Sem 5 Intra Moot Company Law

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INTRA SEMESTER MOOT COURT COMPETITION, 2023
BEFORE THE HON’BLE SUPREME COURT OF INDICA
Kota Sons Ltd.

(APPELLANT)
v.
Mr. Nikolas
(RESPONDENT)
PETITION INVOKED UNDER SECTION 423 OF

THE COMPANIES ACT, 2013
__________________________________________________________________________
_
COUNSEL APPEARING ON BEHALF OF THE APPELANT

Memorandum of Appellant
TABLE OF CONTENT
SR.NO PARTICULARS Page.

No
1 LIST OF ABBREVIATIONS 2
2 INDEX OF AUTHORITIES 3
3 STATEMENT OF JURISDICTION 4
4 STATEMENT OF FACTS 5
5 STATEMENT OF ISSUES 7
6 SUMMARY OF ARGUMENTS 8
7 ARGUMENT ADVANCE 9
8 PRAYER 32
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LIST OF ABBREVIATIONS
& And
AIR All India Reporter
Art Article.
S. Section
HON’BLE Honorable
i.e. That is.
PUCL People’s union for civil Liberties
ILR Indian Law Reports
Ors. Others
SC Supreme Court
SCC Supreme Court Cases
UOI Union of India
V. Versus

INDEX OF AUTHORITIES
Legislations Referred:
1. The Companies act, 2013.
Website Referred :
1. www.scconline.com
2. www.ipleaders.in
3. www.manupatra.in
Cases Referred:
1. Hanuman Prasad Bagri & ors vs Bagress cereals Pvt. Ltd. APO No.72 of 2006
2. S.P. Jain v. Kalinga Tubes Ltd 1965 AIR 1535
3. Tata Sons Ltd. Vs Cyrus Investments Pvt. Ltd., (2021) 3 SCC 67
4. Brown Forman Mauritius Limited vs Jagatjit Brown-Forman India Ltd.2005 126
CompCas 392 Delhisp
5. Jones v. E. Hulton & Co., L. R. (1909), 2 K. B.444
6. Mahendra Ram v. Harnandan Prasad AIR 1958 Pat 445
Links Referred:
1) https://www.legalserviceindia.com/legal/article-2224-defamation-law-in-
india.html#:~:text=The%20Supreme%20Court%20has%20ruled,the%20right%20to
%20free%20speech
2) https://www.scobserver.in/cases/subramanian-swamy-union-of-india-defamation-as-
a-criminal-offence-case-background/amp/
3) https://indiankanoon.org/search/?formInput=civil
%20defamation+doctypes:judgments

STATEMENT OF JURISDICTION
The appellant has approached the hon’ble supreme court to file the appeal under sec.423 of
the companies act, 2013.1
1
Section 423 in The Companies Act, 1956:
Penalty for non- compliance with sections 421 and 422. If default is made in complying with the requirements
of section 421 or 422, the company, and every officer of the company who is in default, shall be punishable
with fine which may extend to two hundred rupees. For the purposes of this section, the receiver shall be
deemed to be an officer of the company.

STATEMENT OF FACTS
INRODUCTION TO THE APPELLANT
Kota sons ltd. is a holding company which provides national and international service in
various sectors situated at Mumbai, Parashtra. The founder, Mohan Kota and other family
member holds 80% of the shares of the company.
INTRODUCTION TO THE RESPONDENT
Lalji-Premji group led by Mr. Nikolas holds 20% of share-holding in the appellant’s
company. The two groups have developed trust and confidence through their business
collaborations over the span of 60 years.
UNJUSTIFIED REMOVAL OF THE RESPONDENT
Mr. Nikolas was chosen as the 'Executive Chairman' of ‘Kota Sons Limited' through a
rigorous selection process based on his qualifications and merits. During his tenure, Mr.
Nikolas made significant decisions leading to a substantial increase in its market value. on
April 1, 2019, Mr. Nikolas was abruptly removed as the Executive Chairman of Kota Sons
Ltd., without providing substantial reasons. He decided to appeal before the Board of
Directors and challenge his removal but the board of the company decided against the
appeal.
RESTRUCTURING OF SHARES
Kota Sons Ltd. decided to restructure its share capital by converting existing surplus reserves
into rights shares for existing shareholders at a discounted price. Some shareholders
exclusively belonging to LPG but not associated with the Kota and Sons filed an application
to Mr. Mohan Kota, alleging that the rights shares were only allotted to shareholders
representing the Kota and Sons.
THE CASE BEFORE NCLT
Contentions: wrongful removal from the post of executive chairman, Oppression and
mismanagement in the company, reduce the voting rights of shareholders by further reducing

