Supreme Court Moot on Bilateral Treaty, Jurisdiction and Company Law Issues

SYMBIOSIS LAW SCHOOL, PUNE INTERNAL MOOT ELIMINATION, 2018 – 2019
IN THE HON’BLE SUPREME COURT OF SWADESH
IN THE MATTER OF ARTICLE 136 OF THE CONSTITUTION
In the matter of Article 226 of the Constitution, Sec 3&4 of the Indian Penal Code, 1860 r/wSec. 188 of the
Code of Criminal, 1973 Procedure, Section 244 of the Companies Act, 2013
Special Leave Petition NO _____/2018
PIL Petitioners and ……….......…v.………………………………..……..Union of Swadesh

Small Trade Association
Heard Along With,
Mr Rolando…………..…………. v. …………………………..………..The State of Vindya
Heard Along With,

Promoters of CPIL……………v…..……….…………..………..Swachh Power Limited
BEFORE THE HON’BLE CHIEF JUSTICE AND HIS COMPANION JUSTICE OF THE
HON’BLESUPREME COURT
MEMORIAL ON BEHALF OF THE APPELLANTS

SYMBIOSIS LAW SCHOOL, PUNE INTERNAL MOOT ELIMINATION, 2018 - 2019
TABLE OF CONTENTS
List of Abbreviations............................................................................................................. ii
Index of Authorities ............................................................................................................. iii
Statement of Jurisdiction ...................................................................................................... vi
Statement of facts ................................................................................................................ vii
Issues Presented ................................................................................................................... ix
Summary of arguments ......................................................................................................... x
Arguments Advanced ............................................................................................................ 1
Issue I: Whether the prayers sought for by the pil petitioners before the high court is
maintainable. ..................................................................................................................... 1
[A] The Bilateral Treaty and the agreement in furtherance of the treaty are against
Constitutional Provisions. .............................................................................................. 1
A.2 Legislative Power of Treaty Making ....................................................................... 2
A.3 Comity of Nations ................................................................................................... 3
A.3 Article 13 and Treaty Making Power ....................................................................... 3
A.4 Treaty declared as Law ............................................................................................ 3
[B] High Court under Art. 226 can enter the realm of economic policy if manifestly
arbitrary. ........................................................................................................................ 4
[C] Court can issue direction to government on matters of policy. .................................. 5
[D] Territorial Jurisdiction is not a bar under Article 226. .............................................. 5
Issue II: Whether the allegations constitute a prima facie offence and courts of Swadesh
have jurisdiction over the crimes committed and assets located in U.K. ............................. 7
[A] The allegations do not constitute a prima-facie offence ............................................ 7
[B] Courts of Swadesh do not have Jurisdiction over crimes committed and assets
located in U.K. ............................................................................................................... 9
[C] The Appellant is entitled to have his FIR Quashed. ................................................ 10
Issue III: Whether the Promoters of cpil are entitled to maintain a petition for oppression
and mismanagement in relation to spl. ............................................................................. 12
[A] Affairs of Subsidiary Company comes under the scope of the affairs of the Holding
Company. .................................................................................................................... 12
[B] The Promoters qualify to file the petition under section 244 of the Companies Act,
2013. ............................................................................................................................ 14
Prayer ................................................................................................................................. 16
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LIST OF ABBREVIATIONS
ABBREVIATIONS FULL FORM
& And
Sec. Section
A.I.R. All India Reporter
A.L.J. Allahabad Law Journal
Anr. Another
Cr L.J. Criminal Law Journal
CrPC Code of Criminal Procedure
PMLA Prevention of Money Laundering Act
Ed. Edition
HC High Court
I.L.R. Indian Law Report
I.P.C. Indian Penal Code
SEC Swadesh Energy Corporation
CPIL Clean Power Industries Ltd.
No. Number
Ors. Others
pg. Page
PIL Public Interest Litigation
NCLAT National Company Law Appellate Tribunal
S.C. Supreme Court
S.C.C. Supreme Court Cases
S.C.R. Supreme Court Reporter
W.P. Writ Petition
v. Versus
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INDEX OF AUTHORITIES
I. CASES
Ajaib Singh v. State of Punjab, AIR 1952 Punj...................................................................... 3

