The Supreme Court on Friday sought a response from the Enforcement Directorate (ED) on a plea filed by Chaitanya Baghel, son of former Chhattisgarh Chief Minister Bhupesh Baghel, challenging his arrest in connection with the alleged ₹2,000 crore Chhattisgarh liquor scam. The case raises key questions about the legality of the investigation and the procedural safeguards under criminal law.
A bench of Justices Surya Kant and Joymalya Bagchi issued notice to the ED, directing it to file its reply within 10 days, and scheduled the matter for further hearing after two weeks.
The court clarified that the matter was not only about the arrest itself but also about the interpretation of Section 193 of the Code of Criminal Procedure (CrPC) — a provision that limits the power of courts to take cognizance of offences without prior sanction from a magistrate. “More than the grounds of arrest, this petition is about the interpretation of Section 193 CrPC. How long can you continue with further investigation and stall proceedings in trial — this is the issue that needs to be examined,” the bench observed.
The Legal Question: Section 193 and Its Relevance
Section 193 of the CrPC states that a court of session cannot take cognizance of an offence unless a magistrate grants prior permission. Baghel’s petition argues that his arrest was conducted as part of a “further investigation” without such mandatory permission from the magistrate, making the process illegal and void ab initio.
The plea contends:
“The arrest of the petitioner, during further investigation conducted without mandatory permission, is an illegality going to the root of the matter, which not only renders such further investigation void but also vitiates the arrest.”
Baghel is accused in the high-profile liquor scam case that allegedly involved large-scale corruption in liquor licensing and distribution during his father’s tenure as Chief Minister.
Arguments by the Petitioner
Represented by senior advocate Kapil Sibal and advocate Mayank Jain, Baghel argued that his arrest violated both procedural law and fundamental fairness. Sibal pointed out that the ED had not issued any summons under Section 50 of the Prevention of Money Laundering Act (PMLA) before arresting him, and that the only reason cited for his arrest was “non-cooperation with the investigation.”
Sibal argued,
“They have not issued me any summons under Section 50 of PMLA, and yet they arrest me on the ground that I have not cooperated with the investigation. My non-disclosure is the only ground for my arrest.”
He cited the Supreme Court’s Vijay Madanlal Chaudhary judgment (2022), which upheld crucial provisions of the PMLA but clarified that Section 193 CrPC applies to PMLA procedures under Section 44. Thus, Sibal claimed, the ED’s further investigation without a magistrate’s sanction was procedurally flawed.
Challenge to PMLA Provisions
In addition to the appeal against his arrest, Baghel also filed a separate petition challenging the constitutional validity of Section 50 of the PMLA and other provisions of the law.
Senior advocate N. Hariharan, also appearing for Baghel, informed the Supreme Court that similar challenges to these provisions are already pending before the top court and are expected to be heard next week. The bench ordered that Baghel’s plea be listed along with those cases.
Hariharan also contended that the ED’s investigation has gone on indefinitely without closure. “The investigation cannot continue for eternity,” he said, arguing that Baghel was being targeted based solely on witness statements, with no concrete evidence against him.
ED’s Response
Additional Solicitor General (ASG) S.V. Raju, appearing for the ED, defended the agency’s actions and maintained that the Chhattisgarh High Court had already examined and dismissed these grounds, calling them “baseless.”
Raju also reminded the Supreme Court that on September 26, a separate bench had permitted the ED to complete its investigation within three months in connection with other accused in the same case. He insisted that there was sufficient evidence against Baghel, including statements from other accused persons.
“They have already moved a petition for bail. These grounds can be raised there. As regards further investigation, this court has permitted me three months. Statements have been recorded of other accused and there is evidence against him,” the ASG said.
Court’s Directions
The Supreme Court, after hearing both sides, directed the ED to file its detailed reply within 10 days. The court also permitted Baghel’s counsel to file a rejoinder before the next hearing.
The bench noted,
“You have to respond to the grounds raised here. We will take up the matter after two weeks.”
Claims of Political Vendetta
Kapil Sibal also alleged that Baghel’s arrest was politically motivated. He told the court that the questions posed to Baghel by the ED revolved around his role as “the son of a former Chief Minister”, suggesting that the agency’s intent was political rather than investigative.
“The trial has not begun against me yet, and even the high court accepts that the Magistrate’s permission was not taken. They have arrested me without issuing any summons asking for information. The arrest is attributed to non-disclosure of information, but under Section 53 of PMLA, arrest can only be made after such summons,” Sibal argued.
Allegations of Selective Targeting
The petition accused the ED of adopting a “pick and choose” approach in its investigation. It stated that several co-accused individuals — including excise department officers, distillery owners, and other alleged beneficiaries — were not arrested, despite facing more serious allegations.
“Many co-accused, including excise officers and distillery owners, are not arrested despite graver allegations and direct benefit. This shows the pick and choose policy of ED. When no summons under Section 50 of PMLA is issued during three years of investigation, arrest of the petitioner for non-cooperation shows a predetermined mindset to arrest,” the plea alleged.
High Court’s Findings
Earlier this month, the Chhattisgarh High Court had upheld Baghel’s arrest, dismissing his plea to quash it. The court held that the issues raised by the petitioner amounted to “procedural lapses or irregularities” but did not render the arrest illegal. The High Court also said that Baghel could raise these arguments during his bail proceedings.
“The grounds raised by the petitioner in this petition are procedural lapses or irregularities which do not amount to illegality,” the high court had observed.
Background: The Chhattisgarh Liquor Scam
The alleged ₹2,000 crore Chhattisgarh liquor scam involves claims that a cartel of politicians, bureaucrats, and liquor manufacturers manipulated the state’s liquor trade policy between 2019 and 2023 to collect illicit funds. The ED’s case is based on alleged money laundering linked to illegal commissions and kickbacks from the sale and distribution of liquor in the state.
The agency claims that proceeds of the scam were funneled through shell companies and used for political funding. Several state excise department officials and businessmen have already been questioned, and multiple raids were conducted across Chhattisgarh in recent years.
What Lies Ahead
The Supreme Court’s notice to the ED signals that it will scrutinize not just the circumstances of Chaitanya Baghel’s arrest, but also the broader procedural legality of ongoing ED investigations under the PMLA. The outcome could have wider implications for future money-laundering probes, especially those conducted without explicit sanction from magistrates during “further investigation” phases.
The ED must now file its detailed response within the stipulated period. The matter will be taken up again after two weeks, when both sides are expected to argue on the scope of Section 193 CrPC, the validity of Baghel’s arrest, and whether the ED has complied with all legal preconditions for continuing its probe.
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