In a 969-page counter-affidavit to a petition of Mallya and Herbertson before the Company Law Board alleging that Chhabria was running BDA and that he had siphoned out funds from the company to acquire shares in Herbertson, Ganguli has submitted that petition was not maintainable, and therefore should be dismissed. Ganguli has further described the Herbertson petition as "motivated" and "an abuse of the process, filed for oblique motive and collateral purpose".

He added that the petition is "malafide and motivated to pressurise Chhabrias to submit to the unjustified and illegal demands of Herbertsons".BDA, which owns Officer's Choice whisky brand, is a subsidiary of Herbertson while Kishore Chhabria and his uncle MD Chhabria control about 50 per centstake in Herbertson through a number of investment companies. Only 37 per cent share holding of Chhabria family in Herbertson has been registered by it.

Ganguli has contradicted Herbertson claim that BDA was being run by Chhabria by keeping Herbertson nominees on the board in the dark. "BDA has always been a board managed company." The management of BDA with effect from December 14 1993, was under SS Gandhi, the then president of the spirits division of Mallya-owned UB group and SD Lalla, the then non-executive director of Herbertson. UB Group's vice chairman SR Gupte and finance head R Ranganathan were also appointed non-executive directors of BDA on that date. Moreover, the management of other Chhabria companies such as Chhabria Marketing which was marketing BDA products, Tracstar Investment and Asoka Liquors-manufacturers of BDA products-were also put under the supervision of SS Gandhi and SD Lalla. Ganguli has further pointed out that despite being the managing director of BDA since September 1993 tillhe resigned on December 28, 1998, he did not have any functional or line responsibility in the day-to-day operations of the company. "KR Chhabria formally entrusted all operational responsibilities to SD Lalla. I as the MD of BDA was only supposed to receive copies of correspondences." To substantiate his claim Ganguli has quoted from a memo written to Mallya by Gandhi on January 18, 1995: "Various recommendations put forward by Gandhi in relation to all aspects of BDA be it manufacturing, accounting, sales, distribution etc, will be examined by SD Lalla before a further dialogue with KR Chhabria."Citing 271 instances which displayed the complete control of Gandhi, Lalla and their team, Ganguli has stated that Mallya, through a memo on January 1, 1995 had requested Chhabria to allow Gandhi and his team to "function in their own way". Ganguli goes further to state: "The affairs of BDA specially considering the circumstances under which it has been operating, has been managed very well ... and therefore thequestion of correcting the alleged mismanagement, does not arise and had been raised mischievously and with an ulterior motive." On the allegation that Kishore Chhabria and his uncle MD Chhabria have diverted amounts excess of Rs 180 crore from BDA during the period between 1993-94 and 1997-98, Ganguli asserts that these allegations were "baseless and malicious."