Sources in the LG's office told PTI that Baijal had also sought opinion of the Public Works Department on the issue, which gave an opinion that the "accommodation was allotted violating the rules".
"The accommodation allotment to the AAP by the government was in clear violation of laid down rules as powers related to land in Delhi are vested with the Centre," a source said.
On March 29, Baijal had also directed the Delhi chief secretary to recover Rs 97 crore from the AAP for advertisements projecting Chief Minister Arvind Kejriwal and the party, allegedly in violation of the Supreme Court guidelines.
In November 2015, the AAP government had approved a policy for land allotment to state parties.
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The Kejriwal government then alloted a bungalow to the AAP on Rouse Avenue early last year. The bungalow was earlier alloted to Asim Ahmed Khan, the then Delhi Minister, who was sacked over graft charges.
"The LG and the BJP locked our party office. They want to close our office. They made the CBI raid my office. They only found me as the corrupt person in the country, but found nothing but four mufflers," Kejriwal said.
His deputy Manish Sisoda said his party has waged a war against the corrupt and the struggle would continue even if everything is taken away from them.
Hitting out at the LG and the Centre, senior AAP leader Sanjay Singh said the BJP was not allowing the AAP to work for the people in the national capital.
"I want to know whether a party which has got huge mandate from the people and won 67 out of 70 seats cannot have its office in the state?" Singh asked.
He said while the BJP has been alloted a bungalow on the Pant Marg, former LG Jung had also alloted land to the saffron party on DDU Marg, which was orginally earmarked for a school.
The BJP said allotment of an accommodation for office to the AAP was a "criminal breach of trust and illegal encroachment of the property".
"Installation of furniture and electrical fittings made in the government bungalow was turned into party office on public expense. This was against the norms. PWD raised objections, but they were ignored by the Chief Minister," Gupta added.
AAP leader Ashish Khetan said, when "smaller parties" can have offices in the national capital, why can't a state party that has an overwhelming majority in the Delhi Assembly have the same.