Intro
The Delhi High Court upheld the rejection of Pernod Ricard’s liquor licence applications, citing pending criminal proceedings
New Delhi
The Delhi High Court has dismissed a petition filed by French liquor major Pernod Ricard challenging the rejection of its wholesale liquor licence applications, holding that the company currently has a “criminal background” under the provisions of the Delhi Excise Act and is therefore ineligible for an L-1 licence.
Justice Purushaindra Kumar Kaurav upheld the decisions of the Excise Commissioner and the Financial Commissioner, who had denied the company’s applications due to its involvement in ongoing criminal proceedings related to the alleged Delhi excise policy scam.
The court observed that the authorities acted within the framework of the law and that their decision-making process was neither arbitrary nor violative of constitutional principles. It ruled that the existence of pending prosecution against the company was sufficient to attract disqualification under Section 13(1)(c) of the Delhi Excise Act.
Clarifying the interpretation of the provision, the court stated that the requirement of not being convicted of a criminal offence is not the only criterion for determining whether an applicant has a criminal background. According to the judgment, the expression “has no criminal background” must be read alongside the condition of having no conviction, rather than as an alternative requirement.
Pernod Ricard had argued that the law only disqualifies applicants who have been convicted of offences and that pending criminal proceedings should not be treated as proof of a criminal background. The company contended that the authorities had expanded the scope of the law beyond its intended meaning.
However, the Delhi government defended the licence rejection, citing the ongoing prosecution initiated by the Enforcement Directorate in a money laundering case linked to alleged irregularities in the now-scrapped excise policy.
While dismissing the plea, the High Court granted liberty to the company to submit a fresh application if the status of the criminal proceedings changes in the future.
Earlier this month, the Competition Commission of India also ordered an antitrust investigation into Pernod Ricard over alleged exclusive arrangements with liquor retailers in Delhi.
