The Delhi High Court on Friday upheld the denial of permission to French liquor giant Pernod Ricard's Indian wing, which sought to resume the sale of its products in the national capital. The court cited the company's alleged involvement in money laundering in the Delhi excise policy case.
Court's Reasoning
Justice Purushaindra Kumar Kaurav stated that the petitioner continues to be a company accused of committing the offence of money-laundering as defined under the Prevention of Money Laundering Act (PMLA). The court noted that the firm is facing trial before a court of competent jurisdiction.
The high court concluded that Pernod Ricard India has a criminal background as per Section 13(1)(c) of the Delhi Excise Act and is ineligible for the grant of the L-1 licence.
Nature of Allegations
The court observed that the nature of the allegations against the petitioner, according to the CBI's FIR, the chargesheet, the ED, and the supplementary prosecution complaint, all point to the petitioner purportedly having illegally influenced the formation of the excise policy to the detriment of the people of Delhi. This clearly shows that the company has a criminal background for the purposes of Section 13(1)(c) of the Excise Act.
The high court agreed with the submission of Delhi government standing counsel Sameer Vashisht that the ongoing ED investigation against the company made it ineligible for the L-1 liquor licence. It further stated that a company cannot be considered to be without a criminal background when it is accused of committing money-laundering in connection with the Delhi excise policy, and a court has concluded that there is sufficient ground to proceed with trial.
Rejection of Pernod's Arguments
Pernod Ricard India had moved the high court challenging the excise department's decision to reject its applications for an L-1 wholesale licence. The company argued that the decision was taken mechanically and that it has not been convicted of any offence.
The high court rejected this argument, holding that the condition for not being convicted of a criminal offence is the floor and not the ceiling for a person, so that anyone with a criminal background is not part of the liquor business.
Impact of CBI's Non-Prosecution
The high court added that even if the CBI does not prosecute one of the company's employees for corruption, it does not strip off the criminal background of the company concerning the offence of money-laundering under the PMLA.
