 22 others in connection with the now scrapped Delhi excise policy in the Central Bureau of Investigation (CBI) case were “prima facie erroneous”, the Delhi high court said on Monday and issued notice in the agency’s appeal.

Former Delhi chief minister Arvind Kejriwal and several others were discharged in the case. (PTI)

Justice Swarana Kanta Sharma also stayed till March 16 the trial court’s February 27 order directing departmental action against CBI’s investigating officer and observations against him, noting that the remarks were “prima facie foundationally misconceived especially when made at the stage of charge itself.”

Justice Sharma also requested the trial court to defer the Enforcement Directorate’s money laundering case that had stemmed from the CBI case, and await the outcome of CBI’s appeal against the February 27 verdict. “In the meantime, the learned trial court, where the proceedings regarding the connected case filed by the Directorate of Enforcement are pending, is requested to adjourn the case to a date, later than the date fixed before this court, and await the outcome of the present case,” the court said.

excise case delhi hc (HT Graphic)

On February 27, the trial court had discharged Kejriwal, his then deputy Manish Sisodia, former Telangana lawmaker K Kavitha and others, concluding that he had no hesitation in holding that CBI’s material did not even disclose a prima facie case, let alone a grave suspicion. In his 601-page order, special judge Jitendra Singh of Rouse Avenue Court also directed a departmental inquiry against the “erring investigating officer” who framed charges against the accused in the absence of material evidence, holding that the IO abused his official position to conduct an unfair investigation.

But justice Sharma appeared to disagree.

“This court is of the opinion that certain factual discrepancies pointed out in the impugned order, the observations made by the trial court regarding the statement of witnesses and the approvers at the stage of charge itself, prima facie appears erroneous and need consideration when viewed in the background of well settled law on charge and conspiracy as to whether such observations could have been made at the stage of charge itself. In these circumstances, issue notice to all 23 respondents, by all permissible modes, including electronically, as also through the concerned Investigating Officer, returnable on the next date of hearing,” the high court said in its order.

Justice Sharma further asked Kejriwal, Sisodia and others to file their response to CBI’s appeal, challenging the trial court’s February 27 order, by the next date of hearing on March 16.

“As far as the argument regarding stay of remarks made qua the investigating officer of the case is concerned, this court takes note of the fact that such scathing remarks recorded in the impugned order and the reasons given for passing such remarks including, concluding that the investigating officer has abused his official position to conduct unfair investigation, are prima facie foundationally misconceived especially when made at the stage of charge itself. In view of the aforesaid, the observations limited only qua the investigating officer are stayed, till the next date of hearing, including the direction recommending departmental action against him,” the court added.

The developments came after CBI’s lawyer, solicitor general Tushar Mehta, urged the trial court to stay the “adverse observations” made against its IO and pass an order to an effect that the February 27 verdict should not impact the money laundering case that had stemmed from the CBI case, arguing that the 601-page order effectively turned the fundamentals of criminal law on its head and amounted to “an acquittal without trial.”

Describing the Delhi excise policy case as one of the biggest scams in the history of the national capital and a matter of national shame, the law officer said that the agency had conducted the investigation scientifically and established every aspect of the alleged criminal conspiracy through substantial corroborative material, including digital evidence and witness statements. The verdict, the law officer said, was passed by “ignoring” the evidence gathered by the agency and the verdict’s author seemed to be more conversant in “constitutional law” rather than “criminal law.” He also added that the findings were “inherently wrong” and the agency collected several documents, examined witnesses, collected emails, whatsapp chats and its evidence was not in “air.”

No lawyer appeared for the accused before the high court on advance notice.

Kejriwal, Sisodia, and former Rajya Sabha member Sanjay Singh were among prominent AAP leaders arrested in connection to the excise policy, in which the federal agency alleged kickbacks were paid. The policy was rolled out for the 2021-22 financial year in November 2021, marking the exit of the government from retail sales of alcohol and allowing private companies to bid for licences, but was scrapped after Delhi’s former LG Vinai Kumar Saxena ordered an investigation based on a report by the chief secretary alleging financial irregularities.

The AAP denied wrongdoing and accused the Bharatiya Janata Party (BJP)-led Union government of targeting political rivals.

Sisodia was arrested in February 2023 and spent about 17 months in jail before receiving bail from the Supreme Court of India. Kejriwal was arrested in March 2024, shortly before the general elections, campaigned on interim bail, and was granted regular bail in September 2024.

The CBI filed five chargesheets, while ED investigated related money-laundering allegations under the Prevention of Money Laundering Act.

The AAP on Monday said that the CBI had fabricated the case at BJP’s behest and was exposed when the trial court found the matter unfit even for trial. Delhi AAP chief Saurabh Bharadwaj said the agency’s failure to secure a stay has left the lower court order intact, while the officers who built the case now fear disciplinary action, loss of service and jail.

“Ever since the Rouse Avenue Court found that the entire matter was fake and fabricated, the truth has been before everyone. Being discharged is even a higher stage than being acquitted, because acquittal happens after the entire trial is conducted and evidence and witnesses are examined. Here the court did not even consider the matter fit for trial,” Bharadwaj said. Delhi education minister Ashish Sood said that the AAP had consistently tried to give the issue a political colour and play the victim card.

Separately, the Delhi HC is scheduled to hear on Tuesday a petition filed by the Enforcement Directorate (ED) to expunge the trial court’s February 27 observations. The trial court had observed that the investigations by the state police, the CBI or the ED cannot be initiated or sustained solely on allegations of election funding irregularities and excess expenditure, and criminal law, particularly the extraordinary and coercive regimes of the PC Act and the Prevention of Money Laundering Act, cannot be employed as a substitute for election law remedies or a device to convert political accusations into prosecutable offenses.

According to the agency, the proceedings were confined strictly to the case investigated by the CBI, and the observations could