The ED on Friday sought the custody of Delhi's former chief minister Manish Sisodia, under arrest in a money laundering case related to the Delhi excise policy, for 10 days, claiming the AAP leader was "part of the money laundering nexus".

ED's counsel Zoheb Hossain also claimed before a special court that Sisodia destroyed his phone, an important piece of evidence in the investigation.

The lawyer for the federal anti-money laundering probe agency alleged Sisodia made false statements about the 'scam' and that it wanted to unearth the modus operandi of the perpetrators and confront him with the other accused.

The claims of the ED counsel were contested by a battery of lawyers who represented Sisodia.

Senior advocates Dayan Krishnan, Mohit Mathur and Siddharth Aggarwal said the excise policy was accepted by the Lieutenant Governor who must have examined it.

Sisodia's lawyers while opposing the ED's plea for his custody, said it is the executive's job to make policy which goes through several layers of scrutiny.

"How can ED look into policy making in money-laundering case," the AAP leader's counsel asked the court.

"ED has not found a single penny from my client...the case is entirely based on hearsay," the lawyer said.

The ED questioned Sisodia fielding three lawyers for his defence, but the court allowed all of them to argue. Normally only one lawyer defends an accused in a case.

There was heavy security within and outside the Rouse Avenue Courts where Sisodia was produced before special judge M K Nagpal amid protests by his Aam Aadmi Party and the rival BJP.

The supporters of the Aam Aadmi Party (AAP) staged a protest outside the court premises and raised slogans in Sisodia's favour, while those of the BJP demonstrated demanding Chief Minister Arvind Kejriwal's resignation over the case.

The federal anti-money laundering probe agency produced Sisodia before special judge M K Nagpal and contended before him that the "scam" started soon after the new excise policy was drafted by him and others.

The ED counsel said it had evidence against the senior AAP leader in the case.

The movement of tainted money through hawala channels was also being probed, he said, claiming Sisodia was part of the "money laundering nexus".

"Sisodia destroyed the phone and other evidence. He instead used a phone purchased by others," the ED lawyer told the court.

Sisodia's counsel rejected the allegations. Terming the PMLA a "draconian" law, they said he was arrested so that he can be kept in jail. The time has come for courts to come down heavily on such arrests, they said.

The ED arrested Sisodia on Thursday evening in the Tihar jail, where he was lodged in connection with a case being probed by the CBI pertaining to alleged corruption in formulation and implementation of the now-scrapped Delhi Excise Policy for 2021-22.

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