PARTICIPANT CODE:

SYMBIOSIS LAW SCHOOL, PUNE INTERNAL MOOT ELIMINATION, 2018-2019

BEFORE THE HON’BLE SUPREME COURT OF UNION OF SWADESH

UNDER ARTICLE 136 OF CONSTITUTION OF SWADESH

In the matter of Article 226 of Constitution of Swadesh

Section 3&4 of Swadeshi Penal Code along with Section 188 of Code of Criminal Procedure

Section 241 & 244 of Companies Act, 2013

Special Leave Petition No. ___/ 2018

PIL Petitioners & Small Traders Association….v………………………………Union of Swadesh

Heard along with

Special Leave Petition No.___/2018

Mr. Rolando…………………………………………v………………………………..State of Vindhya

Heard along with

Special Leave Petition No.___/ 2018

Promoters of CPIL………………………………...v………………………..Swachh Power Limited

UPON SUBMISSION TO THE HON’BLE CHIEF JUSTICE AND HIS COMPANION JUSTICES OF
THE HON’BLE SUPREME COURT OF SWADESH

MEMORIAL ON BEHALF OF APPELLANT

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TABLE OF CONTENTS

List Of Abbreviations ............................................................................................................... iv

Index Of Authorities ................................................................................................................. vi

I. Cases: ............................................................................................................................. vi

II. Books: ......................................................................................................................... viii

III. Legislations: ............................................................................................................ viii

IV. Online Databases: .................................................................................................... viii

Statement Of Jurisdiction........................................................................................................... x

Statement Of Facts .................................................................................................................... xi

Issues Raised .......................................................................................................................... xiii

Summary Of Arguments ......................................................................................................... xiv

Arguments Advanced................................................................................................................. 1

Issue I: Whether The Prayers Sought For By The PIL Petitioners Before The High Court Is

Maintainable. .......................................................................................................................... 1

[I.1] A Treaty Is An Executive Act. ................................................................................... 1

[I.2] An Executive Act Is Subject To Judicial Review....................................................... 2

[I.3] The Courts Have The Power To Interfere In The Policy Decisions Of The

Government. ....................................................................................................................... 3

Issue II: Whether The Allegation Constitute Prima Facie Offences And Courts Of Swadesh

Have Jurisdiction Over The Crimes Committed And Assets Located In UK. ....................... 5

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[II.1] Allegations Doesn’t Constitute Prima Facie Offences. ............................................. 5

[II.2] Courts Of Swadesh Don’t Have Jurisdiction Over The Crimes Committed And

Assets Located In UK. ........................................................................................................ 6

Issue III: Whether The Promoters Of CPIL Are Entitled To Maintain A Petition For

Oppression And Mismanagement In Relation To SPL. ....................................................... 10

[III.1] Affairs Of The Holding Company Includes Affairs Of The Subsidiary Company.

.......................................................................................................................................... 10

[III.2] Corporate Veil Between The Holding Company And The Subsidiary Company

Has To Be Lifted. ............................................................................................................. 12

[III.3] The Conditions Required Under Section 244 Are Fulfilled. ................................. 13

Prayer ....................................................................................................................................... 15

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LIST OF ABBREVIATIONS

ABBREVIATION ACTUAL TERM

& And

AIR All India Reporter

Anr. Another

CLB Company Law Board

CPIL Clean Power Industries Limited

CompLJ Company Law Journal

CrPC Code of Criminal Procedure

Ed. Edition

Inc. Incoporated

No. Number

Ors. Others

Para. Paragraph

Pg. Page

SCR Supreme Court Reports

SCC Supreme Court Cases

SPC Swadeshi Penal Code

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SPL Swachh Power Limited

SPV Special Purpose Vehicle

Spl. Special

Supp Supplementary

WLR Weekly Law Reporter

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INDEX OF AUTHORITIES

I. CASES:

1. Ajay Agarwal v. Union of India, AIR 1993 SC 1637. ..................................................................... 7

2. Bajrang Prasad Jalan v. Mahabir Prasad Jalan, (2000) 6 CompLJ 377. ......................................... 13

3. Bajrang Prasad Jalan v. Mahabir Prasad Jalan, AIR 1999 Cal 156. ............................................... 11

4. Bharat Petroleum Corpn. v. Maddula Ratnavalli, (2007) 6 SCC 81. ............................................... 2

5. Central Bank of India Ltd. v. Ram Narain, AIR 1955 SC 36. .......................................................... 7

6. City Branch Group Ltd, Re Companies Act 1985, (2005) 1 WLR 3505, para 33. ........................ 11

7. Consumer Education and Research Centre v. UOI, (1995) 3 SCC 42. ............................................ 4

8. Cooke v. Vogeler Co., [1901] AC 102 ............................................................................................. 7

9. DDA v. Joint Action Committee, Allottee of SFS Flats, (2008) 2 SCC 672 ................................... 2

10. Dewan, AIR 1936 N 55. ................................................................................................................... 8

11. Fatima Bibi Ahmed Patel v. State of Gujarat and Ors., (2008) 6 SCC 789. .................................... 7

12. Gopalkirshna Kamath v. Manglore Trading Association Pvt. Ltd., (2004) CompCas 191 (CLB). 12

13. Hindustan Petroleum Corporation Limited v. D.N. Vidhate and Ors., (2001) ILLJ 1411 Del ........ 5

14. I.R. Coelho v. State of Tamil Nadu, (2007) 2 SCC 1. ...................................................................... 2

