Kejriwal bail issue: "Unusual" for HC to reserve verdict while granting interim stay on bail order

Dellhi CM Arvind Kejriwal
Dellhi CM Arvind Kejriwal

New Delhi | The Supreme Court on Monday termed as "unusual" the Delhi High Court's decision of reserving the order while granting interim stay on the operation of the trial court's order granting bail to Delhi Chief Minister Arvind Kejriwal in a money laundering case linked to the alleged excise scam.

A vacation bench of Justices Manoj Misra and SVN Bhatti, which fixed June 26 for hearing Kejriwal's plea against the interim stay granted by the high court at the time of reserving its verdict on ED's plea said, "Normally, on stay applications, orders are not reserved. They are passed at the hearing itself, on the spot. So, it is a bit unusual."

The bench said it would like to wait for the pronouncement of the high court order before taking a call on the AAP national convenor's appeal.

During the brief hearing, senior advocate Abhishek Singhvi, appearing for Kejriwal, sought vacation of the interim stay on the bail order, contending it was contrary to the well-established norm that a bail granted is very different from a bail reversed or cancelled.

Giving the sequence of events that unfolded in the high court on June 21, Singhvi said, after the bail was granted on June 20, Additional Solicitor General SV Raju, appearing for the ED, made a mention before a vacation bench.

"This is important. On June 21, at the mentioning stage itself, in my presence, the judge stays the order and then the judge proceeds to hear us for some time on that day at length. Then reserves order," he said.

Contending that there are two or three legal points involved, Singhvi said, first, the procedure of staying a bail on the first attempt, on the first day and first challenge is "unprecedented" and, secondly, the balance of convenience is totally in Kejriwal's favour.

"If the judgement is reversed, the man will go back to jail as he did when he was out for three weeks under the Supreme Court's direction. The Supreme Court had directed him to be out for three weeks and he went back immediately. Secondly, he is not a flight risk," Singhvi said.

The bench told Singhvi that pronouncing any order at this stage would be prejudging the issue which is before the high court.

"We will be pre-judging the issue, if we pass any order at this stage. It is not some other court but the high court," the bench told Singhvi.

It noted that the high court had on June 21 asked the parties to file written submissions on the interim relief of stay of the bail.

"The parties were directed to file short submissions not running more than two-three pages by June 24. Therefore it is expected that the order will be pronounced shortly, maybe in a day or two," the bench said.

Singhvi said the order was reserved on the interim relief sought by the ED, while the main matter is still pending, and if the bail order is reversed, Kejriwal will go back to jail like he did on June 2.

"Why can't I be free? I am not a flight risk. I will go back to jail the moment the order is reversed. I have a judgement in my favour," he submitted.

The bench asked Raju about the twin conditions under section 45 of the PMLA and whether they were satisfied.

The ASG said he was not given an opportunity to argue in detail and file the reply.

Solicitor General Tushar Mehta, also appearing for the ED, said the twin conditions were not met as the trial court itself said it has not gone through the records and Raju was not given optimum time to argue his case.

Under section 45 of the Prevention of Money Laundering Act, an accused can be granted bail subject to twin conditions that the court is prima facie satisfied that he is not guilty of such offence and the prosecutor has been given an opportunity to oppose the application for bail.

Singhvi urged the bench to stay the high court order before it is pronounced.

"I know what I am asking. This court must stay the high court judgement before it is pronounced just like the high court had stayed the bail order on mere mentioning by the ED," he submitted.

Justice Misra said if the high court made a mistake, why should this court repeat it. Singhvi urged the matter to be listed later this week, contending it related to personal liberty.

The bench then posted the matter for hearing on Wednesday.

The high court had on Friday paused Kejriwal's release after the trial court granted him bail on June 20.

Kejriwal, who was arrested by the ED on March 21, could have walked out of Tihar jail on Friday last had the high court not granted the interim relief in favour of the federal anti-money laundering agency.

It also issued a notice to Kejriwal seeking his response to the ED's plea challenging the trial court's June 20 order by which he was granted bail and listed it for hearing on July 10.

In its bail order, the trial court had held that prima facie, Kejriwal's guilt was yet to be established and that the ED had failed to furnish direct evidence linking him to the proceeds of crime in the money laundering case.

