Author : Harsh Tewari, student at Bennett University
To the point
Delhi Chief Minister Arvind Kejriwal was arrested in 2024 as a result of the Delhi Liquor Policy Scam, which centered regarding the Excise Policy of 2021–2022. Unprecedented judicial events occurred in India between March and June 2024, including the arrest of a sitting Chief Minister by the Enforcement Directorate, releasing him on temporary bail by the Supreme Court, his subsequent re-arrest by the CBI, and a drawn-out court case involving several agencies. Fundamentally, the case raises issues of executive accountability, abuse of public workplace, and the relationship between the political power and law enforcement.
Use of Legal Jargon
Money Laundering – Concealing the origins of illegally obtained money by passing it through legitimate channels.
Prevention of Money Laundering Act (PMLA), 2002 – Indian legislation to prevent money laundering and empower agencies to confiscate related assets.
Predicate Offence – The base offence (like corruption or cheating) that generates illicit proceeds forming the basis of laundering.
Bail under Section 45 PMLA – Stringent bail conditions under PMLA requiring prima facie innocence to be satisfied.
Enforcement Directorate (ED) – Central agency tasked with enforcing financial crime laws, including FEMA and PMLA.
Central Bureau of Investigation (CBI) – India’s premier criminal investigative agency, handling corruption, fraud, and other serious crimes.
Doctrine of Separation of Powers – Constitutional principle separating the Legislature, Executive, and Judiciary.
Presumption of Innocence – Fundamental right ensuring an accused is deemed innocent until proven guilty.
Vicarious Liability – Legal responsibility of superiors (such as political leaders) for actions taken by their subordinates.
The Proof
Context of the 2021–2022 Excise Policy-
The Delhi government implemented a new excise policy in 2021 with the aim of improving the city’s liquor sales, privatizing retail establishments, and boosting the state’s finances. Private sellers were encouraged, government liquor shops were gradually phased out, and their hours of operation were extended to three in the morning. Delhi’s liquor market was one of the most relaxed in India since discounts and home delivery were allowed.
But these changes quickly sparked debate. There were complaints made about:
Favoritism: It is alleged that the policy gave disproportionate wholesale control to certain liquor vendors, particularly to a group known as the “South Group.”
Kickbacks and Bribes: It was alleged that Aam Aadmi Party leaders and Delhi government officials accepted kickbacks in exchange for giving these licenses.
Money Laundering: According to the Enforcement Directorate, kickback proceeds from criminal activity were used for funding election campaigns, particularly the AAP’s Goa campaign.
Revenue Loss: According to a February 2025 Comptroller and Auditor General report, policy waivers and faulty tendering processes were the main causes of Delhi’s over ₹2000 crore in revenue loss.
The Function of Arvind Kejriwal and His Court Cases (March–June 2024)
Investigative agencies charged that Arvind Kejriwal, the leader of the Delhi government and the AAP, was the “kingpin” of the purported scam. The Central Bureau of Investigation and the Enforcement Directorate jointly issued several summonses for Kejriwal’s questioning.
Timeline of Events:
-Kejriwal evaded nine ED summonses prior to March 2024 by claiming they were “illegal” and “politically motivated.”
-March 21: ED Arrest: Kejriwal became the very first sitting Chief Minister in Indian history to be arrested on such charges when the ED raided his home after the Delhi High Court refused to grant him protection. According to the ED, Kejriwal purposefully crafted the excise framework to benefit certain organizations in return for kickbacks.
-May 10, 2024: Supreme Court grants Kejriwal temporary release on bail up until June 1, 2024, allowing him to begin campaigning for the general elections in 2024. This is a historic temporary relief. Conditions prevented him from publicly discussing the case’s merits or taking part in governmental activities.
-Return to Jail on June 2, 2024: When Kejriwal’s temporary bail ran out, he turned himself in at Tihar Jail as required.
-June 20, 2024: Trial Court Bail Granted: A Delhi trial court provided Kejriwal regular bail, citing the absence of concrete evidence that would directly connect him to money laundering. The court underlined that prior to his ED arrest, Kejriwal had never received a summons from the trial court in this particular instance/case.
-June 21, 2024: Delhi High Court Stays Bail: The High Court of Delhi temporarily halted his release after the ED contested the bail, stating that it needed more thorough examination.