the share of LPG. NCLT upheld the decision of the board to remove Mr. Nikolas from the
post of Executive Chairman.
THE APPEAL BEFORE NCLAT
NCLAT reversed the judgement of NCLT. The NCLAT observed that Mr. Nicholas was
removed from the post of chairmanship illegally and the board of directors did not have a
right to remove him on the grounds that such power can be exercised only in exceptional
circumstances and in the interest of the company. Moreover, before exercising such power,
reasons for removal should be recorded in writing and intimated to the respective
shareholders whose rights will be affected. Therefore, the hon’ble tribunal ordered kota sons
ltd. To reinstate mr. Nicholas.
APPEAL BEFORE SUPREME COURT
Kota Sons Ltd. has now approached the Supreme Court of India. The Supreme Court is
currently hearing the case, which involves issues of corporate governance, oppression and
mismanagement, shareholder rights, and the removal of Mr.Nikolas as the Executive
Chairman of Kota Sons Ltd.

ISSUES RAISED
ISSUE 1:
Whether the acts of the appellant constitute corporate governance, oppression and
mismanagement, issue of shareholders rights and abrupt removal of the respondent from the
post of ‘executive chairman’?
ISSUE 2:
Whether the order of the NCLAT be struck down?
ISSUE 3:
Whether the acts of the respondent defame and tarnish the image of the appellant and
constitute defamation?

SUMMARY OF ARGUMENTS
ISSUE I:
No, the acts of the appellant do not constitute corporate governance, oppression and
post of ‘Executive Chairman’. The council states so owing to the facts, figures and merits of
the case being adhered to the current situation. Moreover, the council so as to throw light on
the issues pertaining to corporate governance, oppression and mismanagement, issue of
shareholders rights and abrupt removal of the respondent from the post of ‘Executive
Chairman’ deems it appropriate before this hon’ble court to address these issues separately
so as to remove any scope of confusion and make the issues crystal clear before this hon’ble
court.
ISSUE II:
Yes, the order of the NCLAT be struck down as the same does not seem relevant from the
perspective of both the merits of the case and the laws governing the factsheet as well as the
companies and also in this case the petitioner as well as the respondent and moreover the act
or the decision of the NCLAT with regards to the reinstatement of the respondent Nikolas on
the post of executive chairman seems violative to the council appearing on behalf of the
petitioner as well as the petitioner as far as the Indian Companies Act,2013 is concerned.
ISSUE III:
Yes, the acts of the respondent defame and tarnish the image of the petitioner and constitute
the same in the offence of defamation. The council appearing on behalf of the appellant
humbly states the same before this hon’ble court in the due course of justice considering it as
one of the profounds grounds to be taken into consideration and which according to the
council plays a very important role as far as facts, figures and merits are concerned.

ARGUMENT ADVANCED
ISSUE 1:
Whether the acts of the appellant constitute corporate governance, oppression and
mismanagement, issue of shareholders rights and abrupt removal of the respondent
from the post of ‘executive chairman’?
No, the acts of the appellant do not constitute corporate governance, oppression and
post of ‘Executive Chairman’. The council states so owing to the facts, figures and merits of
the case being adhered to the current situation. Moreover, the council so as to throw light on
the issues pertaining to corporate governance, oppression and mismanagement, issue of
shareholders rights and abrupt removal of the respondent from the post of ‘Executive
Chairman’ deems it appropriate before this hon’ble court to address these issues separately
so as to remove any scope of confusion and make the issues crystal clear before this hon’ble
court.
1.1 Corporate Governance:

The first sub issue which the council deems fit to deal with before this hon’ble court is the
issue of corporate governance and so as to further bring clarity to the issue the council would
like to present before this hon’ble court the definition of corporate governance given by the
Institute of Companies Secretary of India.
The definition of corporate governance goes as follows:

