NEW DELHI: The Supreme Court on Tuesday granted bail to Bharat Rashtra Samithi (BRS) leader K Kavitha in the Delhi excise policy case and delivered a stern rebuke to the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) regarding the fairness of their investigation, criticizing the agencies for relying on inferences rather than concrete, incriminating evidence.
A bench comprising Justices Bhushan R Gavai and KV Viswanathan granted Kavitha bail, citing that the investigation was complete, the trial was expected to be delayed due to the extensive number of witnesses and documents, and that as a woman, she was entitled to special consideration under Section 45(1) of the Prevention of Money Laundering Act (PMLA).
“The investigation is complete and a charge sheet has been filed. The custody of the appellant (Kavitha) is not necessary. She has been incarcerated for five months. It is impossible for the trial to conclude in the near future. As stated in various rulings of this court, under-trial custody should not become a form of punishment,” the bench stated in its order.
Kavitha, an MLC and daughter of former Telangana Chief Minister K Chandrashekar Rao, was arrested by the ED on March 15 and by the CBI nearly a month later in connection with alleged irregularities in the now-scrapped Delhi liquor policy of 2021-22. The case has garnered significant political attention, with Kavitha accused of playing a key role in allegedly paying a ₹100 crore bribe to the Aam Aadmi Party (AAP) and its leaders, including Delhi Chief Minister Arvind Kejriwal and former Deputy Chief Minister Manish Sisodia, in exchange for benefits to private liquor businessmen from southern India—a group termed the “South Group.”
Kavitha’s bail came two weeks after the same bench granted bail to Sisodia, arguing that his prolonged incarceration of 17 months and the lack of any likelihood of the trial concluding soon violated his fundamental rights to liberty and a speedy trial under Article 21 of the Constitution.
In her plea, Kavitha referenced the judgment in Sisodia’s case. Notably, a different bench of the top court is currently hearing petitions from Kejriwal seeking to invalidate his arrest by the CBI on June 26 and to grant him bail. Kejriwal’s petition, who has been granted interim bail by the Supreme Court in the ED case but remains detained in the CBI case, also heavily relies on the reasoning used in Sisodia’s case.
BRS working president KT Rama Rao thanked the Supreme Court for granting bail to his sister and party MLC, Kavitha, posting on X: “Thank You Supreme Court. Relieved. Justice prevailed.”
The bench also criticized the selective approach of the agencies in treating some accused as approvers to build a prosecutable case. “The prosecution has to be fair. Someone who incriminates themselves has been made a witness, while others are prosecuted based on their statements…Can you randomly choose anyone? You cannot selectively pick and choose accused…This isn’t fair,” the court said, referring to Sharat Chandra Reddy, initially arrested as an accused but later made an approver, who claimed he participated in the Delhi liquor business on Kavitha’s assurances.
Regarding Arun Pillai, a key witness who later retracted his statement, the bench noted that the agencies were relying on his earlier, self-incriminating statement while ignoring his retraction. “You cannot selectively choose statements that suit your case,” the court added.
The bench also questioned the prosecution’s reliance on negative inferences, particularly regarding allegations that Kavitha had destroyed evidence by erasing her mobile phones. “You are drawing a negative inference without any substantive proof. People do delete messages; it is normal human behavior,” the bench remarked, emphasizing that the agencies needed to provide solid evidence rather than speculative conclusions.
While Additional Solicitor General (ASG) SV Raju, representing the agencies, read out statements from witnesses and other evidence to argue against granting bail to Kavitha, the court’s criticism intensified, warning the ASG that continuing his arguments could prompt the court to formally question the impartiality of the investigation.
“If you continue to argue, we will be forced to comment on the unfair conduct of your investigating agency,” the bench warned, prompting Raju to retreat.
The Delhi High Court had previously denied her bail on July 1, citing certain incriminating statements from other witnesses, including Reddy. The court also argued that Kavitha, being well-educated and of significant political standing, did not qualify for the exemption from rigorous bail standards under the PMLA that are typically afforded to “vulnerable” women.
On Tuesday, the Supreme Court decisively rejected the High Court’s reasoning, describing it as “perverse” and cautioning that allowing it to stand could set a dangerous precedent that could misguide future cases.
“If this Delhi High Court order remains, these perverse observations would imply that no educated woman can ever get bail. This would apply at least to all courts within the jurisdiction of Delhi. What is this? On the contrary, we say courts should not differentiate between an MP and a common citizen, but here the High Court is creating an artificial distinction not present in the statute,” the bench stated.
The hearing before the bench involved intense scrutiny of the prosecution’s case. Senior counsel Mukul Rohatgi, representing Kavitha, argued that she had been unjustly held in custody for over five months despite a lack of direct evidence linking her to the alleged crime. He highlighted the vastness of the case files, which include 493 witnesses and 50,000 pages of documents, making it evident that the trial would not conclude anytime soon.
In response, ASG Raju contended that there was sufficient documentary evidence to deny bail to Kavitha due to her central role in a conspiracy to manipulate the now-scrapped Delhi liquor policy of 2021-22 to benefit private liquor retailers. He also argued that she was a person of influence, prompting the High Court to deny her the benefit under Section 45(1) of the PMLA.
However, the bench questioned the rationale behind denying bail to Kavitha, particularly given that the investigation had been completed in both the CBI and ED cases and charge sheets had been filed. The bench further noted that the Delhi High Court had denied her bail by distinguishing between “vulnerable women” and women of higher status—a distinction not found in the statute. “A woman is a woman. The law does not differentiate between vulnerable women and others,” it observed.
During the proceedings, the bench expressed concern over the prosecution’s approach, particularly the selective treatment of individuals based on their statements and the absence of independent evidence to substantiate the allegations. “You cannot base your case on inferences alone. There must be independent evidence to connect your inferences with criminality,” the court said, rejecting the agencies’ plea to deny her bail.
Quashing the High Court order, the bench ordered Kavitha’s immediate release on bail, subject to conditions including submitting a ₹10 lakh bail bond in the two cases, surrendering her passport, and committing not to tamper with evidence or influence witnesses. The court emphasized that its observations were limited to the bail proceedings and would not affect the merits of the trial.
The Supreme Court’s strong remarks against the CBI and ED are likely to have significant implications, not only for the ongoing prosecution in the excise policy case but also for the broader conduct of the agencies in high-profile cases, particularly in relation to the selective treatment of witnesses and reliance on inferences rather than direct evidence.
Additionally, the Supreme Court’s stance on the interpretation of Section 45(1) of the PMLA, regarding the rights of women accused, could serve as a corrective measure to ensure statutory protections for women are upheld without arbitrary distinctions.
