MC Explains: Delhi excise policy cases and why AAP leaders are being summoned by ED

Delhi Excise Policy

October 30 saw a lot of action in the Delhi excise policy-related cases. First, the Supreme Court denied bail to Delhi’s former deputy chief minister and Aam Aadmi Party (AAP) leader, Manish Sisodia. Hours later, Delhi's Chief Minister, Arvind Kejriwal, was summoned by the Enforcement Directorate (ED) for questioning on November 2.

Cases relating to the alleged scam are being fought in district courts, high court, and, until recently, in the Supreme Court. AAP leaders such as Sisodia, Sanjay Singh, and Vijay Nair have been arrested by the ED for their alleged involvement, while leaders such as Kejriwal and Satyender Jain have been questioned in relation to it. Politicians such as K Kavita, of the Bharat Rashtra Samithi (BRS) have also been summoned for questioning by the ED. The case also saw businessmen, chartered accountants, and executives of liquor companies arrested for their involvement in the alleged scam.

Moneycontrol explains what the policy was, what ED's allegations against these AAP leaders are, and the status of the pending court cases now.
What is the Delhi excise policy row?

In March 2021, the AAP government announced a slew of changes in the liquor excise policy. Apart from lowering the drinking age from 25 to 21, the government also proposed the establishment of five “super-premium” vends, which would offer the best liquor brands and a high-end walk-in experience.

The policy also saw the closure of government-owned liquor stores and the grant of licences to run these stores to private parties. Furthermore, the policy recommended different registration criteria for different brands of liquor, depending on the pricing and sales figures outside Delhi. It also proposed a hike in the liquor vending licence fee from Rs 8 lakh to Rs 75 lakh a year.

With the introduction of the excise policy, the Delhi government withdrew from the liquor business, letting only private players operate liquor stores. Licences were issued to 849 retail vendors via open bidding by the excise department. However, the Delhi government announced on July 30 that the excise policy that was implemented in November last year was being rolled back. The announcement had come just two days before the new liquor policy expired.

The rollback came amid allegations of corruption and favouritism in granting liquor licences.

In July 2022, Sisodia stated that the department would revert to the 'old regime' of the excise policy for a period of six months until a fresh policy was put in place. However, in August, the CBI registered a case against Sisodia, then excise department officials, and businessmen on charges of cheating and bribery under the excise policy (2021-22).

The Central Bureau of Investigation (CBI) carried out searches on various locations, including properties belonging to Manish Sisodia. ED has also alleged that some AAP leaders benefited from the alleged scam and laundered the ill-gotten proceeds from the scam.Manish Sisodia’s arrest and court litigation

In February 2023, the CBI arrested Manish Sisodia. Subsequently, the ED arrested Sisodia in a money-laundering case stemming from the CBI FIR on March 9 after questioning him in Tihar jail. Sisodia resigned from the Delhi cabinet on February 28.

Sisodia moved the Delhi High Court to obtain bail in both the CBI and ED cases. However, the high court denied him bail in the CBI case on May 30, saying that having been the deputy chief minister and excise minister, he is a "high-profile" person who has the potential to influence the witnesses.

On July 3, the high court declined his bail in the ED case pertaining to charges of money laundering, wherein irregularities in the city government's excise policy were alleged. The HC had observed that the charges against him were "very serious in nature".

Sisodia challenged Delhi HC’s order at the Supreme Court. On October 30, the Supreme Court rejected this plea. As a result of this, Sisodia will continue to be in custody.

Sanjay Singh’s arrest

On October 4, AAP’s Rajya Sabha member Sanjay Singh was arrested in connection with the excise policy case after searching properties belonging to him. Singh moved the Delhi High Court, challenging his arrest and the alleged political motives behind it. However, on October 21, the Delhi High Court refused to grant him relief and noted that he could not make allegations of political motives against ED without showing any proof to substantiate them.

Singh is now in judicial custody, where he will continue to remain until November 10. The court will thereafter consider whether his custody is required.

Allegations against liquor companies

ED has also accused French spirit maker Pernod Ricard of benefitting from the liquor policy. On the expiration of the policy, the government refused to renew its licence to continue selling its brands in Delhi. ED has also arrested the company’s executives in connection with the case.

Pernod Ricard challenged the Delhi government's decision rejecting its application for renewal of the sales licence at the Delhi High Court. However, in July 2023, the court dismissed the plea, permitted Pernod Ricard to approach the excise appellate authority, and directed the authority to consider the appeal within a month after the company approached it. The court further noted that the company cannot distance itself from the allegations against its employees.