Delhi HC CJ Rejects Kejriwal's Excise Case Transfer Plea, Prompting Supreme Court Appeal

In a pivotal escalation in the long-running Delhi excise policy corruption saga, Delhi High Court Chief Justice Devendra Kumar Upadhyaya has dismissed Aam Aadmi Party (AAP) supremo Arvind Kejriwal's administrative request to transfer the Central Bureau of Investigation's (CBI) revision petition—from challenging his discharge and that of 22 others—from Justice Swarana Kanta Sharma's bench to another judge. The decision, rendered on the administrative side, underscores the primacy of judicial rosters amid claims of a "grave, bona fide, and reasonable apprehension" of bias. Undeterred, Kejriwal and senior AAP leader Manish Sisodia have swiftly approached the Supreme Court under Article 32 of the Constitution, challenging both the Chief Justice's order and Justice Sharma's March 9 interlocutory observations, setting the stage for a higher judicial scrutiny just a day before the CBI plea is slated for hearing.

This development reignites debates on judicial impartiality in politically charged probes, where prima facie remarks at nascent stages can fuel recusal demands. For legal practitioners tracking high-stakes corruption cases, it highlights the delicate balance between roster allocations, subjective bias perceptions, and the constitutional right to a fair trial.

Background on the Excise Policy Case

The controversy stems from the Delhi government's 2021 Excise Policy, ostensibly designed to revolutionize the liquor trade by privatizing retail licenses, boosting revenue, and curbing black marketing. Introduced amid AAP's governance, the policy allowed private entities to operate liquor vends for a fixed license fee plus a 12% commission on sales. However, allegations soon surfaced of irregularities: cartelization, undue favors to select licensees, and kickbacks funneled to AAP for electoral gains in Goa and Punjab.

Lieutenant Governor Vinay Kumar Saxena recommended a CBI probe in 2022, leading to an FIR accusing policymakers, including then-Deputy Chief Minister Manish Sisodia and later Chief Minister Arvind Kejriwal, of tweaking rules "without approval of competent authority" to benefit licensees. The CBI alleged Sisodia and others orchestrated decisions extending post-tender favors, with evidence drawn from approver statements and financial trails. Sisodia was arrested by CBI on February 26, 2023, spending over 530 days in custody before bail; Kejriwal followed on June 26, 2024, while in ED custody for the parallel money laundering case under PMLA, enduring 156 days across stints until Supreme Court bail on September 13, 2024.

Parallel ED proceedings framed the policy as a money laundering conduit, but the CBI corruption case forms the bedrock. Among the 23 discharged accused are Vijay Nair (AAP communications head), Abhishek Boinpally, Arun Pillai, K. Kavitha (BRS leader), Sanjay Singh (AAP MP), and business figures like Sameer Mahendru and Sarath Reddy. The policy was scrapped amid the uproar.

Trial Court's Discharge Order: A Scathing Indictment of CBI Probe

On February 27—after arguments began in December 2024—the Rouse Avenue special CBI court discharged all 23 accused, including Kejriwal and Sisodia. Special Judge (PC Act) delivered a 200-page order excoriating the CBI's "voluminous chargesheet" as riddled with "lacunae," unsupported by independent witness corroboration. It noted allegations against Kejriwal hinged solely on co-accused or approver statements, lacking direct links to conspiracy.

The court lambasted CBI for repeatedly re-recording approver testimonies "ostensibly to fill gaps, improve the prosecution narrative, implicate additional accused, or artificially weave missing links." It found no prima facie case against Sisodia and deemed Kejriwal's implication "without cogent material." Additionally, it directed departmental action against the Investigating Officer (IO) for alleged investigative lapses and abuse of position, staying unrelated observations.

This order buoyed the accused but provoked CBI's revision under Section 397 CrPC, filed promptly and assigned to Justice Sharma per roster.

