LG seeks CBI probe into Delhi govt’s liquor policy; Kejriwal calls case ‘fake’

Jul 22, 2022 04:40 PM IST

The Arvind Kejriwal-led Aam Aadmi Party government introduced the new liquor regime in November, 2021 saying it will clean up malpractices and improve user experience

Delhi’s lieutenant governor VK Saxena on Friday asked the Central Bureau of Investigation (CBI) to inquire into the Delhi government’s excise policy, 2021-22, flagging procedural lapses in its implementation which he suggested were intended to benefit private liquor barons and individuals “at the highest echelons of the government”, people familiar with the matter said.

LG VK Saxena also questioned the timing of framing this policy and implementing it. (File image)
LG VK Saxena also questioned the timing of framing this policy and implementing it. (File image)

The Aam Aadmi Party (AAP) government introduced the new liquor regime in November, 2021 saying it would clean up malpractices and improve user experience.

In the excise policy of 2021-22, the Delhi government managed to earn about 8,917.59 crore through bidding, which was about 26.7% higher than the reserve price set by the government.

Reacting to the development, chief minister Arvind Kejriwal said 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,” he said while addressing a press conference on Friday.

Also Read: Delhi liquor policy among key schemes that await new LG’s nod

Officials in the LG office, Raj Niwas, said that it is expected that a probe by the CBI in the matter will unearth “the nefarious game being played at the cost of the people of Delhi and ascertain the quantum of kick-backs received by the AAP government and its leaders, as also the use of this money to influence the Punjab elections.”

The LG also questioned the timing of framing this policy and implementing it saying that it was done during the peak Delta wave of the Covid-19 pandemic when migrants were leaving the city due to lack of basic subsistence income, street vendors were facing challenge to their livelihood, dhabas, restaurants, hotels, gyms, schools and all other business establishments were facing closure.

On allegations against Sisodia, officers in the LG office said the deputy CM, under full political patronage of Kejriwal, took decisions regarding the new excise regime without taking the Cabinet into confidence. “Subsequently, in a hoodwinking hogwash, Sisodia got the Cabinet to take a decision authorising him to make ‘minor changes’ within the over-all framework of the policy in the interest of its implementation. However, despite this cabinet decision being flagged negatively by the then LG (Anil Baijal) and a subsequent Cabinet decision withdrawing its earlier decision of ‘authorising’ Sisodia, the decisions under question continued to be brazenly implemented by the excise department solely on the approval of Sisodia.

LG officials stated that when the chief secretary started inquiring and sent a note to the chief minister to draft his report, the Delhi Cabinet “hurriedly” tried to get those decisions legalised on July 14, 2022 through a “post facto” cabinet decision.

Kejriwal, in his response, said, “There are three reasons why they (BJP) are after the AAP. First, because we are honest. Second, because ever since AAP won in Punjab, they want to stall our expanding footprint across the country. Third, they want to stall the good works being done by us (AAP) in Delhi,” the chief minister said.

On July 5, during the Delhi Assembly’s two-day monsoon session, CM Kejriwal, while referring to the continuous onslaught by central government agencies on AAP legislators, had alleged that the Bharatiya Janata Party (BJP) is trying to arrest Sisodia by the end of August.

“Now, they’re threatening to arrest Sisodia by the end of August. He (Sisodia) has given a bright future to 18 lakh children of Delhi. I am giving an open challenge to the BJP, which has 19 states under its rule. All your 19 states on one side and Delhi on the other. We will show 10 schools under our control. You can show 10 schools under yours,” the AAP chief had said.

The LG’s decision was based on a report prepared by chief secretary Naresh Kumar, dated July 8, which stated that the policy, prima facie, was implemented in violation of the GNCTD Act 1991, Transaction of Business Rules (ToBR) 1993, Delhi Excise Act 2009 and Delhi Excise Rules 2010.

Kumar’s findings mentioned that the violations were indicative of financial quid pro quo at the top political level, wherein Sisodia took and got executed, major decisions and actions in violation of the statutory provisions. Kumar is empowered under the ToBR 1993 to flag any deviation from laid down procedures to the LG and the chief minister. His report on the irregularities in the Delhi Excise policy 2021-22 was sent to CM Kejriwal as well.

A senior official in the LG office requesting anonymity said the LG in his note stated that the government, in total disregard of every other segment of Delhi’s business and economy, singularly favoured the alcohol merchants by allowing waiver amounting to 144.36 crore on tendered license fee on account of Covid-19 pandemic. This was done despite the fact that no specific provision for compensation in the form of reduction in tendered license fee was available in the tender document and resulted in blatant undue benefit to licensee and loss of 144.36 crore to the public exchequer.

A second official from the LG office claimed that the excise department on the direction of Manish Sisodia, decided to refund the earnest money deposit amounting to 30 Crore to the L-1 bidder of license of Airport Zone which failed to obtain a ‘NOC’ from the airport authorities.

“This too 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. However, the government in apparent cahoots with the liquor mafia chose to refund the EMD obviously for a kick-back, when it should have actually forfeited the EMD,” the official said.

They stated that the operational period of the excise policy was extended without the cabinet and the LG’s approval twice from April 1, 2022 to May 31, 2022 and then from June 1, 2022 to July 31, 2022.

Further, the Delhi government floated a tender by incorporating a condition of setting up minimum two liquor vends in each ward without undertaking any exercise/due diligence to ascertain the viability of opening just two vends in each ward.

“Subsequently, as per design aimed at providing windfall post tender gains to the existing licensees, the excise department allowed them to open additional vends in conforming areas in lieu of non-conforming wards without taking approval of the competent authority,” the LG office said.

The findings also stated that the excise department, without seeking approval from the competent authority, revised the formula of calculation of rates of foreign liquor and removed the levy of import pass fee at 50 per case on beer.

“This made foreign liquor as well as beer cheaper for retail (L7Z) licenses at the cost of loss of revenue to the state exchequer. Clearly, extension of such benefit after the tender has been awarded amounts to extending undue favour to licensees.

Also, the excise department yet again convolutedly relaxed provisions of the tender document to provide undue financial favours to the L7Z (private retail) licensees, when it should have actually taken coercive action against them for default in payment of license fee, interest and penalty for non-genuine reasons,” it stated.


    Sweta Goswami writes on politics, urban development, transportation, energy and social welfare. Based in Delhi, she tracks government policies and suggests corrections based on public feedback and on-ground implementation through her reports. She has also covered the Aam Aadmi Party (AAP) since its inception.

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