A Delhi court on Friday acquitted all 23 accused in the Delhi Excise Policy case investigated by the Central Bureau of Investigation (CBI), including former Delhi Chief Minister Arvind Kejriwal and Deputy Chief Minister Manish Sisodia.
In a detailed judgement running into nearly 600 pages, Special Judge (PC Act) Jitendra Singh dismantled the CBI case, citing procedural lapses, violation of constitutional principles and reliance on hearsay evidence.
In fact, the Court issued a scathing indictment of the CBI, holding that the probe was neither objective nor impartial.
Here is a summary of the Court's findings and how the case collapsed.
1. No manipulation of liquor policy
Judge Singh said that the Excise Policy was the outcome of a structured governmental process involving multiple departments, expert committees and cabinet-level approvals.
The Court said that there was no admissible material demonstrating that Sisodia or Kejriwal exercised their official authority with the intent to confer undue benefits or to participate in any criminal conspiracy.
It stressed that policy decisions, even if later withdrawn or criticised, cannot by themselves give rise to criminal liability unless supported by clear evidence of quid pro quo, personal gain, or misuse of office. It held that the prosecution failed to place any such material on record.
“The clauses incorporated in the policy cannot be traced to any document allegedly supplied by the so-called South Group. The record reflects deliberations at various levels, examination by the competent authorities, and a progressive development of the policy framework, culminating in approval by the Hon’ble LG. No material has been shown to suggest any prior agreement or meeting of minds indicative of a criminal conspiracy in the formulation of the policy,” the Court said.
2. Case against Kejriwal based on a singular approver statement
It was the CBI case that Kejriwal, in his capacity as the Chief Minister of Delhi, occupied the apex position and exercised overarching control over the criminal conspiracy relating to the formulation and implementation of the policy.
Judge Singh rejected the allegations outright. He noted that Kejriwal’s role features in the case only in the fourth supplementary chargesheet filed in July 2024 and the only principal material relied upon to implicate him is the statement of approver Magunta Sreenivasulu Reddy.
The judge said that despite an alleged conversation occurring in the presence of public persons, none were examined, leaving the claim incapable of verification.
The Court ruled that mutual reliance between accomplice-like statements does not amount to legal corroboration.
“The allegation against A-18 rests primarily on a solitary line in the statement of PW-225 [Reddy], an accomplice-like witness, stating that A-17 [K Kavitha] would be contacting him. The said statement is alleged to have been made in the presence of 10 to 12 persons. Those persons were admittedly present; however, they have either not been examined or, if examined, have not been cited as witnesses in the charge-sheet. The absence of such independent version raises serious concerns regarding the completeness and fairness of the investigation. Where direct witnesses are available, reliance on a tainted source cannot compensate for their non-production."
3. Approver statements unreliable, uncorroborated
The Court held that the prosecution’s case against certain accused, like Kejriwal, was built almost entirely on statements made by an approver, without any independent corroboration.
It noted that these statements (by one Raghav Magunta) amounted to inadmissible hearsay insofar as they were not supported by documentary evidence, financial trails, or testimony from independent witnesses.
The Court found that the CBI court found that the investigating agency treated the approver’s version as inherently truthful, without subjecting it to rigorous verification.
“In the considered view of this Court, the manner in which the investigating agency has proceeded, by repeatedly recording the statements of the approver without justification and over a prolonged duration, reflects an exercise of discretion that cannot be characterised as fair or reasonable. If left unchecked, such conduct risks converting the exceptional mechanism of pardon into an instrument for narrative construction rather than truth discovery, thereby causing serious prejudice to the accused and eroding confidence in the criminal justice process,” the Court said.
4. Case against Sisodia built on inferences
The CBI had alleged that Manish Sisodia, as Deputy Chief Minister holding the Excise portfolio, was the principal architect of the Delhi Excise Policy 2021–22 and the central controlling force behind its formulation and alleged conspiratorial implementation.
However, the Court held that the prosecution failed to establish any prima facie case against Sisodia.
It found no evidence placing him in conspiratorial meetings, clandestine deliberations, or alleged cash transactions and no recovery, document, or financial trail linking him to any transfer of funds.
The attempt to connect him to the money movement through another accused was based on inference, not admissible proof, the Court said. It added that the Excise Policy was formulated through consultations involving the Lieutenant Governor and the Council of Ministers, following constitutional procedures.
