Delhi leader Arvind Kejriwal to stay in jail after losing appeal over arrest

Chief Minister has accused Prime Minister Narendra Modi’s government of unleashing federal agencies against him

Aam Aadmi Party supporters hold up photos of leader and Delhi Chief Minister Arvind Kejriwal during a protest in India's capital. Bloomberg

Delhi’s embattled Chief Minister Arvind Kejriwal on Tuesday lost an appeal against his arrest over an alleged corruption scam, in a major setback for the leading opposition politician only 10 days before the start of India's general election.

Mr Kejriwal, whose Aam Aadmi Party (AAP) rules India's capital region, was arrested last month by the Enforcement Directorate, the federal financial crimes police. Mr Kejriwal and his party are accused of accepting bribes of about one billion rupees ($12 million) to pass an alcohol policy favourable to private businesses.

The 55-year-old politician, who rose swiftly in Indian politics over the past decade after emerging as an anti-corruption crusader, has denied any wrongdoing and claims his arrest was “illegal” and carried out at the behest of Prime Minister Narendra Modi, his main political rival.

The federal agency has accused Mr Kejriwal of being a “kingpin” in the multimillion-dollar money laundering and bribery case after his administration cleared a policy that would have led to the Delhi government exiting the drinks business and privatising the trade.

Many of his party colleagues are in Delhi’s high-security Tihar jail over the alleged scam, in which the AAP is accused of using the kickbacks to fund its campaigns in regional elections last year.

Mr Kejriwal asked the Delhi High Court to quash the case against him while accusing Mr Modi’s government of unleashing federal agencies against its political rivals to crush the opposition in an election year.

But Justice Swarana Kanta Sharma on Tuesday rejected the appeal, saying material evidence from the Enforcement Directorate revealed the Delhi Chief Minister had “conspired and was actively involved in use and concealment of proceeds of crime".

"He is also allegedly involved in a personal capacity in the formulation of policy and demanding kickbacks, and secondly in the capacity of national convener of Aam Aadmi Party," the judge said.

Mr Kejriwal will remain in judicial custody until April 15 and is likely to appeal against the order in the Supreme Court.

Mr Modi’s government has brought in stringent provisions against money laundering to weed out tax evasion and corruption, with those accused finding it hard to secure bail.

Justice Sharma said judges were bound by law and judgments were based on the legal principles, not on political considerations.

“Political considerations cannot be brought before the court as they are not relevant,” she said.

The order said the Enforcement Directorate, which reports to Mr Modi’s federal government, “cannot be seen as an agency of the ruling Bharatiya Janata Party”, a claim repeatedly raised following recent arrests of opposition leaders by the organisation ahead of the general election.

The world’s largest democracy will hold the election in seven phases from April 19, with the results to be announced on June 4.

The federal tax authorities in February froze the bank accounts of the Indian National Congress, the main opposition party, followed by a tax demand of $216 million over alleged violations.

The opposition India bloc, which includes Congress and the AAP, has accused the right-wing Hindu nationalist BJP of threatening democracy in India by embarking on a crackdown against its political rivals using federal investigative agencies and financial institutions to intimidate and weaken them.