“Corporate Governance is the application of best Management Practices, Compliance of
Laws in true letter and spirit and adherence to ethical standards for effective management
and distribution of wealth and discharge of social responsibility for sustainable development
of all stakeholders.”
If the above definition is looked at it can be clearly implied and interpretated that corporate
governance includes managerial practice along with abidance of law and certain ethical
standards for effective management along with great emphasis on transparency with regards

to distribution of wealth and if the same is looked at it can be clearly implied from the
factsheet that the acts of the appellant do not amount to lack of corporate governance. On the
contrary the same cannot be inferred from the side of the respondent if the definition is
looked at and the same will be interpretated at a later stage.
The council so as to provide sustainable grounds to the arguments submitted and presented
by the council before this hon’ble court would with due respect refer certain sections from
the Indian Companies Act,2013 before this hon’ble court so as to make the things crystal
clear before this hon’ble court
The sections from the Indian Companies Act,2013 which deals with corporate governance
are as follows:
 Section 135 - Corporate Social Responsibility.

 Section 149 - Company to have Board of Directors.
 Section 151 - Appointment of director elected by small shareholders.
If all the 3 sections referred herein are looked at referring the sections and the facts as in the
factsheet in can be adhered that
1. Section 135 of the Indian Companies Act deals with corporate social responsibility
wherein the must condition for the same is with regards to those companies or ventures
having net worth of rupees five hundred crore or more, or turnover of rupees one thousand
crore or more or a net profit of rupees five crore or more during any financial year which if
referred to the facts of the case can be clearly implied. Moreover, the act also mandates
compulsory requirement of having board of directors etc which if looked at the appellant has
fulfilled all the mandates further listed in the section 135 of the companies act. Owing to the
above facts and requirements being fulfilled it can be construed that the appellant fulfills the
requirement of section 135 necessary for corporate governance.
2. Section 149 of the companies act states and clarifies the need of the board of directors in a
company signifying the importance of the same and if the factsheet is looked at it can be
clearly implied that the appellant met all the requirements as mentioned under the said act
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owing to which it can be construed that the appellant fulfills the requirement under section
149 necessary for corporate governance.
3. Section 151 of the companies act states adheres the need of appointment of director
elected by small shareholders and it clearly states that A listed company may have one
director elected by such small shareholders in such manner and with such terms and
conditions as may be prescribed. If the facts of the case are referred in this given context it
can be inferred that the joint venture between the kota sons and the LPG group has been from
past 60 years and that too based on mutual trust and confidence and moreover it can also be
clearly implied that the appellant being such a reputed and a big group has clearly implied to
all conditions and hence clearly can be construed with the fact that the same does not amount
to lack of corporate governance.
1.2 Oppression and Mismanagement and Shareholders rights:
The council before this hon’ble court with due permission would raise the second sub issue
and in the very juncture humbly deems it appropriate before this hon’ble court to take on
both the sub issues i.e. oppression and mismanagement as well as shareholders rights as the
council finds the sub issues cognate in nature .
As far as the issue of Oppression and Mismanagement is concerned if the factsheet is looked
at a glance it can be clearly inferred that the respondent appealed before the board of
directors and when the same didn’t work for the respondent, the respondent started to
relentlessly allege the same board for tarnishing his image .
Moreover, looking at the facts and figures of the case it can also be clearly implied that when
given a chance to clarify his saying on the same relentless allegations appeared from the side
of the respondent. Moreover if looked at the facts of the case it can certainly be implied that
the respondent was charged with unequal distribution of profits between the directors and the
other shareholders which if looked at it clearly constitutes the act of fraud.
Fraud in simple terms and simple sense means a wrongful act done willingly for and so as to
satisfy selfish motives . If the same is referred and implemented with the facts of the case it
can be clearly interpretated that unequal distribution of profits between the directors and the
other shareholders surely and certainly constitutes to fraud.