15. In re: Berubari Union and Exchange of Enclaves, AIR 1960 S.C. 845 at 857. ................................ 1

16. Jivandas Savchand, Re, (1930) 55 Bom 59. ..................................................................................... 8

17. Kashiram, AIR 1934 A 499 .............................................................................................................. 8

18. Kasturi Lal Lakshmi Reddy v. State of Jammu & Kashmir and Anr., [1980] 3 SCR 1338. ............ 4

19. Kesavananda Bharti v. State of Kerela, (1973) 4 SCC 225. ............................................................. 3

20. L. Chandra Kumar v. Union of India, AIR 1997 SC 1125 ............................................................... 2

21. Life Insurance Company of India v. Hari Das Mundhra, [1966] 36 CompCas 371....................... 12

22. Life Insurance Corporation of India v. Escorts Ltd. and Ors., [1985] Supp 3 SCR 909. ............... 12

23. Maganbhai Ishwarbhai Patel v. Union of India, 1969 AIR 783. ...................................................... 1

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24. Maneka Gandhi v. Union of India, AIR 1978 SC 597. .................................................................... 2

25. Manohar Lal Sharma v. Union of India, (2013) 6 SCC 616. ........................................................... 4

26. Marie-Emmanuelle Verhoeven v. Union of India, (2016) 6 SCC 456. ............................................ 1

27. Merchandise Transport Ltd. v. British Transport Commission, [1961] 3 All E.R. 495, page 512. 12

28. Mobarik Ali Ahmed v. State of Bombay, AIR 1957 SC 857, page 869. ......................................... 6

29. Mohd Nohy-ud-Din v. Emperor, AIR 1946 Lah 158, at page 169................................................... 7

30. Mohinder Singh v. State of Punjab, (2013) 3 SCC 294. .................................................................. 2

31. Mrs. Dhanalakshmi v R. Prasanna Kumar & Ors, 1990 AIR 494. ................................................... 6

32. Narumal v. State of Bombay, AIR 1960 SC 1329............................................................................ 7

33. Nicholas v. Soundcraft Electronics Limited, [1993] BCLC 360, page 364. .................................. 11

34. Oriental Bank of Commerce v. Sunder Lal Jain and Ors, (2008) 2 SCC 2000. ............................... 4

35. Parshuram v. State, 2006 CrLJ 3738 (3730). ................................................................................... 8

36. Pheroz Jehangir Dastoor v. Roshan Lal Nanavati, (1964) 2 CrLJ 533............................................. 6

37. R v. Board of Trade ex p St Martins Preserving Company Limited, [1965] 1 QB 603, page 613. 11

38. R v. Jameson, [1896] 2 QB 245. ...................................................................................................... 7

39. Re Dernacourt Investments Pty Ltd (1990) 2 ACSR 553, page 556. ............................................. 11

40. Re Norvabron Pty Ltd (No 2) (1986) 11 ACLR 279, page 292. .................................................... 11

41. Rosiline George v. Union of India, (1994) 2 SCC 80. ..................................................................... 1

42. S.P. Gupta v. Union of India, AIR 1982 SC 149. ............................................................................. 3

43. S.R. Bommai v. Union of India, (1994) 3 SCC 1. ............................................................................ 2

44. Scotish Co-operative Wholesale Society Ltd. v. Meyar, [1958] 3 AER 66. .................................. 13

45. State of Haryana and Ors. v. Bhajan Lal and Ors., 1992 Supp (1) SCC 335. .................................. 5

46. State of Karnataka v. M. Devenderappa and another, 2002 (3) SCC 89. ......................................... 5

47. State of Madhya Pradesh v. Suresh Kaushal, (2003) 11 SCC 126. .................................................. 8

48. State of U.P. v. U.P. University Colleges Pensioners' Association, (1994) 2 SCC 729. .................. 4

49. Subramaniam Swamy v. P.S. Pai, 1984 CrLJ 1329 (Bom). ............................................................. 8

50. Supreme Court Advocates-on-Record Assn. v. Union of India, (2016) 5 SCC 1. ........................... 2
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51. TELCO Ltd. v. State of Bohar, (1964) 34 Comp Cas 458. ............................................................ 12

52. The Goa State Cooperative Bank v. the Deputy Director, Directorate of Enforcement,

Ahmadabad, MANU/ML/0025/2018. .............................................................................................. 5

