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Synopsis

The Delhi High Court on Tuesday rejected a petition by French spirits major Pernod Ricard challenging the Delhi government's refusal to renew its licence for sale of liquor in the national capital.

Justice Prathiba M. Singh said that the writ petition was “not maintainable” and asked Pernod Ricard India Pvt Ltd to “approach the appellate authority” under the excise law with its grievance.

"This Court, accordingly holds that the present writ is not maintainable in view of the express statutory provision which permits the Petitioner to approach the Appellate Authority against the impugned order dated 13 2023 in term of section 72 of the Excise Act, 2009...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 ordered.

PRI had approached the High Court earlier this year and on March 29 the court had asked the Delhi Government’s Excise Department to take a decision on the company’s L-1 license application. Subsequently, after rejection of PRI’s application, it moved the court again.

The liquor company's L1 licence application was rejected by the Department of Excise on April 13 on the ground of the ongoing investigations against it in cases related to the alleged Delhi excise scam.

An L-1 License application is an application for a “wholesale vend of Indian liquor license” which is granted by the Excise Department.

The single-judge bench said that if the liquor company seeks an oral hearing, the Appellate Authority shall grant it and the order should be passed within one month of the hearing.

It also clarified that since the plea was being dismissed due to “non-maintainability”, it had not gone into the merits of the parties’ contentions. “The remedies of the Petitioner in accordance with law and to raise all grounds available to it are not foreclosed,” the court said.

While observing that the licensing authority had considered certain documents including the CBI FIR and chargesheet in the excise case, which revealed a rather “stark situation”, the court opined, “The allegation made therein against the petitioner and its employees are serious and cannot be dismissed outrightly as the same are relevant to the liquor business of the Petitioner and thus is directly connected to the Excise licence”.

“..Admittedly, the Petitioner or any of its employees have not been convicted of any offence punishable under this or other relevant Acts… While it can be argued by the Petitioner that it cannot be blamed for any unauthorised conduct of its employees, such an argument has not been placed before this Court,” it said.

The single-judge bench noted, “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 Petitioner, 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 opined that a case of this nature, which raises “serious allegations” against the petitioner, would require examination of facts, thus, the court could not exercise its extraordinary writ jurisdiction under Article 226 of the Constitution to grant Pernod Ricard relief.

Case Title: Pernod Ricard India Private Limited v. Government of NCT of Delhi & Anr.