New Delhi: The special CBI judge Friday junked the agency’s case as it could not prove a conspiracy in the formulation of the 2021-22 Delhi excise policy, acquitting former Delhi chief minister Arvind Kejriwal, his deputy Manish Sisodia and 21 others.
Judge Jitendra Singh observed that the principal allegations were against Sisodia, who was the minister in charge of the excise department at the time, and that any allegations against Kejriwal could not stand on their own without the validity of the allegations against the former.
A focal point of the CBI’s case rested on the role of Vijay Nair, the former campaign manager of the Aam Aadmi Party (AAP), the supervisory role of the Telangana Jagruthi president K. Kavitha and three businessmen from Telangana, who allegedly acted in collusion to bring about manipulation of the policy.
ThePrint pieces together the CBI’s case against each of them and the court’s observations while dismissing the agency’s case.
Also read: In clearing Kejriwal & Sisodia, court draws line—‘Can’t use criminal law to punish policy choices’
Vijay Nair
The former campaign manager of the ruling party, Nair was the first person to be arrested by the CBI in its probe into the irregularities in the formulation and implementation of the Delhi excise policy. He was arrested in September 2022 and released on bail only in November 2024, after the Supreme Court granted him bail.
Nair was the former chief executive officer of Mumbai-based media management company Only Much Louder before joining AAP in 2014.
Special Judge Jitendra Singh observed that the agency projected Nair as “the central facilitator and operational fulcrum” of the alleged criminal conspiracy concerning the formulation and implementation of the excise policy. The agency had argued that, without holding any post in the Delhi government, Nair exercised influence on policy due to his proximity to top AAP leaders, including then chief minister Arvind Kejriwal and then deputy chief minister Manish Sisodia.
The court further documented the CBI’s allegations that Nair worked as the “principal intermediary” between public servants and private liquor businessmen described as the “South Group”.
According to the CBI’s charge sheet, the “South Group” was a group of businesses from southern states. Among its members were Telangana Jagruthi president K. Kavitha, Telugu Desam Party (TDP) MP Magunta Srinivasulu Reddy, his son Raghav Magunta, and businessman P. Sarath Chandra Reddy.
According to the CBI, kickbacks totalling Rs 100 crore were paid to the AAP, allegedly spent on electoral expenses during the assembly elections.
The CBI traced the alleged conspiracy to a meeting at a Delhi apartment on 21 May 2021, involving Nair, businessmen Arjun Pandey, Dinesh Arora, Sikander Maan, his nephew Virat Maan, Abhishek Boinpally, Arun Ramchandra Pillai, and chartered accountant Butchi Babu. The same group allegedly met again at a Hyderabad hotel to finalise the contours of the excise policy for that year.
The court rejected the CBI’s allegation that the “South Group” planned to control five to ten retail zones under the excise policy. It noted that the agency relied solely on Arora’s statement to support this claim. However, Arora made these allegations only in fresh statements recorded after he was granted pardon; he had not made such claims earlier.
Moreover, the court noted that one witness to the Delhi meeting stated that Butchi Babu was making “elementary inquiries” about the Delhi liquor market—contrary to the version presented by the CBI.
The court also observed that the agency claimed Raghav Magunta, son of Magunta Srinivasulu Reddy, had already paid Rs 10 crore out of a projected Rs 25 crore as early as March 2021. Yet, according to the record, the individuals allegedly involved were still discussing basic issues in May 2021, including whether the Delhi market was commercially viable.
“Even if one were to assume, for the sake of argument, that the prosecution case is stretched to its fullest amplitude, there remains no material to indicate that any criminal design or conspiracy was ever discussed, conceived, or agreed upon in the manner alleged. The foundational element of a meeting of minds continues to remain absent from the record,” Special Judge Singh observed in reference to the allegations against Nair.
Abhishek Boinpally, Arun Ramchandra Pillai, Butchi Babu
A liquor businessman from Hyderabad, Boinpally was arrested by the CBI in October 2022 and was released in October 2024 after the Supreme Court granted him interim bail. Pillai, another Hyderabad-based businessman, was accused of channelling alleged kickbacks totalling Rs 100 crore to top AAP leaders.
Butchi Babu, a chartered accountant based in Hyderabad, was arrested by the CBI in February 2023. According to the agency, the trio represented the business interests of K. Kavitha, president of the Telangana Jagruthi party and daughter of former Telangana chief minister K. Chandrasekhar Rao.
The judge observed that the primary allegation against them was that they attended a meeting in Delhi to acquire five to ten retail zones.
However, advocate Sumer Singh Boparai argued that there was no independent oral or documentary material to show that Boinpally and others discussed any such plan during the meeting. He submitted that a simple reading of a prosecution witness’ statement indicated that the discussion was limited to exploring business opportunities and assessing the viability of entering the Delhi market.
