On June 4, the Supreme Court disposed of the bail application filed by former deputy chief minister of Delhi Manish Sisodia without granting him bail. The very next day, a Delhi court rejected the interim bail application of Delhi Chief Minister and Aam Aadmi Party convenor Arvind Kejriwal to undergo medical tests.

Both Kejriwal and Sisodia have had multiple bail applications disallowed by different levels of courts in the judicial system ever since they were both arrested over allegations of money laundering linked to the Delhi liquor scam – a case under investigation for over two years.

Scroll went over all the court orders denying them bail in the last one year. The orders show that despite the Enforcement Directorate failing to establish a money trail directly linking either of the two leaders with any illicit money, Kejriwal and Sisodia have been denied bail primarily due to a harsh “guilty until proven innocent” standard employed by courts under the Prevention of Money Laundering Act.

Under the law, which has been weaponised by the Modi government to go after the Opposition, bail can only be granted if the court is absolutely sure that no case is made out against the accused. With trials taking long to start, the court is forced to rely on untested evidence presented by the prosecution while taking a decision on bail.

In the case against Kejriwal and Sisodia, the Enforcement Directorate has largely relied on witness statements. Strikingly, on two separate occasions, the reliability of these witness statements has come under question from the Supreme Court.

Sisodia’s bail rejection

In November 2021, the Aam Aadmi Party government made sweeping changes to Delhi’s liquor policy, granting licences not to individual shops but to entire zones.

The Bharatiya Janata Party accused the AAP government of tailoring the policy to suit a select group of businessmen and giving them licenses in exchange for kickbacks.

The Central Bureau of Investigation launched a probe into financial irregularities and corruption in the liquor licensing regime in July 2022. Sisodia, who had drafted the liquor policy as Delhi’s excise minister, was arrested by the agency in February 2023.

Apart from the CBI case, Sisodia was also booked in a money laundering case by the Enforcement Directorate, which accused him of using the bribes generated from the sale of liquor licenses to fund the Aam Aadmi Party’s Goa Assembly election campaign in 2022.

Sisodia immediately challenged his arrest in the Supreme Court, which directed him to approach the lower courts. Article 32 of the Constitution allows citizens to approach the Supreme Court directly for protecting fundamental rights, but the Court often requires exhausting lower court remedies first for administrative convenience.

Sisodia’s bail applications in both cases have been repeatedly rejected by lower courts and the Delhi High Court on grounds that the allegations against him are serious.

In October last year, the Supreme Court also denied him bail, merely citing the windfall gains of Rs 338 crore made by some liquor distributors, without offering any evidence that the gains had resulted in a loss to the public exchequer.

Delhi Police personnel escort Delhi Deputy Chief Minister Manish Sisodia ahead of his questioning by the CBI in the liquor policy case, in February 2023. Credit: PTI file photo.

Neither did the court order detail any evidence supporting the Enforcement Directorate’s contention that Sisodia was directly responsible for the alleged scam. The court allowed Sisodia to reapply for bail if the trial did not progress satisfactorily within six to eight months.

The Supreme Court rejected Sisodia’s review petition against this judgment on December 14 and his curative petition against the decision on March 14.

On April 30, a lower court in Delhi again rejected Sisodia’s bail plea in both cases, filed on the grounds of delay in his trial. The court blamed Sisodia for the delay, arguing his numerous bail applications in the last one year had stalled the trial.

On May 21, the Delhi High Court rejected Sisodia’s bail plea for the third time. It again referred to the seriousness of the allegations against him, the possibility of him tampering evidence and influencing witnesses due to his influential position and the prosecution’s commitment to a speedy trial within six to eight months.

On June 4, the Supreme Court refused to engage with Sisodia’s petitions challenging the Delhi High Court’s order but noted the Enforcement Directorate’s assurance that a chargesheet would be filed by July 3 and the trial would commence thereafter. The Court advised Sisodia to approach it again if the trial did not proceed promptly.

Kejriwal’s bail rejection

Kejriwal was arrested in the same case by the Enforcement Directorate on March 21, only a few days after the announcement of the Lok Sabha election schedule.

His plea challenging his arrest was rejected by the Delhi High Court on April 9, on grounds similar to those seen in Sisodia’s bail rejection orders: that there was a prima facie case against Kejriwal by virtue of him being the convenor and manager of the Aam Aadmi Party that benefitted from the alleged proceeds of the crime.

The court also held, in an unprecedented step, that an entire political party could be booked under the Prevention of Money Laundering Act.