53. Ugar Sugar Works Ltd. v. Delhi Administration and others, (2001) 3 SCC 635. ............................ 4

II. BOOKS REFERRED:

1. Durga Das Basu, Commentary on the Constitution of India, Vol. 08 (8th Ed. 2011).

2. Jain, M.P., Indian Constitutional Law (7th Ed, 2014).

3. Justice C.K. Thakker, Commentary of Constitution of India, Vol. 1 (2016).

4. Justice C.K. Thakker, Commentary of Constitution of India, Vol. 2 (2016).

5. PSA Pillai, Criminal Law,(10th Ed. LexisNexis Butterwork, 2009).

6. Ratanlal&Dhirajlal, Code of Criminal Procedure, (21st Ed. LexisNexis, 2014).

7. Ratanlal&Dhirajlal, The Indian Penal Code, (34th Ed. LexisNexis, 2014).

III. LEGISLATIONS:

1. Code of Criminal Procedure, 1973.

2. Companies Act, 2013

3. Constitution of Swadesh, 1900.

4. Prevention of Corruption Act, 1988.

5. Prevention of Money Laundering Act, 2002.

6. Swadeshi Penal Code, 1860.

IV. ONLINE DATABASES:

1. Westlaw (www.westlawindia.com)

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2. Manupatra(www.manupatra.com)

3. SCC Online(www.scconline.in)

4. Jstor(www.jstor.org)

5. Lexis Nexis Academics (www.lexisnexisacademics.com)

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STATEMENT OF JURISDICTION

The Appellant has moved to the Hon’ble Supreme Court of Swadesh under Article 136 of the

Constitution of Swadesh, 1900. The Hon’ble Supreme Court of Swadesh has the jurisdiction

to hear the instant matter.

Article 136 of the Constitution of Swadesh, 1900 reads as:

“136. Special leave to appeal by the Supreme Court:

(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its

discretion, grant special leave to appeal from any judgment, decree,

determination, sentence or order in any cause or matter passed or made by

any court or tribunal in the territory of India.

(2) Nothing in clause (1) shall apply to any judgment, determination, sentence

or order passed or made by any court or tribunal constituted by or under any

law relating to the Armed Forces.”

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STATEMENT OF FACTS

 Union of Swadesh is an Asian country having one of the bulkiest Constitution in the

world. SVM government, the ruling party, entered into a bilateral treaty with Republic of

Wakanda (hereinafter ROW) for knowledge and technology transfer. The said treaty

contained various clauses which indemnified the State of Wakanda from any individual

claims and that they would be liable only to Union of Swadesh. Also, another clause

stated that the benefits of the said treaty could only be availed by the state-owned

corporation of UOS.

 CPIL, a state owned company, had a composition as 56% shares being held by

government, 16% by Promoters of CPIL and 28% by public at large. It entered into an

agreement for Grade II Vibranium with ROW under the said treaty and incorporated SPL

(a special purpose vehicle), a fully owned subsidiary, in order to carry of that agreement.

 Later, a startling fact was discovered that SPL was supplied with Grade III Vibranium

instead of Grade II which resulted in great loss to the company.

 It was also revealed to the promoters of the CPIL by a private investigation agency that

one Mr. Rolando, who is a director of CPIL as well as SPL, along with some other

officials of ROW swapped Grade II Vibranium with Grade III in Liverpool and provided

the benefit of it to a company based in Geneva. For this, he received an illegal

gratification of Rs. 250 crores which he rotated between Dubai and UK in order to show

such funds as bonafide. For such an act, a complaint under PMLA and an FIR under

relevant provisions of SPC and Prevention of Money Laundering Act was filed against

him.

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 A complaint was filed by the promoters of CPIL for oppression & mismanagement in

SPL at NCLT and then NCLAT. At both places, it was rejected on maintainability.

 A PIL was also filed before the High Court of Vindya seeking to declare the treaty as

unconstitutional and direct the Government to espouse its claim for SPL against ROW. It

was also dismissed on maintainability.

 A writ petition was filed before the High Court of Vindya by Mr. Rolando seeking

quashing of FIR and complaint registered against him and all the proceedings initiated

pursuant thereto. The said petition was also dismissed on maintainability.

 The PIL Petitioners, Writ Petitioner and the promoters of CPIL filed SLPs under Article

136 before the Supreme Court aggrieved from their respective orders.

 All the 3 SLPs were admitted and are posted for final hearing.

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ISSUES RAISED

ISSUE I: WHETHER THE PRAYERS SOUGHT FOR BY THE PIL PETITIONERS BEFORE THE

HIGH COURT IS MAINTAINABLE.

ISSUE II: WHETHER THE ALLEGATION CONSTITUTE PRIMA FACIE OFFENCES AND

COURTS OF SWADESH HAVE JURISDICTION OVER THE CRIMES COMMITTED AND ASSETS

LOCATED IN UK.

ISSUE III: WHETHER THE PROMOTERS OF CPIL ARE ENTITLED TO MAINTAIN A

PETITION FOR OPPRESSION AND MISMANAGEMENT IN RELATION TO SPL.

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SUMMARY OF ARGUMENTS

ISSUE I: WHETHER THE PRAYERS SOUGHT FOR BY THE PIL PETITIONERS BEFORE THE

HIGH COURT IS MAINTAINABLE.

It is contended that the entering into a treaty is an executive act of the state. An executive act

can be challenged on the grounds of constitutionality. Hence, the treaty signed by the

Swadeshi government along with republic of Wakanda being an executive act can be

declared as unconstitutional. Also, the policy decision being against public interest, the court

can direct the government to espouse its claim against the Republic of Wakanda.

ISSUE II: WHETHER THE ALLEGATION CONSTITUTE PRIMA FACIE OFFENCES AND

COURTS OF SWADESH HAVE JURISDICTION OVER THE CRIMES COMMITTED AND ASSETS

LOCATED IN UK.

