Delhi Excise Policy Scam: Court Grants Bail To C.A. Butchibabu Gorantla

Delhi's Rouse Avenue Court on Monday granted bail to CA Butchibabu Gorantla, the former auditor of MLC K Kavitha. 

The Hyderabad-based Chartered Accountant participated in meetings on formulating the excise policy as a representative of Kavitha, MLC and Sharat Reddy of   Arbindo  Group of companies, who were members of the South lobby. 

"The applicant was neither a licensee nor a beneficiary in the criminal conspiracy or of the cartel formed between different accused persons in pursuance of the said conspiracy as he was not in the liquor business in Delhi or in any other part of the country", said Special Judge M.K. Nagpal while allowing the bail application moved on behalf of Gorantala.

The Central Bureau of Investigation had arrested Gorantla on charges of criminal conspiracy under Indian penal laws and illegal gratification under the Prevention Of Corruption Act to probe his role in the Delhi excise liquor money laundering scam on February 8.

Prerequisites for proving a case against the C.A. Butchibabu Gorantla

Whether Gorantala had agreed to be directly or indirectly involved as a party in the commission of the alleged Delhi excise liquor scam.

Whether he played a role in the formulation of excise policy.

Whether he can be considered a public servant brings him under the purview of section 7 of the PC Act which deals with the question of illegal gratification.

No substantive offence under P.C. Act says applicant 

Senior Advocate Pramod Dubey and Senior Advocate Mohit Mathur representing the Chartered Accountant emphasised that Butchibabu Gorantla was not serving the interests of his client MLC K Kavitha in the capacity of a public servant. As per the submissions made by the senior counsels, Gorantala was attending the excise policy meetings in his professional capacity in order to understand the intricacies of the liquor business. As per the admitted facts of the case, the Chartered Accountant was not a stakeholder in the liquor business argued the senior counsels. 

It was further the submission of Senior Counsels that the offences alleged in the chargesheet of this case attract a maximum term of imprisonment of seven years only and hence, the same cannot be considered as grievous or serious enough to deny the benefit of bail to the applicant when even no substantive offence under the PC Act is alleged to have been committed by him. 

Butchibabu Gorantla active member of criminal conspiracy claims prosecution

Special Public Prosecutor appearing for CBI claimed that Butchibabu Gorantla is not entitled to bail in this case as he was an active member of the criminal conspiracy and he played a vital role in formulation of the excise policy and the investigation conducted so far suggests that not only he participated in different meetings held with the other co­accused, in connection with framing of the said policy and as a representative of the South liquor lobby, but some of the suggestions given by him found incorporated in the report of   Group of Ministers.  

Gorantla attended excise policy meetings in professional capacity: Court

Allowing the bail application in favour of Gorantala, the court sided with the arguments made by the applicant's counsels while directing the Chartered Accountant to surrender his passport before the court. The court also relied on CBI's response to the bail application. 

"It is admitted case of CBI/prosecution as per the said reply that the applicant attended these meetings as an auditor or financial advisor of the above persons from South and even this admission substantiates the claim which has been made by Counsels representing the applicant that he attended the said meetings in his professional capacity as CA only and not in his personal capacity."

The applicant was not carrying any personal interest when he attended or participated in the said meetings and therefore, whatever suggestions were given by the applicant at the time of said meetings for incorporation in the said policy, the same was given in his professional capacity and only to protect and secure the interests of his clients", the court added. 

Understanding CBI's Case against illegal liquor monopoly

Ever since Delhi's excise case policy case started making headlines, media reports were rife with stories of arm-twisting the provisions of the excise policy in favour of the liquor lobby from the South. A look at CBI's case against AAP minister Manish Sisodia and other politicians accused in the case claims that excise policy was intentionally framed with loopholes to facilitate a criminal conspiracy. The investigating agency has said on record that around Rs.20­30 crores were paid by South lobby to the politicians of AAP (Aam Aadmi Party) and other public servants in Delhi, through the co-­accused Vijay Nair and Abhishek Boinpally.

Alleged illegal model for repayment and consequent cartelization

The prosecution claimed that kickbacks were agreed to be and being repaid to the South lobby out of the profit margins of 12% kept for designated wholesalers and 6% of the above profit margins were meant for repayment of the kickbacks and this repayment was agreed and found to have been made through different modes,  including bank transfers and excess credit notes issued by the wholesalers in favour of the retail zone licensees. 

Consequently, it is said that a cartel was formed by the liquor manufacturers,   wholesalers and retail vendors in apparent violation of provisions of the excise policy and to favour the South lobby in the liquor business and it was done in a planned manner with the connivance of all the accused. As a result thereof,   a   monopoly of the liquor brands of certain liquor manufacturers was achieved against the said policy and the above all resulted in huge illegal and undue benefits to the members of said cartel and conspiracy and also losses to the government exchequer.

The applicant was represented by Senior Advocates Pramod Dubey And Senior Advocate Mohit Mathur; assisted by Abhishek Singh, Abhishek Choudhary, Aalok Kumar, Siddharth Arora, Kaustubh Chouhan, Aadhyan Khanna, Shiv Chopra and Satyam   Sharma, Advocates.

CBI was represented by Senior PP Pankaj Gupta.