Delhi HC rejects plea to renew licence of French liquor manufacturer

The Delhi high court has rejected a plea by French liquor manufacturer Pernod Ricard challenging the Delhi government's decision not to renew its sales licence due to an ongoing probe into alleged irregularities in the excise policy. The court said the company can appeal the decision at the appellate authority under the excise law. The Delhi government argued that Pernod Ricard and its employees were fully involved in the alleged scam.

The Delhi high court on Tuesday rejected a plea by French liquor manufacturer Pernod Ricard, challenging the Delhi government’s decision to not renew its sales licence because of the ongoing probe against the company in alleged irregularities in the Capital’s excise policy 2021-22.

On Tuesday, justice Prathiba M Singh said that a case of this nature, which raises serious allegations against Pernod Ricard, would require examination of facts. (HT Archive)

The liquor manufacturer’s application for a licence was rejected on April 13 on the ground that various documents were received from the Central Bureau of Investigation and Enforcement Directorate, alleging its participation in the alleged irregularities in the excise policy.

Challenging the rejecting of its licence, Pernod Ricard said the CBI first information report (FIR) would not have any bearing on its application for an L1 licence — which allows wholesale vend of liquor — as neither the French company nor its employees have been charge sheeted. It was also contended that the only employee against whom allegations were made was Benoy Babu, who has been arrested by ED.

On Tuesday, justice Prathiba M Singh said that a case of this nature, which raises serious allegations against Pernod Ricard, would require examination of facts.

“In the case of a corporate entity like the petitioner, whose employees are not claimed to have acted in their individual capacity and continue to remain in the employment of the company, the said allegations could not have been brushed aside by the Licensing Authority. Moreover, the allegations also reveal that the employees represented themselves to be acting for Pernod Ricard. The allegations go to the root of good corporate governance of a company like the petitioner,” the court said in a 27-page judgment.

The court, however, said that the company could challenge the order at the appellate authority under the excise law. “The petitioner is permitted to approach the Appellate Authority under the Excise Act, 2009 by filing an appeal within two weeks. If such an appeal is filed within the period prescribed, the same shall not be dismissed on the ground of limitation,” the court said.

In its arguments, the Delhi government through its counsel took the stand that there was an efficacious alternative remedy available with Pernod Ricard in the form of an appeal under the Excise Act, 2009. The counsel argued that the entire conspiracy which unravelled in the CBI FIR and in various complaints of ED would show that Pernod Ricard and its employees were fully involved in the conspiracy relating to the alleged scam and were beneficiaries as well.