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In a rather shocking turn of events, India recently saw the arrest of its first sitting chief minister in light of a liquor policy scam. Arvind Kejriwal, the current chief minister of Delhi, was accused of money laundering and violating the excise policy for favours granted in return.
Given the gravity of the situation, this matter went beyond a mere CBI investigation and reached higher authorities, namely the Enforcement Directorate (ED).
Let’s unpack the events that unfolded and the factors that prompted the arrest in the first place.
The curtain lifts
On March 23, Kejriwal was escorted out of his house by the CBI, a medical team and several police officers. As loyal followers often do, AAP’s followers stood waiting, blocking the police in an attempt to save their leader from the inevitable arrest ordered by the ED.
Several raids and accusations that followed the arrest found nothing of evidence.
Conspiracy theorists and numerous politicians and government officials, who look down upon the current BJP government, have branded the arrest a ‘political propaganda’ to prevent Kejriwal from participating in the upcoming polls. They’ve labelled the incident as “Modi’s tactics”, meant to remove Kejriwal from contention.
AAP leader and Minister of Health of Delhi Saurabh Bharadwaj has raised concerns over the actions of the BJP-led government:
“People in not only India but those across the world have come to know that the BJP government is busy putting the entire Opposition in jail.”
Such sweeping claims of the BJP government’s actions have not gone unnoticed internationally, as evidenced by the recent statement from the U.S. State Department Spokesperson Matthew Miller:
“We continue to follow these actions closely, including the arrest of Delhi CM Arvind Kejriwal. We are also aware of the Congress party’s allegations that tax authorities have frozen some of their bank accounts in a manner that will make it challenging to effectively campaign in the upcoming elections. And we encourage fair, transparent and timely legal processes for each of these issues.”
Following the trail: Policies to arrests
For the purpose of maintaining a timeline, let us understand what transpired since late 2021.
In November of that year, the Delhi government, under Kejriwal’s rule, introduced a new excise policy aimed at reindustrialising alcohol sales in the city. Even with safety checks, the policy received mixed reviews. Some commended the measure and the changes it would bring, while others questioned its potential financial and public health implications. Both sides had ample reasons to be for or against it. Yet, Kejriwal was headstrong about his decision, later posting about it on X (formerly Twitter).
In July 2022, Delhi’s Chief Secretary Naresh Kumar reported violations in the policy to Lieutenant Governor (L-G) Vinai Kumar Saxena. Allegedly, the report stated “financial losses to the exchequer”, amounting to over ₹580 crores.
A case was filed and later handed over to the CBI on August 17, 2022. Later in September, the new excise policy was withdrawn, and the old policy was reinstated in an attempt to establish a new regime.
The whole ordeal lost its momentum for a while, or so it seemed, until the CBI got involved. By now the CBI had conducted several raids targeting Delhi’s Deputy Chief Minister Manish Sisodia and a few other dignitaries. The issue escalated further when the Enforcement Directorate (ED) initiated a money laundering investigation connected to the liquor policy. Once PLMA (Prevention of Money Laundering Act, 2002) got attached to the case, a slew of arrests were made. Several high-profile AAP leaders, including Sisodia, were at the receiving end of these arrests.
Since the arrests, the probe agency has had one job: sending summons to Kejriwal. These summons were sent over a span of six months, from October 2023 to March 2024.
The ED reportedly issued approximately nine summons to Kejriwal. Subsequently, ED officials arrived at his residence and personally delivered the tenth summon, leading to his arrest. The Delhi High Court refused to protect him from the arrest because it considered Kejriwal a major player in the money laundering case.
Aside from being AAP’s commander-in-chief, Kejriwal has, due to the aforementioned events, gained the title of “Kingpin” and “key conspirator” in the liquor scam. The CBI was eventually allowed to interrogate Kejriwal, which lasted up to nine hours.
The CM continued to run the Delhi government from jail, and was granted bail on May 10, 2024. He has been campaigning for his party briskly since then.
Kejriwal’s response
Kejriwal has repeatedly stated that these accusations are politically motivated. Senior Advocate Abhishek Manu Singhvi, appearing for Kejriwal, argued in court that the summonses lacked specificity and amounted to a vague fishing expedition, infringing Kejriwal’s fundamental rights.
On November 2, 2023, Kejriwal wrote a letter to the ED addressing his summons.
He strongly believed that he would be arrested against his rights if he appeared in court. Kejriwal approached the Supreme Court, challenging the High Court’s order passed on March 21, 2024, which dismissed his plea for release from jail and rejected his argument of political vendetta amid the looming Lok Sabha elections.