Ajay Agarwal v. Union of India & Ors. , 1993 (3) SCC 609 .................................................. 9
also Oriental Bank of Commerce vs. Sunder Lal Jain and Anr., AIR 2008 SC 1339 .............. 5
also P.B. Samant And Others v. Union Of India And Another, AIR 1994 Bom 323............... 2
Arun Vyas and another v. Anita Vyas, AIR 1999 SC 471 ...................................................... 7
Bajrang Prasad Jalan v. Mahabir Prasad Jalan, AIR 1999 Cal 156 ................................. 13, 14
Berubari Union (In re), AIR 1960 SC 845 ............................................................................. 2
Central Bank of India ltd. v. Ram Narain, (1955) 1 SCR 697................................................. 9
Comptroller and Auditor General of India, Gain Prakash, New Delhi and another vs. K.S.
Jagannathan and another, AIR 1987 SC 537 ...................................................................... 5
Delhi Development Authority and another v. Joint Action Committee, Allottee of SFS Flats
and others, (2008)2 SCC 672 ............................................................................................. 4
Hindustan Petroleum Corporation ... vs D.N. Vidhate And Anr., 2003 (5) BomCR 482 ......... 8
HUNGERFORD INVESTMENT TRUST LTD., RE v. TURNER MORRISON & CO. LTD,
1972 SCR (3) 711 ............................................................................................................ 13
LIC of India v. Escorts Ltd., AIR 1986 SC 1370 ................................................................. 14
LIFE INSURANCE CORPORATION OF INDIA v. HARI DAS MUNDHRA (36 Comp Cas
371.) ................................................................................................................................ 12
LIFE INSURANCE CORPORATION OF INDIA v. HARI DAS MUNDHRA, 36 Comp Cas
371. ................................................................................................................................. 14
M/s. World Wide Agencies Pvt Ltd. v. Mrs. Margrat T. Desor,, 1989 Indlaw SC 348.......... 14
Maganbhai Ishwarbhai Patel v. Union Of India And Anr, 1969 SCR (3) 254;........................ 2
Merchandise Transport Ltd. v. British Transport Commission, [1961] 3 All E.R. 495, 512 .. 13
N.Balkrishna and another Vs.George Fernandez and other,1969 (3) SCC 238 ....................... 8
Nikhil Mathew v. State Bank of India and Ors., MANU/KE/1068/2018 ................................ 5
Parshuram v. State, 2006 CrLJ 3738 (3730) ........................................................................ 10
Pheroz Jehangir Dastoor v. Roshan Lal Nanavati,, (1964) 2 CrLJ 533. .................................. 9
Public Interest Litigation vs. Union of India, 2012 (3) SCC 1 ................................................ 4
R v. Page [1954] 1 QB 170 ................................................................................................... 9
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R. Kalyani v. Janak C. Mehta and others, (2009) 1 SCC 516 ............................................... 11

Rackind and others v. Gross and others (2005) 1 WLR 3505 ............................................... 13
Shiva Kant Jha v. Union of India & Ors., 2009 SCC OnLine Del 3643.............................. 1, 2
State of Haryana v. Bhanjan Lal 1992 SCC (Cri) 426 .......................................................... 10
T. Rajkumar and Ors. v. Union of India, Ministry of Finance, Department of Revenue and
Ors., 2016 (3) CTC 681 ..................................................................................................... 4
Telugunadu Workcharged Employees State Federation, Nalgonda District Unit v.
Government of India, 1997 (3) A.L.T. 492......................................................................... 6
Union Of India v. Government Of Tamil Nadu, (2013) 3 LW 201 (Mad.) (DB) .................... 4
Villianur Iyarkkai Padukappu Maiyam vs. Union of India and others, (2009) 7 SCC 561 ...... 4
STATUTES
Code of Criminal Procedure, 1973, S.177.............................................................................. 9

Code of Criminal Procedure, 1973, S.177 read with section 179 .......................................... 10
Code of Criminal Procedure, 1973, S.188.............................................................................. 9
Companies Act, 2013, S. 241 .............................................................................................. 12
Indian Penal Code, 1860, Sec. 3 read with section 4 .............................................................. 9
Prevention of Money Laundering Act, 2002, S. 2(u)............................................................ 10
Prevention of Money Laundering Act, 2002, S.5 ................................................................. 10
CONSTITUTIONAL PROVISIONS
The Constitution of India, 1950, Art. 13 (3) ........................................................................... 3