It is contended that the reports of private investigation agency are not reliable source of

information and don’t have any force of law. Therefore, due to lack of evidences, allegations

doesn’t constitute prima facie offences. In order to have jurisdiction by Swadeshi Courts,

either the crimes are to be committed in Swadesh by any person or outside Swadesh by a

Swadeshi citizen. Mr. Rolando being a citizen of UK committed all the alleged crimes

outside Swadesh. Therefore, the Courts of Swadesh don’t have any jurisdiction.

ISSUE III: WHETHER THE PROMOTERS OF CPIL ARE ENTITLED TO MAINTAIN A

PETITION FOR OPPRESSION AND MISMANAGEMENT IN RELATION TO SPL.

It is contended that affairs of the holding company include affairs of its subsidiaries. Hence,

the promoters of CPIL are entitled to maintain a petition for in relation to SPL.

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ARGUMENTS ADVANCED

ISSUE I: WHETHER THE PRAYERS SOUGHT FOR BY THE PIL PETITIONERS BEFORE THE

HIGH COURT IS MAINTAINABLE.

1. It is humbly contended before the Hon’ble Supreme Court of Swadesh that the prayers

sought for by the PIL petitioners before the High Court of Vindya is maintainable. This

contention is sought to be established by three grounds, namely: [I.1] A treaty is an

executive act, [I.2] An executive act is subject to Judicial Review and [I.3] The courts

have the power to interfere in the policy decisions of the Government.

[I.1] A TREATY IS AN EXECUTIVE ACT.

2. It is humbly contended that a treaty entered by the Union of Swadesh is an executive act1.

Article 53 read with Article 73 provides President the power to enter into treaties with

other nations. Under Article 253 read with Entry 14 of List I of VII Schedule to the

Constitution, the Parliament has the power to legislate for giving the effect to the

international treaties and agreements entered thereof.

3. Getting into treaties is an act of executive act2 and such power could be exercised only by

the executive head of the state or through officers subordinate to him 3. However, this

power of the executive is subject to the judicial review and other limitations4.

4. Hence, it is humbly submitted that the treaty entered by the SVM government with the

Republic of Wakanda for the knowledge and technology transfer5 duly ratified by the

government6 is an executive act by the State.

1
Marie-Emmanuelle Verhoeven v. Union of India, (2016) 6 SCC 456.
2
MaganbhaiIshwarbhai Patel v. Union of India, 1969 AIR 783.
3
Rosiline George v. Union of India, (1994) 2 SCC 80.
4
In re: Berubari Union and Exchange of Enclaves, AIR 1960 S.C. 845 at 857.

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[I.2] AN EXECUTIVE ACT IS SUBJECT TO JUDICIAL REVIEW.

5. It is humbly contended that a treaty purely an executive act is subject to judicial review.

The Constitution of Swadesh by virtue of Article 32, 136, 226 and 227 confers a right to

the High Courts and the Supreme Court to review any executive act or legislation of the

Parliament7. Such power of judicial review of the courts is held to be a part of basic

structure of the Constitution of Swadesh8 and cannot be taken away9.

6. Under Judicial Review, the Supreme Court and the High Courts have the power to declare

any executive act of State as unconstitutional if it is not in consonance with the basic

structure of the Constitution10. In order to declare an executive act as unconstitutional,

two requisites are to be fulfilled11:

a) There should be an executive act, and

b) It should violate the basic structure doctrine.

7. Any executive act which is simply unfair or unreasonable is not sustainable 12. Also, an

executive act termed as a policy decision is not beyond the pale of judicial review 13. The

only requirement to challenge constitutionality of an executive act is that it should violate

the basic structure doctrine14.

8. In the present case, the treaty which was being entered into by the SVM Government and

Republic of Wakanda15 is alleged to be arbitrary16 and have violated various fundamental

rights of the people of Swadesh.

5
Factual Matrix, para 11.
6
Factual matrix, para 19.
7
L. Chandra Kumar v. Union of India, AIR 1997 SC 1125.
8
S.R. Bommai v. Union of India, (1994) 3 SCC 1.
9
I.R. Coelho v. State of Tamil Nadu, (2007) 2 SCC 1.
10
Maneka Gandhi v. Union of India, AIR 1978 SC 597.
11
Supreme Court Advocates-on-Record Assn. v. Union of India, (2016) 5 SCC 1.
12
Bharat Petroleum Corpn. v. MaddulaRatnavalli, (2007) 6 SCC 81.
13
DDA v. Joint Action Committee, Allottee of SFS Flats, (2008) 2 SCC 672.
14
Mohinder Singh v. State of Punjab, (2013) 3 SCC 294.
15
Supra Note 5.
16
Factual Matrix, para 27, line 07.

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9. Since, the treaty entered by the SVM government with the Republic of Wakanda for the

knowledge and technology transfer17 being an executive act, which is said to have

violated various fundamental rights of people in Swadesh, its constitutionality under

Article 226 of the Constitution of Swadesh can be challenged. Also, the agreement

between CPIL and WEC Company Ltd.18 entered in furtherance of that treaty can be

brought into the court of law contending as it is violating fundamental rights of the

people.