The liquor policy that landed Kejriwal and co. in soup
If you’ve ever been to Delhi for work, holiday or to visit your family, odds are someone has picked up liquor for you. Maybe it was a colleague or a family member. If your group plans a party and needs alcohol, usually it’s your local friends, mostly guys, who volunteer to hit up the government-run liquor stores. Why? Because these places are nearby and, well, let’s just say they’re not exactly easy on the eye.
An average liquor shop in Delhi looks somewhat like a rundown shack attached to a large, often dilapidated, building with a window-like opening to facilitate the buying and selling of goods.
At these windows, sellers sit while buyers jostle their way through the crowd, comprising mostly men, to get their daily fix. You’d often find smoke and paan shops as well in the vicinity. All of these factors make liquor shops a breeding ground for public nuisance. And that’s exactly what necessitated urgent action and change, according to Sisodia. They aimed to establish spacious, stylish liquor shops that they hoped would provide a sense of safety and security for both patrons and the public, while boosting sales.
The larger rationale behind this initiative was that the excise duty on these bottles was crucial for Delhi to increase its state revenue. Given that each state has autonomy over its liquor policies and taxes, this move was seen as essential. Currently, Karnataka levies 83% tax on the actual price, making it the highest tax-rated state in the country. Kejriwal’s reasoning for reforming the old policy, which was set up during Congress’s regime, was:
- Poor customer experience
- Losing liquor revenue to neighbouring states
- Corruption due to the liquor mafia
To address these issues, the Kejriwal government tried to establish more aesthetically pleasing liquor shops, transitioning from government management to private companies. Additionally, they lowered the drinking age from 25 to 21, and slashed the prices of alcohol. In February 2021, the CM formed a Reform Excise committee chaired by Manish Sisodia, that included the likes of Satyendra Jain, health, industries, power, public works department, home and urban development minister, and Kailash Gahlot, the transport minister.
In June 2021, the new excise policy was unveiled, outlining the implementation of an auction system for selling licences. These licences would be auctioned off at bidding prices, starting at 221 crores, aiming to maximise revenue through this method. The government would earn money from the licences sold in addition to excise duty and VAT. The upgrade from 630 shops in Delhi to 864 shops, all privately owned, was a big leap for AAP, and the new policy’s success was crucial.
To protect the interests of consumers, the government imposed several essential conditions. Things such as air conditioning, lighting and minimum area to be used were all clearly specified in the policy document. Non-compliance would result in revocation of the licence.
Only a set number of liquor shops could operate in each zone, and to uphold order and control, no business was permitted to acquire more than two licences. Furthermore, companies were barred from getting involved in different stages of the supply chain to further de-monopolise the business. In the initial phase, the sale of just 20 out of 32 licences generated over ₹5300 crores, nearly touching the ₹5600-crore average revenue that the government typically earns annually from selling licences alone.
While AAP leaders were celebrating this success, several politicians were opposing the move behind the curtains. Some of these protesters were BJP party members clamouring for answers: why reduce the legal drinking age of the state if the goal was to control liquor sales, and make children and women feel safe? However, a few months later, the BJP lowered the legal drinking age in Haryana from 25 to 21.
Meanwhile, liquor shops were being opened in villages — near schools, religious places and other unauthorised areas, causing a whirlwind of protests statewide.
AAP soon faced much more severe and divisive allegations. It was claimed that the party was allegedly favouring larger businesses by deliberately hiking the bidding participation fee and creating conditions that prevented a level playing field. Earnest Money Deposit (EMD) was a refundable fee given by bidders to participate in the bidding process. This amount would be refunded only if the bidding company failed to acquire any zone during the auction. The price of EMD was raised from ₹8 lakhs to 30 lakhs, discouraging many companies from even applying. Aside from high EMD, the minimum 500 sq. ft. requirement and the prepayment of taxes served as huge roadblocks for AAP’s ambitious policy reform agenda to succeed.
Not surprisingly, retailers were compelled to shut down their shops and surrender their licences to the government, leading to the imminent collapse of the plan that involved establishing liquor shops in nine zones across Delhi. Despite the initial plan to open 864 shops, as of July 2022, only 464 shops were operational.
Acche din aane wale hai
How do you win something? You can prepare your level best for sure, but does that guarantee a sure-shot victory lap? An age-old trick would be to weaken your opponents or eliminate them altogether. Now that would surely assure you of the first place, wouldn’t it?
A report on The New Indian Express in September 2022 — based on a study of court records, agency statements and reports of politicians booked, arrested, raided or questioned by the ED was revealed. It talked about how, since 2014, when the Narendra Modi-led BJP first came to power, there had been a four-fold jump in ED cases against politicians in comparison to the UPA regime earlier.
