Actions by companies named as accused or beneficiaries were legitimate, says court
The two key allegations made by the prosecution were that the company M/S Indospirits was structured to represent the “South Group” and used as a vehicle to recoup "upfront money".
3 min readNew DelhiUpdated: Feb 28, 2026 08:20 AM IST
The court said that the policy could not have favoured the company since its own revenue could not have matched the threshold of the policy requirement. (Photo generated using AI)
In discharging former Delhi Chief Minister Arvind Kejriwal and 22 others in the corruption case linked to the alleged excise policy scam, a Delhi trial court said on Friday that private companies lawfully earning profits or securing commercial advantages within a policy framework cannot be criminalised unless the material discloses clear elements of fraud, bribery, or statutory breach.
The court concluded that the actions by companies named as accused or “beneficiaries” in the case were either legitimate commercial transactions or permitted under the regulatory framework.
The two key allegations made by the prosecution were that the company M/S Indospirits was structured to represent the “South Group” and used as a vehicle to recoup “upfront money”.
This, the CBI said, was done by inserting a wholesale margin of 12% (raised from 5%) and by enhancing the turnover eligibility criteria for grant of L-1 licence to Rs 500 crore every year for five years to eliminate competition and favour the group. This money, the agency alleged, was used by the party to fund its 2022 Assembly election campaigns in Goa and Punjab.
The CBI had also alleged that 61% of its profits were illegally transferred to an accused, Hyderabad-based businessman Arun Ramchandra Pillai, as proceeds of crime.
However, the court said that the policy could not have favoured the company since its own revenue could not have matched the threshold of the policy requirement.
“The very entity alleged to be beneficiaries of the conspiracy, M/S Indospirit, were themselves confronted with difficulty in meeting the turnover requirement… If the prosecution theory is that the eligibility threshold was deliberately raised to eliminate competitors and secure advantage for conspirators, the fact that the alleged conspirators themselves faced disqualification on the very same turnover condition introduces a serious inconsistency. A clause that renders the supposed beneficiaries ineligible cannot, on its face, be described as a provision crafted exclusively for their benefit,” the court said.
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It further said that the transition was not from a fixed 5% to 12%, but from a 5% minimum to a standardised 12%. “The first draft did not prescribe a 5% ceiling; it prescribed only a floor. The second draft replaced a flexible regime with a uniform rate. It is also of significance that the investigating agency has not alleged manipulation in the first draft,” the Judge said.
Further, the court found that the L-1 licence was granted strictly in accordance with eligibility criteria. It ruled that the profit transfer to A-5 was based on a consensual, prior mutual understanding among partners and did not constitute a clandestine diversion.
Nirbhay Thakur is a Senior Correspondent with The Indian Express who primarily covers district courts in Delhi and has reported on the trials of many high-profile cases since 2023.
Professional Background
Education: Nirbhay is an economics graduate from Delhi University.
Beats: His reporting spans the trial courts, and he occasionally interviews ambassadors and has a keen interest in doing data stories.
Specializations: He has a specific interest in data stories related to courts.
Core Strength: Nirbhay is known for tracking long-running legal sagas and providing meticulous updates on high-profile criminal trials.
Recent notable articles
In 2025, he has written long form articles and two investigations. Along with breaking many court stories, he has also done various exclusive stories.
1) A long form on Surender Koli, accused in the Nithari serial killings of 2006. He was acquitted after spending 2 decades in jail. was a branded man. Deemed the “cannibal" who allegedly lured children to his employer’s house in Noida, murdered them, and “ate their flesh” – his actions cited were cited as evidence of human depravity at its worst. However, the SC acquitted him finding various lapses in the investigation. The Indian Express spoke to his lawyers and traced the 2 decades journey.
2) For decades, the Jawaharlal Nehru University (JNU) has been at the forefront of the Government’s national rankings, placed at No. 2 over the past two years alone. It has also been the crucible of campus activism, its protests often spilling into national debates, its student leaders going on to become the faces and voices of political parties of all hues and thoughts. The Indian Express looked at all court cases spanning over two decades and did an investigation.
3) Investigation on the 700 Delhi riots cases. The Indian Express found that in 17 of 93 acquittals (which amounted to 85% of the decided cases) in Delhi riots cases, courts red-flag ‘fabricated’ evidence and pulled up the police.
Signature Style
Nirbhay’s writing is characterized by its procedural depth. He excels at summarizing 400-page chargesheets and complex court orders into digestible news for the general public.
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