Alongside, if the facts, figures and merits are looked at with regards to shareholders rights
constituting their violation and ultimately leading to oppression and mismanagement, the
same can’t be construed with the allegation of the violation of Shareholders rights as well as
oppression and mismanagement. The council considerably argues the same before this
hon’ble court by looking all the facts, figures and merits at a glance adhering to which it can
be profoundly implied and interpretated that the grounds do not constitute the same and it
can be submitted before this hon’ble court based on two reasons. Firstly it can be adhered
that mere converting surplus equity shares into right shares and then giving away those
shares at a discounted price and that too among all the shareholders do not constitute to
violation of shareholders rights and their oppression as well as it is also pertinent to note that
not all the shareholders belonging to only the LPG group have filed an application or
complaint before Mr. Mohan Kota. It has been clearly mentioned in the fact sheet that only
some have objected with the same issue before Mr. Mohan Kota which can also be implied
as a deliberate attempt to cause havoc in the company with regards to the management the
company has been doing exceptionally well with.
Moreover, the council would refer section 47 of the Indian Companies Act,2013 which goes
thereby:
Section 47- Subject to the provisions of section 43 and sub-section (2) of section 50: —
(a) every member of a company limited by shares and holding equity share capital therein,
shall have a right to vote on every resolution placed before the company; and
(b) his voting right on a poll shall be in proportion to his share in the paid-up equity share
capital of the company.
(2) Every member of a company limited by shares and holding any preference share capital
therein shall, in respect of such capital, have a right to vote only on resolutions placed
before the company which directly affect the rights attached to his preference shares and,
any resolution for the winding up of the company or for the repayment or reduction of its
equity or preference share capital and his voting right on a poll shall be in proportion to his
share in the paid-up preference share capital of the company:
Provided that the proportion of the voting rights of equity shareholders to the voting rights of
the preference shareholders shall be in the same proportion as the paid-up capital in respect
of the equity shares bears to the paid-up capital in respect of the preference shares:

Provided further that where the dividend in respect of a class of preference shares has not
been paid for a period of two years or more, such class of preference shareholders shall
have a right to vote on all the resolutions placed before the company
If section 47 of the abovementioned act clearly states and the same can be interpretated that
every company which runs on shares as the main source of capital and the company which is
limited by shares is bound to give right to every member of such company right to vote in
every resolution to be passed and to be placed before the company. Moreover it is pertinent
to note that Section 47(1)(b) of the companies act states in furtherance and in accordance to
section 47(1)(a) that the voting rights of all such members will be proportional to his share in
the paid up equity capital which if adhered and interpreted in the current situation would
surely mean the same and interpret that mere converting the surplus equity shares into right
shares and distributing the same among the existing shareholders of the company won’t
affect the rights of the left out shareholders though belonging to the minority group as the
voting will be conducted as per the perovisions mentioned in section 47 a and b of the act.
Moreover, the council so as to prove and justify his considerable argument before this
hon’ble court would refer the case of Hanuman Prasad Bagri & ors vs Bagress cereals
Pvt. Ltd.2 wherein, the petitioner only had 20% shares of the joint venture and claimed
oppression and mismanagement from the side of the respondent owing to the decision of
winding up to which it was specifically states by the hon’ble supreme court that oppression
and mismanagement can’t be raised on anonymous grounds and the same has to have a
concrete evidence to be proved.
Moreover, the counsel would like to refer the case of S.P. Jain v. Kalinga Tubes Ltd.3
wherein supreme court held that:-
The decision of the Hon'ble Supreme Court in “S.P. Jain v. Kalinga Tubes Ltd., AIR 1965
SC 1535” wherein the Hon'ble Supreme Court held that the conduct of the majority
shareholders was oppressive to the minority as members, and this requires that events have
to be considered not in isolation but as a part of a consecutive story. There must be
continuous acts on the part of the majority shareholders, continuing up to the date of
petition, showing that the affairs of the company were being conducted in a manner
2
Hanuman Prasad Bagri & ors vs Bagress cereals Pvt. Ltd. APO No.72 of 2006
3
S.P. Jain v. Kalinga Tubes Ltd , AIR 1965 SC 1535