The excise policy was scrapped in 2022 after the Delhi lieutenant governor ordered a CBI probe into alleged irregularities and corruption involving its formulation and execution.

According to the ED and the Central Bureau of Investigation (CBI), irregularities were committed while modifying the policy and undue favours extended to the licence holders.

Bail order perverse, Kejriwal neck deep in money laundering: ED to HC

New Delhi | The Enforcement Directorate on Monday told the Delhi High Court that the trial court order granting bail to Chief Minister Arvind Kejriwal was based on "perverse" findings as it did not consider the material demonstrating his "neck deep involvement" in the offence of money laundering linked to the alleged excise scam.

In a written note filed in relation to its plea seeking a stay on the trial court’s decision, the agency contended the order suffers from a "jurisdictional defect" since it was not given a proper opportunity to argue its case.

It also said the trial judge did not record her satisfaction that “there are reasonable grounds for believing that he is not guilty of such offence” as per section 45 of the Prevention of Money Laundering Act (PMLA).

On June 20, Special Judge Niyay Bindu, who sat as the vacation judge, granted bail to Kejriwal in the money laundering case, saying the Enforcement Directorate (ED) failed to furnish direct evidence linking him to the proceeds of crime in the money laundering case.

On July 21, high court's vacation bench of Justice Sudhir Kumar Jain, however, put an interim stay on the trial court order as it reserved verdict on the issue of stay on a plea moved by the ED.

"Considering the factual and legal perversities in the impugned order granting bail, which fails to consider a single relevant material placed before the learned Vacation Judge demonstrating the neck deep involvement of the accused Arvind Kejriwal in the offence of money laundering including the generation of proceeds of crime and its subsequent utilization as well as his vicarious role as National Convener of AAP -- which was the ultimate beneficiary of the major part of proceeds of crime to the tune of at least Rs 45 crores, the impugned order deserves to be stayed and ultimately set aside," the note said.

The ED said the trial court asked its counsel to "cut short" his arguments and its right to avail the legal remedies was also curtailed as the bail order was not uploaded until after 11 a.m. on the next day.

It said the bail is liable to be cancelled as it is "illegal and perverse", is based on irrelevant considerations, and ignores relevant material.

The trial court could not have deviated from the findings given by the high court in another case pertaining to the AAP leader, it said.

"The impugned order dated 20.06.2024 passed by the Ld. Special Judge (Vacation Judge), Rouse Avenue, has been passed in breach of both the mandatory twin conditions which any Court considering bail under the PMLA is bound to follow and therefore, the impugned order suffers from a jurisdictional defect," the note said.

"The Vacation Judge commits a fundamental jurisdictional error by holding that grant of bail to an accused under Section 45 of the PMLA is a matter of discretion of the court. On the contrary, several Supreme Court judgments hold that the twin conditions are mandatory and only upon the satisfaction of the Court that there exist reasonable grounds for believing that the accused is not guilty of the offence of money laundering and that he will not commit such offence while on bail can he be released," it added.

The note further said the trial court completely disregarded Kejriwal's vicarious role as the head of the political party which is the "major beneficiary of the proceeds of crime generated in the Delhi Liquor Scam" and the "concession" given to him for holding a constitutional chair is also perverse.

"In para 26, the (trial) court records a completely perverse finding when it holds that ED is silent about the facts as to how the proceeds of crime have been utilized in the Assembly Elections at Goa by AAP. The entire end-to-end money trail was not only placed before the Court, both in the reply as well as the Prosecution Complaint with (evidence and material)...

"However, despite placing all these materials and adverting to them during arguments, despite repeated attempt on the part of the Judge to “cut short”, there is no such discussion on the above material," the ED said in the note.

"A person who is a Chief Minister commits a serious offence of money laundering can never take refuge under the law and seek immunity from the applicable law on the ground of holding a constitutional chair. Moreover, no such exception is carved out for any constitutional chair either under Section 3 of the PMLA.. Therefore, the concession given to the applicant on account of holding a constitutional chair is perverse and contrary to settled canons of law," it argued.

