The Delhi High Court on Monday dropped a trial court’s adverse remarks against the Central Bureau of Investigation (CBI) and its investigating officer while acquitting 23 accused — including Aam Aadmi Party leaders Arvind Kejriwal and Manish Sisodia — in the Delhi Excise Tax policy case. The high court also issued notices to all the acquitted accused and ordered that the proceedings in the related money laundering case be stayed till it decides the CBI’s challenge to the trial court’s verdict.
The order came as the court was hearing a criminal revision petition filed by the CBI seeking to set aside the February 27 decision of the special court that acquitted all the accused persons in the case.
The Delhi High Court stayed the court’s orders against the CBI
During Monday’s hearing, Justice Swarana Kanta Sharma indicated that the court would suspend the criticism leveled against the investigating agency and its official in the trial court judgement.
According to the Bar and Bench, the Delhi High Court judge said, “I will issue a stay order against any remarks and statements made against the investigating agency and the officer. I will request the trial court to adjourn the hearing of the PMLA case to a date after the hearing in this court.”
The High Court subsequently issued notices to all the accused persons discharged by the trial court and directed them to submit their replies to the CBI’s revision application.
The court also asked the trial court to stay the enforcement directorate’s money laundering case under the Prevention of Money Laundering Act (PMLA) pending the High Court’s decision on the matter.
CBI questions release of Arvind Kejriwal, Manish Sisodia and others
The CBI moved the high court after a special court on February 27 acquitted all 23 accused in the case, ruling that the prosecution’s allegations did not survive judicial review.
Appearing for the CBI, Solicitor General Tushar Mehta clarified that the agency was not seeking an immediate stay on the release order but wanted an assurance that the decision would not affect a separate money laundering investigation being conducted by the Enforcement Directorate.
As reported by the Bar and Bench, he told the court: “It is a strange manner in which the dismissal has taken place. I understand that a stay of judgment would mean that the trial would be held. I would not ask for that, but this is a CBI case on which the ED case is pending. This judgment may not affect that. My lady can remain unaffected by the ED case.”
He further described the case as one of the most significant corruption investigations in the capital.
According to the Bar and Bench, he said: “This is one of the biggest frauds in the history of this nation’s capital and, in my opinion, a national disgrace. A scientific investigation has been carried out. Every aspect of the conspiracy has been proven.”
Allegations of conspiracy and bribery in excise policy
The CBI claimed that its investigation had uncovered detailed evidence of a conspiracy surrounding the formulation and implementation of the Delhi Consumption Policy 2021-22.
The prosecution insisted that witness statements, including those recorded under Section 164 of the Penal Code, provided a clear account of how the alleged kickbacks were arranged and distributed.
As stated by the Bar and Bench, the Solicitor General stated:
“There have been 164 (CrPC) statements. There are witnesses who clearly state how the conspiracy was hatched, how the bribe was paid and to whom the bribe was paid. There is one person named Vijay Nair who is in charge of the communications of the political party… ₹19 million crowns ₹Instead of the favors provided, a bribe of 100 million crowns was paid. from that ₹44.50 crore was transferred through hawala and careful scientific research shows that the money went to Goa to fund elections for the party.”
Excise Case Background: All accused acquitted by court
The case dates back to 2022 when the CBI registered a First Information Report alleging irregularities in Delhi’s excise duty policy in 2021-22. The inquiry was initiated on a complaint by Governor VK Saxen.
Investigators alleged that loopholes were deliberately created in the policy to favor specific liquor licensees and allow the liquor trade to be cartelized in the national capital. The Enforcement Directorate later launched a parallel investigation under the PMLA.
During the investigation, 23 people were charged. Several opposition leaders, including Kejriwal and Sisodia, spent months in custody before securing relief from the Supreme Court after lower courts denied bail.
However, a special court presided over by Justice Jitendra Singh acquitted all the accused, concluding that the prosecution’s theory rested heavily on the approver’s statement and speculative inferences.
The court also criticized the investigative approach, noting that the use of an approver’s testimony to fill in gaps in the prosecution’s case raises constitutional concerns.
According to the Bar and Bench, the judge said: “If such conduct is allowed, it would be a serious violation of constitutional principles. A proceeding where an accused is pardoned and subsequently approved, his statements serve to fill in the gaps in the investigation/narrative and to incriminate others.”
The CBI claims that the order to release Kejriwal and Sisodia is legally flawed
In its review petition, the CBI has argued that the order of release is legally unsustainable and based on a flawed assessment of evidence.
The agency argued that the trial court had indeed conducted a detailed evaluation of the evidence — something it said was not inappropriate at the indictment stage.
According to the petition cited by the Bar and Bench, the agency argued, “The Ld Special Judge passed the impugned order reading the prosecution case selectively without considering the material showing the guilt of the accused.”
She also criticized the trial court’s direction regarding the department’s action against the investigating officer and termed the observations as deeply disturbing.
The Attorney General further argued that the sentence is akin to an acquittal without a full trial.
As reported by the Bar and Bench, he told the High Court: “This is an order of acquittal without trial. It is so bad. It may sound like an exaggeration, but it is an understatement.”
In defense of the investigation, he added: “At least with my limited experience in this area, I have not come across such meticulous evidence gathered by the investigating agency.”
He also criticized the trial court’s approach to evaluating the approver’s testimony, stating that corroboration is not required at the indictment stage.
According to the Bar and Bench, he said: “This (judgment) turns the criminal law on its head. The statements of the approver do not need corroboration until the trial stage. They can be cross-examined (during the trial). The approver was not placed in the witness box before the court, was not examined, is not cross-examined.
He further questioned the trial court’s reasoning, adding: “So now we have to prove that the person personally handled the cash, as in the past when a police officer was caught red-handed with cash?”
