On Wednesday, 15th January, the Enforcement Directorate (ED) received approval from the Union Ministry of Home Affairs to initiate proceedings against former Delhi Deputy CM Manish Sisodia and former CM Arvind Kejriwal under the Prevention of Money Laundering Act (PMLA). This permission allows them to investigate the duo's alleged involvement in money laundering linked to the liquor scam.
Delhi liquor policy scam case: Home Ministry approves ED to prosecute AAP leaders Arvind Kejriwal, Manish Sisodia(PTI)
The approval comes a month after Lt Governor of Delhi, VK Saxena, recommended prosecution of Kejriwal in the excise policy case. To date, the ED has raided 245 locations across Delhi, Hyderabad, Chennai, and Mumbai in relation to the matter. This decision comes ahead of the Delhi elections scheduled for February 2025.
On 11th January, the Comptroller and Auditor General (CAG) published a report on the Delhi government’s now-repealed excise policy. The CAG revealed that the policy led to a loss of Rs 2,026 crore to the public exchequer. The report also pointed to significant lapses in policy execution, claiming that taxpayers bore the brunt of mismanagement, while there are allegations of kickbacks benefiting Aam Aadmi Party (AAP) leaders.
The CAG specifically noted that the Group of Ministers (GoM), led by Sisodia, was at the center of the issue. The report stated that the GoM ignored recommendations from an expert panel and allowed irregularities in the decision-making process. This led to all entities being permitted to bid for licenses, despite complaints and financial weaknesses.
The CAG also highlighted that violators of licensing conditions were not penalized, and pricing decisions lacked transparency. Additionally, cabinet and Lieutenant Governor approvals were bypassed on several key matters, and excise rules that should have been scrutinized by the Delhi Assembly were kept from legislative review.
The financial impact of the AAP government’s mismanagement in the excise policy was staggering, with a loss of Rs 2,026 crore. Among the significant losses, Rs 890 crore was due to the failure to re-tender retail licenses surrendered mid-policy, while exemptions granted to zonal licensees led to a revenue loss of Rs 941 crore. The government also waived Rs 144 crore in license fees, citing COVID-19 restrictions, which directly contradicted tender provisions that placed all commercial risks on licensees. Moreover, errors in collecting security deposits led to an additional loss of Rs 27 crore.
It is important to note that Sisodia was jailed by the CBI in 2023 but granted bail in August 2024, after spending 17 months in jail. The bail was granted in cases filed by both the CBI and ED, which were investigating the now-scrapped Delhi Excise Policy.
In September 2024, former CM Arvind Kejriwal was also granted bail by the Supreme Court in relation to the liquor policy scam case. The court acknowledged that Kejriwal’s arrest was valid, and there were no legal issues with the Central Bureau of Investigation's (CBI) actions.
Kejriwal had been arrested in March of the previous year and named in a chargesheet filed on May 17. The ED claimed that Kejriwal used a Rs 45 crore bribe from a total of Rs 100 crore to fund the AAP during the Goa elections, asserting that he was the mastermind behind the scam and oversaw all party operations.
Delhi's liquor policy corruption case
The core of the controversy lies in the Delhi Excise Policy 2021-2022, which is outlined in 10 straightforward points.
The liquor policy was initially proposed in September 2020, but it only came into effect in November 2021.
It transformed the alcohol sales system in the National Capital by introducing private players into the market and removing government-run liquor vendors.
Delhi was divided into 32 zones, with 27 private vendors assigned to each zone. Each municipal ward had 2-3 liquor vendors operating within it.
Proposals, including home delivery of liquor, enabling vendors to offer unlimited discounts, and allowing stores to stay open until 3 am, were also presented to the Delhi Cabinet.
The significant policy shift led to a 27% rise in government revenue, reaching ₹8900 crores, while also resulting in the Delhi government's complete exit from the liquor business.
Although the goal of the Excise Policy 2021-2022 was to eliminate black marketing and the liquor mafia, the Delhi government soon faced criticism due to corruption allegations.
Naresh Kumar, the Chief Secretary of Delhi, uncovered irregularities and procedural errors in the new policy, prompting Lieutenant Governor VK Saxena to order a CBI investigation based on Kumar's recommendation.
Manish Sisodia forgave ₹144.36 crores in license fees that private liquor vendors were supposed to pay, citing the Coronavirus pandemic as the reason. This decision caused a loss to the Excise Department and benefited the liquor licensees by waiving the import pass fee of ₹50 per beer case.
These changes were made without final approval from the Lieutenant Governor and were deemed illegal according to the Delhi Excise Rules of 2010 and the Transaction of Business Rules of 1993.
As a result, the Delhi government reversed its stance on the new excise policy in July 2022. A month later, the CBI filed an FIR against Manish Sisodia, former OML CEO Vijay Nair, and 13 others for irregularities in implementing the Delhi Excise Policy 2021-2022.
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