The Delhi High Court issued notice on a petition filed by the Directorate of Enforcement seeking removal of certain observations made by a trial court while discharging all accused persons in the Delhi excise policy case. The petition was heard by Justice Swarana Kanta Sharma, who agreed to examine the plea and directed the respondents to file their replies to the petition.
The matter arose after a special court discharged all twenty-three accused persons in the case related to the alleged irregularities in the formulation and implementation of the Delhi excise policy. Among those discharged were political leaders Arvind Kejriwal, Manish Sisodia and K. Kavitha, along with several other individuals who had been accused in connection with the case. The trial court held that the material placed before it did not establish a prima facie case against the accused persons and therefore discharged them from the proceedings.
While passing the discharge order, the trial court also made several observations concerning the role and functioning of investigative agencies, including the Directorate of Enforcement. These remarks later became the subject of challenge before the High Court through a petition filed by the agency.
In its petition before the High Court, the Directorate of Enforcement contended that it was not a party to the proceedings before the trial court in which the observations had been recorded. According to the agency, it had not been given any opportunity to present its position or to respond before the remarks were made. The agency argued that the observations were therefore recorded without hearing it and in violation of the principles of natural justice.
The Directorate of Enforcement further submitted that the remarks made by the trial court were sweeping in nature and were not based on any material collected during its investigation. The agency argued that the trial court was not dealing with the prosecution complaints filed by it under the Prevention of Money Laundering Act when those remarks were made. According to the agency, the proceedings before the trial court were limited to the case registered by the Central Bureau of Investigation and therefore the trial court had no occasion to comment on the investigation carried out by the Enforcement Directorate.
The petition also stated that the observations could cause serious prejudice to the agency and its ongoing proceedings. The Directorate of Enforcement argued that the remarks had been made without examining the evidence collected during its independent investigation under the Prevention of Money Laundering Act and without giving the agency an opportunity to place its case before the court. It therefore sought an order from the High Court directing that the remarks be removed from the trial court’s judgment.
The observations made by the trial court included remarks about the scope of criminal investigations relating to election funding and financial transactions associated with political activity. The trial court had stated that if investigative agencies such as the Central Bureau of Investigation or the Directorate of Enforcement were allowed to intervene in the electoral process merely on allegations relating to cash expenditure, illegal funding or unaccounted spending, it could lead to the criminalisation of electoral competition.
The trial court also observed that proceedings under the Prevention of Money Laundering Act cannot be initiated in the absence of a scheduled offence and the existence of proceeds of crime. According to the trial court, the law cannot be invoked in a vacuum and must be based on the existence of a predicate offence and the generation of proceeds of crime arising from that offence.
In addition, the trial court noted that investigative agencies cannot initiate or sustain criminal proceedings solely on allegations relating to election funding irregularities or excessive electoral expenditure. It observed that such matters cannot automatically be treated as criminal offences unless the legal ingredients required to establish a cognisable offence are clearly present.
The Directorate of Enforcement challenged these remarks before the High Court and argued that the trial court had made comments about its investigation even though the proceedings before it did not involve the cases registered by the agency. According to the agency, the remarks had been recorded without examining the material collected during its investigation and without hearing the agency on the issue.
The petition further stated that allowing the remarks to remain on record could adversely affect the ongoing investigation and prosecution conducted by the agency under the Prevention of Money Laundering Act. The Directorate of Enforcement therefore requested the High Court to expunge the remarks from the trial court’s judgment.
The High Court took note of the submissions made by the agency and issued notice on the petition. The Court indicated that it would examine whether the remarks made by the trial court required interference and would consider the arguments raised by the parties before deciding the matter.
Earlier, the High Court had also issued notice on a petition filed by the Central Bureau of Investigation challenging the trial court’s order discharging all the accused persons in the case. The High Court indicated that the issues raised in both petitions would be examined together.
In connection with the earlier proceedings, the High Court had stayed certain remarks made by the trial court against the investigating officer of the Central Bureau of Investigation. The Court observed that the remarks accusing the investigating officer of abusing his official position appeared prima facie erroneous and required further examination, particularly because they had been made at the stage of considering charges.
The High Court also requested the trial court dealing with proceedings under the Prevention of Money Laundering Act to adjourn those proceedings until the High Court completes its consideration of the challenge to the discharge order and the plea seeking removal of the remarks.
The discharge order passed by the trial court had brought the criminal proceedings against all accused persons to an end at the trial stage, unless the order is set aside by a higher court. The case had originated from allegations of irregularities in the formulation and implementation of the Delhi excise policy for the year 2021–22, which had later been withdrawn after the initiation of an investigation.
With the issuance of notice on the petition filed by the Directorate of Enforcement, the Delhi High Court has initiated proceedings to examine whether the observations made by the trial court should remain part of the judgment or be removed. The Court will consider the submissions of the parties before deciding the request made by the agency to expunge the remarks recorded in the discharge order.
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