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Introduction

The controversial Delhi Excise Policy 2021-22 was introduced on November 17, 2021 with an aim to revolutionize the liquor retail landscape in the capital. Its objectives were to maximize revenue for the state, combat liquor mafia and black marketing, improve the consumer experience and ensure equitable distribution of liquor vends. It marked the withdrawal of the government from the business of selling liquor and allowed only private operators to run the liquor shops. The government also made the rules flexible for licensees, such as allowing them to offer discounts and set their own prices instead of selling on MRP fixed by the government. These reforms increased the Government’s revenue by 27 percent, generating around Rs. 8900 crore.

Under the new policy, the city was divided into 32 zones inviting firms to bid on the zones. Instead of individual licences, bidding was done zone-by-zone. Each municipal ward would have 2-3 vends. Also, licenses for 849 retail vends were issued through open bidding by the Excise department as opposed to 475 liquors shops run by the four government agencies, and 389 by the private operators under the old liquor policy.

For the first time, shops were allowed to offer discounts to retail customers, which attracted crowds and reduced the number of dry days from 21 to 3. The new policy also had a provision for home delivery of liquor. It even proposed lowering the drinking age from 25 to 21. It also suggested the opening of shops till 3 am. However, these were not implemented.

However, after a series of vehement opposition and allegations of procedural irregularities the Government of Delhi withdrew the policy on August 1st, 2022 and reverted to the old excise regime.

Report of Chief Secretary

The Chief Secretary found procedural lapses and irregularities in the new policy and submitted a report on the same to the Lieutenant Governor and Chief Minister of Delhi. According to the report, Manish Sisodia, Head of the Excise Department was accused of making changes to the excise policy without the approval of the L-G, such as allowing a waiver of Rs 144.36 crore on the tendered licence fee. Further, the arbitrary and unilateral decisions taken by then Minister resulted in financial losses to the exchequer, estimated at more than Rs 580 crore.

The law governing this subject states that if any changes are made to a policy that has already been implemented, the excise department needs to place them before the cabinet, and forward it to the L-G for final approval. However, the changes made by the Deputy CM did not comply with these mandates. Therefore, the policy implemented without the approval of the cabinet and L-G was illegal, and violative of the Delhi Excise Rules, 2010 and the Transaction of Business Rules, 1993.

Timeline of Events leading to the Arrest of AAP leaders

July 8, 2022: Chief Secretary submits report to L-G office alleging procedural lapses in excise policy implementation. L-G writes to MHA recommending CBI inquiry in matter.

July 30: Sisodia says Government to revert to old excise policy

Aug 6: L-G nod to suspend ex-excise commissioner, IAS officer Arava Gopi Krishna, Dy Commissioner Anand Tiwari

Aug 17: CBI files FIR

Aug 19: CBI Raids Deputy Chief Minister Manish Sisodia and Others on Delhi LG’s Recommendation, followed by Enforcement Directorate’s money laundering probe on liquor policy.

Sept 28 : CBI arrests Vijay Nair, the Aam Aadmi Party’s Chief of Communications.

Oct 10: CBI arrests Abhishek Boinpally

Nov 14: ED arrests Boinpally and Nair

Nov 24: CBI files Cargesheet; names 7

November 26: ED files first prosecution complaint/ chargesheet. Alleges excise policy “formulated with deliberate loopholes”, which “promoted cartel formations through back door” to benefit AAP leaders

January 6, 2023: ED files second prosecution com- plaint/supplementary chargesheet claiming CM allegedly spoke to one of main accused, Sameer Mahendru, asked him to continue working with co-accused Nair who he referred to as “his boy”.

January 14: CBI visits Sisodia’s office. He calls it “raid”, CBI denies

February 19: Sisodia says CBI called him for questioning again. Seeks week’s time

February 26: Sisodia arrested

March 2023: The Enforcement Directorate detains Manish Sisodia, the former deputy chief minister of Delhi.

October: AAP Leader Sanjay Singh is arrested by the Enforcement Directorate, and the first summons is issued to Delhi CM Arvind Kejriwal in connection with the liquor policy fraud.

November 2023: On November 2, Kejriwal flies to Singrauli, Madhya Pradesh, to address a political rally instead of responding to the ED’s first summons.

December 2023: Kejriwal ignores the second summons, saying it is ‘illegal and politically motivated’. The ED sends Kejriwal a third summons to appear for questioning on January 3.

January 2024: Kejriwal misses the third summons for alleged conspiracy by the Central government. In the same month, the ED issues a fourth summons to the Aam Aadmi Party (AAP) convenor, asking him to appear for questioning on January 18. Kejriwal responds to the Enforcement Directorate’s summons to him, asking the agency why notices were issued. The ED follows up by issuing its fifth summons.

February 2024: For the fifth time, Kejriwal ignores the Enforcement Directorate’s summons. An ED court filing from February said that the AAP politician was not following the summons. Kejriwal was granted a one-day reprieve from making a personal appearance by a Delhi court in February.

March 2024: In response to two allegations from the ED against Kejriwal for allegedly ignoring its summonses in the case, a sessions judge grants him bail.

