Case Summary: CBI v. Kuldeep Singh & Others (2026) | Kejriwal Liquor Policy Case (Order on Charge)

The case of CBI v. Kuldeep Singh & Others (2026) represents one of the most significant corruption prosecutions arising out of the Delhi Excise Policy 2021–22, popularly known as the Delhi Liquor Policy Case. The Special Court at Rouse Avenue delivered a detailed order on charge examining whether a prima facie case existed against several accused persons, including political leaders, public servants, and liquor businessmen.

The prosecution alleged that the Excise Policy was manipulated to favour select liquor businesses in exchange for illegal gratification amounting to nearly ₹90–100 crores. The order analysed multiple charge sheets filed by the Central Bureau of Investigation (CBI) and examined whether sufficient material existed to proceed to trial.

The Court considered one principal charge sheet along with four supplementary charge sheets, naming 23 accused persons, including public servants and private individuals.

Court: Court of the Special Judge (PC Act) (CBI)–23, Rouse Avenue Courts, New Delhi

Case No.: CBI Case No. 56/2022

Date on which order pronounced: 27.02.202627 February 2026

Judge: Sh. Jitendra Singh, Special Judge (PC Act)

Background of the Case

The prosecution case relates to the formulation and implementation of the Delhi Excise Policy 2021–22 (DEP-21/22), which came into force on 5 July 2021. The policy introduced major structural changes, including the separation of manufacturing, wholesale and retail operations and the allocation of retail zones through tender.

According to the CBI, certain public servants in the Excise Department of the Government of the National Capital Territory of Delhi allegedly entered into a conspiracy with liquor businessmen and intermediaries to manipulate the policy framework to secure unlawful pecuniary benefits.

It was alleged that the policy changes were not merely administrative decisions but were intended to benefit a group of businessmen commonly referred to as the “South Group.”

The offences alleged included:

• Criminal conspiracy (Section 120B IPC) [Section 61(2) BNS]
• Cheating (Section 420 IPC) [Section 318(4) BNS]
• Destruction of evidence (Section 201 IPC) (Section 238 BNS)
• Offences under Sections 7, 7A, 8 and 12 of the Prevention of Corruption Act.

Alleged Conspiracy and Policy Manipulation

The prosecution alleged that meetings were held in 2021 among intermediaries and liquor businessmen to plan the acquisition of retail zones and wholesale distribution rights in Delhi.

One such meeting allegedly took place near Claridges Hotel, Delhi, where participants discussed capturing several retail zones and coordinating policy-related activities. Another meeting was held at the ITC Kohenoor Hotel in Hyderabad, where it was allegedly decided that substantial funds would be transferred as “upfront money.”

The CBI alleged that ₹20–30 crores were transferred through hawala channels to intermediaries in Delhi and that these funds were to be adjusted through business arrangements.

It was further alleged that wholesale distribution rights for major liquor manufacturers were arranged for selected entities so that they could earn a wholesale margin of 12 percent.

According to the prosecution, these arrangements were intended to generate profits which would subsequently be used for illegal gratification and political funding.

Role of Public Servants

The charge-sheet alleged involvement of public servants responsible for granting wholesale licences and processing complaints relating to cartelisation.

According to the prosecution:

• Important allegations against certain companies were not properly investigated.
• Cross-funding between wholesale and retail entities was allegedly ignored.
• Licensing procedures were expedited irregularly.

The prosecution claimed that deficiencies in licence applications were overlooked and documents were inserted into official files without proper procedure, resulting in the grant of wholesale licences.

It was further alleged that illegal gratification of ₹30 lakhs was paid for securing and expediting the licence.

Cross-Funding and Financial Transactions

A major part of the prosecution's case related to alleged financial irregularities. The CBI alleged that funds were transferred from wholesale entities to retail entities in violation of policy restrictions. Demand drafts for earnest money deposits and application fees were allegedly funded through inter-company transfers.

The prosecution claimed that a wholesale firm recorded turnover exceeding ₹1,300 crores and generated profits which were routed through complex financial transactions to various individuals and companies.

Certain loan agreements were alleged to be sham transactions intended to disguise illegal payments.

Allegations Against Policy Makers

The supplementary charge-sheets expanded the scope of allegations and included political leaders and senior policymakers.

According to the CBI, the Expert Committee report recommending government control over wholesale distribution was ignored and replaced by a policy model favouring private entities.

It was alleged that:

• The wholesale margin was increased from 5% to 12%.
• Eligibility criteria for licences were modified.
• Zonal licensing was introduced.
• Restrictions on related entities were diluted.

