Loss of over ₹580 Crore: ED's case against CM Kejriwal in Delhi Liquor 'Scam'

2 Apr 2024  Read 1598 Views

Alcohol consumption and business are always hot topics in India and are surrounded by controversies. It gets even more controversial when the government is involved in it. In India, alcohol affairs vary from state to state since it is a state subject, and it is also banned in a few states like Bihar and Gujarat (though no comments on the ban's effectiveness)

Talking about Liquor, the Delhi Liquor Policy has been in the news headlines recently - but why? 

Well, this blog is all about how Delhi's Chief Minister found himself in the midst of a liquor policy scam that led to his arrest, what this policy is, and what are accusations against him with other important details.

What has happened? 

  • Delhi Chief Minister Kejriwal had become the first serving CM in the country to be arrested. 
  • He has been sent to Tihar jail for judicial custody in the Delhi excise policy scam, aka liquor policy case. 
  • He was sent to jail by Delhi's Rouse Avenue Court after his custody with the Enforcement Directorate on 21 March ended.

What are the Accusations against Delhi's CM Kejriwal?  

Two cases have been registered in relation to the excise policy scam:-

  • by the CBI on alleged involvement in corruption within the policy 
  • by the ED on alleged money laundering

In court, the Enforcement Directorate (ED) said that the Aam Aadmi Party Chief was the main person, i.e., the "key conspirator" behind the Delhi Excise Scam. They said Kejriwal was part of a plan to help certain people & get money from liquor businessmen in return for favours. 

Also, ED alleged that he was part of using money from illegal activities in the AAP's campaign during the Goa election in 2022. 

Read more about Election's Model Code of Conduct

What is the Delhi Excise Policy Scam, aka Liquor Policy case?

In Nov 2021, the Delhi government introduced a new plan to update how alcohol is sold in the city and changed the excise taxes and duties levied on liquor. 

In July 2022, Delhi's Chief Secretary reported violations and procedural lapses in the formation of the policy to Lt. Governer, who asked the Central Bureau of Investigation (CBI) to check it out.

This policy came into force in November 2021 but was scrapped in July 2022 due to allegations that this policy reduced government revenue. 

The report said that the decision taken in regard to policy by the Excise Minister caused a loss of over ₹580 crore to the government.

What are the Issues with the Delhi Excise Policy case?

  1. Favouritism:- The Enforcement Directorate said the policy was made with loopholes to favour AAP leaders and promote cartel formations. 
  2. Special Consideration:- ED said AAP leaders got extra money from the liquor business for special treatment like discounts and not paying license fees, especially during COVID-19.
  3. Kickbacks:- The ED claimed that the "scam" included giving wholesale liquor businesses to private companies. These companies were supposed to make a fixed profit of 12%, but they secretly gave 6% of that profit back to AAP leaders.
  4. Scam:- The ED told a court that the money from the supposed excise policy scam was over ₹ 292 crore.

Before Kejriwal was arrested, the ED issued nine summons, but he didn't go. Reasons given by Kejriwal for refusing to appear before the ED were - 1. He is under legal advice that summons are invalid; 2. There's a political game happening to stop him from campaigning. 

What is the alleged connection between Kejriwal and the 'South Lobby'?

According to the Enforcement Directorate (ED):-

  • Kejriwal was directly involved in making the excise policy, which was made to favour the South Lobby, aka South Group.
  • The South Group is a group of individuals from South India. They got special access and benefits, even more than what the rules allowed. 
  • The South Group gave ₹ 100 crore to AAP leaders in exchange for selling liquors from southern liquor companies to Delhi retailers.

Through the acts of corruption & conspiracy in formulating and implementing the Delhi Excise Policy 2021-22, AAP got illegal money from wholesalers as a bribe.

But can a sitting CM be arrested?

The President of India and Governors of states and Union Territories are the only constitutional officials protected from civil and criminal proceedings until their term ends.

According to Article 361 of the Constitution, the President of India and Governors of states cannot be questioned in any court of law for "any act done in discharge of their official duties."

So, protection under Article 361 is not granted to the Prime Minister of India or any Chief Minister of State and is treated as a common citizen of India.

Can Arvind Kejriwal Run Office from Tihar Jail?

  • No constitutional provision stops a Chief Minister from running for office from behind bars.
  • However, experts say it is "practically impossible" because a CM must sign many official papers, check important files, and make important decisions. 
  • As per the law, a Chief Minister can only be disqualified or removed from office when he is convicted in any case.
  • In the present case, Arvind Kejriwal has not been convicted yet.

Do Politicians Get Special Privileges in Jail?

Even though jail manuals say that all prisoners should be treated equally, prisoners can ask to be treated differently based on their social standing and economic profile. Then, it's up to the courts to grant permission for special treatment. 

In the present arrest of Dehli's CM in the liquor policy scam, the Court directed Tihar Jail authorities to allow Kejriwal to carry prescribed medicine and books.

The court also asked authorities to provide one table and chair, a religious locket, and a special diet as prescribed by the doctors, as per the jail manual.

Kejriwal asked permission to carry several books, including Bagwad Geeta, Ramayana, and others.

Read- Supreme Court Ends Immunity For Lawmakers Taking Bribes-to-Vote from Here!

What happens after Judicial Custody?

When a person is initially arrested, they are taken into the police custody. Afterwards, the arrested person is brought before a magistrate. The magistrate decides either to send for judicial custody or allow the person to be retired to police custody.

Judicial custody can last up to 90 days. If the chargesheet is not filed within 90 days, the court usually lets the suspect out on bail.

In the case of heinous crimes like rapes, murders, and money laundering, even after the charges are filed, the suspect is kept under judicial custody to make sure the trial proceedings are not influenced. 

Conclusion

This Delhi Liquor 'Scam' involving CM Kejriwal has created many controversies. The accusations range from favouritism and money laundering to connections with the ‘South Lobby', leading to serious legal implications for Kejriwal.

As the case progresses through judicial custody, the public awaits the outcomes and implications on governance and accountability.

About the Author: Anirudh Nikhare | 29 Post(s)

Anirudh did his Bachelor's in Law and has practical experience in IPR, Contracts, and Corporate. He is your go-to legal content writer turning head-scratching legal topics into easy-to-understand gems of wisdom. Through his blog, he aims to empower readers with knowledge, making legal concepts digestible and applicable to everyday life.

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