Chief Minister Arvind Kejriwal files a petition with the Delhi High Court challenging ED summonses. He informed the Delhi High Court that he will not appear before the Enforcement Directorate due to a “clear intent” to arrest him during the upcoming elections.

The Delhi High Court refused to provide Kejriwal any protection from coercive action. Consequently, Kejriwal petitioned before the Supreme Court for protection against any coercive action by the ED.

Therefore, on account of ignoring nine summonses issued by the agency for questioning, the ED arrests Delhi Chief Minister Arvind Kejriwal.

Matter referred to CBI

The report of the Chief Secretary was referred to the CBI, which subsequently, led to the arrest of the then Delhi Deputy CM Manish Sisodia. 14 members belonging to AAP party were also made accused in its FIR.

Enforcement Directorate role in the case

Two cases, one by CBI and one on alleged money laundering being investigated by ED, have been registered in relation to the excise policy. The ED told the court that the alleged proceeds of crime amounted to more than Rs 292 crore, and that it was necessary to establish the modus operandi.

Manish Sisodia arrested in February 2023

AAP leader Sisodia has been under judicial custody since February 26 last year, after he was arrested by the CBI, which is also probing the “procedural lapses” in the policy execution. Sisodia is alleged to have “destroyed evidence” by changing his phone frequently, and the profit margin for wholesalers has been changed from 5 per cent to 12 per cent, among other accusations.

The case investigation began two months after Delhi LG VK Saxena assumed office in May 2022. He recommended a CBI probe into the malafide activities around the repealed policy.

BRS leader K Kavitha arrested on March 15

The Bharat Rashtra Samithi (BRS) leader K Kavitha also approached the Supreme Court over a plea against her arrest in the same probe. However, the court refused to take up her petition and asked her to approach the trial court first. Kavitha is alleged to have “plotted” with Kejriwal and jailed former Delhi deputy CM Manish Sisodia to get “favours” in excise policy. The agency claims that she is linked to a “south group” which paid about Rs 100 crore to AAP for skewing the policy in their favour.

Kejriwal arrested on March 21^st 2023

The Chief Minister filed a challenged his arrest before the Supreme Court. But, when the Court directed to try the case first before the lower courts in the similar matter involving Kavitha, the Minister withdrew his suit and contested before the High Court. A fresh plea in HC against ED, has been filed seeking protection from any coercive action by the ED.

References

Case title – Satyendar Kumar Jain and Ors Vs Directorate of Enforcement

Case no. – Criminal Appeal Nos. 1638 of 2024, 1639 of 2024, 1640 of 2024

Decision on – March 18th, 2024

Quoram – Justice Bela M. Trivedi, Justice Pankaj Mithal

Facts of the case

Satyendar Jain was alleged to have acquired disproportionate assets with the help of his family members and other persons and further laundered tainted money through four Kolkata based shell companies while he was functioning as Minister of Govt. NCT of Delhi. An FIR was filed under Section 109 IPC and 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988 which were the offences under the Prevention of Money Laundering Act, 2002 (PMLA). The ED had arrested Satyendar Jain in the money laundering case based on a CBI’s FIR registered against him in 2017 under the Prevention of Corruption Act.

The Directorate of Enforcement further registered an ECIR against Satyendar Jain, Vaibhav Jain, Ankush Jain and others for investigation into the commission of the offence of Money laundering as defined under Section 3 and punishable under Section 4 of the PMLA.

On the completion of the said investigation, a Prosecution Complaint was filed by the ED before the Court of District and Sessions Judge. Subsequently, the trial court, in 2022 had taken cognizance of the prosecution complaint (charge sheet) filed by the ED against Satyendar Jain, his wife, and eight others, including the four firms, in connection with the money laundering case and dismissed the bail applications of the accused.

The Delhi High Court by its impugned judgement had observed that Jain is an influential person and may tamper with evidence. The High Court noted that there was no illegality or infirmity in the trial court’s order by which the bail pleas were dismissed. The Court while dismissing the bail plea held that Satyendar Jain had not satisfied the twin conditions for bail under the Prevention of Money Laundering Act (PMLA).

Court’s Analysis and Judgement

The Court examined the submissions of both the parties and observed that appellants had miserably failed to reasonably establish that they were not guilty of the alleged offences. Whereas, the Court found merit in the material collected by the respondent-ED to show that they are prima facie guilty of the alleged offences.

The Court allowed ED to correct its inadvertent mistakes in the affidavit and pointed out that it had no significance in the present case.

The Court noted that appellants had not complied with the twin mandatory conditions laid down in Section 45 of PMLA and thereby, upheld the decision of High Court.

The Court stated that the right to speedy trial and access to justice is a valuable right enshrined in the Constitution of India, and provisions of Section 436A of the Cr.P.C. would apply with full force to the cases of money laundering falling under Section 3 of the PMLA, subject to the Provisos and the Explanation contained therein.

The Court, therefore, denied the bail to the appellants and directed them to surrender before the Special Court without any delay.

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Judgement Reviewed by – Keerthi K

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