Manish Sisodia Arrest: Decoding Delhi's Alleged "Liquor Scam"

AAP protests (left), Manish Sisodia (right) | Photo courtesy: @AamAadmiParty | Twitter

The Central Bureau of Investigation (CBI) on Sunday arrested Delhi Deputy Chief Minister Manish Sisodia in connection with alleged corruption in Delhi’s liquor policy. While the Aam Aadmi Party (AAP) has cried vendetta politics and blamed BJP for misusing central agencies, we dig deeper into Delhi liquor policy case to find out if rules were flouted and if Manish Sisodia’s arrest was warranted.

Manish Sisodia’s Arrest

Manish Sisodia arrived at the CBI headquarters in New Delhi around 11 am on Sunday and was questioned for about eight hours before his arrest was finally recorded.

The LG office indicated that it found substantial indications of a financial quid pro quo at the topmost political level within the Aam Aadmi Party and that the Delhi government has allegedly violated many law provisions, and there have been procedural lapses. Following a report by the Delhi Chief Secretary, which found that the GNCTD Act of 1991 was violated, the LG recommended a CBI probe into AAP’s excise policy earlier. Delhi Chief Secretary Naresh Kumar’s report alleged that Sisodia provided undue benefits to liquor vend licensees in return for kickbacks and commissions, which was used by AAP in the Punjab elections. The excise policy was scrapped in July last year after the LG recommended a CBI probe into the matter. Amongst other things, the Delhi government is being blamed for extending undue financial favours to the liquor licensees even after the tenders were awarded, which allegedly caused huge losses to the state exchequer. The Delhi Police’s Economic Offences Wing (EOW) has been investigating the Delhi government’s excise policy separately.

All About Delhi’s Alleged “Liquor Scam”

The AAP government implemented the new excise policy on 17 November 2021, under which retail licences were given to private bidders for 849 liquor vends across 32 zones in the city. In its excise policy document, the government stated that Delhi is ranked the 28th most visited city in the world, and the excise revenue is an essential source of revenue for the State. However, the current system of excise regime in Delhi is highly cumbersome, and the liquor trade is conducted in an archaic manner, the policy noted.

The policy paper stated: “the excise revenue, presently generated in Delhi, is at a suboptimal level, and there is significant potential for revenue augmentation and also providing a decent standard of customer experience commensurate with the stature of the National Capital.” The Delhi government further went on to claim that the New Excise Policy was necessitated to reform the liquor trade in Delhi, increase the state excise duty revenue, simplify the liquor pricing mechanism, check malpractices and evasion of duty in the liquor trade, to not allow the formation of any monopoly or a cartel and to eradicate the sale of spurious liquor and ensure equitable access to liquor supply across the national capital.

To further this goal, the government stated that it would grant wholesale licences in the form of L-1 category licences to entities for the supply of Indian and foreign liquor. According to the new excise policy, these licences would be granted to private business entities with distribution experience in the liquor trade in any State of India for at least five years. The policy document stated that the number of retail liquor vends will be 849, including five super-premium retail vends and that there shall be no government-owned liquor vends for IMFL and FL and licences in the form of L-6, L-6FG & L-6FE, which will become redundant.

The AAP government is also accused of allegedly refunding 30 crores to the lowest bidder of the licence of Airport Zone even when the bidder failed to obtain NOC from the airport authorities. Again, this is believed to be a violation of Delhi Excise Rules, 2010, which stipulates that if the bidder fails to complete all formalities for the grant of a licence, his deposits will stand forfeited. Further, multiple media reports have stated that the excise department, in its November 8, 2021 order, revised the formula of calculation of rates of foreign liquor and removed the levy of import pass fee of Rs 50 per case on beer “without the approval of the competent authority”, making it cheaper for retailers and causing loss of revenue to the state exchequer.

CBI’s Response

In a statement released on Sunday, the CBI mentioned that Manish Sisodia was arrested in an ongoing investigation of a case relating to alleged irregularities in framing and implementation of the excise policy of the Government of National Capital Territory of Delhi (GNCTD). The CBI also noted that the case was registered against Manish Sisodia and 14 others for the irregularities and for extending post-tender benefits to private persons.

The CBI had filed a chargesheet in the matter on 25 November 2022 against the then-CEO of a Mumbai-based private company and six others. A notice was issued by the CBI under section 41A of the Cr.P.C for attending the investigation on 19 February 2023. However, Manish Sisodia sought time of one week, citing his preoccupation. The CBI stated: “Accepting his request, he was issued a notice u/s 41A Cr.P.C for attending the investigation (on 26.02.2023) for answering various questions evaded by him during his examination on 17.10.2022 and further questions relating to his incriminating role based on evidence collected during the investigation of the case. However, he gave evasive replies and did not cooperate with the investigation despite being confronted with evidence to the contrary. Therefore, he has been arrested.”

The CBI officials told the media that they interrogated Manish Sisodia on various aspects, including his alleged links with Dinesh Arora and many other accused persons whose name figures in the FIR. The officials have said that the Deputy Chief Minister was not cooperating with the agency and was providing evasive replies.

Earlier today, the CBI produced Manish Sisodia before the Rouse Avenue Court and sought his five-day custody. Later in the day, the court granted the CBI the custody of Manish Sisodia till March 4.