Six key faces in Delhi liquor scam case: Charges and clean chit

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Sameer Mahendru, proprietor of M/s Indospirit

Allegation: Prosecution projected Mahendru as a “major beneficiary” where M/S Indospirits was structured to represent the interests of the so-called South Group, and a medium for transfer of “ill-gotten money”. Turnover eligibility clauses of the policy were allegedly deliberately tweaked to make it favourable for M/s Indospirits to gain a significant stake in wholesale distributorship. M/S Indospirits allegedly earned profits of Rs 29.29 crore, forming part of the funds circulated as bribe money, paid to the excise department.

What the court observed: Noting that the firm had initially applied for an L-1 licence but withdrew it as it did not meet the requisite criteria for applying, recorded, “This fact is of considerable significance. If the reduction to Rs 150 crore (of turnover eligibility) had been specifically engineered to favour that entity, it is difficult to explain why it failed to qualify under the very condition allegedly tailored for its benefit.” Allegations “does not appear to align with the factual material on record” as the company itself was “confronted with difficulty in meeting the turnover requirement.” The court also noted that bribe allegations “is founded solely upon the statement of the approver”, minus any “independent corroboration”.

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Butchibabu Gorantla, Hyderabad-based CA, purportedly an associate of K Kavitha

Allegation: Allegedly assisted the so-called South Group to incorporate favorable clauses and was allegedly involved in policy-draft discussions. A confidential Excise Department tender document recovered from him was cited to suggest unauthorised access to official records. He allegedly coordinated the delivery of Rs 10 crore from Kavitha, for paving the way for the so-called South Group to enter the Delhi liquor market.

What the court observed: The court noted that the material on record, including prosecution witness statements, show that he was only enquiring about liquor market considerations in Delhi and recorded that the material “reflects that basic commercial issues, such as staffing of retail operations, setting up of shops and overall market viability, were still being explored”, where such conduct “does not align with the existence of a settled and pre-determined criminal conspiracy”. Further, the Rs 10 crore allegation was only based on the approver statement with no independent corroborative evidence.

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Kavitha Kalvakuntla alias K Kavitha, daughter of K Chandrashekar Rao and former BRS leader

Allegation: Allegedly used M/s Indospirits as a vehicle to recoup upfront money, which was routed back to her. She allegedly recouped Rs 14 crore through a sham land transaction with a company under the Aurobindo Group, controlled by Sarath Chandra Reddy. She also allegedly received Rs 80 lakh through CSR contributions, routed via an Aurobindo Group company in favour of her NGO Telangana Jagruthi.

What the court observed: Noting that she has been primarily implicated in the case on the basis of two prosecution witnesses, one of whom was granted pardon, which counted as “accomplice-like statement”, the court held the allegation is “speculative and legally unsustainable”, in the absence of any material that the land transaction was a facade, that the funds were utilised for any unlawful purpose, or that the tender process was manipulated to confer benefit.

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Durgesh Pathak, former AAP MLA, who was in-charge of AAP’s campaign in Goa for 2022 Assembly elections

Allegation: He allegedly played a role in the utilisation of the purported proceeds of crime arising out of the alleged Excise Policy conspiracy for political purposes, specifically in connection with the Goa Assembly Elections, 2022. He allegedly approached candidates and party workers and assured them that their election expenses would be borne by the party, which purportedly indicated the existence of a centrally managed funding mechanism for the campaign.

What the court observed: With respect to the assurances given to the potential candidates, the court held that such assurances fall squarely “within the domain of permissible political conduct, and cannot, without more, be elevated to criminality”.

“The court expresses its serious disapproval of the manner in which the investigating agency has sought to implicate (Pathak) without placing on record any material indicative of his knowledge, participation or involvement in the alleged conspiracy or the alleged proceeds of crime. Criminal liability cannot be fastened on the basis of political position, organisational role or supervisory responsibility,” the court held.

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Sarath Chandra Reddy, director of Aurobindo Pharma

Allegation: He reportedly secured retail zones through “multiple entities” and subsequently, an amount of about Rs 60 crore remained outstanding in relation to the five retail zones under his control, out of which around Rs 46.88 crore remained unpaid, an exemption allegedly allowed as a favour.

What the court observed: The allegations are “resting on conjecture rather than cogent material”. Allegations of outstanding dues, by itself do not disclose criminal conspiracy and “at best, the matter appears to arise out of commercial transactions between wholesaler, manufacturer and retailer under a policy framework that was later withdrawn”. The court factored in that such disputes over recovery of dues “ordinarily fall within the realm of contractual remedies” and the fact that litigation has taken place between the parties “further indicates the commercial nature of the controversy”.