The long-running controversy over Delhi's new liquor policy boiled over on Sunday, 26 February, when the Central Bureau of Investigation (CBI) arrested Deputy Chief Minister Manish Sisodia, the principal accused in the case relating to lapses in the excise policy of the Arvind Kejriwal government.
The chain of events leading to the CBI case against Sisodia began in July, when the chief secretary of the Delhi government submitted a report alleging "ulterior motive of monetary gains" through Delhi's Excise Policy 2021-22. The exposition had prompted the Lieutenant Governor Vinai Kumar Saxena to recommend a probe into the now-rescinded policy.
CBI Arrests Manish Sisodia: Delhi's Liquor Policy Controversy Explained
1. What Is the Excise Policy 2021-22?
The Delhi government's Excise Policy 2021-22, launched on 17 November 2021, was touted to aid the reform of the retail liquor sector, improve consumer experience, and augment revenue by Rs 9,500 crore.
The new policy introduced by the Arvind Kejriwal government sought to shut down 600 government-operated vends to pave way for swanky, new, privately-owned shops – marking the exit of the government from selling liquor.
The policy provided for the granting of retail licences to 849 liquor vends, including 266 that were privately run, across 32 zones of the city.
After the implementation of the new excise policy, the government’s revenue increased by 27 percent, generating around Rs 8,900 crore.
Here are some salient reforms introduced by the Delhi's Excise Policy 2021-22:
It provided for the licensing of 849 retail liquor vends in the city, including five super-premium retail vends, having a minimum carpet area of 2,500 square feet.
The government also made rules flexible for licencees, allowing them to offer discounts. "The licensee is free to give concession, rebate or discount on the MRP," the new policy stated.
The policy got rid of the iron grilles at the front of most liquor vends in the capital city, and allowed buyers to browse and purchase the brands of their choice. For this, the shops had to be spacious, well lit and air-conditioned to allow customers a walk-in experience and must be under camera surveillance.
It also allowed home delivery of liquor in Delhi through websites and apps.
The policy allowed stores to be opened in markets, malls, commercial roads/areas, local shopping complexes, and other such places as long as the standard rules and regulations of opening a new shop are followed.
It slashed the number of dry days to three from 21 per year, and allowed bars in hotels and restaurants to stay open till 3 am.
Expand2. What Were the Alleged Irregularities in the New Excise Policy?
The contentious policy was withdrawn by the Delhi government in July 2022, after Lieutenant Governor Vinai Kumar Saxena recommended a CBI probe into alleged discrepancies in the arrangement.
The L-G's decision was based on a report by Delhi Chief Secretary Naresh Kumar, which listed alleged irregularities in the implementation of the policy by citing specific instances. The violations included “deliberate and gross procedural lapses” to provide post-tender “undue benefits to liquor licensees” through the policy.
A waiver of Rs 144.36 crores on tendered licence fee, citing effects of COVID-19, was given to licensees despite the fact that no specific provision for compensation in the form of reduction in tendered licence fee was available in the tender document. This resulted in blatant undue benefits to licensees and loss to the public exchequer, the report claimed.
The vigilance directorate report had also listed different irregularities, including revision of the formula for calculation of rates of foreign liquor and removal of import pass fee at the rate of Rs 50 per case on beer, which reduced input cost of beer and foreign liquor to retailers.
It claimed that "undue benefits were extended to the licensees at the cost of the public exchequer, in brazen violation of established statutes, rules. and procedures with an ulterior motive of monetary gains by the powers that be."
The document reportedly took note of various decisions made by officials of the excise department without prior approval of the council of ministers or the L-G.
Sisoda had accused former LG Anil Baijal of changing his stance on the excise policy and blocking liquor vends in non-conforming areas of Delhi two days before the implementation of the policy, by putting a condition for the vends to get permission from the Delhi Development Authority (DDA) and the Municipal Corporation of Delhi for opening such vends.
This caused “thousands of crores of losses” to the Delhi government, he alleged.
Baijal hit back, saying the allegations levelled on him by Sisodia were an attempt of a "desperate man to save his own skin."
Expand3. What Is the CBI Case Against Sisodia?
The CBI on Friday, 19 August, listed 16 accused, including Delhi Deputy CM Manish Sisodia, in its FIR on the alleged excise scam, following its 12-hour-long raids at the AAP leader's residence.
The central investigation agency has named Sisodia as the prime accused in the case, which has been registered under IPC sections related to criminal conspiracy and provisions of the Prevention of Corruption Act.
The FIR says that Sisodia, the then Delhi Excise Commissioner Arava Gopi Krishna, and two other senior excise department officials were “instrumental in recommending and taking decisions pertaining to excise policy for the year 2021-22 without approval of competent authority with an intention to extend undue favours to the licencees post tender."
Here are the charges levelled against Sisodia by the CBI:
A liquor trader paid Rs 1 crore to a company managed by an associate of Manish Sisodia.