The Constitution of India, 1950, Art. 14 ................................................................................ 5
BOOKS
Ballantine on Corporations, 1946 edition, page 294 ; Stevens' Law of Corporations, 1949
edition, page 95; L. C. B. Gower, Modern Company Law, 2nd edition, pages 207-209)... 13
Taxxman’s , Company Law and Practive (A Comprehensive Textbook on Companies Act,
2013), p.791 (22nd Ed., Taxxman Publication Pvt. Ltd.2016) ........................................... 12
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ONLINE DATABASE
Manupatra (www.manupatra.com)
SCC Online (www.scconline.in)
Lexis Nexis (www.lexisnexis.com)
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STATEMENT OF JURISDICTION
The Hon’ble Court has the jurisdiction to hear the matter under Article 136 of Constitution of
India.
“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
Introduction: Union of Swadesh is a quasi-federal country with a parliamentary form of
government. The Constitution is the Grundnorm of the naton. It is widely acknowledged as a
world leader in the Clean Energy Movement and has several small businesses which flourish
in clean energy, contributing 12% to the Swadeshi economy. Swadesh has always been one
of the fastest growing economies in the world and by 2000 it was considered as one of the
Global Super Powers.
Backdrop:A treaty is entered into between the Union of Swadesh& a country named
Wakanda for sharing knowledge and technology.In December 2015, CPIL was negotiating
with the WEC Company Ltd., a state owned corporation of Wakanda for transfer of a
technology for setting up a huge solar plant. It was estimated that if the said negotiations
were to go through then the new solar plant would cater to energy needs of more than 60% of
the Swadeshi population. Under the treaty, the benefits of the same can only be received by
state-owned corporations and the private entities are excluded from various advantages.
Hence, a PIL is filed against it in the High Court of Vindhya and Small Traders Association
is impeded as a party in the PIL. The PIL is dismissed on the basis of maintainability by the
High Court.
Clean Power Industries Limited (CPIL) is a state-owned corporation which has entered into
an agreement with WEC, a state owned company in Wakanda for transfer of technology in
setting up a solar power plant. Swachh Power Limited (SPL) is the wholly owned subsidiary
of CPIL. One of the directors of SPL & CPIL is Rolando, a UK citizen who was also the
former governor of RBS. Later on in a public interest litigation, an organization of Small
Traders Association is also a party which stands for small traders of Swadesh.
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Meanwhile, Rolando is accused of receiving illegal gratification for swapping Grade II
Vibranium with Grade III Vibranium in Liverpool. He is charged with various allegations by
the Joint Director, Directorate of Enforcement & the Central Agency of Investigation under
relevant sections of IPC, PoCA& PMLA. He challenges the same by filing a Writ Petition in
the High Court of Vindhya. The Writ petition is dismissed on the basis of maintainability by
the High court.
At the same time, the solar power project entered into between SPL & WEC is unable to meet
even 10% of the projected power supply due to which huge debts pile up on SPL’s account.
The loan is declared as a Non- Performing Asset and simultaneously the Board of Directors
of SPL decide to sell all assets to pay the loans. The hasty action results in sale at a lower
price than actual valuation. Unhappy with the financial conditions, the promoters of CPIL file
for oppression and mismanagement in SPL before NCLT. The petition is dismissed by NCLT
on maintainability. On appeal, it is again dismissed on the same basis by NCLAT on the basis
of maintainability.
Present Case: Aggrieved by the above mentioned orders, the PIL Petitioners and the Writ
Petitioners filed a
SLP under Article 136 of the Swadeshi Constitution before the Supreme Court. The
Promoters of CPIL also preferred a SLP against the orders of the NCLT. The Supreme Court
considering the complex questions of law involved in the matters admitted the three SLPs and
decided to hear all the Appeals together.
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ISSUES PRESENTED
ISSUE I: WHETHER THE PRAYERS SOUGHT FOR BY THE PIL PETITIONERS BEFORE THE HIGH
COURT IS MAINTAINABLE.
ISSUE II: WHETHER THE ALLEGATIONS CONSTITUTE A PRIMA FACIE OFFENCE AND COURTS
OF SWADESH HAVE JURISDICTION OVER THE CRIMES COMMITTED AND ASSETS LOCATED IN
U.K.
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
It is submitted that the Appellant filed PIL No. 18/2018 before the High Court of Vindya
seeking a declaration that the Bilateral Treaty in question and the Agreement between WEC
and SPL be declared unconstitutional. Alternatively, praying for directions to be issued to the
Government of Swadesh to espouse the claims of behalf of SPL, against Wakanda. The said
PIL was dismissed on the basis of maintainability without going into merits. Therefore the
appeal in question is regarding the maintainability of the said PIL vis-à-vis the treaty making
power of the government. It is contended that the Bilateral Treaty cannot be declared
unconstitutional as [A] The Bilateral Treaty is against Constitutional Provisions[B] High
Court can under Article 226 enter economic policy matter as it is manifestly arbitrary [C] The
Court can direct the executive on a policy decision matter.[D] Territorial Jurisdiction is not a
bar under Article 226.
U.K.
It is submitted that a complaint was filed by the Directorate of Enforcement New, Delhi
under section 45 of the Swadesh Money Laundering Act, 2002 along with relevant sections
of IPC and Prevention of Corruption Act, 1988. Contending the same Mr. Rolando moved a
Writ Petition before the High Court of Vindya seeking quashing of FIR and the proceedings
initiated. The High Court dismissed the Writ Petition on the grounds that the prima facie
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offence was proved. The issue before the Court today is of the jurisdiction of the Courts of
Swadesh in respect to crimes committed and assets located in UK. It is submitted that Courts
in Swadesh do not possess the Jurisdiction for the same as [A] The allegations do not
constitute a prima-facie offence [B] Courts of Swadesh do not have jurisdiction in respect to
crimes committed and assets located in UK.
It is humbly submitted before this Hon’ble Court that the Petitioners had filed a petition for
Oppression and Mismanagement in front of the NCLT that was dismissed on the ground of
non-maintainability as promoters of CPIL are not shareholders of SPL, furthermore the same
order was upheld by the NCLAT. Hence the Issue before this court on appeal from the order
of the NCLAT is one of maintainability and not merit. It is contended that the Tribunal has
erred in its judgement as it has not taken into its consideration the ‘scope of affairs’ of a
Holding Company vis-à-vis its Subsidiary Company.
It is humbly contended by the appellant that the Petitioners are entitled to maintain the
Petition for Oppression and Mismanagement in the NCLT [A] Affairs of Subsidiary
Company comes under the scope of the affairs of the Holding Company therefore [B] The
Promoters qualify to file the petition under section 244 of the Companies Act, 2013
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ARGUMENTS ADVANCED
[A] THE BILATERAL TREATY AND THE AGREEMENT IN FURTHERANCE OF THE TREATY ARE
AGAINST CONSTITUTIONAL PROVISIONS.
A.1 EXECUTIVE POWER OF TREATY MAKING.
1. The Constitution of India on the subject of entering into treaties provides in Article 73
that The Executive power of the Union shall extend to the matters with respect to which
Parliament has the powers to make laws.” And under Article 53 1 the executive power has
been vested in the President of India in accordance with this constitution. In the absence
of legislation the power to enter into treaties is vested in the President. But it is submitted
that the power is not unfettered as it must be in accordance with the constitution hence the
Constitution has itself limited the power of the executive. Article 73 2 starts with the
words ‘Subject to the provisions of this constitution.’ Implying ‘Constitutional
Limitations’3
2. However, insofar as the fundamental question of any act of the Government in pursuance
to an international treaty resulting in violation of any provision of the Constitution or not
satisfying the test of being in compliance with the doctrine of basic structure is concerned
1
The Constitution of India, 1950, Art. 53
2
3
Shiva Kant Jha v. Union of India &Ors.,2009 SCC OnLine Del 3643
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the Court has held that any treaty entered must be in consonance with “Constitutional
Limitations”4
3. Therefore the contention of the respondent that the Court cannot interfere with the treaty
even if it is violative of the Constitution as to declare it unconstitutional is not correct.5
A.2 LEGISLATIVE POWER OF TREATY MAKING
4. There is a distinction between the formation and the performance of the obligations
constituted by a treaty. Under the Constitution the obligations arising under the
agreement or treaties are not by their own force binding upon Indian nationals or others.
The power to legislate in respect of treaties lies with the Parliament and making of law
under that authority is necessary when the treaty or agreement operates to restrict the
rights of citizens or others or modifies the laws of the State.6
5. It is submitted that the treaty with Wakanda and the agreement in furtherance of the treaty
are not self-executing as firstly, they restrict the rights of individuals to benefit from the
treaty or any technology transferred because of the treaty. Secondly, the treaty restricts
the right of the Individual to approach the Courts in a situation where there rights have
been violated. Judicial Remedy is part of the basic structure of the Constitution that has
been curtailed via this treaty. In such a situation it has been held by this Hon’ble Court in
various decisions that a separate law should have been created by the Legislature. It is
hence submitted that as the requirements of entering into such a treaty were not in
accordance with the Constitution in respect of going against Fundamental Rights and not
following the Treaty-Making procedure ensued, hence the matter at hand must be held
maintainable and heard on merit.
4
Berubari Union (In re), AIR 1960 SC 845
5
Shiva Kant Jha v. Union of India &Ors., 2009 SCC OnLine Del 3643
6
MaganbhaiIshwarbhai Patel v. Union Of India And Anr,1969 SCR (3) 254; see also P.B. Samant And Others v.
Union Of India And Another,AIR 1994 Bom 323