oppressive to some part of the members and the conduct must be burdensome, harsh and
wrongful and not mere lack of confidence.
1.3 Abrupt Removal of the Respondent i.e. Nikolas
If the facts and figures of the case are looked at it can be clearly found that the removal of
the respondent i.e. Mr. Nikolas was not at all abrupt in nature as the same was on grounds of
trust deficit and the due procedure in the course of law was followed.
The removal of the respondent as stated in the facts was on the charges of unequal
distribution of profits between the Directors and other shareholders as well as it’s
gratification which does not seem alleged in nature as the respondent has not made counter
as well as relentless allegations from their part as far as the charges are concerned which
hereby constitutes fraud and which as per the council constitutes a sustainable ground for the
removal of the respondent.
Moreover, it has also been alleged by the appellant that the respondent had his own business
and that to with the sustainable grounds that the directors of the company were not aware
about. If the position hierarchy is looked at the executive chairman is appointed by the
director and has the duties of the board of directors also not completely but the basic duties
which in this case are certainly violated as enlisted under Section 166 of the companies act.
The council so as to provide substantial and considerable grounds to the arguments being
presented before this hon’ble with regards to the submission and the fact that the removal of
the appellant was not at all abrupt in nature would like to refer before this hon’ble court
section 169(1) of the companies act,2013 which goes and states as follows:
169. Removal of directors. — (1) A company may, by ordinary resolution, remove a director,
not being a director appointed by the Tribunal under section 242, before the expiry of the
period of his office after giving him a reasonable opportunity of being heard:
Provided that nothing contained in this sub-section shall apply where the company has
availed itself of the option given to it under section 163 to appoint not less than two-thirds of
the total number of directors according to the principle of proportional representation.
The counsel so as to prove the considerable grounds on which he has been arguing before the
honorable court has referred the above clause of the above section which hereby states that

any person who has been appointed as a director by the tribunal empowered under section
242 of the said act other then those directors the companies may by general resolution
remove the director from the post before his date of expiry after giving him a substantial
opportunity of being heard.
The counsel adhering to the facts of the current situation has found it pertinent to note that if
the same is refrred with the facts of the given case, it can be implied with factsheet that the
respondent was firstly not appointed by the tribunal i.e. NCLAT
But was rather reinstated by the tribunal which in this case if looked at empowers the
company to remove the director before his date of expiry and the same has been done by the
company and that to complying with all the legal essentials by removal through a general
resolution as stated in the factsheet.
Secondly the point has also been raised in the section wherein it has been of significant
importance that the. Opportunity must be provided of being heard which if implied and
interpreted from the factsheet can be found that the respondent challenged the decision
before the board of directors wherein he was given an opportunity to be heard but on the
contrary the opportunity was turned into a nutshell by the respondent by relentlessly alleged
the appellant which shows the in competitiveness of the respondent and the legal bindings of
the appellant.
Moreover, the council also mentioned in the above paragraphs that the removal was in
accordance with the law. The council states so as the removal of the respondent was initiated
through the general resolution after the meeting of the board of directors and the same cannot
be placed as well as passed without the voting of the equity shareholders of the company as
prescribed under Section 47 of the said act. Thus it can be interpretated that the removal was
executed after all the due voting rights and was completely lawful in nature
Thus, based on the above presented arguments, facts, figures and merits the council before
this hon’ble court humbly pleads to declare that the acts of the appellant do not constitute
corporate governance, oppression and mismanagement, issue of shareholders rights and
abrupt removal of the respondent from the post of ‘Executive Chairman’

ISSUE 2:
WHETHER THE ORDER OF THE NCLAT BE STRUCK DOWN?
Yes, the order of the NCLAT be struck down as the same does not seem relevant from the
perspective of both the merits of the case and the laws governing the factsheet as well as the
companies and also in this case the petitioner as well as the respondent and moreover the act
or the decision of the NCLAT with regards to the reinstatement of the respondent Nikolas on
the post of executive chairman seems violative to the council appearing on behalf of the
petitioner as well as the petitioner as far as the Indian Companies Act,2013 is concerned.
The council so as to prove the argument stated above on a considerable and concrete ground
would first like to brief the hon’ble court with the facts with regards to this matter and issue
arising out of the factsheet.
The respondent Nikolas was appointed as the executive chairman of the Kota Sons Limited
in the spirit of interdependence and mutual trust as well as he was chosen through a rigorous
process based on qualification and merits. He used to work hard go above and beyond to
protect the legacy issues of the petitioner. As the time passed with the circumstances of
events the respondent i.e. Nikolas was alleged by the board with regards to the unequal
distribution of profit between the directors and the shareholders as well as he was also
alleged and claimed by the petitioner to be having an own personal business which he had
been caring for years as well as the same was not known neither brought to the knowledge of
the board. When the respondent was asked by the board to throw light on the concerned issue
relentless allegations appeared from the side of the respondent instead of giving his
clarifications which at some point or the other raises the doubts with regards to he having an
another business not having been brought to the knowledge of the board.
The Council so as to advance the argument by providing a supportive and concrete ground
humbly deems fit before this hon’ble court to divide the argument on two basis i.e arguments
on sections and arguments on merits

