Two investigations, multiple arrests: Revisiting the Delhi excise policy case

Alleged role as per ED chargesheet: Accused of being a middleman between the ‘South Group’ which allegedly gave Rs 100 crore as kickbacks to enter the liquor retail segment in the Capital, and the AAP. Also accused of laundering money received as kickbacks during AAP’s Goa Assembly poll campaign.

According to the investigating officer, Nair, in collusion with co-accused Dinesh and Amit Arora, allegedly arm-twisted a few wholesalers to surrender their L-1 licences and then coerced manufacturers to choose wholesalers of his choice.

Vijay Nair during Idea Exchange at Express Tower on Friday. Express Photo by Vasant Prabhu. 13.09.2013. Mumbai.

“On account of the conspiracy, the government lost revenue of 12% — Rs 581 crore that would have accrued in case the expert committee recommendations were accepted by the government, which, in the subject policy, was assigned to private players only to fill personal coffers of AAP leaders…,” the IO said.

Case status: CBI arrested Nair last September. In November, he was arrested by the ED. This July, a Delhi court dismissed his bail plea. Earlier, the High Court had denied relief to Nair.

Senior advocate Rebecca John, appearing for Nair, argued that the chargesheets filed by the ED were done in a “piecemeal” way. She said the agency is “continuously filing supplementary chargesheets” and, therefore, her client is entitled to be granted statutory bail.

Who: Manish Sisodia, former Delhi Deputy Chief Minister and then Excise Minister.

Alleged role as per ED chargesheet: Accused of extra-procedural interference in framing the new excise policy, tweaking it for the benefit of select liquor entities, and causing loss of several hundred crore to state exchequer in excise revenue.

The ED had earlier attached assets belonging to Sisodia; owner of Brindco Spirits Amandeep Singh Dhall; Rajesh Joshi, director of a private firm involved in ad campaigns; Gautam Malhotra, son of liquor baron and former Akali Dal MLA Deep Malhotra; and others in connection with its probe.

“The attached assets worth Rs 52.24 crore include immovable properties worth Rs 7.29 crore — two immovable properties of Manish Sisodia and his wife Seema, land/flat of Rajesh Joshi/Chariot Productions Media Pvt Ltd. and land/flat of Gautam Malhotra. The attachment also includes movable assets worth Rs 44.29 crore including bank balances of Manish Sisodia (Rs 11.49 lakh), Brindco Sales Pvt. Ltd. (Rs 16.45 crore) and others,” an ED spokesperson said.

On July 8 last year, Chief Secretary Naresh Kumar sent a report to L-G VK Saxena and Chief Minister Arvind Kejriwal flagging “deviations” from laid-down procedures in the formulation of the excise policy. It flagged the apparent reversal of Sisodia’s earlier policy on dry days. As per the report, extension of the licence period without an increase in fee prima facie led to “undue benefit” to licensees without “any justification”.

Case status: Sisodia was first arrested by the CBI in February and by the ED in March. In the ED’s chargesheet, Sisodia was named a “key conspirator”. He is now out on bail.

In October 2023, while hearing his bail plea, the Supreme Court asked the CBI and ED if there was any evidence to connect the proceeds of the alleged money laundering activity with the AAP leader. “Where is the evidence? Dinesh Arora himself is the recipient… Except for the statement of Dinesh Arora, is there any other evidence?” Justice Sanjiv Khanna, presiding over a bench that also comprised Justice S V Bhatti, asked Additional Solicitor General S V Raju who appeared for the ED and CBI in the matter.

“How will you establish money laundering by Sisodia factually and legally?… He may be aware it may be used, as per your case, but he never came in actual physical possession,” the apex court had said. “You have to establish a chain… This doesn’t fully establish,” Justice Khanna said. “You see, the money has to flow from the liquor lobby to the person. Both of us agree it is difficult to establish the chain because everything is done under cover… But that’s where your competence will come in,” he said, adding the case against Sisodia will fall flat.

Sisodia’s counsel Dayan Krishnan had earlier said, “Not a single penny has been traced to me. So they say Vijay Nair portrayed himself as the representative of Sisodia. Laughable to say the least… We are talking about a premium investigating agency. Why have they not been able to trace a single penny to me?”

The Supreme Court granted Sisodia bail in both the CBI and ED’s cases related to the alleged excise policy scam on August 9, 2024.

Who: Dinesh Arora, Delhi-based restaurateur. He is involved in operations of several restaurants across Delhi-NCR, including Chica Delhi, Unplugged Courtyard, and La Roca Aerocity.

Alleged role as per ED chargesheet: Accused of being a “conduit for kickbacks” between the ‘South group’ and AAP.