A.3 COMITY OF NATIONS
6. The contention of the Advocate General regarding the comity of nations cannot be taken
as this article occurs in part IV of the Constitution which deals with the directive
principles of state policy and it is not enforceable in a court of law. 7
7. Thus, it can be clearly stated that neither article 51 nor article 253 empowers Parliament
to make a law which can deprive a citizen of India of the fundamental rights conferred
upon him. 8
A.3 ARTICLE 13 AND TREATY MAKING POWER
8. Article 13 (3) defines what a ‘law’9 means. The Constitution is the Grundnorm of
Swadesh and if a treaty is made in derogation with the provisions of the Constitution it
shall be declared unconstitutional. It is submitted that the making of the treaty was against
the provisions in the constitution and not in accordance with the treaty making power of
the union executive ensued in Article 73 and Article 253.
A.4 TREATY DECLARED AS LAW
9. Alternatively, it has also been held that the Constitution deals with an inconsistency either
between two sets of laws made by the Parliament itself or between a bilateral or
international Treaty or Convention on the one hand and a law made by the Parliament on
the other hand. This is due to the fact that a Treaty entered into by the country with
another country is actually in the realm of executive action in terms of Article 73. The
Treaty entered into in exercise of the power conferred by Article 73, is also treated as
7
8
Ajaib Singh v. State of Punjab, AIR 1952 Punj.
9
The Constitution of India, 1950, Art. 13 (3)

‘law’, only on account of the seal of authority affixed to the samehence is amenable to
Judicial Scrutiny under Article 226.10
[B] HIGH COURT UNDER ART. 226 CAN ENTER THE REALM OF ECONOMIC POLICY IF
MANIFESTLY ARBITRARY.
10. An executive order termed as a policy decision is not beyond the pale of judicial review.
Whereas the superior courts may not interfere with the nittygritties of the policy, or
substitute one by the other but it will not be correct to contend that the court shall like its
judicial hands off, when a plea is raised that the impugned decision is a policy decision.
Interference therewith on the part of the superior court would not be without jurisdiction
as it is subject to judicial review. 11
11. The Supreme Court in a plethora of cases has held that it would ordinarily not get into
economic policy matters but when such policy. If the policy fails to satisfy the test of
reasonableness, it would be unconstitutional. 12;II.The policy can be faulted on grounds of
mala fides, unreasonableness, arbitrariness or unfairness, etc ; III. If the policy is found to
be against any statute or the Constitution or runs counter to the philosophy behind these
provisions. 13;IV.If the policy is against public interest or does not sub-serve public
interest, public purpose and public good.14
12. Hence it is submitted that even on the ground of policy the Court can enter into the realm
of a treaty if it fits under the above-mentioned heads. It is submitted therefore the PIL
10
T. Rajkumar and Ors. v. Union of India, Ministry of Finance, Department of Revenue and Ors.,
2016(3)CTC681
11
Delhi Development Authority and another v. Joint Action Committee, Allottee of SFS Flats and others,
(2008)2 SCC 672
12
Union Of India v. Government Of Tamil Nadu, (2013) 3 LW 201 (Mad.) (DB)
13
VillianurIyarkkaiPadukappuMaiyam vs. Union of India and others, (2009) 7 SCC 561
14
Public Interest Litigation vs. Union of India, 2012 (3) SCC 1

