On the night of March 21, just after 9.05pm, the ED sleuths raided Arvind Kejriwal’s official residence. Soon after, he was arrested. According to the Delhi High Court judge Swarana Kanta Sharma, who is now being painted as a BJP stooge or sympathizer, the ED officers, following the procedure, informed him of the evidence it had against him, by serving a 28-page document which contained various assertions and allegations made against him by former colleagues, businessmen and other associates Arvind Kejriwal had been dealing with during the formation of the now ill-fated liquor policy.
While lawyers will continue to fight the battle to have him released by the Supreme Court if it were so minded, to see how difficult it is for the APP and its head honchos to negotiate their way out of this mess they have created for themselves, it is imperative to look into the root cause of the trouble Arvind Kejriwal is in and that lies in the charge-sheet filed against Manish Sisodia, the Minister responsible for the framing and implementation of the policy.
The charge-sheet reads as below:
Raising the wholesale commission from 5% to 12%
The existing excise policy was changed to facilitate and get kickbacks and bribes from the wholesale distributors by enhancing their commission/fee from 5% under the old policy to 12% under the new policy. Accordingly, a conspiracy was hatched to carefully draft the new policy, deviating from the expert opinion/views to create an ecosystem to assure unjust enrichment of the wholesale distributors at the expense of government exchequer or the consumer. The illegal income (proceeds of crime, as per the DoE) would partly be recycled and returned in the form of bribes.
Role of Vijay Nair
Vijay Nair, who was the middleman, a go-between, a member of AAP, and a co-confident of the appellant – Manish Sisodia, had interacted with Butchi Babu, Arun Pillai, Abhishek Boinpally and Sarath Reddy, to frame the excise policy on conditions and terms put forth and to the satisfaction and desire of the liquor group.
Vijay Nair and the members of the liquor group had meetings on different dates, including 16.03.2021, and had prepared the new excise policy, which was handed over to Vijay Nair. Thereupon, the commission/fee, which was earlier fixed at minimum of 5%, was enhanced to fixed fee of 12% payable to wholesale distributor.
Also read: Landslide for Kejriwal, AAP in Delhi
Manish Sisidia’s generosity towards the 2 big wholesalers
Manish Sisodia was aware that three liquor manufacturers have 85% share in the liquor market in Delhi. Out of them two manufacturers had 65% liquor share, while 14 small manufacturers had 20% market share. As per the term in the new excise policy – each manufacturer could appoint only one wholesale distributor, through whom alone the liquor would be sold. At the same time, the wholesale distributors could enter into distribution agreements with multiple manufacturers. This facilitated getting kickbacks or bribes from the wholesale distributors having substantial market share and turnover.
Fixing the licence fee
The licence fee payable by the wholesale distributor was a fixed amount of Rs.5,00,00,000/- (rupees five crores only). It was not dependant on the turnover. The new policy facilitated big wholesale distributors, whose outpour towards the licence fee was fixed. The policy favoured and promoted cartelisation. Large wholesale distributors with high market share because of extraneous reasons and kickbacks, were ensured to earn exorbitant profits. Page 53 of 106 W.P. (CRL.) 985/2024
Forced surrender of Mahadev Liquor
Mahadev Liquor, who was a wholesale distributor for 14 small manufacturers, having 20% market share, was forced to surrender the wholesale distributorship licence.
Extra earning of Rs338 crore in 10 months
Indo Spirit, the firm in which the liquor group had interest, was granted whole distributor licence, in spite of complaints of cartelisation etc. which were overlooked. The complainant was forced to take back his complaint. The excess amount of 7% commission/fee earned by the wholesale distributors of Rs.338,00,00,000/- (rupees three hundred thirty eight crores only) constitute an offence as defined under Section 7 of the PoC Act, relating to a public servant being bribed. (As per the DoE, these are proceeds of crime). This amount was earned by the wholesale distributors in a span of ten months. This figure cannot be disputed or challenged. Thus, the new excise policy was meant to give windfall gains to select few wholesale distributors, who in turn had agreed to give kickbacks and bribes.
VAT reduced to mere 1%
No doubt, VAT and excise duty was payable separately However, under the new policy the VAT was reduced to mere 1%.
As promised, the liquor group was made distributor of Pernod Ricard, one of the biggest players in the market.
The Supreme Court has labelled the extra profit of Rs. 338 crores made by the wholesalers, assisted by the new liquor policy Arvind Kejriwal introduced as the proceeds of crime.
This increase in margin (from5% to 12%) was formulated by the APP as a part of excise policy to grant favours to certain liquor groups in exchange of receiving kickbacks for funding the elections of Aam Aadmi Party, whose National Convenor is the present petitioner.
Dismissing Kejriwal’s application challenging his arrest as “illegal”, justice Swarana Kanta Sharma said:
“… the material which has been encapsulated hereinabove reveals that Sh. Arvind Kejriwal had allegedly conspired with other persons and was involved in the formulation of Delhi Excise Policy 2021-22, in the process of demanding kickbacks from the South Group, as well as in generation, use and concealment of proceeds of crime. He is allegedly involved in the offence of money laundering in two capacities. Firstly, in his personal capacity as he was involved in formulation of the Excise Policy and in demanding kickbacks. Secondly, in his capacity as the National Convenor of Aam Aadmi Party as per Section 70(1) of PMLA, for use of proceeds of crime of Rs. 45 crores in the election campaign of Aam Aadmi Party in Goa Elections 2022, which are prima facie apparent from the material relied upon by the respondent in this regard as well as the statement recorded on 08.03.2024 of one of the candidates of Aam Aadmi Party in Goa Elections 2022, which has been discussed hereinabove.”
Dismissing the AAP’s attack on the two approvers – Magunta Reddy and Sarasth Reddy – as “BJP’s men”, the court said it cannot go into the political shenanigans and would confine itself to the legal arguments of both sides.
Answering the attack of the ED’s reliance on the approvers’ statements as “political”, the judge said the law relating to approvers in the Indian jurisprudence was more than 100 years old. She further said that proper procedures had been followed in recording the statements and the corroborative evidence adduced by the ED subsequent to the recording of the statements early last year adds weight to those claims rendering them beyond question.
The Judge said she was bound by law and not by politics.
“This Court also holds that judgments are driven by legal principles and not political affiliations… Political considerations and equations cannot be brought before a Court of law as they are not relevant to the legal proceedings”, the judge added refusing to grant any relief to Arvind Kejriwal.
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