Explained: AAP’s Excise Policy over which CBI has raided Manish Sisodia’s house

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The Central Bureau of Investigation (CBI) searched over 20 locations in Delhi and its neighbouring areas, including the residence of Deputy Chief Minister Manish Sisodia early Friday.

The raids were conducted in connection with the alleged regularities in the Delhi Excise Policy.

“CBI is here at my residence. I will cooperate with the probe agency, they will not find anything against me,” Sisodia tweeted. He said that it’s unfortunate that those who do good work in the country are harassed like this.

“We welcome CBI. Will give full cooperation in the investigation so that the truth can come out soon. Until now many cases have been filed against me but nothing has come out. Nothing will come out of it either. My work for quality education in the country cannot be stopped,” he tweeted in Hindi.

The raids come close to a month after Delhi Lieutenant-Governor VK Saxena recommended a CBI probe into the Aam Aadmi Party’s 2021-2022 Excise Policy.

In early July, an official notification stated that the Delhi government had extended the licences of those supplying country liquor in the Capital by a month. For the extension, the licence holders would have to pay a pro-rate licence fee for a month.

The CBI had registered a First Information Report (FIR )in connection with alleged irregularities in the formulation and execution of the Excise Policy, which was introduced in November last year.

Amid growing criticism, the Delhi government rolled back the policy on 1 August.

Let’s take a closer look at the features of the excise policy:

The Aam Aadmi Party (AAP) government introduced the new liquor regime in November 2021 claiming it would ‘clean up malpractices’ and improve the experience of individuals while buying liquor.

Arvind Kejriwal

The Delhi government in its policy document had claimed that revenue in Delhi was sub-optimal and that there is significant potential for revenue augmentation and also providing a decent standard of customer experience commensurate to the stature of the National Capital.

The Excise Policy 2021-22 which went into effect on 17 November stated

  • No new liquor shops will be opened in Delhi
  • The government will not run any vend
  • Retail licences would be issued to private bidders for 849 vends
  • Those 849 vends across the city would be divided into 32 zones
  • Each zone was divided into 8-10 wards which have around 27 vends
  • 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, particularly Rule 51 of the Delhi Excise Rules
  • It listed maintaining law and order as being essential to get a renewal of the licence.

‘Quid pro quo at top level’

The CBI inquiry was recommended on Delhi Chief Secretary’s report filed earlier this month, showing prima facie violations of GNCTD Act 1991, Transaction of Business Rules (ToBR)-1993, Delhi Excise Act-2009 and Delhi Excise Rules-2010, officials said.

A copy of the report was also sent to the chief minister, they said.

The LG has found “substantive indications” of “financial quid pro quo” at the “top political level” wherein the excise minister “took and got executed major decisions in violation of the statutory provisions” and notified the Excise Policy that had “huge financial implications”, sources said.

Apart from this, there were also “deliberate and gross procedural lapses” to provide post tender “undue benefits to liquor licensees”, said the officials.

Deputy Chief Minister Manish Sisodia heads the excise department of the Delhi government.

The excise department gave a waiver of Rs 144.36 crore to the licensees on the tendered license fee under the excuse of the COVID-19 pandemic. It also refunded earnest money of Rs 30 crore to the lowest bidder of the licence of Airport Zone, when it failed to obtain ‘NOC’ from the airport authorities, claimed sources.

Many liquor stores failed to open for being located in non-confirming areas of the city. Several such vends were sealed by the municipal corporations, they said.

“It was in gross violation of Rule 48(11)(b) of the Delhi Excise Rules, 2010, which clearly stipulates that the successful bidder must complete all formalities for grant of license failing which all deposits made by him shall stand forfeited to the government,” said the note.

Further, the excise department in its 8 November 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 approval of the competent authority” making it cheaper for retailers causing loss of revenue to the state exchequer, they claimed further.

The “lapses” in awarding licenses for liquor vends were also reported by the Chief Secretary and the excise department also relaxed provisions of the tender document to provide undue financial favours to the retailers, instead of acting against them for default in payment of license fee, interest and penalty for non-genuine reasons, sources said.

VK Saxena and member of the Delhi Legislative Assembly. @LtGovDelhi

Some of the decisions taken by Sisodia were also red-flagged by the then LG on being taken without the approval of the Delhi Cabinet, they added.

“The illegal decisions taken in the past were attempted to be legalized by getting the stamp of a post facto Cabinet decision as recently as on July 14, which in itself was in violation of laid down rules and procedures,” they claimed.

AAP hits back

Delhi Chief Minister and Aam Aadmi convener Arvind Kejriwal said that the probe agency officials did not find anything during the earlier searches, and nothing will come out this time as well.

Earlier, Kejriwal had said that the entire case is “false” and “baseless”.

“There is no truth to any of the allegations. Sisodia is an honest politician. Sisodia has given hope to crores of children in the country that government schools can also be world-class. We are not scared of jail. You (BJP) are the children of Savarkar, who apologised to the British rule. We are the children of Bhagat Singh, who refused to bow down before the Britishers and sacrificed his life for the country,” Kejriwal told The Hindustan Times in July.

AAP chief spokesperson Saurabh Bhardwaj said that Central agencies like the CBI and ED will investigate against every minister of Delhi government to keep it at bay as Prime Minister Narendra Modi is “scared” of party convener and Chief Minister Arvind Kejriwal since Aam Aadmi Party’s stupendous victory in Punjab.

The BJP and Congress had vociferously opposed the policy and lodged complaints with the LG as well as central agencies for a probe into it.

The Excise Policy 2022-23 was approved by the Delhi cabinet on 5 May.

It was not approved by the lieutenant governor.

The official notification by the Excise department notified, "... approval of the Competent Authority is hereby conveyed regarding extension of L-3/33 Licence for supplying country liquor in GNCT of Delhi for a further period of one month i.e. from 01.07.2022 to 31.07.2022. The extension is subject to payment of pro-rata fee for the extension period."

The notification further read, "however, any person holding such non-renewable license shall not be under any obligation to accept such offer to extend its license."

With inputs from agencies

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