must be held as maintainable and be heard on merits by the High Court of Vindya as it is
arbitrary and violative of Article 1415.
[C] COURT CAN ISSUE DIRECTION TO GOVERNMENT ON MATTERS OF POLICY.
13. The High Court’s exercising jurisdiction underArticle 226 of the Constitution have the
power to issue a writ of mandamus or a writ in the nature of mandamus or to pass orders
and give necessary directions where the government or a public authority has failed to
exercise or has wrongly exercised the discretion conferred upon it by a statute or a rule
or a policy decision of the government or has exercised such discretion mala fide or on
irrelevant considerations or by ignoring the relevant considerations and materials or in
such a manner as to frustrate the object of conferring discretion or the policy for
implementingwhich such discretion has been conferred. In all such cases and any other
fit and proper case the High Court can compel the performance in a proper and lawful
manner of thediscretion so conferred and in a proper case in order to prevent injustice
resulting to the concerned parties, the Court may itself pass an order or give directions,
which thegovernment or the public authority should have passed or given had it properly
andlawfully exercised its discretion. 16
[D] TERRITORIAL JURISDICTION IS NOT A BAR UNDER ARTICLE 226.
14. The contentions of the Respondents regarding territorial jurisdiction of the High Court of
Vindya under Article 226 vis-à-vis its reach beyond its territory has been answered in of
Kusum Ingots v. Union of India 17the Apex court of the India observed that:
15
16
Comptroller and Auditor General of India, Gain Prakash, New Delhi and another vs. K.S. Jagannathan and
another, AIR 1987 SC 537; see also Oriental Bank of Commerce vs. Sunder Lal Jain and Anr., AIR 2008 SC
1339; Nikhil Mathew v. State Bank of India and Ors., MANU/KE/1068/2018
17
KusumIgnotis v. Union of India, 2004 (6) SCC 254

“An order passed on writ petition questioning the constitutionality of
a Parliamentary Act whether interim or final, keeping in view the provisions
contained in Clause (2) of Article 226 of the Constitution of India, will have
effect throughout the territory of India subject of course to the applicability of
the Act”
15. So hence the case brings out the answer to the question of territoriality where it is
observed: “An order passed on writ petition questioning the constitutionality of
a Parliamentary Act whether interim or final, keeping in view the provisions contained in
Clause (2) of Article 226 of the Constitution of India, will have effect throughout the
territory of India subject of course to the applicability of the Act.”
16. It has been observed inTelugunaduWorkcharged Employees State Federation, Nalgonda
District Unit v. Government of India 18 that, “Article 226(2) of the Constitution to
conclude that a High Court’s decision on the constitutionality of a Parliamentary Act
would take effect throughout the territory of India”
17. Therefore it is submitted that High court have appropriate jurisdiction under 226 (2) to
strike down the treaty as unconstitutional and same is within the jurisdiction of the High
court.
18
TelugunaduWorkcharged Employees State Federation, Nalgonda District Unit v. Government of India, 1997
(3) A.L.T. 492

U.K.
[A] THE ALLEGATIONS DO NOT CONSTITUTE A PRIMA-FACIE OFFENCE
18. On the outset it is submitted that mere allegation is not a prima facie offence. 19 It was
held allegations or imputations made against the accused do not make out a prima facie
case and do not furnish basis for framing charges, it will be a case of charge being
groundless, so the court has no option but to discharge the accused, that the most
appropriate stage at which the accused can plead for his discharge is the stage of framing
charges and that the accused need not wait till the completion of the trial.
19. It is contendedthat the allegations constituted against the petitioner are baseless and
redundant. They are mala-fide and just a way to harass him and make him a scape-goat
for the mismanagement of affairs that have occurred in the dealings of SPL. The failure of
the Union to stand true to its promises has led them to finding a scape-goat and distraction
from their own mistakes.It is submitted that the Promoters of CPIL had hired a private
investigation agency to investigate Mr Rolando.
20. Placing reliance in the decisions in the matters of Hindustan Tin Works Pvt. Limited v.
The Employees of Hindustan Tin Works Pvt. Limited and Ors., , Oriental Containers
Ltd., Bombay v. Engineering Workers' Association and Ors., reported in 1996 (1) CLR
934, Taj Services Limited v. Industrial Tribunal and Ors., reported in 2000 (84) FLR 600,
and Municipal Corporation of Delhi v. ShriRamkishan and Anr., reported in 2001 (89)
FLR 549, “It is submitted that in the absence of any cogent material being placed on
record disclosing gainful employment of the employee since the termination of his
19
ArunVyas and another v. Anita Vyas,AIR 1999 SC 471

services by the petitioners, mere report of a detective agency placed on record does not
disprove the contention of the employee that the employee has not been gainfully
employed since the termination of his services and the burden which otherwise lies upon
the employer in relation to the proof of gainful employment of the employee has not been
discharged and, therefore, the employee is entitled for the relief prayed for”.20
21. Hence a mere private investigation report cannot be considered as evidence.
22. Mr Rolando further is an appointment of the SEC against which the Promoters of CPIL
have filed a petition against Oppression and Mismanagement hence there is an inherent
bias of the Promoters to frame someone from the SEC hence they revealed to the media
falsely that Mr Rolando was involved in the swapping of Vibranium without any cogent
proof of the same.
23. It has been alleged that Mr Rolando abused his official position and received illegal
gratification of Rs. 250 Crores from one M/S John & I & Co but there is no proof of the
same and it is submitted that this is a concerted story by the Promoters to defame Mr
Rolando. It is submitted that no money has been transferred as aired in media reports
from Mr Rolando to JevahastaDoramsPvt. Ltd. to M/s AlfalahSalefiPvt. Ltd. based in
U.K. If it is observed all the allegations find their source in the Promoters feeding wrong
and unverified information to the media and every allegation resulting from the same is
denied.
24. The question of admissibility of the newspaper reports came up for consideration in the
Apex Court21 observed that "A newspaper item without any further proof of what had
actually happened through witnesses is of no value. It is at best a second hand evidence. It
is well known that reporters collect information and pass it on to the editor who edits the
news item and then publish it. In this process truth might get perverted or garbled. Such
20
Hindustan Petroleum Corporation ... vs D.N. Vidhate And Anr., 2003 (5) BomCR 482
21
N.Balkrishna and another Vs.George Fernandez and other,1969 (3) SCC 238