Amit Arora, Director of Buddy Retail Pvt Limited in Gurgaon, as well as Dinesh Arora and Arjun Pandey are "close associates" of Sisodia and were "actively involved in managing and diverting the undue pecuniary advantage collected from liquor licensees" for the accused public servants.
Radha Industries managed by Dinesh Arora received Rs 1 crore from Sameer Mahendru of Indospirits.
"Source further revealed that Arun Ramchandra Pillai used to collect undue pecuniary advantage from Sameer Mahendru for onward transmission to the accused public servants through Vijay Nair. A person named Arjun Pandey has once collected a huge cash amount of about Rs 2-4 crore from Sameer Mahendru on behalf of Vijay Nair," the CBI said. Nair is the former CEO of entertainment and event management company Only Much Louder or OML.
Sunny Marwah's Mahadev Liquors was granted L-1 licence under the policy. Marwah, who was on the board of firms of the dead liquor baron Ponty Chadha, was in close contact with the accused public servants and regularly paid bribes to them.
"It was alleged that irregularities were committed including in modifications in the excise policy, extending undue favours to the licencees, waiver/reduction in licence fee, extension of L-1 licence without approval, etc," the CBI's spokesperson said in a statement.
The CBI also raided around 20 other locations in Delhi-NCR, including premises of Arava Gopi Krishna. Excise officials, liquor company executives, dealers, along with unknown public servants and private persons, have also been booked in the case.
Expand4. What Has Manish Sisodia Said?
A day after the raids, Sisodia said at a press conference on Saturday said that he will be arrested by the CBI in the next two or three days.
"Satyendar Jain is already in jail, I will also be arrested in 2-3 days; there is a conspiracy to stop work in the education and health sector," Sisodia told the media.
He also said that the CBI had been directed by the central government's highest level to conduct the raids. He also said that the BJP was not interested in the excise policy, and that their main concern was the growing popularity of Chief Minister Arvind Kejriwal, who is "loved by masses and has emerged as a national option (against Prime Minister Narendra Modi)."
Sisodia had also spoken to the media after the conclusion of the 15-hour-long raids at over 20 locations on Friday. "The CBI team reached in the morning and searched the whole house. My family and myself extended them full cooperation. They seized my computer and mobile phone. They also took away some files," he had stated.
When the raids began, the AAP leader had tweeted, "The CBI has come. They are welcome. We are absolutely honest." Sisodia asserted that he had not committed any wrong and was not scared of the CBI probe.
Meanwhile, referring to The New York Times' positive coverage of the Delhi government's work on education a day before the raids, Chief Minister Arvind Kejriwal called Manish Sisodia "the best education minister in the world" and claimed that is the reason he is being targeted by the BJP.
(This was first published on 22 August 2022. It has been republished from The Quint's archives over Manish Sisodia's arrest by the CBI.)
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)
Expand
What Is the Excise Policy 2021-22?
The Delhi government's Excise Policy 2021-22, launched on 17 November 2021, was touted to aid the reform of the retail liquor sector, improve consumer experience, and augment revenue by Rs 9,500 crore.
The new policy introduced by the Arvind Kejriwal government sought to shut down 600 government-operated vends to pave way for swanky, new, privately-owned shops – marking the exit of the government from selling liquor.
The policy provided for the granting of retail licences to 849 liquor vends, including 266 that were privately run, across 32 zones of the city.
After the implementation of the new excise policy, the government’s revenue increased by 27 percent, generating around Rs 8,900 crore.
Here are some salient reforms introduced by the Delhi's Excise Policy 2021-22:
It provided for the licensing of 849 retail liquor vends in the city, including five super-premium retail vends, having a minimum carpet area of 2,500 square feet.
The government also made rules flexible for licencees, allowing them to offer discounts. "The licensee is free to give concession, rebate or discount on the MRP," the new policy stated.
The policy got rid of the iron grilles at the front of most liquor vends in the capital city, and allowed buyers to browse and purchase the brands of their choice. For this, the shops had to be spacious, well lit and air-conditioned to allow customers a walk-in experience and must be under camera surveillance.
It also allowed home delivery of liquor in Delhi through websites and apps.
The policy allowed stores to be opened in markets, malls, commercial roads/areas, local shopping complexes, and other such places as long as the standard rules and regulations of opening a new shop are followed.
It slashed the number of dry days to three from 21 per year, and allowed bars in hotels and restaurants to stay open till 3 am.
What Were the Alleged Irregularities in the New Excise Policy?
The contentious policy was withdrawn by the Delhi government in July 2022, after Lieutenant Governor Vinai Kumar Saxena recommended a CBI probe into alleged discrepancies in the arrangement.
The L-G's decision was based on a report by Delhi Chief Secretary Naresh Kumar, which listed alleged irregularities in the implementation of the policy by citing specific instances. The violations included “deliberate and gross procedural lapses” to provide post-tender “undue benefits to liquor licensees” through the policy.