10. Hence, it is humbly submitted that the prayer sought19 by the PIL petitioners seeking that

the Bilateral Treaty between Swadesh and Wakanda and the agreement between WEC

and SPL entered in furtherance of the said treaty were unconstitutional is maintainable.

[I.3] THE COURTS HAVE THE POWER TO INTERFERE IN THE POLICY DECISIONS OF THE

GOVERNMENT.

11. It is humbly contended that the Constitution of Swadesh is based on the principle of

Separation of Power20 and has been held to be a part basic structure doctrine21. There are

mainly three wings of the State, namely, legislature, executive and judiciary. Each wing

of the State has the power to act in its own sphere of activity. Legislature is to make

laws22. Executive is to make policies (subject to law), implement them, and run the

administration23. Judiciary is to apply laws, interpret laws, and to decide disputes and

deliver justice24.

17
Supra, note 12.
18
Factual Matrix, para 14, line 05.
19
Factual Matrix, para 27, para 27, line 02.
20
S.P. Gupta v. Union of India, AIR 1982 SC 149.
21
Kesavananda Bharti v. State of Kerela, (1973) 4 SCC 225.
22
Constitution of India, Art. 246.
23
Constitution of India, Art. 53.
24
Constitution of India, Part V, Chapter IV.

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12. Ordinarily, the courts doesn’t have power to interfere in the policy matters of the

government25. Such interference is subject to irrationality, unreasonableness or patently

illegality of the policy26. The courts can interfere only if the policy decisions of the

Government are arbitrary or mala fide and manifestly contrary to public interest 27.The

mere fact that it may affect the interests of a party does not justify invalidating the

policy28.

13. A direction or writ of mandamus can be issued by the High Courts if they are satisfied

that the executive act is malafide or arbitrary29. Such a direction can be given or such a

writ can be issued against a policy decision to the government where government or a

public authority has failed to exercise or wrongly exercised the discretion conferred upon

them30.

14. In the present case, the right that has been conferred upon the Government under the

treaty that only they can espouse any claim against the Republic of Wakanda is

arbitrary31. Also, even if it is the policy matter of the Government to espouse the claim or

not, it will be against the public interest if such a right is not exercised by them. Hence,

the courts are required to interfere and direct the government to ensure that the claims of

SPL are claimed.

15. Hence, it is humbly submitted that the courts can interfere in the policy decision of the

Union of Swadesh and the prayer sought32 to direct the Swadeshi Government to enforce

its rights under the bilateral treaty and espouse the claims on behalf of SPL against

Wakanda is maintainable.

25
Manohar Lal Sharma v. Union of India, (2013) 6 SCC 616.
26
Kasturi Lal Lakshmi Reddy v. State of Jammu & Kashmir and Anr., [1980] 3 SCR 1338.
27
State of U.P. v. U.P. University Colleges Pensioners' Association, (1994) 2 SCC 729.
28
Ugar Sugar Works Ltd. v. Delhi Administration and others, (2001) 3 SCC 635.
29
Oriental Bank of Commerce v. Sunder Lal Jain and Ors, (2008) 2 SCC 2000.
30
Consumer Education and Research Centre v. UOI, (1995) 3 SCC 42.
31
Factual Matrix, para 12, line 05.
32
Factual Matrix, para 27, line 04.

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ISSUE II: WHETHER THE ALLEGATION CONSTITUTE PRIMA FACIE OFFENCES AND

COURTS OF SWADESH HAVE JURISDICTION OVER THE CRIMES COMMITTED AND ASSETS

LOCATED IN UK.

16. It is humbly contended before the Hon’ble Supreme Court of Swadesh that the allegations

doesn’t constitute prima facie offences and the Courts of Swadesh don’t have jurisdiction

over the crimes committed and assets located in UK. This contention is sought to be

established by three grounds, namely: [II.1] Allegations doesn’t constitute prima facie

offences and [II.2] Courts of Swadesh don’t have jurisdiction over the crimes committed

and assets located in UK.

[II.1] ALLEGATIONS DOESN’T CONSTITUTE PRIMA FACIE OFFENCES.

17. It is humbly contended that Courts have enumerated certain categories of cases by way of

illustration wherein the extraordinary power under Article 226 or the inherent powers

under Section 482 of the Code of Criminal Procedure (hereinafter CrPC) could be

exercised33. Such categories are laid down in order to prevent abuse of the process of the

court34 and otherwise to secure the ends of justice35.

18. The courts have held that the reports and findings of private investigation agencies cannot

be relied upon and hold no force of law36. Further, in order to set out a case in PMLA, the

enforcement directorate is required to investigate and produce material in support of the

case37.

33
State of Haryana and Ors. v. Bhajan Lal and Ors., 1992 Supp (1) SCC 335.
34
State of Karnataka v. M. Devenderappa and another, 2002 (3) SCC 89.
35
Rajesh Bajaj v. State NCT of Delhi, AIR 1999 SC 1216.
36
Hindustan Petroleum Corporation Limited v. D.N. Vidhate and Ors., (2001) ILLJ 1411 Del
37
The Goa State Cooperative Bank v. the Deputy Director, Directorate of Enforcement, Ahmadabad,
MANU/ML/0025/2018.

