On Wednesday, 15th January, the Enforcement Directorate (ED) got permission from the Union Ministry of Home Affairs to prosecute former Deputy CM of Delhi Manish Sisodia and former CM Arvind Kejriwal under the Prevention of Money Laundering Act (PMLA). Permission has been granted to investigate their involvement in the alleged money laundering related to the liquor scam case.
As per the initial reports, the authorized permission comes a month after Lt Governor Delhi VK Saxena recommended that Kejriwal be prosecuted in the excise policy scam. To date, the ED has conducted searches in 245 locations across Delhi, Hyderabad, Chennai, and Mumbai in the given case. The permission also comes ahead of the Delhi elections scheduled in February 2025.
Union Home Ministry has granted permission to the Enforcement Directorate (ED) to prosecute former Deputy CM of Delhi Manish Sisodia under the Prevention of Money Laundering Act (PMLA) for alleged money laundering connected to the liquor scam case: Sources
— ANI (@ANI) January 15, 2025
On 11th January, the Comptroller and Auditor General (CAG) released its report on the Delhi government’s now-repealed excise policy. The CAG revealed that the policy resulted in a staggering Rs 2,026 crore loss to the public exchequer. Furthermore, the report highlighted significant lapses in policy implementation and stated that it was ultimately the taxpayers who paid the price of the mismanagement, while there are also allegations of kickbacks having benefited Aam Aadmi Party leaders.
Notably, the report suggested that at the core of the issue is the Group of Ministers (GoM) led by former Delhi minister Manish Sisodia. The CAG stated that the GoM disregarded recommendations from an expert panel. Furthermore, the decision-making process was marred by irregularities, which allowed all entities to bid for licenses despite documented complaints and financial weaknesses.
As reported earlier, violators of licensing conditions were not penalized, and there was a lack of transparency in pricing decisions, which added to the problem. Cabinet and Lieutenant Governor approvals were bypassed on several key matters, and excise rules, which should have been ratified by the Delhi Assembly, were kept from legislative scrutiny.
The CAG highlighted that the financial breakdown of the mismanagement in the excise policy by the AAP government led to a loss of Rs 2,026 crore, painting a grim picture. The failure of the ruling party to re-tender retail licenses surrendered mid-policy resulted in a loss of Rs 890 crore. Adding to the financial misery, the government granted exemptions to zonal licensees, which caused additional revenue depletion of Rs 941 crore. Furthermore, the government waived Rs 144 crore worth of license fees, which was “justified” under COVID-19 restrictions. This directly contradicted tender provisions that placed all commercial risks on licensees. To add to the woes, the incorrect collection of security deposits led to a Rs 27 crore loss.
It is crucial to note that Sisodia was jailed by the CBI in the case in 2023 and was granted bail in August 2024, following which he walked out of jail after 17 months. The bail was granted in cases filed by CBI and ED probing the now-scrapped Delhi Excise Policy.
Former CM Arvind Kejriwal also was granted bail by the Supreme Court in September 2024 in connection to the liquor policy scam case. The court meanwhile noted that the arrest of the Delhi Chief Minister was valid and that there was no illegality on the part of the Central Bureau of Investigation (CBI).
Kejriwal was arrested in March last year and named in the chargesheet filed on May 17. The ED stated that the leader used a Rs 45 crore bribe of Rs 100 crore for AAP funding during the Goa elections. The ED said that Kejriwal was the brain behind the scam and controlled all the operations by the party.
Delhi Liquor policy scam case
At the heart of the controversy is the Delhi Excise Policy 2021-2022, which has been explained in 10 simple points.
- 1. The liquor policy was first proposed in September 2020 but came into effect only in November 2021.
- 2. It changed the manner in which alcohol was being sold in the National Capital. Introduced private players in the market and marked the exit of government-owned liquor vendors.
- 3. Delhi was divided into 32 zones and a total of 27 private vendors were to ply in each zone. Every municipal ward had 2-3 liquor vendors operating in the area.
- 4. Proposals such as home delivery of liquor, allowing liquor vendors to offer unlimited discounts and opening of stores till 3 am were also tabled before the Delhi Cabinet.
- 5. The drastic policy change resulted in a 27% increase in government revenue to ₹8900 crores. At the same time, it marked the complete exit of the Delhi government from the liquor business.
- 6. While the objective of Excise Policy 2021-2022 was to end black marketing and the liquor mafia, the Delhi government soon came under fire over allegations of corruption.
- 7. Chief Secretary of Delhi, Naresh Kumar, found irregularities and procedural lapses in the new liquor policy. Lieutenant Governor VK Saxena ordered a CBI probe on the recommendation of Naresh Kumar.
- 8. Manish Sisodia waived off ₹144.36 crores on the license fee, to be paid by the private liquor vendors, under the garb of the Coronavirus pandemic. Incurred loss to the Excise Department and benefitted liquor licensees by waiving the import pass fee of ₹50 per beer case.
- 9. All these changes were made without the final approval of the Lieutenant Governor and thus considered illegal under the Delhi Excise Rules of 2010 and Transaction of Business Rules of 1993.
- 10. Thus, the Delhi government made a U-turn on its new excise policy in July 2022. A month later, CBI booked Manish Sisodia, ex-Only Much Louder (OML) CEO Vijay Nair, and 13 others in an FIR for irregularities in the implementation of the Delhi Excise Policy 2021-2022.