The prosecution claimed these changes were made to benefit selected businessmen in return for illegal payments. Illegal gratification amounting to ₹90–100 crores was alleged to have been arranged through intermediaries.

Alleged Election Funding

One of the major allegations in the supplementary charge-sheets was that part of the alleged illegal gratification was used for political purposes.

According to the prosecution:

• Approximately ₹44.54 crores were allegedly used for the Goa Assembly election campaign.
• Funds were transferred through hawala channels.
• Cash was distributed to campaign workers and vendors.

The prosecution relied on financial records, call detail records, and statements of witnesses to support these allegations.

Role of Other Accused

The later supplementary charge-sheets alleged involvement of additional individuals in demanding and collecting illegal payments and influencing policy provisions.

It was alleged that:

• Upfront payments of ₹100 crores were demanded for favourable policy provisions.
• Part of these funds was routed through intermediaries.
• Sham transactions and inflated land deals were used to recoup payments.

The prosecution also alleged that proceeds of crime were channelled through corporate transactions and charitable contributions.

Issues

The principal issue before the Special Court was whether the material placed by the prosecution disclosed a prima facie case sufficient to frame charges.

The Court considered:

• Scope of scrutiny at the stage of charge
• Nature of evidence required
• Role of documentary evidence
• Limits of criminal liability in policy decisions
• Requirements for proving conspiracy

Principles Governing Framing of Charge

The Court reiterated that at the stage of framing of charge, the court does not conduct a detailed evaluation of evidence but must determine whether the material discloses a grave suspicion of the commission of an offence. Reliance was placed on Sajjan Kumar v. CBI (2010), where the Supreme Court held that the judge may sift evidence to determine whether a prima facie case exists.

The Court emphasised that suspicion must be strong and supported by material capable of becoming evidence, and cannot be based on conjecture.

Policy Decisions and Criminal Liability

A significant portion of the order examined the legal limits of criminal prosecution in matters involving policy decisions.

The Court observed that:

• Policy decisions often involve executive discretion.
• Administrative lapses do not automatically constitute criminal offences.
• Profit earned by private parties is not illegal by itself.
• Criminal liability requires proof of dishonest intention.

The Court emphasised that criminal law cannot be used to retrospectively question policy wisdom in the absence of evidence of corruption or quid pro quo.

Conspiracy and Corruption Allegations

The Court observed that criminal conspiracy requires proof of an agreement to commit an illegal act. Economic gain or uneven commercial outcomes cannot by themselves establish conspiracy.

The Court also stated that where circumstantial evidence is relied upon, the chain of circumstances must be legally coherent and cannot depend on speculation.

Order on Charge: Key Findings of the Special Court

1. All Accused Discharged: The Special Court discharged all 23 accused persons, including Arvind Kejriwal and Manish Sisodia, holding that the CBI material did not disclose even a prima facie case or grave suspicion of conspiracy or corruption.
2. Case Based on Weak Evidence: The Court observed that the prosecution case rested largely on “surmises, conjectures and inferential leaps unsupported by cogent material,” and therefore could not sustain criminal prosecution.
3. Policy Not Shown to Be Manipulated: The Court held that the Delhi Excise Policy 2021–22 was not shown to have been manipulated to confer unlawful benefits and appeared to be the result of a consultative and lawful decision-making process.
4. No Evidence Against Kejriwal or Sisodia: The Court found no evidence linking Arvind Kejriwal or Manish Sisodia to conspiratorial meetings, illegal gratification, or policy manipulation.
5. Approver Evidence Found Unreliable: The Court raised serious doubts about reliance on approver testimony, holding that statements of accomplice-like witnesses cannot corroborate each other without independent evidence.
6. Investigation Criticised: The Court criticised the investigation, noting that repeated police statements of approvers and shifting versions created doubts about the reliability and fairness of the investigation.
7. Money Laundering Case Linked: The Court observed that PMLA proceedings depend on a valid predicate offence, and coercive measures cannot continue where the underlying offence itself is doubtful.
8. Case “Discredited in Its Entirety”: The Court concluded that the prosecution's case failed judicial scrutiny and stood “discredited in its entirety.”

Click Here to Read the Official Order

Conclusion

The order in CBI v. Kuldeep Singh & Others (2026) represents a significant development in the Delhi Excise Policy case, as the Special Court discharged all accused after finding no prima facie evidence of conspiracy or corruption. The Court emphasised that criminal prosecution cannot be based on surmises or conjectures and that policy decisions cannot be criminalised without clear proof of wrongdoing, thereby reaffirming fundamental principles of criminal justice and fair investigation.

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