Kejriwal-Sisodia Excise Case: Why did Trial Court Rap CBI?

It all started with an FIR lodged in August 2022 alleging a criminal conspiracy surrounding a Liquor Policy – The very famous Kejriwal-Sisodia Excise Policy Case. It was alleged that certain people including private individuals, liquor businessmen and Delhi Government officials were framing and implementing Delhi Excise Policy 2021-22 to secure unlawful pecuniary advantage. Questions were avoided, arrests were made, bail applications denied, Government ran behind the prison walls, and a lot of drama unveiled. The matter was not confined to the Trial Court but the Delhi High Court and even the Supreme Court was approached for one aspect or the other. 

Now, when the trial is finally over, the Special Judge of the Rouse Avenue Court passed its judgment. All 23 accused persons in the Delhi Liquor Policy case have been discharged. In fact, the CBI has approached the High Court against the Trial Court decision.  

Apart from discussing the innocence and gaps in evidence against the accused, the Court said a lot more. The Trial Court highlighted all the points where CBI went wrong, unnecessarily active. The Court delineated all the facets where the CBI went beyond its territory, its powers, while investigating the Kejriwal-Sisodia Excise Case. Here is what the Court said about the Central Bureau of Investigation.  

CBI Charge Sheet in Excise Policy Case 

The Trial Court focused upon the principal charge sheet with four supplementary charge sheets filed by CBI in the Liquor Policy Case. The matter involved 23 accused persons including included prominent political figures like Arvind Kejriwal and Manish Sisodia, bureaucrats and private liquor businessmen. 

The Crime Story 

An Expert Committee Report in 2020 recommeneded continued Government control over wholesale, complete privatization of retail vends to individual and allotted through lottery and other safeguards to prevent cartelisation. This report as per CBI was not processed in the normal course, since accused persons intended to favour private entities. The CBI alleged that the accused conspired to tweak the DEP-2021-22 to favor a specific cartel of liquor businessmen referred to as the "South Group". The alleged manipulation included arbitrarily increasing the wholesale profit margin from 5% to 12% and relaxing eligibility norms to establish a monopoly. Fabricated public feedback was allegedly made to show public support for retail liquor licence allotment through auction, reduction of Excise and VAT and enhancement of license fee and increase in number of liquor vends. A draft Cabinet note favouring status quo went missing, and the CBI alleged that the file was deliberately removed by Manish Sisodia. 

CBI alleged offences under Section 120B of the Indian Penal Code, 1860, Sections 7, 7A, 8 and 12 of the Prevention of Corruption Act, 1988 and other provisions.  

Fabricated Emails 

On CBI’s claims of fabricated public feedback through emails, it was suggested that a group of interns were instructed to send multiple emails in an organised manner. However, the Trial Court pointed out that the CBI could only trace 6 emails originating from the said group. The Court therefore questioned the “absence of any large-scale or impactful campaign” in contrast with more than 14 thousand emails received by the Excise Department after the public notice. 

Repeated Recording of Statements 

At one point in Kejriwal-Sisodia excise case, there was mention of payment of 30 lakhs or the payment of Rs. 2.10 crore which the witness did not reiterate or elaborate. The Trial Court noted the recording of multiple statements of a witness under Section 161 of CrPC after recording statement under Section 306(4) of CrPC. The Court questioned whether repeated recording of statements was permissible. The Court further doubted the evidentiary value of such statements for the purpose of charge.  

“Partial Investigation” by CBI in Excise Policy Case 

The Trial Court in Kejriwal-Sisodia liquor policy case expressed concerns that the allegations levelled by CBI against the accused persons did not flow through objective or impartial investigation. The record revealed a “pre-meditated and choreographed exercise” as per the Court, where roles were apparently pre-assigned to suit a “preconceived narrative”. 

The Court expressed astonishment that “What is particularly disturbing is the complete disregard shown by the investigating officer to the fact that public servants, who were discharging their official duties on a day-to-day basis for the effective implementation of a governmental policy, have been subjected to criminal prosecution solely on the basis of inadmissible hearsay attributed to an approver, despite the investigation yielding no material against them.”  

