[Delhi Excise Policy Case] Hyd-Bizman Benoy Babu moves High Court against trial court order denying him bail; Notice issued

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Binoy Babu was arrested by the ED in November 2022 while he was working as a Regional Manager for the liquor company M/S Pernod Ricard.

Hyderabad-business man and accused in the Delhi Excise Policy case Benoy Babu on Tuesday moved the Delhi High Court. Binoy worked as a Regional Manager with a liquor company M/S Pernod Ricard and was arrested in November 2022 in connection with the case being investigated by the Directorate of Enforcement (ED).

During the hearing, Senior Advocates Mukul Rohatgi and Siddarth Luthra appeared for Babu. Advocate Zoheb Hossain appeared for ED.

Rohatgi contended, “I (Benoy Babu) was arrested on November 10, 2022, by the ED and the peculiarity of this case is My Lord that I am a witness in the CBI First Information Report (FIR), and I am not an accused in the CBI case. I am a witness there, my S.164 statement has been recorded. Chargesheet is now filed, there I am not an accused, here also (ED) now a complaint has been filed.”

“My Lord! on this peculiarity, you (ED) will use my S. 164 statement in CBI as part of the case here (ED case). How can this co-exist?...I am a witness in the predicate offence of CBI, how can I be arrested by the ED here? This is the first question”, Rohatgi submitted.

“Second, If I may so, the petitioner is a regional manager of a liquor company M/S Pernod Ricard, India…see the nature of the allegation, turn to page 175..”, he added.

While referring to the allegations on the role played by Binoy Babu, Rohtagi argued, “It is observed that he is the brain child of a decision by Pernod Ricard for furnishing a corporate guarantee of Rs. 200 crores to a bank for a loan to be availed by members of a cartel and to take control of liquor business, etc.”

He argued that the accused is just a regional manager, not an MD or Director. Rohatgi further stated, "assume the allegations to be true for the time being, “My Lord! Is it a crime to stand as a guarantee for someone else? And my company stood the guarantee …this Manager gets Rs. 5 lakhs a month…..How is it an offence?”

Furthermore, he referred to the remand application and submitted that as per the prosecution, the license fee has been lost to the government. “I don’t understand how corporate guarantee or cartelization has anything to do with the loss of license fee”, he argued.

Senior Advocate Sidharth Luthra also appeared for Babu and contended that in each case, the ED is looking at the proceeds of crime, emanating from the basic offence and even in the basic offence Babu is not involved, unless he is possessed of proceeds of crime. He argued, “I (Binoy Babu) just gave a corporate guarantee, not a penny except that has gone out, not a penny has come in, this is the case”.

On the contrary, Advocate Zoheb Hossain appearing for ED submitted, “I will file a status report, but before that, I would like to submit. Please, My Lord! Look at the absurdity of the argument”.

“A person who is not involved in the scheduled offence but could have witnessed it. The argument made today is that he cannot be guilty of the offence of money laundering. In fact, Vijay MadanLal (judgment of Supreme Court) itself says that the moment proceeds of crime is generated…after that umbilical cord goes, then the independent investigation can happen and prosecution of the offence can be done.”

Furthermore, he argued, that this a peculiar case, because there is a wholesale destruction of evidence, a huge number of mobile phones destroyed within a span of 1 year by every single person who's involved in this entire case.

Taking note of the submissions, Justice Dinesh Kumar Sharma issued notice to ED and sought a response /status report on the plea. Accordingly, the court listed the matter for further hearing on March 16.

It is to be noted that on February 16, the Special Judge MK Nagpal of the Rouse Avenue Court, Delhi denied bail to Babu, Vijay Nair, Abhishek Boinpally, Sameer Mahendru, and Sarath P Reddy. All of them were arrested by ED in the money laundering case related to the Delhi Liquor scam.

Case Title: Binoy Babu v. ED

Statue: The Code of Criminal Procedure; The Prevention of Money Laundering Act