news items cannot be said to prove themselves although they may be taken into account
with other evidence if the other evidence is forcible."
[B] COURTS OF SWADESH DO NOT HAVE JURISDICTION OVER CRIMES COMMITTED AND
ASSETS LOCATED IN U.K.
25. An analysis of Section 3 and 4 22 of the Indian Penal Code that provides for extra-
territorial jurisdiction to Swadesh though it provides extra-territorial jurisdiction to try a
Non-Citizen23 is rigid in its application. 24 The basic rule enunciated in Section 177 25 of
the Code of Criminal Procedure says that “Ordinary place of inquiry and trial. Every
offence shall ordinarily be inquired into and tried by a Court within whose local
jurisdiction it was committed.”
26. The power of courts taking cognizance outside the country26 is enunciated in Sec. 3 and 4
read with CrPC section 18827 i.e. an extension to section 4 procedurally. Section 188
States: the power of courts to take cognizance is subject to
(a) By the citizen of india, whether on high sea or elsewhere
(b) By the person not being such citizen on any ship, aircraft registered in
India
27. In absence of the above-mentioned criteria’s the provisions are not applicable to the case
at hand.28
28. Mr Rolando as has already been made clear is a non-citizen and a victim of harassment
and malafide intention of the Promoters.
22
Indian Penal Code, 1860, Sec. 3 read with section 4
23
PherozJehangirDastoor v. RoshanLalNanavati,, (1964) 2 CrLJ 533.
24
R v. Page [1954] 1 QB 170
25
Code of Criminal Procedure, 1973, S.177
26
Ajay Agarwal v. Union of India &Ors. , 1993 (3) SCC 609.
27
Code of Criminal Procedure, 1973, S.188
28
Central Bank of India ltd. v. Ram Narain, (1955) 1 SCR 697

29. If we consider the case under section 177 and 179 of the Code of Criminal
Procedure“Offencetriable where act is done or consequence ensues. When an act is an
offence by reason of anything which has been done and of a consequence which has
ensued, the offence may be inquired into or tried by a Court within whose local
jurisdiction such thing has been done or such consequence has ensued.”29
30. A careful reading of the section would lead us to come to the conclusion that there is no
charge on Mr Rolanda prima-facie. As under the section ‘consequence’ and ‘act’ must be
done at the place of enquiry. 30 If the contention is that the Vibranium was swapped in
Liverpool and money received in the same country than anyway Mr Rolando cannot be
tried under the jurisdiction of Swadeshi courts as neither act nor the consequence is in
Swadesh.
31. Further under Section 531 of the SMLA the assets are not under the jurisdiction of the
Swadeshi courts as there is no ground for having a reasonable belief about the assets
being proceeds of crime32 as defined under SMLA.
[C] THE APPELLANT IS ENTITLED TO HAVE HIS FIR QUASHED.
32. It is contended by the Appellant that the allegations against him do not constitute a prima
facie offence in either of the acts i.e. Money Laundering, The Penal Code or the
Prevention of Corruption act hence the relief asked for i.e. quashing of FIR must be
ensued. In the exercise of the extra-ordinary power under Article 226 the Court in State
of Haryana v. BhanjanLal33, has provided Guidelines that have been followed henceforth
regarding when quashing of FIR should be ensued by the Courts:
29
Code of Criminal Procedure, 1973, S.177 read with section 179
30
Parshuram v. State, 2006 CrLJ 3738 (3730)
31
Prevention of Money Laundering Act, 2002, S.5
32
Prevention of Money Laundering Act, 2002, S. 2(u)
33
State of Haryana v. BhanjanLal1992 SCC (Cri) 426
10 | P a g e -MEMORIAL ON BEHALF OF APPELLANT-

“(a) where the allegations made in the First Information Report or the complaint, even if
they are taken at their face value and accepted in their entirety do not prima facie
constitute any offence or make out a case against the accused;
(b) where the uncontroverted allegations made in the FIR or 'complaint and the evidence
collected in support of the same do not disclose the commission of any offence and make
out a case against the accused;
(c) where the allegations made in the FIR or complaint are so absurd and inherently
improbable on the basis of which no prudent person can ever reach a just conclusion that
there is sufficient ground for proceeding against the accused;
(f) where there is an express legal bar engrafted in any of the provisions of the Code or
the concerned Act (under which a criminal proceeding is instituted) to the institu- tion
and continuance of the proceedings and/or where there is a specific provision in the Code
or the concerned Act, providing efficacious redress for the grievance of the
aggrieved party;
(g)where a criminal proceeding is manifestly attended with mala fide and/or where the
proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on
the accused and with a view to spite him due to private and personal grudge.”
33. The High Court ordinarily would not exercise its inherent jurisdiction to quash a criminal
proceeding and, in particular, a first information report unless the allegations contained
therein, even if given face value and taken to be correct in their entirety, disclosed no
cognizable offence.34
34
R. Kalyani v. Janak C. Mehta and others, (2009) 1 SCC 516