A selective conspiracy allegation against Sisodia alone was legally untenable, with the record reflecting institutional deliberation rather than criminal intent, Judge Singh added.
While concluding the judgment, Judge Singh quoted Martin Luther King Jr that “injustice anywhere is a threat to justice everywhere.” He also referred to the Latin maxim “fiat justitia ruat caelum (let justice be done though the heavens may fall)”.
“These principles serve as a constant reminder that the judicial task is neither to secure a convenient outcome nor to endorse a dominant narrative, but to uphold the rule of law. It is only by remaining anchored to these ideals that the confidence of the citizen in the administration of justice is preserved. With that assurance, and conscious of this obligation, the file is directed to be consigned to the record room,” the Court said.
ED’s hurried probes, arrests affecting rights
The court also expressed concern over the Enforcement Directorate’s (ED) practice of making arrests and filing prosecution complaints in money laundering cases even before the facts of the corresponding predicate offence cases undergo judicial scrutiny.
Special Judge Singh noted that the cases under Prevention of Money Laundering Act (PMLA) imperil an individual’s liberty on the basis of a presumption of “proceeds of crime” arising out of the scheduled offences. The accused is then required to meet stringent conditions for bail to avoid prolonged incarceration even at the pre-trial stage, the judge added.
Referring to the settled legal position that money laundering offences do not survive in the event of closure of the predicate offence, the Court observed,
“Despite this settled legal position, the prevailing practice reveals a disturbing inversion of the statutory scheme, wherein coercive powers of arrest and prolonged custody are invoked even before the foundational facts relating to the scheduled offence are judicially tested. This results in a situation where an individual is deprived of personal liberty on the strength of an allegation whose legal sustainability remains uncertain and contingent upon a future outcome in a parallel investigation.”
It noted that ED often proceeds to file prosecution complaints without the completion of investigation into the scheduled offences by the other agency.
“In such situations, while the proceedings under the PMLA are set in motion, the investigation in the predicate offence continues to remain inconclusive, and in many cases even the filing of a charge-sheet therein is awaited. This Court itself is a witness to a case where the proceedings relating to money laundering have reached the final stage of arguments on charge, whereas, in the predicate offence, the investigation is still underway to determine whether any offence has been committed at all,” the Court said.
Commenting further on this “anomalous situation”, the Court said it gives rise to serious legal and constitutional concerns, considering that the continuation of PMLA proceedings remains contingent upon the very survival of the scheduled offence.
While noting that the right to life and personal liberty under Article 21 of the Constitution mandates that any deprivation of liberty must be just, fair, and reasonable, not merely in form but in substance, the Court said,
“A procedure which permits prolonged or indefinite incarceration on the basis of a provisional and untested allegation, while the very substratum of the offence remains under investigation, risks degenerating into a punitive process rather than a regulatory or investigative one. Liberty, once curtailed, cannot be meaningfully restored by a subsequent acquittal, nor can the passage of time compensate for the loss occasioned by unwarranted pre-trial detention.”
However, the Court also acknowledged that the legislature has vested wide powers in the ED to combat the menace of money laundering, including powers of attachment, arrest and prosecution, while recognising the transnational and clandestine nature of such offences.
The object of the statute is undoubtedly legitimate and compelling, the judge said. Nevertheless, he added that statutory power, however wide, cannot eclipse constitutional safeguards.
“The exercise of such power must therefore be harmonised with the settled principle that arrest and prolonged incarceration are exceptions, and not the rule,” the judge said.
Considering his views and experience, the Court flagged the need to evolve a framework for striking a careful balance between an effective investigation of economic offences and the inviolable right of an individual to personal liberty.
“While provisional attachment of alleged proceeds of crime may be justified to preserve the subject-matter of investigation, the coercive measure of arrest and the consequent application of onerous bail conditions cannot be permitted to operate mechanically in the absence of a crystallised and judicially cognisable predicate offence,” the judge said.
The Court further opined that the legitimacy of the PMLA regime depends not merely on the severity of its provisions, but on their fair, proportionate, and constitutionally informed application.
“The balance between the power of the investigating agency and the right to life and personal liberty is not a matter of legislative grace, but a constitutional command. Any failure to maintain this balance is likely to undermine both the rule of law and public confidence in the administration of criminal justice,” it stressed.