A waiver of Rs 144.36 crores on tendered licence fee, citing effects of COVID-19, was given to licensees despite the fact that no specific provision for compensation in the form of reduction in tendered licence fee was available in the tender document. This resulted in blatant undue benefits to licensees and loss to the public exchequer, the report claimed.
The vigilance directorate report had also listed different irregularities, including revision of the formula for calculation of rates of foreign liquor and removal of import pass fee at the rate of Rs 50 per case on beer, which reduced input cost of beer and foreign liquor to retailers.
It claimed that "undue benefits were extended to the licensees at the cost of the public exchequer, in brazen violation of established statutes, rules. and procedures with an ulterior motive of monetary gains by the powers that be."
The document reportedly took note of various decisions made by officials of the excise department without prior approval of the council of ministers or the L-G.
Sisoda had accused former LG Anil Baijal of changing his stance on the excise policy and blocking liquor vends in non-conforming areas of Delhi two days before the implementation of the policy, by putting a condition for the vends to get permission from the Delhi Development Authority (DDA) and the Municipal Corporation of Delhi for opening such vends.
This caused “thousands of crores of losses” to the Delhi government, he alleged.
Baijal hit back, saying the allegations levelled on him by Sisodia were an attempt of a "desperate man to save his own skin."
What Is the CBI Case Against Sisodia?
The CBI on Friday, 19 August, listed 16 accused, including Delhi Deputy CM Manish Sisodia, in its FIR on the alleged excise scam, following its 12-hour-long raids at the AAP leader's residence.
The central investigation agency has named Sisodia as the prime accused in the case, which has been registered under IPC sections related to criminal conspiracy and provisions of the Prevention of Corruption Act.
The FIR says that Sisodia, the then Delhi Excise Commissioner Arava Gopi Krishna, and two other senior excise department officials were “instrumental in recommending and taking decisions pertaining to excise policy for the year 2021-22 without approval of competent authority with an intention to extend undue favours to the licencees post tender."
Here are the charges levelled against Sisodia by the CBI:
A liquor trader paid Rs 1 crore to a company managed by an associate of Manish Sisodia.
Amit Arora, Director of Buddy Retail Pvt Limited in Gurgaon, as well as Dinesh Arora and Arjun Pandey are "close associates" of Sisodia and were "actively involved in managing and diverting the undue pecuniary advantage collected from liquor licensees" for the accused public servants.
Radha Industries managed by Dinesh Arora received Rs 1 crore from Sameer Mahendru of Indospirits.
"Source further revealed that Arun Ramchandra Pillai used to collect undue pecuniary advantage from Sameer Mahendru for onward transmission to the accused public servants through Vijay Nair. A person named Arjun Pandey has once collected a huge cash amount of about Rs 2-4 crore from Sameer Mahendru on behalf of Vijay Nair," the CBI said. Nair is the former CEO of entertainment and event management company Only Much Louder or OML.
Sunny Marwah's Mahadev Liquors was granted L-1 licence under the policy. Marwah, who was on the board of firms of the dead liquor baron Ponty Chadha, was in close contact with the accused public servants and regularly paid bribes to them.
"It was alleged that irregularities were committed including in modifications in the excise policy, extending undue favours to the licencees, waiver/reduction in licence fee, extension of L-1 licence without approval, etc," the CBI's spokesperson said in a statement.
The CBI also raided around 20 other locations in Delhi-NCR, including premises of Arava Gopi Krishna. Excise officials, liquor company executives, dealers, along with unknown public servants and private persons, have also been booked in the case.
What Has Manish Sisodia Said?
A day after the raids, Sisodia said at a press conference on Saturday said that he will be arrested by the CBI in the next two or three days.
"Satyendar Jain is already in jail, I will also be arrested in 2-3 days; there is a conspiracy to stop work in the education and health sector," Sisodia told the media.
He also said that the CBI had been directed by the central government's highest level to conduct the raids. He also said that the BJP was not interested in the excise policy, and that their main concern was the growing popularity of Chief Minister Arvind Kejriwal, who is "loved by masses and has emerged as a national option (against Prime Minister Narendra Modi)."
Sisodia had also spoken to the media after the conclusion of the 15-hour-long raids at over 20 locations on Friday. "The CBI team reached in the morning and searched the whole house. My family and myself extended them full cooperation. They seized my computer and mobile phone. They also took away some files," he had stated.
When the raids began, the AAP leader had tweeted, "The CBI has come. They are welcome. We are absolutely honest." Sisodia asserted that he had not committed any wrong and was not scared of the CBI probe.
Meanwhile, referring to The New York Times' positive coverage of the Delhi government's work on education a day before the raids, Chief Minister Arvind Kejriwal called Manish Sisodia "the best education minister in the world" and claimed that is the reason he is being targeted by the BJP.
(This was first published on 22 August 2022. It has been republished from The Quint's archives over Manish Sisodia's arrest by the CBI.)
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)