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19. Also, it is the inherent power of the court to quash the proceedings is called for only in

cases where the complaint does not disclose any offence or is frivolous, vexatious or

oppressive38.

20. In the present case, allegations were made by the Promoters of the CPIL against Mr.

Rolando that he along some officials of Wakanda and directors of WEC swapped the

Vibranium and gave the benefit of Grade II Vibranium to M/s John & 1 & Co. He

received an illegal gratification of Rs. 250 crores for such favor 39 and such gratification

received by him were transferred by him in UK40.

21. All the allegations made by the promoters were based on a report of private agency. In

absence of any other evidence in support of such allegation, no prima facie case is made

out.

22. Therefore, it is humbly submitted that the allegations being frivolous put forwarded upon

Mr. Rolando does not constitute any prima facie offence. Hence, the FIR, complaint

under PMLA and all the proceedings initiated pursuant thereto should be quashed.

[II.2] COURTS OF SWADESH DON’T HAVE JURISDICTION OVER THE CRIMES COMMITTED

AND ASSETS LOCATED IN UK.

23. It is humbly contended that Courts of Swadesh don’t have jurisdiction over the crimes

committed and assets located in UK. Section 3 & 4 Swadeshi Penal Code (hereinafter

SPC) deals with offence committed beyond territorial limits of Swadesh and relate to the

extra-territorial operation of the code41. It provides to punish a subject for an offence

committed in foreign state as if it had been committed within the territory of Swadesh42.

38
Mrs. Dhanalakshmi v R. Prasanna Kumar &Ors, 1990 AIR 494.
39
Factual Matrix, para 28, line 09.
40
Factual Matrix, para 28, line 19.
41
Mobarik Ali Ahmed v. State of Bombay, AIR 1957 SC 857, page 869.
42
PherozJehangirDastoor v. Roshan Lal Nanavati, (1964) 2 CrLJ 533.

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24. The presumption against extra-territorial operation has its most rigid application as

regards criminal or penal laws. Acts committed by foreigners outside the territory of the

enacting state are not taken to be covered by a criminal43 or penal44 law. An offence

committed by a person who is not a Swadeshi citizen in a foreign country, is not triable in

ordinary criminal courts in Swadesh under the SPC45.

25. Section 177 of the CrPC provides that every offence shall ‘ordinarily’ be inquired into

and tried by a court within whose local jurisdiction it was committed. But the word

‘ordinarily’ in the provision has to be understood as ‘except as otherwise provided in the

code or special law’46. S. 3 & 4 of the SPC read with S. 188 of the CrPC give ample

power to the courts and authorities to deal with the offences committed outside Swadesh,

a) By a citizen whether on high seas or elsewhere, or

b) By a person not being such citizen on any ship or aircraft registered in Swadesh,

in the same manner as if such offences had been committed at any place within

Swadesh47.

26. S. 3 & 4 of SPC and S. 188 CrPC operates where an offence is committed by a citizen of

India outside the country. Requirements are, therefore, one - commission of an offence;

second - by a Swadeshi citizen; and third - that it should have been committed outside the

country48. If, however, at the time of the commission of the offence the accused person is

not a citizen of Swadesh, then the provisions of these sections have no application

whatsoever49.

43
R v. Jameson, [1896] 2 QB 245.
44
Cooke v. Vogeler Co., [1901] AC 102.
45
MohdNohy-ud-Din v. Emperor, AIR 1946 Lah 158, at page 169.
46
Narumal v. State of Bombay, AIR 1960 SC 1329.
47
Fatima Bibi Ahmed Patel v. State of Gujarat and Ors., (2008) 6 SCC 789.
48
Ajay Agarwal v. Union of India, AIR 1993 SC 1637.
49
Central Bank of India Ltd. v. Ram Narain, AIR 1955 SC 36.

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27. In the present case, Mr. Rolando is a citizen of UK with Swadeshi Origin50. The crimes

committed by him also took place outside Swadesh only51. Since the conditions required

to try him are not fulfilled, he not amenable to the jurisdiction of Swadeshi Courts under

S. 3 & 4 of SPC read with S. 188 of CrPC.

28. Section 179 of CrPC provides that a person is triable by a Court within the local limits of

whose jurisdiction the act amounting to the offence has been done or the consequences of

that act has ensued52.

29. The conjunction ‘and’ used in the section suggests that the act contemplated here

becomes of an offence on account of the cumulative effect of the things done and the

consequences ensued53. The consequence must form a part of the offence charged 54. If the

consequence is not part of the offence, S. 179 has no application 55. Such offences may be

tried by the Court within whole local jurisdiction such thing was done or the consequence

has ensued56.

30. In the present case, the alleged swapping of Vibranium by Mr. Rolando with some

officials of Wakanda and directors of WEC was done outside Swadesh (in Liverpool)57.

