{"id":297283,"date":"2023-07-20T10:00:10","date_gmt":"2023-07-20T04:30:10","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=297283"},"modified":"2023-07-26T08:35:02","modified_gmt":"2023-07-26T03:05:02","slug":"delhi-hc-dismisses-plea-pernod-ricard-renewal-liquor-licence-on-ground-non-maintainability","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2023\/07\/20\/delhi-hc-dismisses-plea-pernod-ricard-renewal-liquor-licence-on-ground-non-maintainability\/","title":{"rendered":"Delhi High Court dismisses plea of Pernod Ricard for renewal of its liquor licence on ground of non-maintainability"},"content":{"rendered":"
\n

Delhi High Court:<\/b> In a case wherein the petitioner, Pernod Ricard India (P) Ltd. had challenged the impugned order dated 13-4-2023 passed by the Office of the Commissioner Excise, Entertainment and Luxury Tax, Government of Delhi (‘licensing authority’) by which the L-1 License application made by the petitioner before Respondent 2, Department of Excise, Government of Delhi had been rejected, a Single Judge Bench of Prathiba M. Singh, J.*<\/b>, opined that a case of this nature which raised serious allegations against the petitioner would require examination of facts and would not be one where discretion ought to be exercised in favour of the petitioner in this Court’s extraordinary writ jurisdiction under Article 226<\/a> of the Constitution<\/a>. Thus, the Court dismissed the present petition holding that it was not maintainable in view of the express statutory provision which permitted the petitioner to approach the Appellate Authority against the impugned order dated 13-4-2023 in term of Section 72<\/a> of the Delhi Excise Act, 2009<\/a> (‘Excise Act, 2009’).<\/p>\n

Background<\/b><\/p>\n

The petitioner was engaged in manufacturing and bottling of Indian Made foreign Liquor (‘IMFL’) and from 1993 till 2021, the petitioner held valid licenses for the sale of liquor in Delhi. It held licenses for its different units located at various locations in India including units located in Uttar Pradesh, Punjab, Madhya Pradesh, etc. The petitioner last held a valid L-1 license issued by the Government of Delhi for its two units in Gwalior and Mohali.<\/p>\n

The Delhi Excise Policy, 2021 (‘Excise Policy, 2021’) was brought into effect which put in place various modifications and amendments in relation to the eligibility criteria, procedures for application and grant of licenses, and license fees payable for L-1 Licenses and brand registration. Pursuant to Clause 3.1.1(iii) of the Excise Policy, 2021, the entities undertaking manufacturing of liquor anywhere in the country were ineligible to hold L-1 Licenses in Delhi. Accordingly, since the petitioner was undertaking liquor manufacturing activities in different states, it was ineligible to hold L-1 Licenses under the Excise Policy, 2021. Thereafter, the Government of Delhi issued a new policy specifying terms and conditions for issuance of L-1 Licenses for the licensing year 2022-2023 (‘L1 Policy, 2022’). Under the new policy, the disqualification imposed on manufacturers from applying for L-1 Licenses, under the Excise Policy, 2021 was lifted. Thus, even liquor manufacturers could apply and obtain a L1 license under the L1 Policy, 2022. Accordingly, the petitioner applied to Respondent 2 for the grant of L-1 Licenses for the financial year 2022-2023 for its business in Delhi.<\/p>\n

The petitioner submitted that on 30-8-2023, it issued a letter to Respondent 2 clarifying that one of its employees was named in the FIR registered by the CBI (‘CBI FIR’), however, none of its salesman, employee or representatives in Delhi had been convicted in a criminal offense. This letter was disputed by the respondents who submitted that no acknowledgement existed for this letter. Thus, the issuance of this letter was itself suspected, and the respondents submitted that the existence of a criminal complaint against one of the employees was deliberately concealed by the petitioner. However, Respondent 2 approved granting the L-1 license to the petitioner. Thereafter, the petitioner deposited the license fee. Respondent 2 had, thereafter, received communication from the Directorate of Vigilance of the registration of a FIR by CBI against one of the employees of the petitioners. Respondent 2, then issued a communication directing the petitioner to provide police verification certificates of all its directors. Thereafter, a reasoned order being the impugned order dated 13-4-2023 had been passed rejecting the L-1 License application of the petitioner on the ground that documents had been received from investigating agencies alleging the participation of the petitioner and its employees in what was now commonly referred to as the “Delhi Excise Policy Scam”.<\/p>\n