Justice Sharma's March 9 Order: Prima Facie Concerns and Interim Reliefs

On March 9, Justice Swarana Kanta Sharma listed the CBI petition, issuing notices to all 23 respondents ex parte. She observed: "certain factual discrepancies pointed out in the impugned order, the observations made by the learned Trial Court regarding statements of the witnesses and the approvers, at the stage of charge itself, prima facie appear erroneous, and need consideration."

Further, she stayed the trial court's "scathing remarks" against the CBI IO as "foundationally misconceived especially when made at the stage of charge itself," halting departmental action probes. Notably, though ED was not a party, she directed the PMLA trial court to adjourn proceedings beyond the revision's hearing date, deferring money laundering charges.

These ex parte interventions—without affording respondents a hearing—formed the crux of AAP's unease, especially as Justice Sharma had handled prior excise-related petitions, issuing observations later critiqued or overturned by the Supreme Court.

Kejriwal's Transfer Plea: Apprehension of Bias and CJ's Firm Rejection

In a March 11 representation to Chief Justice Upadhyaya, Kejriwal argued for transfer, citing not personal predilections but the "test of a reasonable apprehension in the mind of a fair minded and informed litigant." He flagged:

(i) lack of reasons for "specific perversity" in the March 9 order justifying stays;

(ii) prior benches (including Sharma's) dismissing accused pleas with prima facie views, some reversed by SC;

(iii) expedited scheduling signaling "predisposition";

(iv) deferral of non-party PMLA without pleadings.

Chief Justice Upadhyaya rejected it succinctly: “I, however, do not find any reason to transfer the petition by passing an order on the administrative side." He affirmed Justice Sharma's assignment per "current roster" and noted recusal pleas must go to the concerned judge, not administrative fiat.

Supreme Court Petition: Article 32 for Constitutional Remedies

Sources privy to Bar & Bench reveal Kejriwal's Supreme Court filing under Article 32 directly invokes fundamental rights to fair trial (Art 21), challenging the CJ's order and March 9 directives. Filed alongside Sisodia, it seeks reassignment to an "impartial" bench, amplifying the political-legal standoff ahead of Monday's hearing.

Spotlight on Justice Swarana Kanta Sharma

Elevated to Delhi HC in March 2022 after a stellar district judiciary career—from magistrate at 24 to Principal Sessions Judge—Justice Sharma (PhD in Judicial Education, author of books like Tumhari Sakhi on women's rights and Judicial Education – Achieving Constitutional Vision of Justice ) brings mediation expertise and prior CBI special judgeship. Her profile underscores commitment to justice delivery, amid AAP's narrative of predisposition.

Legal Principles at Play: Bias, Recusal, and Roster Supremacy

Central is the doctrine from R v Sussex Justices (1924): "justice should not only be done, but should manifestly and undoubtedly be seen to be done." Indian courts apply the "real likelihood" or "reasonable apprehension" test—would a fair-minded observer doubt impartiality? (See Supreme Court Advocate-on-Record Assn v Union of India ). Recusals are judge-driven, not routine; administrative transfers rare, favoring rosters to prevent "judge-shopping" ( R K Anand v Delhi HC ).

Here, ex parte prima facie findings at notice stage are permissible under revisional powers (S. 397/401 CrPC), but AAP contends they crossed into merits prejudgment, especially given overturned priors. Interim discharge interferences are "rarest of rare" ( State of Orissa v Debendra Nath Padhi ), amplifying scrutiny.

Implications for Legal Practice and Justice System

For criminal litigators, this saga spotlights strategies: bolstering approver corroboration, challenging IO biases early, leveraging SC for bail/discharge stays. Politically, it fuels narratives of agency misuse, potentially chilling probes. Broader: Reinforces CJ's administrative discretion (Art 226/227), curbing transfers sans compelling bias evidence; impacts ED-CBI synergy in tandem cases; sets precedent on charge-stage discharges amid policy scams.

As excise probes evolve, practitioners must navigate heightened scrutiny on judicial neutrality, ensuring defenses invoke constitutional safeguards proactively.

In sum, while CBI pushes for chargesheet revival, the Supreme Court's stance could redefine bias thresholds in mega-corruption battles, safeguarding yet another layer of accountability.