Supreme Court grants bail to K Kavitha in Delhi excise policy case

The Supreme Court on Tuesday granted bail to Bharat Rashtra Samithi (BRS) leader Kalvakuntla Kavitha in the cases initiated by the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) in relation to the alleged corruption in the implementation of the now-scrapped Delhi excise policy 2021-22 [Kalvakuntla Kavitha v Directorate of Enforcement].

A Bench of Justices BR Gavai and KV Viswanathan passed the order after noting that the investigation is over and trial will take a long time to conclude.

"Investigation is complete and chargesheet has been filed. Custody of the appellant (K Kavitha) is not necessary. She has been behind bars for 5 months. The likelihood of trial being concluded in near future is impossible. As said in various pronouncements of this court, undertrial custody should not turn into a punishment," the Court said.

The Court also said that Kavitha is entitled to beneficial treatment available to women under the proviso to Section 45 of the Prevention of Money Laundering Act (PMLA).

"Proviso to 45(1) would entitle woman to special consideration," the Court made it clear.

The Court also took strong exception to the Delhi High Court observations that an educated, sophisticated woman is not entitled to bail under the beneficiary provision for women under PMLA.

"If this Delhi High Court order is allowed to become law, these perverse observations would mean no educated woman can get bail. It would apply at least to all courts in jurisdiction of Delhi. What is this?! On the contrary, we say courts should not differ between an MP and common person, but here (High Court is) finding an artificial discretion not there in the statute," the Supreme Court orally observed.

The Court echoed the same in its order as well.

It noted that the contradiction in the High Court's reasoning to deny the benefit of Section 46 proviso to Kavitha.

On one hand, the High Court had noted that Kavitha was a well-educated woman who had made significant contributions through her social work.

On this ground, the High Court had concluded that she was not a vulnerable person and had refused to grant her the benefit available to women under the proviso of Section 45 PMLA.

"The learned single-judge while denying relief under Section 45 comes to a heartening conclusion that appellant is highly educated and has made significant contributions and (engaged in) social work. High Court while recording her accomplishments said it cannot lose sight of serious allegations and proceeded to observe that present appellant cannot be a vulnerable woman," the Supreme Court noted.

It said that courts should be more sensitive towards women accused under PMLA.

"Courts need to be more sensitive and sympathetic to those in that category. We find that the learned single-judge has totally misdirected herself in applying the proviso," the order said.

In view of the same, the appeal was allowed and Kavitha was directed to be released on bail. Kavitha is the third major political leader to be released on bail.

Earlier, Aam Aadmi Party (AAP) leaders Sanjay Singh and Manish Sisodia were granted bail by the Apex Court.

The Supreme Court was hearing the bail pleas moved by Kavitha after Justice Swarana Kanta Sharma of Delhi High Court had on July 1 rejected the bail pleas filed by the BRS leader. The appeal before the Apex Court was filed through advocate P Mohith Rao.

Background

Kavitha was arrested by the ED on March 15 from Hyderabad. Subsequently, the CBI took her into custody on April 11. The CBI and the ED have claimed that she was involved in the exchange of bribes and the laundering of money in connection with the Delhi Excise Policy. The trial court rejected K Kavitha's bail plea in both the CBI and ED cases on May 6. The case against Kavitha and others originated in 2022 when a First Information Report (FIR) was registered by the CBI alleging that the Delhi Excise Policy of 2021-22 was manipulated to facilitate monopolisation and cartelisation of wholesale and retail liquor trade in Delhi.

As per the CBI and ED, certain persons/groups from South India benefited in the process and some amount of their profits was given to the Aam Aadmi Party (AAP), which used the same to campaign for the Goa assembly elections. Kavitha is one of several political leaders arrested in the case.

The other accused include Delhi Chief Minister and AAP national convenor Arvind Kejriwal and AAP leaders such as Sanjay Singh (presently out on bail) and Manish Sisodia, who the Supreme Court recently granted bail.

Hearing today

During the hearing today, Additional Solicitor General (ASG) SV Raju said that the beneficial provision applicable to women for grant of bail will not apply to Kavitha since she destroyed evidence by formatting her phone.

"Her conduct amounts to tampering with evidence and threatening witnessed," Raju said.

Senior Advocate Mukul Rohatgi, appearing for K Kavitha, countered the same.

He said that the phone was formatted since she had given it to her servant.

"An iPhone?" the ASG asked.

"Yes. So what?" Rohatgi responded.

The Court prima facie agreed with Rohatgi and said that merely formatting a mobile phone cannot be sufficient reason to hold a prima facie case against Kavitha.

"Mr. Raju, a phone is such a private thing. There will be other things in it. I am just on human contact. Normal contact. There may be partial removal of messages in exchanging. Like I have a habit of deleting messaged in school and college groups where so many things are put and it gets messed up," Justice Viswanathan said.

"You cannot format the phone. She was asked to produce," the ASG responded.

"So many counsel have 2-3 phones," Justice Gavai weighed in.

"Yes personal numbers we keep because otherwise we will always be bombarded," Justice Viswanathan stated.

"Yes even I keep two. I don't like iPhone but I keep one apart from Android to facetime with my grandkids," the ASG said.

"What is material to show she was involved in the crime?" the Court asked.

"I am on why she is not entitled to benefit as a woman, not on merits," the ASG replied.

"For tampering with evidence you need (more). Here it only shows formatting," the Bench said.

"We have call data records (CDR) to show her connection with other accused," the ASG answered.

The ASG also highlighted how one of the co-accused Arun Pillai had retracted his statement.

"That time Arun Pillai was in your (ED) custody. How can she be made responsible for his retracting statement," the Court queried.

"It is not that from custody you cannot do anything. Can still get people beaten up," the ASG said.

"So we have to draw an inference that she was responsible?" the Bench said.

It then asked how much weightage can be given to a co-accused implicating a person.

"Purely from a legal point, what is the evidentiary value of co-accused implicating the appellant. How incriminatory can it be? You cannot start with this. You have to see for lending assurance after marshalling other evidence. We are ignoring the retraction and going by the unretracted statement, just from a legal perspective," the Court said.

Senior Advocates Vikram Chaudhri and Dama Seshadri Naidu with Advocates Nitesh Rana, J Akshitha, Arveen Sekhon, Deepak Nagar, Somanadri Goud K, Shaik Sohil Akthar, Muskaan Khurana, Eugene S Philomene, Ashish Jacob Mathee, Varun Varma, Hitesh Kumar Sharma, Shubam Rajhans, Nikhil Kohli, Nikhil Rohatgi, Keshav Sehgal, Shashank Khurana, and Kalyani Bhide Gharote also appeared for K Kavitha today.

Advocates Zoheb Hossain, Mukesh Kumar Maroria, Annam Venkatesh, Arkaj Kumar, Vivek Gurnani, Arvind Kumar Sharma, Samrat Goswami, Hitarth Raja, Shweta Desai, and Abhi Priya Rai also appeared for the ED and the CBI.