Phoolka, however, clarified that he has not given up the party's primary membership. He said that he would remain an "inherent" part of AAP, which he said is standing on the cusp of winning the next Assembly polls in Punjab.
The veteran lawyer also sought to scotch rumours that he felt "sidelined" in the party and said he had resigned from all the posts he held in AAP, including being its legal head, spokesperson and executive member.
Phoolka announced his decision at a press conference here, saying he wanted to devote "undivided attention" to the anti-Sikh riots cases which are at a "crucial juncture".
"..Now, the cases of Sajjan Kumar and Jagdish Tytler are at a very crucial juncture. These matters are on trial and evidence of witnesses is being recorded...I feel at this critical stage, these cases and this issue needs my undivided attention," he said.
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"After detailed discussions with Kejriwal ji and with his approval, it has been decided collectively that I quit active politics and resign from party posts, to enable myself to entirely devote time for getting justice for the 1984 victims," he said, adding though he will continue to play role as an activist now.
When asked if he felt "sidelined" in the party's state unit, Phoolka, who had unsuccessfully contested last year's Lok Sabha polls from Ludhiana, replied in the negative.
Asked if he felt he had slim chances of being projected as Chief Ministerial candidate by the AAP for the 2017 Assembly polls, which may have hastened his decision to resign, Phoolka said for him posts are not important and he never craved for any post.
Ruling Shiromani Akali Dal dubbed Phoolka's move as an attempt to "escape from responsibility", saying the AAP "has failed to live up to expectations of people of the state".
A former senior leader of AAP from Punjab, Manjit Singh said the lawyer had taken a "honourable exit" after finding himself "sidelined" in the party's state unit.
Commenting on Phoolka's move, Punjab Education Minister and SAD spokesman Daljit Singh Cheema said "his decision to leave party posts.. I feel it is escaping from responsibility.