Here are 10 big developments in this story:
Mr Kejriwal has rejected Home Minister Sushil Kumar Shinde's offer that appropriate action will be considered against three Delhi Police cops only after an inquiry. He demanded the immediate suspension of three cops he has accused of dereliction of duty. (Track latest updates)
"They say I am an anarchist. Yes, I am. Today, I will create anarchy for Mr Shinde," the 45-year-old Chief Minister said, after emerging from his blue WagonR car that was stopped by the police at the Rail Bhavan crossing, some distance away from Mr Shinde's office. (Read)
Mr Kejriwal also urged "everyone to come and join us for this protest," in contrast to his tweet last evening, asking people not to join his demonstration. "In view of republic day preps, i urge supporters and public not to come for dharna. Only MLAs will sit. No one else shud come pl. (sic)", he had tweeted.
The chief minister and his cabinet are protesting outside Rail Bhavan after not being allowed to proceed to the Union Home Minister's office. Cops have asked Mr Kejriwal to shift his dharna to Jantar Mantar.
Mr Kejriwal is also looking at official files that arrived in cartons at the site of his sit-in protest. (Read) He had earlier told NDTV that he would sign files from the dharna site after being asked how his government would run if he and his ministers were on protest. (Watch)
The Centre has imposed Section 144 which temporarily bans the gathering of groups when law and order is perceived to be at risk. All roads leading up to Mr Shinde's North Block office, near the presidential palace, have been barricaded.
Four Metro stations near North Block - Patel Chowk, Central Secretariat, Udyog Bhawan and Race Course - will remain closed from 9 am to 1 pm to ensure the public does not join the protest. (Read) A disappointed commuter said an "aam aadmi" or common man's chief minister should not cause inconvenience to the people.
The BJP slammed the Chief Minister for causing inconvenience to thousands of commuters through his protest, calling it "most unfortunate and unprecedented".
Mr Kejriwal has demanded action - suspension or at least a transfer - against cops who, he says, refused to cooperate with his Law Minister Somnath Bharti in cracking down on an alleged drug and prostitution racket. And he wants action against a policeman who had a showdown with another minister Rakhi Birla. The Chief Minister has also accused the police of mishandling a gang-rape case; a 51-year-old Danish tourist was gang raped early last week in the heart of Delhi.
Delhi Police Commissioner BS Bassi has refused to suspend the cops - he points out that an enquiry is being conducted to determine the facts. About today's AAP protest, Mr Bassi said, "Whatever has to be done according to law will be done."