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Delhi Court sends BRS leader K Kavitha to ED remand for 7 days in Delhi excise PMLA case

New Delhi: The Rouse Avenue Court sent Bharat Rashtra Samithi (BRS) MLC K Kavitha to custodial remand on Saturday until March 23, 2024. She has been arrested in connection with a Delhi excise policy-linked money laundering case.

The Special Judge, MK Nagpal, after hearing the submissions, decided to send the BRS leader to ED remand until March 23, 2024.
She was arrested by the ED team on Friday in Hydrabad and was later brought to Delhi. Kavitha was arrested after a day-long questioning followed by a raid at her residence.

K. Kavitha was produced in the courtroom under heavy security in the presence of a number of media persons, lawyers and party workers.

Senior Advocate Vikram Chaudhari, along with Advocate Nitesh Rana, appeared for the K Kavitha before the court. Advocates Wajeeh Shafiq, Anuj Tiwari and Deepak Nagar also appeared for accused K Kavitha in the matter. However, Special ED Counsel Zoheb Hossain and Special Public Prosecutor Naveen Kumar Matta appeared for the Enforcement Directorate.

Chaudhari argued that this arrest was a blatant abuse of power. They have clearly violated the Supreme Court orders, which have protected us.

He further stated that, as per the law, there is a stay on her arrest until March 19.

He also added that the vindictiveness and malafide on the part of the Enforcement Directorate are further writ large from the fact that despite the pendency of the issue/prayer before the Supreme Court that the mobile phones of the petitioner could not have been seized, leading to invasion of the right to privacy, the officers have gone ahead and at the time of the purported search on March 15, 2024.

Appearing for ED, Advocate Zoheb Hossain argued that there is no statement given to any court, even SC, that we will not take any no coercive action. There were two distinct prayers, one was for the quashing of summons and the other sought no coercive action. No statement was ever made that anyone has ever said that there will be no coercive action, stated Zoheb Hossain, while opposing the statement made by Vikram Chaudhari before the court.

ED further argued that it is an admitted position that there is no written interim order in their favour The statement that we gave was that we would give 10 days before issuing a summons. If there's a prayer for no coercive action, and until there is an explicit order, you can't presume an interim order. There is no dispute between parties that the undertaking was never that no coercive would be taken against the petitioner.

In the arrest order, the concerned ED investigation officer said, "I believe that Kalvakuntla Kavitha, w/o DR Anil Kumar, residing in Hyderabad, Telengana-500034, has been guilty of an offence punishable under the provisions of the Prevention of Money Laundering Act, 2002 (15 of 2003)."

"Now, therefore, in the exercise of the power conferred upon me under subsection (1) of Section 19 of the Prevention of Money Laundering Act, 2002 (915 of 2003), I hereby arrest the said Kalvakuntla Kavitha at 05.20 pm on 15.03.2024 and she has been informed of the grounds for her arrest. A copy of the grounds of arrest (containing 14 pages) has been served upon her."

The action comes almost two months after the ED issued a summons to the 45-year-old daughter of former Telangana CM and BRS chief K Chandrashekhar Rao.

She was questioned three times in this case last year and the central agency recorded her statement under the Prevention of Money Laundering Act (PMLA). The BRS MLC has asserted in the past that she had done nothing wrong and alleged that the BJP-led central government was "using" the ED as the BJP could not gain "backdoor entry" into Telangana. Earlier, the Central Bureau of Investigation had also questioned Kavitha in this case. The ED case of money laundering was filed with cognizance of the CBI FIR.

According to ED, Hyderabad-based businessman Arun Ramchandra Pillai, who was arrested last year in the case, "is one of the key persons in the entire scam involving payments of huge kickbacks and formation of the biggest cartel of the South Group."

"South Group comprises Telangana MLC Kavitha, Sarath Reddy (promoter of Aurobindo Group), Magunta Srinivasulu Reddy (MP, Ongole), his son Raghav Magunta, and others, the probe said. The South Group was being represented by Pillai. Abhishek Boinpalli and Butchi Babu", the federal agency said in its investigation.

Pillai, along with his associates, was allegedly coordinating with various persons to execute the political understanding between the South Group and a leader of the Aam Aadmi Party (AAP), the probe agency said.

Pillai has been an accomplice and was involved in the kickbacks from the South Group and the recoupment of the same from the businesses in Delhi, according to ED.

The ED had earlier said that the South Group "gave kickbacks of Rs 100 crore" to AAP leaders.

In this partnership firm, Pillai represented the interests of Kavitha, the ED added.

ED has filed its first chargesheet in the case. The agency said it has so far undertaken nearly 200 search operations in this case after filing an FIR taking cognizance of a CBI case that was registered on the recommendation of the Delhi Lieutenant Governor.

The CBI inquiry was recommended based on the findings of the Delhi Chief Secretary's report filed in July showing prima facie violations of the GNCTD Act 1991, Transaction of Business Rules (ToBR)-1993, Delhi Excise Act-2009, and Delhi Excise Rules-2010, officials said.

The ED and the CBI had alleged that irregularities were committed while modifying the excise policy, undue favours were extended to licence holders, the licence fee was waived or reduced and the L-1 licence was extended without the competent authority's approval. The beneficiaries diverted "illegal" gains to the accused officials and made false entries in their books of account to evade detection, the probe agencies said.

As per the allegations, the Excise Department had decided to refund the earnest money deposit of about Rs 30 crore to a successful tenderer against the set rules. Even though there was no enabling provision, a waiver on tendered licence fees was allowed from December 28, 2021, to January 27, 2022, due to COVID-19, the probe agency said and there was an alleged loss of Rs 144.36 crore to the exchequer. 

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