34. It is submitted that no proof has been collected against the Appellant and he fits the
criteria’s mentioned in State of Haryana v. BhajanLal which is a settled law on guidelines
of quashing FIR under Article 226 or 482 CrPC.
[A] AFFAIRS OF SUBSIDIARY COMPANY COMES UNDER THE SCOPE OF THE AFFAIRS OF
THE HOLDING COMPANY.
35. Section 241 of the act focus on “affairs of the company” in the context of oppression and
mismanagement.35
36. A holding company and a subsidiary company are separate legal entities, their affairs are
separate. But the very expressions "holding company" and "subsidiary company" denote
close connection between the affairs of two such companies. For certain purposes, affairs
of a subsidiary have been treated as affairs of the corresponding holding company.” 36
Hence, it is essential for the Tribunal to go into the grievances and consider the evidence
and their relevance to the subsidiary. 37
37. The situation at hand must be construed in light of the facts and realities of the
case.Certain principles have been laid down to determine whether a business of
subsidiary company could be considered the business of a parent company that are were
1) if the persons conducting the business appointed by the parent company? 2) Was the
35
Companies Act, 2013, S. 241
36
LIFE INSURANCE CORPORATION OF INDIA v. HARI DAS MUNDHRA (36 Comp Cas 371.)
37
Taxxman’s , Company Law and Practive (A Comprehensive Textbook on Companies Act, 2013),p.791 (22nd
Ed., Taxxman Publication Pvt. Ltd.2016)

parent company in effectual and constant control? 3) If in fact, the Holding Company
could control the internal management of their subsidiary companies? 38
38. It is submitted before this Hon’ble Court above mentioned principles apply to the case at
hand as the Majority shareholders have appointed eight Directors into the new subsidiary
as nominated directors hence exercising control over the subsidiary’s internal
management whereas the promoters have only nominated one. Furthermore, the parent
company has by way of sale or lease transferred its several major assets to the subsidiary
by way of lease or sale hence making it financially dependent and as the assets are from
CPIL there lies a vested interest of the Promoters as it is a part of their shareholding. The
fact that two persons are separate in law does not mean that one may not be under the
control of the other to such an extent that together they constitute one commercial unit. It
may be a case of parent and subsidiary. 39 An analysis of these cases and others shows that
courts are willing to lift the corporate veil where it is used to defeat public convenience,
to justify wrong, to protect fraud, or to defend crime 40
39. It is also a trite law that over the affairs of company in question its entire affairs including
those of the subsidiary companies can also be looked into. The court has to examine the
conduct of majority - shareholders to see whether such act of the majority amounts to
oppression to the minority. Such enquiry cannot be made in isolation by the Court strictly
confining itself to the affairs of the holding company. 41 Hence, it cannot be stated that the
expression, 'affairs of the company' in sections 397 and 398 of the Companies Act does
not include the affairs of subsidiary company. 42
38
LIFE INSURANCE CORPORATION OF INDIA v. HARI DAS MUNDHRA (36 Comp Cas 371.)
39
Merchandise Transport Ltd. v. British Transport Commission, [1961] 3 All E.R. 495, 512
40
Ballantine on Corporations, 1946 edition, page 294 ; Stevens' Law of Corporations, 1949 edition, page 95; L.
C. B. Gower, Modern Company Law, 2nd edition, pages 207-209).
41
Bajrang Prasad Jalan v. Mahabir Prasad Jalan, AIR 1999 Cal 156
42
HUNGERFORD INVESTMENT TRUST LTD., RE v. TURNER MORRISON & CO. LTD, 1972 SCR (3)
711; see alsoRackind and others v. Gross and others (2005) 1 WLR 3505

40. It is submitted that the major assets transferred to the subsidiary were from the holding company.
The failure of the subsidiary SPL caused the shares of CPIL to fall drastically and led to SPL
being declared as a Non-Performing Asset by its creditors.
[B] THE PROMOTERS QUALIFY TO FILE THE PETITION UNDER SECTION 244 OF THE
COMPANIES ACT, 2013.
41. It is humbly submitted before this Hon’ble Court that the affairs of a holding company
always include the affairs of the subsidiary companies and since by virtue of his being a
member of the holding company, the petitioner has filed this petition against the affairs of
the subsidiary company and he has every right to array its subsidiaries as parties and seek
relief against them. It is also pointed out that it is not correct to say that the petitioner is
not a shareholder of any of the subsidiaries. 43
42. The Act treats the holding company and its subsidiary as a unified group rather than
separate personified institutions for purposes of ownership of capital, control of the
subsidiary by the parent's directors and managing agents, their inter-corporate finance and
accountancy and disclosure of the subsidiary's affairs to members of the holding
company. 44
43. Section 244. Right to apply under section 24145.— (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 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.
43
LIC of India v. Escorts Ltd., AIR 1986 SC 1370;Bajrang Prasad Jalan v. Mahabir Prasad Jalan, AIR 1999 Cal
156
44
LIFE INSURANCE CORPORATION OF INDIA v. HARI DAS MUNDHRA, 36 Comp Cas 371.
45
Companies Act, 2013, S. 244