Analysis, Law, and Decision<\/b><\/p>\n

The Court noted that in the present case, the Licensing Authority had rejected the L-1 license application of the petitioner by relying on Sections 13(1)(c)<\/a> and 13(1)(g)<\/a> of the Excise Act, 2009<\/a> and the impugned order dated 13-4-2023 indicated that a letter was received from the Directorate of Vigilance, Government of Delhi dated 29-8-2022 which further referred to the CBI FIR. The Licensing Authority also received intimation of the Enforcement Case Information Report (‘ECIR’) filed by the Enforcement Directorate (‘ED’) and proceedings arising therein. The Court further noted that in the said CBI FIR, one of the petitioner’s employees, had been mentioned as one of the accused. However, he had not been arrayed as an accused in the chargesheet arising out of the FIR. However, in a supplementary complaint filed by the ED, a person employed as a regional manager with the petitioner was named as an accused. In the said supplementary complaint, the petitioner was also arrayed as an accused. These and other allegations in the proceedings arising from the CBI FIR, the ECIR and the chargesheet formed the basis for the impugned rejection order passed by the Licensing Authority.<\/p>\n

The Court opined that the documents and circumstances considered by the Licensing Authority for rejecting the petitioner’s L-1 license application revealed a stark situation. The allegations made against the petitioner and its employees were serious and could not be dismissed outrightly as the same were relevant to the liquor business of the petitioner and thus was directly connected to the Excise licence.<\/p>\n

The Court observed that Sections 13(1)(c)<\/a> and 13(1)(g)<\/a> of the Excise Act, 2009<\/a> enumerated the factors that could constitute a disqualification for issuance of a license, (a) that the applicant ought to possess moral character; (b) that the applicant ought not to have a criminal background; (c) that the applicant ought not to have been convicted of any offence punishable under the Excise Act, 2009<\/a> or other relevant Act; and (d) that the applicant does not employ any salesman or any representative who has criminal background. The Court opined that “in the case of a corporate entity like the petitioner, whose employees were not claimed to have acted in their individual capacity and continued to remain in the employment of the petitioner, the said allegations could not have been brushed aside by the Licensing Authority. Moreover, the allegations also revealed that the employees represented themselves to be acting for the petitioner. The allegations go to the root of good corporate governance of a company like the petitioner”<\/i>.<\/p>\n

The Court opined that “a case of this nature which raised serious allegations against the petitioner would require examination of facts and would not be one where discretion ought to be exercised in favour of the petitioner in this Court’s extraordinary writ jurisdiction under Article 226<\/a> of the Constitution<\/a>”<\/i>. The Court relied on South Indian Bank<\/i> v. Naveen Mittal Philip<\/i>, 2023 SCC OnLine SC 435<\/a>, wherein the Supreme Court held that “if an expert body had been constituted under the statute for the purposes of adjudication of disputes, writ jurisdiction ought not to be exercised”<\/i>. The Court observed that the impugned order had been passed by the Office of the Excise Commissioner under signature of the Deputy Commissioner Excise, which was appealable under Section 72<\/a> of the Excise Act, 2009<\/a>. Thus, the Court dismissed the present petition holding that it was not maintainable in view of the express statutory provision which permitted the petitioner to approach the Appellate Authority against the impugned order dated 13-4-2023 in term of Section 72<\/a> of the Excise Act, 2009<\/a>.<\/p>\n

[Pernod Ricard India (P) Ltd. v. Govt. (NCT of Delhi), 2023 SCC OnLine Del 4200<\/a>, decided on 18-7-2023<\/span>]<\/p>\n

*Judgment authored by: Justice Prathiba M. Singh<\/span><\/strong><\/p>\n\n

Advocates who appeared in this case :<\/p>\n

For the Petitioner: Mukul Rohatgi, Akhil Sibal, Senior Advocates; Anuj Berry, Anusha Ramesh, Megha Janakiraman, Neharika Modgil, Tejaswita, Advocates;<\/p>\n

For the Respondents: Santosh Tripathi, SC Civil GNCTD, Arun Panwar, Pradyumn Rao, Utkarsh Singh, Kartik Sharma, Advocates.<\/p>\n

Buy Constitution of India  HERE<\/a><\/h3>\n

\"Constitution<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“A reasoned order dated 13-4-2023 had been passed rejecting the L-1 License application of the petitioner, Pernod Ricard India (P) Ltd. on the ground that documents had been received from investigating agencies alleging the participation of the petitioner and its employees in commonly referred to as the ‘Delhi Excise Policy 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