New Delhi:

Bharat Rashtra Samithi leader K Kavitha – arrested in March in the alleged Delhi liquor policy scam – has been sent to the custody of the Central Bureau of Investigation for three days. She was previously in judicial custody – in Delhi’s Tihar Jail – till April 23 in a related money laundering case.

Ms Kavitha was arrested by the Enforcement Directorate – as her brother and former Telangana minister KT Rama Rao sparred with an ED team – from Hyderabad last month and sent to its custody.

She was then arrested by the CBI – while in Tihar on judicial custody – on Thursday evening.

Last week CBI officials had questioned Ms Kavitha while she was inside Tihar Jail.

The CBI had sought custody of Ms Kavitha for five days, arguing that witness statements, WhatsApp chats, and financial documents implicated her as a “major conspirator” in a scheme to pay Rs 100 crore in bribes to Delhi’s ruling Aam Aadmi Party for liquor licences under the now-scrapped policy.

“Kavitha was required to be arrested… to conduct her custodial interrogation (by) confronting her with the evidence and witnesses, to unearth the larger conspiracy hatched by the accused/suspects regarding formulation and implementation of the excise policy,” the central agency told the court.

The CBI also said it needed Ms Kavitha’s custody to “establish the trail of ill-gotten money and to establish the role of other accused/suspects, as well as unearth facts in her exclusive knowledge”.

The “money trail” has been one of the focal points in this case; the authorities have been unable, so far, to track down the cash from the alleged bribes – a point the AAP has made repeatedly.

The central agency told Delhi’s Rouse Avenue court that a liquor businessman from South India met Delhi Chief Minister Arvind Kejriwal to acquire such licences, and was told to coordinate payments via Ms Kavitha and others, including the AAP’s former communications chief, Vijay Nair.

The CBI – and the Enforcement Directorate, which has arrested Mr Kejriwal and his former deputy, Manish Sisodia – relied on statements from accused-turn-witnesses like Dinesh Arora to make its case. Mr Arora has claimed payments of Rs 90 to Rs 100 crore were made to Mr Nair.

Earlier in the day Ms Kavitha’s lawyers referred to the timing of the arrest – a month before the Lok Sabha election – and said “no case was made” to take her into custody. Due process had been violated, her legal team argued, saying, “This is gross misuse of process of law.”

Ms Kavitha’s team also pointed out that the case against their client did not draw from the stringent Prevention of Money Laundering Act, or PMLA, under which getting bail is next to impossible.

“This is not a PMLA case… purely a police case. Was this a cogent ground to (seek custody)? To confront her with evidence? If that is the basis it is wholly unjustified, illegal and unconstitutional!”

Ms Kavitha, who is ex-Telangana Chief Minister K Chandrasekhar Rao’s daughter, is accused of being part of the ‘south group’ that was involved in payment of crores as bribes to the AAP.

These were allegedly generated thanks to high profit margins for liquor sales as allowed by the AAP – 185 per cent for retailers and 12 per cent for wholesale outlets. Half of the latter – eventually worth Rs 600 crore – was paid as kickbacks and the AAP allegedly used this money to fund poll campaigns.

The ED has labelled the Delhi Chief Minister – who is in Tihar’s Jail No 2 and has moved the Supreme Court after the High Court slapped down a plea to declare his arrest void – as a “key conspirator”.

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