In a fresh development in the high-profile Delhi excise policy litigation, the Delhi High Court on Tuesday issued notice on a petition filed by the Enforcement Directorate (ED) seeking to expunge certain adverse observations made by a trial court while discharging the accused in the alleged liquor policy corruption case.
The matter was heard by Justice Swarana Kanta Sharma, who directed the respondents to file their replies and indicated that the issue would be considered along with connected proceedings relating to the discharge order.
The controversy stems from a February 27 order passed by a special court at Rouse Avenue, which discharged all 23 accused in the case, including prominent political figures such as Arvind Kejriwal, Manish Sisodia and K. Kavitha.
While granting the discharge, the trial judge made several critical remarks about the investigative approach of central agencies in the alleged scam linked to the now-scrapped 2021–22 Delhi excise policy. The court had observed that criminal law agencies cannot initiate prosecutions merely on allegations of electoral funding irregularities unless a distinct and cognisable offence is clearly established.
The order further suggested that laws such as the Prevention of Money Laundering Act, 2002 cannot be invoked in a “vacuum” and require proof of a predicate offence and the generation of “proceeds of crime.”
Challenging these observations, the Enforcement Directorate argued before the High Court that the remarks were made without giving the agency an opportunity to present its case.
Appearing for the agency, Additional Solicitor General S. V. Raju submitted that the impugned comments related to the ED’s money-laundering investigation even though the trial court was adjudicating a separate corruption case investigated by the Central Bureau of Investigation (CBI).
According to the ED, the trial judge’s observations amounted to a violation of the principle of natural justice because the agency had not been heard despite remarks being made about its investigation. The plea states that such “sweeping and unguided” comments could cause serious prejudice to ongoing proceedings under the anti-money laundering law.
The ED also contended that the trial court was only required to determine whether charges were made out in the CBI’s corruption case and had no jurisdiction to comment on the ED’s independent investigation.
During the hearing, the High Court orally remarked that the impugned comments appeared to be “general observations.” However, the bench clarified that it would examine whether such remarks could legitimately be made when the concerned agency was not a party to the proceedings before the trial court.
Senior advocate Vikram Chaudhari, appearing for one of the respondents, argued that the remarks were not directed personally at the ED but were part of the broader reasoning of the judgment. Another counsel, N. Hariharan, submitted that the observations should be read in the context of the entire judgment rather than in isolation.
The excise policy controversy relates to the now-withdrawn Delhi government liquor policy introduced in 2021, which aimed to privatise retail liquor sales but later came under scrutiny following allegations of irregularities and corruption.
Investigations were launched by both the CBI and the ED, leading to multiple arrests and chargesheets over the past several years. However, the trial court recently concluded that the material produced by investigators did not disclose even a prima facie case against the accused, resulting in their discharge.
Separately, the High Court is also hearing the CBI’s challenge to the discharge order, meaning that both the agency’s appeal and the ED’s plea concerning the trial court’s remarks may be examined together.
The dispute before the High Court highlights a key procedural issue in criminal trials: whether courts can make observations affecting an investigating agency that was not heard in the proceedings. The outcome may shape how trial courts frame their reasoning in complex cases involving multiple investigative authorities.
The matter is scheduled for further hearing later this month, where the High Court will consider whether the contested remarks should be removed from the discharge order and what implications they may have for the continuing proceedings in the excise policy investigations.