The note also objected to the trial court referring to a speech by Chief Justice of India D Y Chandrachud at an event to justify hurrying up the proceedings, saying it was "wholly extraneous to the case at hand".

It also said the prayer of the ED counsel to stay the bail order to enable it to avail the legal remedies was orally rejected by the trial court.

On June 21, the high court had put in abeyance the operation of the bail order till the pronouncement on the issue of stay and asked the parties to file written submissions by June 24. The order will be pronounced tomorrow.

Kejriwal has approached the Supreme Court against the interim stay on his bail. On Monday, the top court fixed June 26 for hearing his plea, saying it would like to wait for the pronouncement of the high court order on the issue.

HC to pass order on Tuesday on ED’s plea for stay on Kejriwal's bail

New Delhi | The Delhi High Court will pronounce on Tuesday its verdict on a plea by the Enforcement Directorate seeking a stay on the trial court order granting bail to Chief Minister Arvind Kejriwal in the money laundering case stemming from the alleged excise scam.

The order is scheduled to be pronounced at 2:30 p.m.

In his written submission filed on Monday, the AAP leader defended the bail order and asserted that no prejudice would be caused to the ED if he is released at this stage as he could be sent back to custody in case the high court subsequently decides to set aside the order.

Staying the operation of "the well-reasoned bail order" would amount to virtually allowing the petition for cancellation of the bail, Kejriwal argued.

A vacation bench of Justice Sudhir Kumar Jain had reserved the order on June 21 after the agency challenged the trial court's decision and put it in abeyance until the pronouncement.

The AAP national convenor, who was arrested on March 21 by the Enforcement Directorate (ED), could have walked out of Tihar jail had the high court not granted the interim relief to the central anti-money laundering agency.

The trial court granted bail to Kejriwal on June 20 and ordered his release on a personal bond of Rs 1 lakh, and imposed certain conditions, including that he will not try to hamper the investigation or influence the witnesses.

The ED has contended that the trial court’s order was “perverse”, “one-sided” and “wrong-sided” and that the findings were based on irrelevant facts.

In a note filed on Monday in relation to the plea to stay the bail order, the ED said the decision did not consider the material demonstrating the AAP leader's "neck deep involvement" in the offence of money laundering linked to the alleged excise scam.

Kejriwal, in his written submissions, said the assertions of the ED are "palpably wrong, misleading and tantamount to subterfuge and misrepresentation".

"The repeated contention of the ED that it was not given a proper opportunity of hearing and/or all its contentions have not been dealt with warrant to be rejected at the outset. As stated, the order granting bail not only deals with all the relevant contentions of both the sides but also the reasons for grant of bail duly reflect a due and proper application of mind by the Learned Court on each and every aspect," he said.

It is not a case of perversity which is apparent on the face of the record, he submitted, adding the fact that he is a political figure who is opposed to the dispensation at the Centre, cannot be the ground for "cooking up" a false case against him and to deny him the due process of law.

"Respondent (Kejriwal) is gravely aggrieved by the stay order on his bail order which has rendered justice to be a casualty and the same ought not to be continued even for a moment any further," he said.

"The order passed by the Special Judge granting bail was not only well reasoned but prima facie showed a due application of mind in considering as well as faithfully recording and dealing with ‘relevant arguments and contentions raised on behalf of both the parties’. Therefore, to stay the order would tantamount to virtually allowing the petition at the threshold," he said.

On June 20, Special Judge Niyay Bindu, who sat as the vacation judge, granted bail to Kejriwal in the money laundering case, saying the Enforcement Directorate (ED) failed to furnish direct evidence linking him to the proceeds of crime in the money laundering case.

On June 21, the high court had put in abeyance the operation of the bail order till the pronouncement on the issue of stay and asked the parties to file written submissions by June 24.

Kejriwal has approached the Supreme Court against the interim stay on his bail.

On Monday, the top court fixed June 26 for hearing his plea, saying it would like to wait for the pronouncement of the high court order on the issue.

The excise policy was scrapped in 2022 after the Delhi lieutenant governor ordered a CBI probe into alleged irregularities and corruption involving its formulation and execution.

According to the CBI and ED, irregularities were committed while modifying the excise policy and undue favours extended to the licence holders.

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