The judge also referred to allegations that another meeting took place in Hyderabad in June 2021, where siphoning off 6 per cent of the increased margin to a 12 per cent wholesale margin was allegedly discussed as “upfront money” for Nair.
The prosecution alleged that Boinpally and Pillai stayed at a five-star hotel in Delhi between 14 and 17 March 2021, during which a 36-page document was printed and a photocopy handed over to Nair. The agency alleged that Nair later passed it on to Sisodia and that it formed the basis of the second draft of the Group of Ministers (GoM) report dated 19 March. The CBI claimed certain conditions were added to manipulate the policy in favour of the liquor cartel, particularly the “South Group”.
However, the judge pointed out that certain conditions in the second report did not favour Indospirit—the firm allegedly used as a special purpose vehicle to recoup bribes. Instead, a group firm was disqualified based on the annual revenue eligibility criterion for the preceding three years.
The CBI alleged that Pillai was given a stake in Indospirit to pocket profits from liquor sales in exchange for kickbacks to the ruling AAP.
“In this context, the prosecution’s narrative presents an inherent inconsistency. If A-5 was indeed acting with the object of securing benefit for M/s Indospirit and facilitating recoupment of alleged ‘upfront money’, it is difficult to reconcile such an objective with the introduction or endorsement of a clause that effectively disqualified the very entity in which he held a partnership interest,” Special Judge Singh observed.
The court further noted that the second GoM report ran to 38 pages, contrary to the CBI’s claim that it was 36 pages. It rejected the agency’s argument that the count excluded the front and back pages, observing that the original printout was never recovered and that the identity of the document could not be established solely on the basis of page count in the absence of the original.
K. Kavitha and Sharath Chandra Reddy
Special Judge Singh observed that the prosecution portrayed Kavitha as occupying a “central and facilitative role” in the alleged conspiracy, acting in concert with Pillai, Butchi Babu and Boinpally as a “political and strategic conduit” for private liquor interests seeking favourable policy outcomes.
Kavitha was taken into CBI custody in April 2024, a month after her arrest by the Enforcement Directorate in the excise policy money laundering case.
Sharath Chandra Reddy, director of Aurobindo Pharma, was also accused of working in tandem with Kavitha.
Relying on the statements of Raghav Magunta Reddy—who was granted pardon—the CBI alleged that Kavitha was involved in the “raising, conveyance and facilitation” of an upfront payment of Rs 100 crore in exchange for favourable policy provisions and advantageous outcomes in tendering and licencing.
The agency further alleged that she exercised indirect control over L-1 wholesaler Indospirit through her alleged proxy, Pillai, to recoup illegal gratification disguised as legitimate transactions.
Regarding the alleged upfront payment, the CBI claimed that Kavitha carried out a land transaction worth Rs 14 crore with Reddy and received Rs 80 lakh as a CSR donation to Telangana Jagruthi. These payments were allegedly made by Reddy, who controlled five retail zones in Delhi under the new policy, as his contribution to the alleged upfront payment of Rs 100 crore.
However, the court noted that the agency itself had not alleged that the acquisition of those retail zones was corrupt, nor that any upfront payment was to be sourced from retail operations. Instead, it had claimed the upfront payment was to come from wholesalers, and that Kavitha was given ownership in Indospirit to the tune of 32.5 per cent of through Pillai to recoup wholesale profits.
“The inconsistency becomes evident when the allegation is tested against commercial logic. If recoupment was to arise from wholesale profits, and A-23 had no demonstrated stake in the wholesale regime, there was no occasion for him to make any payment by way of recoupment. The record does not disclose how or why A-23 (Reddy), who is not shown to have derived any share in the wholesale layer, would part with Rs 14 crore for such purpose,” the judge observed.
As for the alleged Rs 80 lakh CSR payment, the court noted that it was duly recorded in Aurobindo Pharma’s account books.
On Kavitha’s alleged ownership in Indospirit, the CBI claimed that Pillai invested Rs 3.40 crore in the firm, of which Rs 2.90 crore was sourced from Kavitha’s associates.
The court rejected this claim, noting that the agency failed to establish any money trail between Pillai and Kavitha. The statements of the alleged associates were also found to be inconsistent.
“The position would have been materially different had the prosecution been able to demonstrate that A-17 herself provided funds that were routed through intermediary accounts and ultimately credited to A-5, or that A-5’s investment resulted in a demonstrable return or benefit to A-17,” the judge said.
“However, that is not the prosecution case. Even if accepted at its highest—that A-17 facilitated introductions or that persons acquainted with her extended financial assistance to A-5—such facts, by themselves, do not give rise to a legally sustainable inference that A-5 was acting as a proxy or benami for A-17,” he observed.
(Edited by Viny Mishra)