In the words of the Trial Court, “An investigation that departs from transparency, consistency, and procedural discipline, particularly by repeatedly rerecording statements of an approver after the grant of pardon without any disclosed justification, does not merely affect evidentiary appreciation, but strikes at the heart of these constitutional and international guarantees. Where investigative discretion is exercised in a manner that erodes the presumption of innocence or dilutes the sanctity of a judicially granted pardon, the process itself assumes a punitive character, impermissible in a constitutional democracy governed by the rule of law.” 

Lack of Incriminating Material 

While delivering its judgment in Aravind Kejriwal – Manish Sisodia excise policy case, the Trial Court highlighted the role played by a government servant while exercising discretion. In the absence of incriminating material, the Court questioned CBI arraying the officials and sanction of their prosecution. The Court expressed that “Such a prosecutorial construct is intrinsically fragile and cannot withstand judicial scrutiny when tested on the anvil of settled principles governing appreciation of evidence. The manner in which the investigation has been conducted, far from conforming to the discipline of a fair and lawful investigation, discloses a calculated and sustained assault on the foundational tenets of the rule of law.” 

Unchallenged Sanction Denial 

CBI’s prosecution theory of coercion and misuse of official machinery was founded on closure of distilleries belonging to a Punjab witness. However, the CBI’s decision of not challenging the order where the authority declined sanction to investigate the officials has been questioned by the Trial Court. The Trial Court relied on Karnataka Emta Coal Mines case (2024 CaseBase (SC) 515) to discuss the serious legal consequences of not challenging the order of refusal for sanctions, amounting to acceptance of findings of the competent authority by the investigating agency.  

Political Misuse of Criminal Machinery 

The Delhi Excise Policy case has mirrored political drama since its inception. The Trial Court in its decision reflected upon the said misuse of criminal machinery for political gains. Pointing towards the law, the Court suggested that “The Act does not envisage, indeed, it consciously excludes, the routine or unilateral invocation of criminal machinery at the behest of rival political actors. This demarcation serves a foundational democratic purpose. If investigative agencies such as the CBI or enforcement authorities under the Prevention of Money Laundering Act, 2002 (PMLA) were permitted to enter the electoral arena merely on allegations of “cash spending”, “illegal funding”, or “unaccounted expenditure”, the inevitable consequence would be the criminalisation of electoral competition. Such an approach would arm the executive with coercive instruments capable of influencing political outcomes, thereby eroding the level playing field that lies at the heart of free and fair elections.” 

CBI Investigation of Election-Expenditure 

The Trial Court expressly discussed the limited jurisdiction of CBI to be exercised upon State consent, Centre’s notification, or judicial directions. As per Trial Court, “To permit the CBI to independently assume jurisdiction over election-expenditure allegations would amount to the executive arrogating to itself a supervisory role over elections, a role which the Constitution has consciously and expressly denied to it.” 

Whether CBI can investigate political parties for election expenses, the Trial Court clarified that “Allegations of excess election expenditure, cash usage, or undeclared campaign spending do not, by themselves, constitute scheduled offences under the PMLA.” The Court also discussed the role of Election Commission of India and Election Courts in this regard, which cannot be assumed by the investigative agencies. The Trial Court delineated the scope of election law remedies and a cognizable offence. It further held that investigation by State Police, CBI or ED cannot be initiated or sustained solely on allegations pertaining to irregularities of election funding or expenditure.  

Not even a Weak Case 

Based on its decision in Kejriwal-Sisodia Excise Policy case, the Court declared the absence of even a prima facie case, in contrast to “grave suspicion” as projected by the CBI. The Trial Court observed that “the theory of an overarching conspiracy, so emphatically projected, stands completely dismantled when tested against the evidentiary record.” 

“South Group” Terminology 

Apart from the deviation of CBI from its role in Kejriwal Liquor Policy Case, the Trial Court also raised its brows upon the use of expression “South Group” by the investigating agency while describing certain accused persons based on their place of origin. It particularly questioned no comparable descriptor employed for the rest of those accused. The Court expressed displeasure saying “Such a nomenclature finds no foundation in law, does not correspond to any legally cognisable classification, and is wholly alien to the statutory framework governing criminal liability.” 

Trial Court’s Conclusion in Delhi Liquor Policy Case

Whatever has been discussed above is just a glimpse of the displeasure conveyed by the Trial Court on the manner in which CBI investigated the case. In short, Trial Court in its order of 500+ pages concluded that “The CBI’s own record acknowledges, at the highest, negligence and not conspiracy.”