44. In M/s. World Wide Agencies Pvt Ltd., vs. Mrs.Margrat T. Desor46, the Apex Court
rejected an objection to the effect that the appellants before it were not members of the
company as their nominess had not been recorded in the register of members."
45. There cannot be any doubt whatsoever that for the purpose of considering a matter of
oppression, the action on the part of the majority shareholders of a holding company may
also be applied in the case of the subsidiary companies as holding companies hold
majority shares in the subsidiary companies.
46. The promoters in toto own 16% of the issued share capital of the holding company. It is
submitted that in the specific case due to the vested interest of the Promoters and the
Control exercised on the affairs of the subsidiary the members (Promoters) of the holding
company must be eligible to maintain the petition for oppression and mismanagement. It
has been held by the Court’s that when the affairs of the subsidiary company are the same
as holding company the members of the two are also considered to be the same, hence,
giving locus to the promoters. It is submitted that the majority shareholders have created a
situation where 8 directors are nominated are also not members of the subsidiary, nor is
the lone director nominated by the promoter’s a shareholder, hence removing the
possibility of having to face any consequence of their oppressive acts and
mismanagement of affairs. Hence, the court must in the interest of justice recognise the
locus of the petitioners.
46
M/s. World Wide Agencies Pvt Ltd. v. Mrs.Margrat T. Desor,, 1989 Indlaw SC 348

PRAYER
Wherefore, in light of the issues raised, arguments advanced and authorities cited, may this
Hon’ble Court be pleased to declare/adjudge/hold that:
1) The prayers of the PIL petitioners is maintainable before theHon’ble High Court and
Remit the matter to High Court for hearing on merits.
2) The FIR may be quashed as the allegation do not constitute prima facie offence and
there is lack of jurisdiction.
3) The promoters of CPIL have locus standi and the petition for Oppression and
Mismanagement be heard in the appropriate forum on merits.
AND/OR
Pass any other order, direction, relief that it may deem fit in the best interests of Justice,
Fairness and Good Conscience.
For this act of kindness, the Appellant shall duty bound forever pray.
Sd/-
(Counsel for the Appellant)

Supreme Court Moot on Bilateral Treaty, Jurisdiction and Company Law Issues

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Supreme Court Moot on Bilateral Treaty, Jurisdiction and Company Law Issues

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

IN THE HON’BLE SUPREME COURT OF SWADESH

IN THE MATTER OF ARTICLE 136 OF THE CONSTITUTION

Special Leave Petition NO _____/2018

PIL Petitioners and ……….......…v.………………………………..……..Union of Swadesh

Heard Along With,

MEMORIAL ON BEHALF OF THE APPELLANTS

i|P ag e -MEMORIAL ON BEHALF OF APPELLANT-

A.I.R. All India Reporter

A.L.J. Allahabad Law Journal

Cr L.J. Criminal Law Journal

CrPC Code of Criminal Procedure

PMLA Prevention of Money Laundering Act

I.L.R. Indian Law Report

I.P.C. Indian Penal Code

SEC Swadesh Energy Corporation

CPIL Clean Power Industries Ltd.

PIL Public Interest Litigation

NCLAT National Company Law Appellate Tribunal

S.C. Supreme Court

S.C.C. Supreme Court Cases

S.C.R. Supreme Court Reporter

W.P. Writ Petition

ii | P a g e -MEMORIAL ON BEHALF OF APPELLANT-

Ajaib Singh v. State of Punjab, AIR 1952 Punj...................................................................... 3

R. Kalyani v. Janak C. Mehta and others, (2009) 1 SCC 516 ............................................... 11

Code of Criminal Procedure, 1973, S.177.............................................................................. 9

The Constitution of India, 1950, Art. 13 (3) ........................................................................... 3

iv | P a g e -MEMORIAL ON BEHALF OF APPELLANT-

SCC Online (www.scconline.in)

Lexis Nexis (www.lexisnexis.com)

v|Page -MEMORIAL ON BEHALF OF APPELLANT-

“136. Special leave to appeal by the Supreme Court

the territory of India

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

relating to the Armed Forces.”

vi | P a g e -MEMORIAL ON BEHALF OF APPELLANT-

Introduction: Union of Swadesh is a quasi-federal country with a parliamentary form of

government. The Constitution is the Grundnorm of the naton. It is widely acknowledged as a

Global Super Powers.

former governor of RBS. Later on in a public interest litigation, an organization of Small

vii | P a g e -MEMORIAL ON BEHALF OF APPELLANT-

Meanwhile, Rolando is accused of receiving illegal gratification for swapping Grade II

the High court.

decided to hear all the Appeals together.

viii | P a g e -MEMORIAL ON BEHALF OF APPELLANT-

FOR OPPRESSION AND MISMANAGEMENT IN RELATION TO SPL.

ix | P a g e -MEMORIAL ON BEHALF OF APPELLANT-

unconstitutional as [A] The Bilateral Treaty is against Constitutional Provisions[B] High

bar under Article 226.

x|P ag e -MEMORIAL ON BEHALF OF APPELLANT-

crimes committed and assets located in UK.

FOR OPPRESSION AND MISMANAGEMENT IN RELATION TO SPL.

Holding Company vis-à-vis its Subsidiary Company.

xi | P a g e -MEMORIAL ON BEHALF OF APPELLANT-

AGAINST CONSTITUTIONAL PROVISIONS.

A.1 EXECUTIVE POWER OF TREATY MAKING.

words ‘Subject to the provisions of this constitution.’ Implying ‘Constitutional

to an international treaty resulting in violation of any provision of the Constitution or not

1|P ag e -MEMORIAL ON BEHALF OF APPELLANT-

even if it is violative of the Constitution as to declare it unconstitutional is not correct.5

A.2 LEGISLATIVE POWER OF TREATY MAKING

rights of citizens or others or modifies the laws of the State.6