On May 10, while hearing his challenge to the Delhi High Court order, the Supreme Court granted Kejriwal bail till June 1 to lead the Aam Aadmi Party’s Lok Sabha election campaign.

However, on May 29, the Supreme Court registry refused to admit his application seeking extension of his interim bail by a week to undergo medical tests – Kejriwal is diabetic.

On June 5, a lower court in Delhi rejected his plea for interim bail extension for medical tests. The court’s rationale was that the extensive campaigning by Kejriwal showed that he did not suffer from any serious ailment.

No medical assessment of Kejriwal was undertaken by the court to arrive at this conclusion.

Aam Aadmi Party leaders protest against Arvind Kejriwal’s arrest. Credit: Aam Aadmi Party/X.

Testimonies relied on by courts

Both Kejriwal and Sisodia’s bail rejections have been premised on the prima facie case against both of them, the centerpiece of which are the witness testimonies against them recorded by the investigating agencies.

An examination of the bail rejection orders as well as a remand application for Kejriwal filed by the Enforcement Directorate in March shows that the Enforcement Directorate has relied on three key testimonies.

The first is the statement of C Arvind, a former secretary of Sisodia. In the statement made to the Enforcement Directorate, Arvind alleged that a clandestine meeting took place at Kejriwal’s residence in March 2021 when a controversial 12% profit margin clause for the liquor policy was introduced. Sisodia allegedly instructed Arvind to incorporate this clause. The Enforcement Directorate has argued that this showed both Sisodia and Kejriwal were involved in rigging the policy to suit select businessmen.

The second testimony that the Enforcement Directorate has relied on is that of Buchi Babu, the chartered accountant of Telangana politician K Kavitha, corroborating it with some Whatsapp correspondence recovered from his phone. The agency has maintained that Kavitha represented a group of businessmen from Telangana and Andhra Pradesh, called the “South Group”, who gave Rs 100 crore to leaders of the Aam Aadmi Party in exchange for the Delhi excise policy to be rolled out in a way that would benefit them.

The third testimony is that of Magunta Srinivasulu Reddy, a politician from Andhra Pradesh who was recently elected to the Lok Sabha for the fourth time. The Enforcement Directorate had accused Reddy of being part of the “South Group”, and had arrested his son Raghava in February 2023.

Five months later, in a statement made to the Enforcement Directorate, Reddy alleged that Kejriwal met him in Delhi in March 2021, and disclosed that Kavitha had made an offer of Rs 100 crore as kickbacks from the “South Group”.

In October, Raghava was released on bail after he turned approver in the case.

Is this evidence reliable?

Since the trial has not commenced in any of the cases, none of these testimonies have been judicially tested yet.

However, the veracity of this testimonial evidence has been questioned on at least two instances by the Supreme Court.

First, while hearing Sisodia’s first bail plea last year, the Supreme Court pointed out that there was no specific prima facie allegation against Sisodia, either in the alleged acceptance of any bribes by him or his alleged role in the transfer of money to the Aam Aadmi Party for the Goa election.

It only denied him bail on the grounds that certain businessmen had made windfall profits due to the liquor policy, who in turn may have given kickbacks and bribes to the Aam Aadmi Party.

The second instance was during the bail hearing of Aam Aadmi Party leader and Rajya Sabha member Sanjay Singh, who had been arrested in the case in October last year. The Supreme Court observed in April that Singh had been arrested on the allegation that someone close to him had received Rs 1 crore from Delhi-based businessman and restaurateur Dinesh Arora, who in turn had accepted the money from the director of a company on behalf of Sisodia.

The court noted that Arora had not implicated Singh in his initial statements and had only done so later, in return for the Enforcement Directorate not objecting to his bail application. Arora turned an approver in the case. The testimony of an approver has weak evidentiary value in criminal law.

Since no money had been recovered from Singh either, the court told the prosecution that it was likely to pass an order on merits granting Singh bail, recording that there was no prima facie case against him.

Responding immediately, the prosecution lawyer, Additional Solicitor General SV Raju told the court that the Enforcement Directorate did not object to the grant of bail to Singh since it no longer required his custody.

Singh was subsequently granted bail by the court.

If the Supreme Court had passed an order on merit recording that there was no prima facie case against Singh, it would have severely weakened the prima facie cases against Kejriwal and Sisodia advanced by the Enforcement Directorate.

Legal scholar and lawyer Gautam Bhatia criticised the evasion by the Supreme Court, calling it a “non-order”.