Delhi Excise Policy Case: The Rouse Avenue Court in Delhi on Friday, February 27, discharged all 23 accused, including former Delhi Chief Minister Arvind Kejriwal and his deputy Manish Sisodia, in the alleged excise policy case. The trial court observed that the chargesheet filed by the Central Bureau of Investigation (CBI) was 'tainted' and failed to present 'prima facie' evidence to support the prosecution's case.
The 598-page order comes as a major relief for the leaders of the Aam Aadmi Party and the other accused named in the case. However, a key question remains unanswered: what lies ahead for the Enforcement Directorate's money laundering case in the alleged excise policy scam?
How Does Money Laundering Probe Work?
An Enforcement Directorate (ED) case under the Prevention of Money Laundering Act (PMLA), 2002, is often described as both a "standalone" offence and one that is "linked to the predicate offence". This means that ED can initiate an inquiry into the alleged generation, possession, or use of "proceeds of crime" even if there has been no conviction in the predicate offence (underlying, primary crime that generates illegal proceeds), The Indian Express reported.
The predicate offence may still be under investigation or pending trial while the ED establishes its money laundering case.
Delhi Excise Policy Case
In the Delhi excise policy case, the ED had summoned former Delhi Chief Minister Arvind Kejriwal even though he was not named as an accused in the CBI case, arguing that money laundering is a "standalone" offence.
However, ED offences are essentially anchored to the predicate offence. This means that an ED investigation must arise from a predicate offence. If a court discharges or acquits the accused in the predicate case, the ED's case cannot be maintained.
What Happens To The ED Case Now?
The answer to this question lies in the landmark 2022 judgment of Vijay Madanlal Chaudhary v. Union of India, where the Supreme Court upheld the validity of the Prevention of Money Laundering Act (PMLA) and set out the law on money laundering cases.
According to the ruling, the ED cannot prosecute a person on a 'notational basis' or on the assumption that a scheduled offence has occurred unless it has been officially registered with the jurisdictional police or is under enquiry or trial, including through a criminal complaint before a competent forum.
In the ruling, the Supreme Court stated that "if the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money-laundering against him or anyone claiming such property, being the property linked to the stated scheduled offence through him", The Indian Express report added.
In simple words, an ED offence must arise from a predicate offence. As a result, if the predicate offence is dismissed or the accused is discharged, the ED case cannot be sustained. This means that with the court dismissing the excise policy case, the ED's case against Kejriwal and others is likely to be significantly weakened.
CBI Moves High Court
The Central Bureau of Investigation (CBI) on Friday filed an appeal in the Delhi High Court, challenging a special court order that discharged former Delhi chief minister Arvind Kejriwal, former deputy chief minister Manish Sisodia, and others in the 2021-22 excise policy case. This means that the ED's money laundering case is still pending.