The ED claimed Arora told them he had spoken to many restaurant owners at Sanjay Singh’s request and “arranged cheques amounting to Rs 82 lakh for collection of party funds for the upcoming elections”. It also claimed Arora told officials he met Sisodia five-six times and CM Kejriwal once.

“As elaborated… Amit Arora paid Rs 2.2 crore to Sisodia through Dinesh Arora for getting policy changes in his favour in the GoM report/excise policy 2021-22. This amount is directly a bribe/kickback to a government functionary and is proceeds of crime under section 2(1)(u) of PMLA, 2002. In this manner, Sisodia participated in the generation of this proceeds of crime,” the ED said in May.

Case status: CBI arrested Arora last year. In November, he turned approver and got bail. This July, he was arrested by the ED. He later became an approver in the ED case as well.

Who: Sanjay Singh, AAP Rajya Sabha MP.

Alleged role as per ED chargesheet: The agency, which arrested Singh Wednesday, called him a “key conspirator”. It sought 10-day custody, alleging that Rs 2 crore illegal cash changed hands at Singh’s official North Avenue residence.

“Sanjay Singh exploited and gained illegal money/kickbacks, which is proceeds of crime generated from the liquor policy (2021-22) scam… (he) has been part of the conspiracy of collecting kickbacks from liquor groups… (he) has a close relationship with Dinesh Arora since 2017 as revealed by (the latter) as well as from his call records,” the ED application stated.

Case status: Out on bail

He was sent to ED custody in October 2023, after approver Dinesh Arora’s statements. In its order, Judge MK Nagpal had said, “This bribe or kickback amount of Rs 2 crore received by the accused is alleged to have been as a part and in furtherance of criminal conspiracy of the scheduled offences case of CBI. It prima facie appears from material placed before this court that this amount was delivered at residence of this accused… and CDRs and cell location chart of mobile phones of… employee of approver Dinesh Arora and of the… associate of accused are there to corroborate this claim…”

Singh’s counsel said the ED investigation “is nothing new” and is one of the “interesting cases where the (probe) will go on and never end”.

Who: K Kavitha, daughter of Telangana Chief Minister KCR and Bharat Rashtra Samithi leader.

Alleged role as per ED chargesheet: The ED alleged Kavitha is one of the prominent members of the ‘South group’. Others alleged to be part of the group include Ongole MP Magunta Srinivasulu Reddy’s son Raghav Magunta, P Sarath Chandra Reddy, son of P V Ramprasad Reddy and co-founder of Hyderabad-based Aurobindo Pharma.

According to the ED, the South Group “secured uninhibited access, undue favours, attained stakes in established wholesale businesses and multiple retail zones (over and above what was allowed in the policy)”. The ED complaint states that to “recover kickbacks given by the South Group, partners of the ‘South Group’ were given a 65% stake in M/s Indospirit” in collusion with its owner Sameer Mahendru, also an accused in this case.

Telangana CM K Chandrsekhar Rao’s daughter K Kavitha during the winter Parliament session on 24th nov. 2014. Express photo by Renuka Puri

Case status: Kavitha has not been arrested in the case. She was, however, summoned by the ED in September. She was earlier questioned by the agency in March. The Supreme Court later asked the ED to not summon Kavitha for questioning before November 20, when her plea challenging the central agency’s summons will be heard.

Who: Sameer Mahendru, Managing Director of M/s Indospirit Group.

Alleged role as per ED chargesheet: Calling him the ‘kingpin’ of the policy, the ED said Mahendru “used proxy/ dummy persons to conceal the real owner of his businesses”.

As per the ED case, Mahendru had a 35% partnership stake in Indospirit LLP, which got a wholesale L1 licence. He also obtained two retail zone licences under the name of Khao Gali restaurants which is under the name of his father-in-law “but (he) used to take all financial decisions in Khao Gali” and was the beneficial owner of the company, it is alleged. The ED alleged the profit the company made between November 17, 2011, and August 31, 2022, of Rs 50 crore, is “nothing but undue benefit generated out of criminal activities”.

The ED alleged Mahendru was directly/indirectly controlling manufacturing, wholesale and retail businesses in violation of the excise policy. “He extended his scheme of cartelisation beyond his own entities by defeating the objectives of the policy… he was also involved in heavy kickback in advance and allowed dummy partners in Indospirit,” the remand application read.

Mahendru allegedly told the ED that when he was initially told by Nair that the South Group “was keen on investing in Delhi business, that they had deep pockets, political connections and friends of Kejriwal”, he resisted joining this partnership as he felt the group wanted to own a stake in his company without making much investment.

Case status: Mahendru was arrested by ED last September. The Delhi High Court in July granted him six weeks’ interim bail on medical grounds. It later refused to extend it. A Delhi court also denied him interim bail.