Also, the alleged act of abusing his official position and giving benefit of Grade II

Vibranium to M/s John & 1 & Co58. and receiving an illegal gratification of Rs. 250

crores was also done by him outside Swadesh (in UK)59. Neither any act nor any

consequences in furtherance of that act were ensued in Swadesh. Hence, for all the

alleged offences, Mr. Rolando is not amenable to the jurisdiction of Indian courts under

S. 179 of CrPC.
50
Factual Matrix, para 28, line 03.
51
Factual Matrix, para 28.
52
Kashiram, AIR 1934 A 499; Dewan, AIR 1936 N 55.
53
Parshuram v. State, 2006 CrLJ 3738 (3730).
54
JivandasSavchand, Re, (1930) 55 Bom 59.
55
SubramaniamSwamy v. P.S. Pai, 1984 CrLJ 1329 (Bom).
56
State of Madhya Pradesh v. Suresh Kaushal, (2003) 11 SCC 126.
57
Factual Matrix, para 28, line 05.
58
Factual Matrix, para 28, line 09.
59
Factual Matrix, para 28, line 19.

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31. Therefore it is humbly submitted that Courts of Swadesh don’t have any jurisdiction over

the crimes committed and assets located in UK.

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ISSUE III: WHETHER THE PROMOTERS OF CPIL ARE ENTITLED TO MAINTAIN A

PETITION FOR OPPRESSION AND MISMANAGEMENT IN RELATION TO SPL.

32. It is humbly contended before the Hon’ble Supreme Court of Union of Swadesh that the

Promoters of CPIL are entitled to maintain a Petition for Oppression and Mismanagement

in relation to SPL. This contention is sought to be established by three grounds, namely:

[III.1] Affairs of the holding company includes affairs of the subsidiary company, [III.2]

Corporate veil between the holding company and the subsidiary company has to be lifted.

[III.3]The conditions required under section 244 are fulfilled.

[III.1] AFFAIRS OF THE HOLDING COMPANY INCLUDES AFFAIRS OF THE SUBSIDIARY

COMPANY.

33. It is humbly contended that the words “affairs of the company” used in Section 241 of

The Companies Act, 2013 (hereinafter the Act) not only denotes that particular company

and but includes its subsidiaries. It deals with the applications made to the tribunal for

relief in cases of oppression, mismanagement, etc. Clause (1) (a) of the said section is

relevant in the present case, which reads as;

“241. Application to Tribunal for relief in cases of oppression, etc.—

(1) Any member of a company who complains that—

(a) the affairs of the company have been or are being conducted in a manner

prejudicial to public interest or in a manner prejudicial or oppressive to him

or any other member or members or in a manner prejudicial to the interests of

the company; or

(b)……”

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34. The common law courts in various judgments have held that the words ‘affairs of the

company’ (the same are being used in Section 241 of the Act) include the affairs of the

fully owned subsidiary company60. They have held that while looking in business

realities of the situation, they should not confine them to a narrow legalistic view61.

35. While dealing with the Section 459 of the Companies Act, 198562 of England, which

correspond to Section 241 of the Act, the Queen’s Division Bench held that when a

subsidiary is fully owned by a parent company, ‘its affairs’ includes almost everything.

The bench held that the affairs of the holding company includes affairs of the subsidiary

company as well63. In another judgment of Queen's Bench Division in Board of Trade, 64

wherein it was held that the term 'affairs of a company' in Section 165 of the Companies

Act, 1948, includes its control of its subsidiaries.

36. The Supreme of Queensland65 and the Equity Division of the Supreme Court of New

Wales66 while dealing with the complaint which was made under a provision equivalent to

Section 241 of the Act, have held that the words ‘affairs of the company’ are extremely

wide and includes the affairs of the subsidiary company also.

37. The same judgments were also relied upon by the High Court of Calcutta while dealing

with the issue of corporate veil and accepted the same line of thought as well67.

38. Also, while dealing with the aspect of investigation in holding company as well as

subsidiary company, the courts have interpreted the same words “affairs of the company”

60
City Branch Group Ltd, Re Companies Act 1985, (2005) 1 WLR 3505, para 33.
61
Nicholas v.Soundcraft Electronics Limited, [1993] BCLC 360, page 364.
62
Legislation.gov.uk, Companies Act, 1985, https://www.legislation.gov.uk/ukpga/1985/6/contents.
63
R v. Board of Trade ex p St Martins Preserving Company Limited, [1965] 1 QB 603, page 613.
64
In re: [1964] 2 AER 561.
65
Re Norvabron Pty Ltd (No 2) (1986) 11 ACLR 279, page 292.
66
Re Dernacourt Investments Pty Ltd (1990) 2 ACSR 553, page 556.
67
Bajrang Prasad Jalan v. Mahabir Prasad Jalan, AIR 1999 Cal 156.

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for both holding as well as subsidiary company interchangeably which shows the intent in

otherwise sense also.68

39. Therefore, it is humbly submitted that Swachh Power Limited (hereinafter SPL) is a fully

owned subsidiary of Clean Power Industries Limited (hereinafter CPIL) 69. Since SPL is a

fully owned subsidiary of CPIL, it can be construed by virtue of above judgments that as

per Section 241 of the Act, affairs of the SPL includes the affairs of the CPIL.

[III.2] CORPORATE VEIL BETWEEN THE HOLDING COMPANY AND THE SUBSIDIARY

COMPANY HAS TO BE LIFTED.

40. The doctrine that the corporation or a company has a legal and separate entity of its own

has been subjected to certain exceptions by the application of the fiction and that the veil

of the corporation can be lifted70. The courts have lifted the corporate veil where it is used

to defeat public convenience, to justify wrong, to protect fraud, or to defend crime71.

