The Delhi High Court on Monday stayed the adverse remarks made by a trial court against the Central Bureau of Investigation (CBI) and its investigating officer while discharging 23 accused — including Aam Aadmi Party leaders Arvind Kejriwal and Manish Sisodia — in the Delhi excise policy case. The High Court also issued notices to all discharged accused and directed that proceedings in the connected money laundering case be deferred until it decides the CBI’s challenge to the trial court verdict.
The order came as the court heard a criminal revision petition filed by the CBI seeking to overturn the February 27 decision of a special court that had discharged all accused persons in the case.
Delhi High Court stays trial court remarks against CBI
During Monday’s hearing, Justice Swarana Kanta Sharma indicated that the court would suspend the critical observations made against the investigating agency and its officer in the trial court judgment.
According to Bar and Bench, the Delhi High Court judge said, “I will pass an order of stay with regard to whatever remarks and statements are made against the investigating agency and officer. I will ask the trial court to postpone the hearing of the PMLA case to a date after the hearing before this court.”
The High Court subsequently issued notices to all accused individuals discharged by the trial court and directed them to file replies to the CBI’s revision plea.
The court also asked the trial court to postpone proceedings in the Enforcement Directorate’s money laundering case under the Prevention of Money Laundering Act (PMLA) until the High Court decides the matter.
CBI challenges discharge of Arvind Kejriwal, Manish Sisodia and others
The CBI moved the High Court after a special court discharged all 23 accused in the case on February 27, ruling that the prosecution’s claims did not survive judicial scrutiny.
Appearing for the CBI, Solicitor General Tushar Mehta clarified that the agency was not seeking an immediate stay on the discharge order but wanted assurance that the ruling would not affect the separate money laundering probe being conducted by the Enforcement Directorate.
As reported by Bar and Bench, he told the court, “It’s a peculiar way in which the discharge has taken place. I understand that the stay of the judgment would mean that the trial takes place. I would not ask for that, but this is a CBI case based on which the ED case is proceeding. This judgment may not affect that. My ladyship may stay this saying that the ED case will not be affected.”
He further described the case as one of the most significant corruption investigations in the capital.
According to Bar and Bench, he said, “This is one of the biggest scams in the history of the capital of this nation and in my opinion a national shame. Scientific investigation was carried out. Each and every aspect of conspiracy was established.”
Allegations of conspiracy and bribery in excise policy
The CBI argued that its investigation uncovered detailed evidence of a conspiracy surrounding the formulation and implementation of the Delhi Excise Policy 2021–22.
The prosecution maintained that witness statements, including those recorded under Section 164 of the Criminal Procedure Code, provided a clear account of how alleged kickbacks were arranged and distributed.
As reported by Bar and Bench, the Solicitor General submitted:
“There were 164 (CrPC) statements. There are witnesses who clearly elaborate how the conspiracy was hatched, how the bribe was paid, and to whom the bribe was paid. There is one person called Vijay Nair, he is the communications incharge of the political party… ₹19 crore to ₹100 crore bribe was paid in lieu of favours given. Out of this, ₹44.50 crore were transferred by hawala, and meticulous scientific investigation demonstrates that the money went to Goa to fund the elections for the party.”
Background to Excise Policy Case: Trial court discharge of all accused
The case traces back to 2022 when the CBI registered a First Information Report alleging irregularities in the Delhi Excise Policy of 2021–22. The probe was initiated following a complaint by Lieutenant Governor VK Saxena.
Investigators alleged that loopholes were deliberately created in the policy to favour specific liquor licensees and enable cartelisation of the liquor trade in the national capital. The Enforcement Directorate later launched a parallel investigation under the PMLA.
Over the course of the investigation, 23 individuals were named as accused. Several opposition leaders, including Kejriwal and Sisodia, spent months in custody before securing relief from the Supreme Court after lower courts declined bail.
However, the special court presided over by judge Jitendra Singh discharged all accused persons, concluding that the prosecution’s theory relied heavily on approver statements and speculative inferences.
The court also criticised the investigative approach, observing that using approver testimony to fill gaps in the prosecution’s case raised constitutional concerns.
According to Bar and Bench, the judge stated, “If such conduct is allowed, it would be a grave violation of the Constitutional principles. The conduct where an accused is granted pardon and then made an approver, his statements used to fill the gaps in the investigation/narrative and make additional people accused is wrong.”
CBI argues discharge order of Kejriwal and Sisodia is legally flawed
In its revision petition, the CBI has argued that the discharge order is legally unsustainable and based on a flawed assessment of evidence.
The agency contended that the trial court effectively conducted a detailed evaluation of evidence — something it said was inappropriate at the stage of framing charges.
According to the petition cited by Bar and Bench, the agency argued, “The Ld Special Judge has passed the impugned order on a selective reading of the prosecution case, disregarding the material showing the culpability of the accused.”
It also criticised the trial court’s direction for departmental action against the investigating officer, describing the observation as deeply troubling.
The Solicitor General further argued that the ruling was akin to an acquittal without a full trial.
As reported by Bar and Bench, he told the High Court, “This is an order of acquittal without trial. It is as bad as that. It may sound like an overstatement, but it is an understatement.”
Defending the investigation, he added, “At least with my limited experience in this field, I have not come across such meticulous evidence collected by an investigation agency.”
He also criticised the trial court’s approach to evaluating approver testimony, arguing that corroboration is not required at the stage of charge framing.
According to Bar and Bench, he submitted, “This (the judgement) is turning criminal law on its head. Approver statements do not need corroboration till the stage of trial. They [approvers] can be cross-examined (during trial). Approver has not been placed before the court in the witness box, not examined, not cross-examined. His approvership is before the magistrate, and it is nobody’s case that he became an approver under threat or coercion.”
Questioning the reasoning of the trial court further, he added, “So, now we have to show that the person personally handled the cash, like in the past when an officer was caught red-handed with cash?”