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Synopsis

The Delhi High Court, on Monday, criticized the vacation judge for not taking into account all significant and relevant documents while adjudicating the Enforcement Directorate’s appeal against the granting of bail to Chief Minister Arvind Kejriwal. 

“The perusal of the Impugned Order is reflecting that the Vacation Judge has passed the Impugned Order without going through and appreciating the entire material brought on record by the rival parties which reflects perversity in Impugned Order… The Vacation Judge was required to consider every important and relevant document at time of passing of Impugned Order”, the bench of Justice Sudhir Kumar Jain held.

The Central Bureau of Investigation (CBI) lodged a First Information Report (FIR) against Manish Sisodia, Deputy Chief Minister, and others on August 17, 2022, alleging discrepancies in the 2021-22 liquor excise policy. On August 22, 2022, the Enforcement Directorate (ED) commenced an investigation. The CBI filed a charge sheet on November 25, 2022, and the ED submitted a Prosecution Complaint on November 26, 2022, which the special court acknowledged. Following this, the ED issued nine summonses to Kejriwal, who did not appear. The ED thereafter issued arrest order, while Kejriwal approached the high court. 

Kejriwal was arrested by the ED on March 21, 2024. Despite petitions in various courts seeking relief, the supreme court granted interim bail to Kejriwal on May 10, enabling him to campaign for the 2024 General Elections. Later, Kejriwal approached the supreme court registry to extend his temporary release, but his application was deemed inappropriate. SC division bench, however, directed Kejriwal to seek regular bail from a trial court. He however, sought an extension of interim relief, which was rejected. Criticizing the ED for perceived bias and lack of direct evidence linking Kejriwal to alleged financial misconduct, the vacation judge granted bail to Kejriwal. However, such a decision was subsequently challenged by the ED in the high court.

Additional Solicitor General S.V. Raju, along with Special Public Prosecutor Zoheb Hossain, represented the Enforcement Directorate (ED) in court. They argued that the judge's order was flawed because it did not allow the ED to oppose Kejriwal’s bail application as required by section 45(1)(i) of the PMLA. They also claimed that the judge failed to establish reasonable grounds under section 45(1)(ii) indicating that Kejriwal did not commit or was unlikely to commit money laundering while on bail.

ASG Raju argued that the judge inaccurately stated that ED had evidence against Kejriwal as early as July 2022, yet Kejriwal was summoned only in August 2023, suggesting malicious intent on ED's part. They also pointed out that the ECIR relevant to the case was registered in August 2022. Kejriwal was arrested on March 21, 2023, and later challenged the arrest through a writ petition, which the court addressed in April 2024, finding no evidence of deliberate timing in the arrest by ED.

Senior Advocates Abhishek Manu Singhvi and Vikram Chaudhari, representing Kejriwal, argued that the prolonged detention of their client was unjustified. They maintained that the judge was not obligated to detail every argument presented by the ED in the order under contest. Senior Advocate Singhvi emphasized that the April 2024 judgment addressed Kejriwal's arrest under section 19 of the PMLA and did not determine the merits of the case itself.

Additionally, Senior Advocate Singhvi pointed out that the Supreme Court had granted leave to appeal against the April 2024 judgment, indicating ongoing review. He referenced interim bail granted to Kejriwal and subsequent Supreme Court directions as evidence of compliance with court orders and the evolving nature of the case.

The court acknowledged that the impugned order concluded malicious intention in ED's conduct. The court opined that the vacation judge was not tasked with determining guilt or innocence but rather with establishing a reasonable belief in Kejriwal’s innocence based on broader probabilities.

“The perusal of written note submitted by ED before the Special Judge/Vacation Judge reflects that the issue regarding the role of respondent for vicarious liability was taken by ED by mentioning that the role of the petitioner in vicarious liability was specifically examined and established after 30.10.2023 but said issue did not find any place in the Impugned Order”, the bench observed. 

The court noted that the vacation judge acknowledged the impracticality of reviewing thousands of pages of documents but affirmed the court's duty to thoroughly consider the matter before issuing an order following the law. However, later in the impugned order, the vacation judge mentioned that the most relevant arguments and contentions were addressed. This apparent contradiction in the vacation judge's observations about the thoroughness of document review reflects a flaw in the impugned order, suggesting a lack of thorough consideration of the entire record.

“Although, there is no allegation of misuse of interim bail by the respondent but one fact cannot be lose sight is that the respondent was not granted interim bail on merit but in background of 18th Lok Sabha General Elections”, the court highlighted. 

The court acknowledged that interim bail was granted on May 5, 2024, by SC. The court noted that such bail was granted in light of the upcoming 18th Lok Sabha General Election, subject to conditions detailed in the order. However, the court also noted that the bail was not granted based on the merits of the case but due to the election context. “The Vacation Judge while passing the Impugned Order did not appropriately appreciate the material/documents submitted on record and pleas taken by ED and the averments/grounds as raised in the petition under section 439(2) of the Code require serious consideration while dealing with said petition”, the court emphasized. 

Accordingly, the court allowed the appeal and set aside the impugned order. 

Case Title: Directorate of Enforcement v Arvind Kejriwal (2024:DHC:4767)