41. The courts have emphasized that the corporate veil should be lifted where the associated

companies are inextricably connected as to be, in reality, part of one concern 72. Further

when two bodies are so intrinsically connected to each other that downfall of one

drastically affects the position of the other, the corporate veil between the two bodies has

to be lifted73.

42. Also, in the cases of oppression and mismanagement, where the holding company has an

indirect control over the affairs of the subsidiary company, the corporate veil between

them has to be lifted74. Hence, the shareholders of a holding company have every right to

68
Gopalkirshna Kamath v. Manglore Trading Association Pvt. Ltd., (2004) CompCas 191 (CLB).
69
Factual Matrix, para 16, line 01.
70
TELCO Ltd. v. State of Bohar, (1964) 34 Comp Cas 458.
71
Merchandise Transport Ltd. v. British Transport Commission, [1961] 3 All E.R. 495, page 512.
72
Life Insurance Corporation of India v. Escorts Ltd. and Ors., [1985] Supp 3 SCR 909.
73
Life Insurance Company of India v. Hari Das Mundhra, [1966] 36 CompCas 371.
74
Supra, note 08.

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challenge the affairs of the subsidiaries of a company against for which a petition is

filed75.

43. Also, the courts have held that when a complaint for oppression comes before it and the

holding company has an indirect control over its subsidiaries, in order to meet the ends of

justice, the corporate veil between the, should be lifted76.

44. It is humbly submitted that in the present case, SPL was incorporated by CPIL only in

order to execute the agreement between the CPIL and WEC Company Ltd. of Wakanda 77.

Further, when SPL collapsed, the shares of the CPIL fell drastically78. These facts shows

how inextricable CPIL and SPL were. Also, by the fact that the directors of the SPL were

appointed by the CPIL79 shows that CPIL had an indirect control over the affairs of the

SPL. Hence, the corporate veil between the CPIL and SPL should be lifted and should be

treated as one single entity.

[III.3] THE CONDITIONS REQUIRED UNDER SECTION 244 ARE FULFILLED.

45. Section 244 of The Companies Act, 2013 (hereinafter referred as the Act) provides for

who can apply for oppression and mismanagement under Section 241 of the Act. It states

that;

“244. Right to apply under section 241.—

(1) The following members of a company shall have the right to apply under section

241, namely:—

(a) in the case of a company having a share capital, not less than one hundred

members of the company or not less than one-tenth of the total number of its

75
Scotish Co-operative Wholesale Society Ltd. v. Meyar, [1958] 3 AER 66.
76
Bajrang Prasad Jalan v. Mahabir Prasad Jalan, (2000) 6 CompLJ 377.
77
Factual Matrix, para 15, line 05.
78
Factual Matrix, para 24, line 02.
79
Factual Matrix, para 15, line 07.

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members, whichever is less, or any member or members holding not less than

one-tenth of the issued share capital of the company, subject to the condition

that the applicant or applicants has or have paid all calls and other sums due

on his or their shares;………..”

46. It is contended that under Section 244, in the case of a company having a share capital,

not less than one hundred members of the company or not less than one-tenth of the total

number of its members, whichever is less, or any member or members holding not less

than one-tenth of the issued share capital of the company, can apply for oppression and

mismanagement under Section 241 of the Act. Such application made under Section 241

read with Section 244 can be made in relation to the parent company as well as its

subsidiaries because ‘affairs of the company' under Section 241 mean and include the

affairs of the subsidiary company as well.

47. Hence, it is humbly submitted that since the words 'affairs of the company' used in

Section 241 of the Act denotes that particular company as well as the affairs of the

subsidiary company. The promoters of CPIL had 16% shares in the holding company80.

Therefore, the Promoters of CPIL are entitled to maintain a Petition for Oppression and

Mismanagement in relation to SPL.

48. Arguendo, assuming but not admitting, if the affairs of the holding company doesn’t

include the affairs of its subsidiary, by the fact that both CPIL and SPL are so intrinsically

connected to each other and CPIL have indirect control over the affair of the SPL, the

corporate veil between the two can be lifted and the Promoters of CPIL can be entitled to

maintain a Petition for Oppression and Mismanagement in relation to SPL.

80
Factual Matrix, para 09, line 05.

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PRAYER

Wherefore, it is humbly prayed to this Hon’ble court that in the light of issues raised,

arguments advanced and authorities cited, this Hon’ble Court may be pleased to:

1. DECLARE that the prayers sought for by the PIL Petitioners before the High

Court is maintainable and remit back the matter to High Court for proper

adjudication on merits.

2. HOLD that the allegations does not constitute any prima facie offences and

Courts of Swadesh don’t have jurisdiction over the crimes committed and

assets located in UK.

3. HOLD that the Promoters of CPIL are entitled to maintain a Petition of

Oppression and Mismanagement in relation to SPL and remit back the matter

to NCLT for proper adjudication on merits.

And / Or pass any such order, direction or relief as it may deem fit in order to uphold the

principles of justice, equity and good conscience.

And for this act of kindness, the appellants shall forever humbly pray.

Sd/-

Counsels for the Appellants

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