Excise policy case: Delhi HC to rule on BRS leader K Kavitha's bail plea in on July 1

NEW DELHI: The Delhi high court is set to announce its decision on July 1, 2024, regarding the bail petitions filed by Bharat Rashtra Samithi (BRS) leader K Kavitha in cases related to the excise policy and examined by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).
The bench of Justice Swarna Kanta Sharma reserved the order on May 28, 2024, after hearing arguments from all involved parties.
Representing K Kavitha, Senior Advocate Vikram Chaudhari, Advocate Nitesh Rana, and other lawyers, Mohit Rao and Deepak Nagar, presented their submissions. Advocate DP Singh represented the CBI, while Advocate Zoheb Hossain appeared for the ED.
The CBI countered the bail plea, arguing that the ongoing investigation is at a crucial stage involving other public servants and private individuals, and tracing the flow of illicit money.
They asserted that if Kavitha is granted bail, there is a significant risk that she might obstruct the investigation, especially when she fails to meet the 'triple test,' as prescribed by the Constitutional Courts across various precedents.
"The accused petitioner is released on bail, there is every likelihood that she will thwart the investigation, more specifically when she fails to meet the 'triple test,' as laid down by the constitutional courts in a catena of decisions," the CBI stated in opposition to the bail plea.
The ED also opposed Kavitha's bail request by noting that standard conditions to ensure the accused's presence at trial or protect evidence are insufficient in money laundering cases due to their trans-border nature and the potential influence of the accused. They cautioned that an accused could utilize modern technology to covertly remove the money trail, thus undermining the investigation and trial.
"In the case of an offence of money laundering, mere routine conditions that ensure the presence of the accused during the trial or protect the evidence are not enough because of the trans-border nature of the offence and the influence that may be exercised by the accused. An accused can anonymously remove the money trail using the technology available today, making the investigation and trial infructuous," the ED argued.
Previously, the Delhi high court had issued notices to the Enforcement Directorate and CBI regarding Kavitha's bail petitions in the money laundering case connected to the now-discarded Excise policy of Delhi. The ED recently submitted a supplementary prosecution complaint (chargesheet) in the Excise Policy money laundering case in Rouse Avenue Court. The chargesheet includes accusations against K Kavitha, Chanpreet Singh, Damodar, Prince Singh, and Arvind Kumar.
In her bail petition, K Kavitha highlighted her familial responsibilities, noting that she is the mother of two children, one of whom is a minor currently under medical care. She insisted that attempts have been made to implicate her in the scandal by members of the ruling party at the Centre.
In her latest bail plea, she argued that the entire case against her built by the Enforcement Directorate relies solely on statements from witnesses and co-accused under Section 50 of the Prevention of Money Laundering Act (PMLA).
"The entire case of the Enforcement Directorate hinges upon statements made by the approver, witnesses, or co-accused under Section 50 of the PMLA. The Prosecution Complaints do not provide a single document that corroborates the statements. There is not a single piece of evidence that points to the guilt of the Applicant," she stated.
She further claimed that her arrest was illegal, asserting there was no adherence to Section 19 of the PMLA. She argued there was no corroboration of any actual cash transaction or money trail, making the arrest order’s expression of her guilt superficial and pretentious.
"The arrest of the applicant is illegal as Section 19 of the PMLA has not been complied with. Neither has any corroboration to the allegation of the actual cash transaction nor any money trail is forthcoming, therefore, the satisfaction of guilt as expressed in her Arrest Order is merely a sham and a pretense," she submitted.
On May 6, the Rouse Avenue Court of Delhi had dismissed the bail requests put forth by K Kavitha in connection to both the CBI and ED cases linked to the Excise Policy. Following her arrests on March 15, 2024, by the Enforcement Directorate, and on April 11, 2024, by the CBI, a remand application was made, stating the necessity of her custodial interrogation.
"Kavitha Kalvakuntla was required to be arrested in the instant case to conduct her custodial interrogation for confronting her with the evidence and witnesses to unearth the larger conspiracy hatched among the accused, suspect persons regarding the formulation and implementation of the Excise Policy, as well as to establish the money trail of ill-gotten money generated and to establish the role of other accused/suspect persons, including public servants, as well as to unearth the facts which are in her exclusive knowledge," the CBI stated through their remand application.
CBI's investigation was recommended following the Delhi Chief Secretary’s report in July, which indicated prima facie violations of the GNCTD Act 1991, Transaction of Business Rules (ToBR)-1993, Delhi Excise Act-2009, and Delhi Excise Rules-2010.
Accusations by the ED and CBI claimed that irregularities occurred during the modification of the excise policy, including undue advantages extended to license holders, waiving or reduction of license fees, and extending the L-1 license without proper authorization.
They alleged that the benefits received were illicitly diverted to officials, with false entries made in financial records to avoid detection. The Excise Department also reportedly decided to refund an earnest money deposit of approximately Rs 30 crore to a successful tenderer against set rules.
Despite lacking an enabling provision, a waiver on tendered license fees was reportedly sanctioned from December 28, 2021, to January 27, 2022, due to COVID-19, resulting in an alleged loss of Rs 144.36 crore to the exchequer.