-CBI Arrest on June 26, 2024: Despite the bail relief granted prior in the ED case, Kejriwal remains in judicial custody after the CBI arrested him on corruption charges connected to the same scam, further complicating the legal maze.
Principal Charges Made Against Kejriwal:
Arvind Kejriwal’s personal involvement in drafting the excise policy in a way that disproportionately benefited certain private liquor companies is the main accusation against him in the Delhi Liquor Policy Scam. He has been charged by investigative agencies with either directly receiving or assisting in the creation of illegal proceeds, which are referred to as “proceeds of crime” under the Prevention of Money Laundering Act . Furthermore, it has been claimed that some of these illegal funds were used for political activities, specifically to support the Aam Aadmi Party’s (AAP) election campaigns. Furthermore, Kejriwal is charged with misusing his official position as Delhi’s chief minister to advance these alleged corrupt practices, thereby abusing public office for party-related or personal gain.
Present Situation (as of June 2025)
-The case went on to develop even though March–June 2024 had been the flashpoint:
-After more than five months in jail, the Supreme Court granted Kejriwal bail in the CBI corruption event in September 2024.
-Kejriwal left his position as chief minister of Delhi in September 2024.
-January 2025: Kejriwal and his deputy, Manish Sisodia, both of whom were officially sanctioned by the Union Home Ministry to be prosecuted in the PMLA case.
– February 2025: The CAG’s audit checked a significant drop in Delhi government revenue.
-In March 2025, a court ordered that Kejriwal be charged with a different crime for allegedly misusing public funds that had nothing to do with the excise case.
-As of the middle of 2025, Kejriwal is still contesting the legality of the ED’s prosecution complain in the Delhi High Court.
Abstract
An important turning point in Indian politics and law enforcement has been the Delhi Liquor Policy Scam. While it highlights how accusations of corruption can entwine with rivalries in politics and electoral dynamics, it also represents a significant challenge to fiscal responsibility and integrity in public office. Since the arrest of Arvind Kejriwal was the first for the current Chief Minister, the legal dispute surrounding this case puts the strength of constitutional safeguards, procedural justice, and independence of the judiciary in delicate investigations to the test. The final results will have an impact well beyond Delhi’s boundaries and could establish enduring standards for accountability, governance, as well as relations between states in India.
Case Laws
- Union of India v. Vijay Madanlal Choudhary (2022) ➔ affirmed that strict PMLA provisions, such as strict bail requirements under Section 45, are constitutional. used a lot in the debate over Kejriwal’s bail requests.
- In Manish Sisodia v. the Directorate of Enforcement (2023), the Delhi High Court established criteria for judicial satisfaction under the PMLA by refusing bail to Delhi’s former Deputy CM in the same liquor scam case.
- The ongoing Supreme Court case Arvind Kejriwal v. Directorate of Enforcement (2024, Still pending) is anticipated to provide procedural protections pertaining to the ED’s arrest authority and temporary relief during election seasons.
- As a guiding precedent for procedural fairness in Kejriwal’s case, P. Chidambaram v. Directorate of Enforcement (2019) – investigated limitations on the executive branch’s power to make arrests for economic offenses.
Conclusion
In addition to being a case of purported corruption, the Delhi Liquor Policy Scam also serves as a larger legal test for Indian democracy. Investigative agencies must adhere to stringent procedural guidelines to prevent the criminal code from being used as a political weapon, even though responsibility for public funds cannot be compromised. The judiciary plays a crucial role in the ongoing legal process by weighing evidence-based prosecution against conflicting political vendetta claims. In India’s changing legal system, the outcome of this case could reshape the boundaries of judicial supervision, prosecutorial discretion, and executive privilege.
FAQs
- What is the Delhi Liquor Policy Scam?
It alludes to claims that kickbacks were given to AAP leaders and Delhi government officials in order to manipulate the Delhi Excise Policy (2021–2022) in favor of private liquor vendors.
- What led to Arvind Kejriwal’s arrest?
Accused of being the “kingpin” of the scam, he was first detained by the ED for allegedly participating in the laundering of bribe money and then by the CBI for alleged policy formulation corruption.
- What is the current state of Kejriwal’s case?
As June 2025, Kejriwal is still free of bail after resigning from his position as chief minister. He is also still facing numerous legal challenges, including ones that question the validity of his prosecution.