The significant increase in ED cases is mainly attributed to the Prevention of Money Laundering Act (PMLA), a law that has been strengthened since it came into force in 2005. With stringent bail conditions, its provisions now grant the agency powers to arrest and seize properties and assets of the accused — and makes the accused’s statement, recorded in the presence of an investigating officer, admissible as evidence in court.
Sisodia and Kejriwal arrests and their connection with the current election
Meanwhile, the ongoing court cases against Sisodia proved him guilty under PLMA which resulted in his arrest on February 26, 2023. This caused a major setback to the AAP committee as he was an important figure in terms of election campaigning as well. The salt to season his wounds would be the rejection of his bail, on grounds of the case being that of a ‘financial irregularity’. However, loneliness would be the least of Sisodia’s concerns because soon the ED would gift him a beloved jail-mate — CM Arvind Kejriwal himself.
Soon after, AAP followers all around Delhi gathered in front of the jail to protest. Never before has a government official of such high stature been arrested, let alone the sitting CM of Delhi. Because the Delhi police were not having it, Section 144 was imposed — gathering of four or more people in public was disallowed.
Assurances from the ED asserting possession of serious evidence finding K. Kavitha, daughter of KCR (Ex-chief minister of Telangana), culpable for paying ₹100 crores on Kejriwal’s request further sparked unrest. The primary charge being that the Delhi CM had taken money in exchange of policy favours to the South Group, thereby, helping the consortium create a cartel, or in other words, helping them gain wholesale as well as retail licences.
To make matters worse, several WhatsApp messages were shown to prove how the money given to Kejriwal funded AAP’s campaigns. The money reached Goa via a network of Hawala transactions run by informal cash couriers – known colloquially as angadiyas – with alleged links to AAP functionaries, members of the South Group and Chariot Productions Media Pvt. Ltd., a firm engaged by the party to oversee its campaign activities in Goa.
The Angadia operator’s Goa office was raided by the Income Tax department in January of 2022. According to the ED, “documents, chits and slips were seized during the raid”, which were eventually analysed and led the ED to conclude that approximately ₹100 crores had been transferred to Goa through Hawala transactions.
AAP ka kya kehna hai?
Following are a few excerpts of AAP leaders, its followers, the general public, rival politicians and the like.
Arvind Kejriwal has repeatedly stated, “Manish is innocent. His arrest is dirty politics. People are very angry with Manish’s arrest. People are watching everything. People are understanding everything. People will answer this. This will further boost our morale. Our struggle will become stronger.”
Delhi’s Minister of Education Atishi Singh said that the party has sought an “urgent appointment” with the Election Commission to ensure a level-playing field in the upcoming Lok Sabha elections. “Despite the representation made yesterday, today the Aam Aadmi Party office was sealed. Lok Sabha candidates and party leaders could not come to the party office for campaign meetings.”
“Reddy was called for questioning on November 9, 2022. During the questioning, he said he never met Arvind Kejriwal and is not related to the AAP. However, he was arrested following this by the ED. After spending several months in jail, Sarath Chandra Reddy changed his statement, saying he had met Arvind Kejriwal. Following this, Sarath Chandra Reddy got bail,” said Atishi in a press conference.
“In June 2023, Aurobindo Pharma’s P Sarath Chandra Reddy became an approver in the case. Through three of his companies the BJP took ₹50 crores via electoral bonds,” alleged AAP leader Saurabh Bharadwaj.
“The arrest will be in grave violation and infraction of the fundamental right to life and liberty. The March 16 summons was issued on the same day on which the general election schedule was declared. The ED has been calling since last year, they can’t wait for two more months?” Singhvi said.
Rahul Gandhi tweeted, “A scared dictator wants to create a dead democracy. While capturing all the institutions including the media, breaking up the parties, extorting money from companies, freezing the account of the main opposition party was not enough for the ‘devilish power’, now the arrest of the elected Chief Ministers has also become a common thing. INDIA will give a befitting reply to this.”
Former Supreme Court Justice Sanjiv Khanna posted a slew of posts on X, one of them stating:
“Arvind Kejriwal ruined the children of lakhs of mothers in Delhi by making them addicted to alcohol, the effect of the curse of all those mothers is visible, today another corrupt person came to an end,” BJP MP Parvesh Verma said on Arvind Kejriwal’s arrest.
Throughout the proceedings of this case, it looks as if politicians and regular folk have chosen sides and are working relentlessly to propagate their version of the truth. Although with the facts at hand, it is difficult to come to a conclusion, especially with any hard evidence yet to be produced in a court of law. As the air thickens with misinformation, rumours and accusations, it is important to not get swayed by any propaganda. But tell us, AAP ka kya kehna hai?
