Two firms accused in Delhi tax case, embroiled in legal battle | Latest Delhi News

While the Enforcement Directorate (ED) is making allegations of collusion between politicians, businessmen and private companies in connection with irregularities in the now-repealed Delhi Excise Policy 2021-22, two companies – Pernod Ricard India and Indo Spirits – are currently locked in a legal battle over the collection of duties.

In fact, the two companies are named as accused in the ED’s chargesheet in the case – Pernod Richard is accused number 4 and Indo Spirits is accused number 11.

Pernod Ricard India, the world's and India's second largest alcohol maker, has initiated arbitration proceedings under the Arbitration and Conciliation Act, 1996 against Indo Spirits, a wholesaler-licensed company owned by businessman Sameer Mahendru, who is allegedly supported by Bharat Rashtra Samithi (BRS) leader K Kavitha, Arun Pillai and others, seeking appointment of a sole arbitrator to settle disputes arising out of the business arrangements under the excise policy.

Pernod Ricard, in its petition before the Delhi High Court, alleged that Indo Spirits had approached him to sell its spirits products “on credit basis”, to which he had agreed as Indo Spirits had issued a surety bond on December 21, 2021, guaranteeing payment to him up to an amount of ₹200 Crore for unpaid amount.

Thereafter, Pernod supplied liquor on credit basis to Indo Spirits, which controlled nine retail zones in Delhi, with 66 days' payment term for each delivery. “The plaintiff (Pernod) continued to supply its products reliably while the defendants (Indo Spirits and its agents) failed to make due payments on invoices issued by them for products supplied from June to August 2022…” said the petition filed in March this year.

Indo Spirits was unable to pay its outstanding debts ₹152 crore for the alcohol supplied during this period, it said.

The excise policy will no longer be applicable from September 30, 2022, following investigations by the Central Bureau of Investigation (CBI) and the ED.

ED has alleged that Pernod Ricard made Indo Spirits its wholesaler and distributor as per the instructions of Vijay Nair (former Communications Officer of AAP and its executives) in exchange for ₹100 crore bribes to the AAP leadership.

In a reply before the Supreme Court, Arun Pillai (who reportedly owned a stake in Indo Spirits and was acting as K Kavitha's representative) stated that there was no arbitration agreement between the two parties and that Pernod Ricard had made this application on “false, frivolous and baseless grounds which should be dismissed in the interest of justice”.

Pillai said in his reply filed last month: “There is no actual outstanding amount owed and payable by Indo Spirits. On the contrary, it is the defendants (Indo Spirits and its agents) who are legally entitled to claim large sums of money from Pernod Ricard for various demands and expenses which they have made and continue to make on behalf of Pernod.”

Advocate Nitesh Rana, representing Pillai, said, “There is no existing arbitration clause that can be invoked and the criminal proceedings in the Excise Policy 2021-22 are currently pending before the court. Therefore, invoking an arbitration clause at this stage is illegal.”

Pernod Ricard did not respond to an email seeking comment.