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Informist, Friday, Aug 23, 2024

 

NEW DELHI – The Delhi High Court today granted a decree in favour of Pernod Ricard India Pvt Ltd and asked Khao Gali Restaurants Pvt Ltd to pay the liquor maker 358.86 mln rupees. The court rejected Khao Gali's plea to seek a grant of leave to defend the suit for recovery filed by Pernod Ricard.

 

"The suit for recovery filed by the plaintiff is decreed for a sum of Rs. 35,88,59,676.11 (358.86 mln rupees) against defendant No. 1 (Khao Gali) along with interest @ 9% per annum from the date of payment made by the plaintiff till the date of institution of this suit," the court said in its order. "Further, the plaintiff is also entitled to pendente lite and future interest @ 9% per annum from the date of institution of suit till the date of payment."

 

Khao Gali had approached Pernod Ricard for financial assistance to participate in the bidding process as a retail licence holder under the New Delhi Excise Policy 2021-22. In order to grant such assistance, Pernod Ricard furnished a corporate guarantee to an Indian branch of the Hong Kong and Shanghai Banking Corp Ltd so that Khao Gali could obtain a loan and participate in the bidding process under the new excise policy.

 

Thereafter, Pernod Ricard also executed a debit authority-cum-undertaking in favour of the bank, permitting it to debit its current account held with HSBC in case Khao Gali failed to make the repayment. Subsequently, Khao Gali defaulted on repayment of the amount taken from the bank. Consequently, the bank issued a notice and thereafter auto-debited the amount from Pernod Ricard's account.

 

Since the amount and guarantee stood discharged, Pernod Ricard said it stood subrogated into the shoes of the bank in terms of the Indian Contract Act, 1872. Pernod Ricard then demanded payment from Khao Gali of the amount debited by the bank. While the communications were going on, the Enforcement Directorate initiated a probe in respect of the excise police in which it arrayed Pernod Ricard and Khao Gali as accused. The probe agency said the loan amounts and the costs incurred by Pernod Ricard in facilitating the issuance of the corporate guarantee were "proceeds of crime".

 

Meanwhile, Pernod Ricard filed a suit against Khao Gali to recover its amount. Khao Gali filed an application seeking leave to defend the case. Among other reasons, Khao Gali said Pernod Ricard’s suit was not tenable in view of the investigation pending before the Enforcement Directorate.

 

Rejecting Khao Gali's application, the high court today said there was only a prima facie initiation of criminal prosecution by the Enforcement Directorate. "As of today, there is no finding of fact by a judicial authority regarding the fact that the sums involved in the present case are proceeds of crime," the court noted. The mere fact that an enforcement case information report has been registered, a complaint has been filed, and cognisance has been taken do not make the transaction illegal and void, the court said. "The present suit for recovery before this Court is only limited to contractual obligations between the parties herein regarding invocation of corporate guarantee of the plaintiff by defendant No. 2 (HSBC) for defaults committed by defendant No. 1 (Khao Gali)," said the court.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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