Excise case: Delhi Court reserves order on bail plea of former CA of KCR's daughter Kavitha

New Delhi [India], February 25 : The Rouse Avenue Court has reserved the order on the bail plea moved by Hyderabad-based chartered accountant Butchi Babu Gorantla, recently arrested by the Central Bureau of Investigation (CBI) in connection with the Delhi liquor policy alleged scam.
Butchi Babu Gorantla is the former auditor of Telangana Chief Minister K Chandrashekar Rao's daughter MLC K Kavitha whose name has already been dragged into the case.
The Special Judge MK Nagpal on Friday while keeping the order said, arguments on the application moved by accused Butchi Babu Gorantla have been heard from both sides. The court listed the application on March 1 for consideration/orders.
Recently Rouse Avenue Court had granted permission to Enforcement Directorate (ED) to quiz Butchi Babu Gorantla in judicial custody. ED had moved an application and sought permission to quiz him and also to record his statement in the money laundering case pertaining to the Excise Policy.
CBI arrested Butchi Babu in the Delhi excise policy case on February 8.
After arresting him, CBI informed in a statement that the accused CA was arrested for his alleged role in formulating and implementing the Delhi Excise Policy and causing wrongful gain to Hyderabad-based wholesale and retail licensees and their beneficial owners.
Recently ED in its chargesheet stated that the Prevention of Money Laundering Act (PMLA) investigation done so far has revealed that, the Delhi Excise Policy, 2021-22 was created by the top leaders of the Aam Aadmi Party (AAP) to continuously generate and channel illegal funds to themselves.
ED further states that the extent of involvement and abatement done by the leaders of the AAP of the criminal activities undertaken by the accused covered in the subject Prosecution Complaint further substantiates their design and scheme of the scam.
The policy promoted cartel formations through back door awarded an exorbitant wholesale profit margin of 12 per cent and a huge retail profit margin of 185 per cent and incentivized other illegal activities on account of criminal conspiracy by the top leaders of AAP to extract kickbacks from the businesses, stated the ED.
Vijay Nair, on behalf of AAP leaders, has received kickbacks to the tune of Rs 100 crore from a group, for convenience, we may call it the South Group (as termed in the statements of various persons recorded during the investigation, whose prominent persons are Magunta Srinivasulu Reddy, Raghav Magunta, Sarath Reddy and K Kavitha. The South Group was represented by Abhishek Boinpally, Arun Pillai and BuchiBabu. Abhishek Boinpalli facilitated the transfer of Rs. 100 Cr kickback in connivance and conspiracy with Vijay Nair and his associate Dinesh Arora, claimed the ED.
The ED and the CBI had, last year registered cases alleging that irregularities were committed while modifying the Excise Policy, undue favours were extended to licence holders, the licence fee was waived or reduced and the L-1 licence was extended without the competent authority's approval. The beneficiaries diverted "illegal" gains to the accused officials and made false entries in their books of account to evade detection.
As alleged, the Excise Department had decided to refund the Earnest Money Deposit of about Rs 30 crore to a successful tenderer against the set rules. Even though there was no enabling provision, a waiver on tendered licence fees was allowed from December 28, 2021, to January 27, 2022, due to COVID-19, which allegedly caused a loss of Rs 144.36 crore to the exchequer, which has been instituted on a reference from the Union Home Ministry following a recommendation from Delhi Lieutenant Governor Vinai Kumar Saxena.
The CBI inquiry was recommended on the findings of the Delhi chief secretary's report filed in July showing prima facie violations of the GNCTD Act 1991, Transaction of Business Rules (ToBR)-1993, Delhi Excise Act-2009, and Delhi Excise Rules-2010, officials had said.