The Gujarat High Court has quashed an FIR against wine and spirits manufacturer Pernod Richard for not deploying an excise escort while transporting liquor through Gujarat, noting that the state transport rules squarely obligate the transporter to arrange and pay for the same.

The Court was hearing an application under Section 482 of the Code of Criminal Procedure, 1973 praying for quashing of a First Information Report filed under certain provisions of the Indian Penal Code, 1860, Motor Vehicles Act, 1988, Gujarat Prohibition Act, 1949 and Gujarat Through Transport Rules, 1966.

The spirits company pointed to the Gujarat Through Transport Rules which say that the transporter is to pay for the excise escort and that according to its agreement with the logistics company, it was the latter's duty to arrange for the escort and pay escort charges, for which it would be reimbursed to the transporter later. The company contended that it cannot be held liable for the fault of the transporter.

A Single-Judge Bench of Justice Devan M. Desai said it is the transporter who was in wilful default of not obtaining the necessary excise escort while entering Gujarat and no fault can be attributed to the spirits company. The Court was of the view that the allegations in the FIR, "if taken at their face value and accepted in their entirety do not constitute the offence alleged and the chances of an ultimate conviction after full-fledged trial are bleak and continuation of criminal prosecution against the applicants accused is merely an empty formality and wastage of precious time of the Court."

Advocate Tarak Damani appeared for Pernod Richard India and Assistant Public Prosecutor Rohan Shah appeared for the State of Gujarat.

The Petitioner, a wine and spirits company which sells brands such Chivas Regal, Ballantines, Jacobs Creek, Blenders Pride and Royal Stag, was in contract with a logistics company to transport 800 cases of Royal Stag Whiskey. While in transit, the truck carrying the cases turtled and the liquor was damaged. The truck entered Gujarat without any escort as required to be provided and without informing Gujarat Excise Department, allegedly with a view to evade paying taxes.

The logistics company had an escort order issued by the Deputy Superintendent, State Excise department and a pass for the export of Indian Made Foreign Liquor. The spirits company had a transit pass issued under the provisions of the Gujarat Value Added Tax Act, 2003.

The Gujarat Through Transport Rules provide that no consignment shall be transported by road through the intervening territory of the State unless it is accompanied by an excise escort. An application has to be made by the transporter to the Local Prohibition and Excise Officer where the consignment would first enter by road in Gujarat.

The Gujarat Prohibition Act makes it an offence for a holder of license, permit, pass or authorisation to willfully do or omit to do anything in contravention of "any rule, regulation or order made under this Act".

The Court said when the FIR does not demonstrate any wilful act or omission on the part of the spirits company, it cannot be said that it is the offenders under the offences mentioned in the FIR. It observed that it was the transporter "who is in wilful default of not obtaining necessary excise escort while entering place where the consignment first entered by road in the State of Gujarat."

The Court therefore quashed the FIR against the spirits company for the offences punishable under Sections 177, 184 and 134 of the Motor Vehicles Act, 1988, Section 77(B) of the Gujarat Prohibition Act, 1949 and Rule-10 of the Gujarat Through Transport Rules, 1966.

Cause Title: Pernod Richard India Private Limited v. State Of Gujarat [R/Special Criminal Application (Quashing) No. 5469 of 2018]

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Justice Devan M. DesaiGujarat High Court

Tushar Kohli