 Arguments on sections:
As per the facts mentioned in the factsheet the NCLAT reversed the decision of the NCLT
and ordered that the respondent i.e Nikolas should be reinstated as the executive chairman of
the petitioner company i.e the Kota Sons Ltd. As far as this decision is concerned the
NCLAT gave this decision under the ambit of Sec 241 and Sec 242 of The Indian Companies
Act,2013. The council deems it appropriate before this Hon’ble court to first look into the
sections and get the exact implementation of the same.
Section 241 of The Indian Companies Act, 2013 :

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) the material change, not being a change brought about by, or in the interests of, any
creditors, including debenture holders or any class of shareholders of the company, has
taken place in the management or control of the company, whether by an alteration in the
Board of Directors, or manager, or in the ownership of the company‘s shares, or if it has no
share capital, in its membership, or in any other manner whatsoever, and that by reason of
such change, it is likely that the affairs of the company will be conducted in a manner
prejudicial to its interests or its members or any class of members,
may apply to the Tribunal, provided such member has a right to apply under section 244, for
an order under this Chapter.
(2) The Central Government, if it is of the opinion that the affairs of the company are being
conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an
order under this chapter.
If the above section is referred at it can be clearly interpretated and implied that when a
person or an either party feels oppressed by the action of the other party or when the affairs
of the company are such that which are prejudicial or oppressive in nature for both either for
a party or public at large than in such cases application can be filed in the tribunal for relief
in cases of oppression .

However, if the facts of the case are looked at it can be clearly interpretated that neither any
person of the company or any person or party outside the company have felt prejudicial or
oppressive in nature owing to the acts as well as the affairs of the company. Moreover the
acts and affairs of the company aren’t even prejudicial and oppressive in nature to as far as
general public or common public is concerned and also hardly violate the interest of the
public at large.
Moreover, if Section 241(1)(b) is looked at it can also be clearly interpretated from Section
241(1)(b) that it has been completely stressed upon the share capital which has been brought
by the members of the company along with any of the debenture holders, creditors etc should
not affect the normal shareholders of the company as far as prejudicial or oppressive nature
is concerned through the acts or affairs of the company.
If the same is looked, interpretated and implied in from the factsheet it seems to be clearly
supporting the argument that there has been no such case as it can be clearly implied from
the facts that the company is a profit making one with business expansions in both national
as well as international market.
Section 242 of the Indian Companies Act, 2013:
242. Powers of Tribunal:— (1) If, on any application made under section 241, the Tribunal
is of the opinion—
(a) that the company‘s affairs have been or are being conducted in a manner prejudicial or
oppressive to any member or members or prejudicial to public interest or in a manner
prejudicial to the interests of the company; and
(b) that to wind up the company would unfairly prejudice such member or members, but that
otherwise the facts would justify the making of a winding-up order on the ground that it was
just and equitable that the company should be wound up, the Tribunal may, with a view to
bringing to an end the matters complained of, make such order as it thinks fit.
(2) Without prejudice to the generality of the powers under sub-section (1), an order under
that subsection may provide for—
(a) the regulation of conduct of affairs of the company in future;
(b) the purchase of shares or interests of any members of the company by other members
thereof or by the company;

(c) in the case of a purchase of its shares by the company as aforesaid, the consequent
reduction of its share capital;
(d) restrictions on the transfer or allotment of the shares of the company;
(e) the termination, setting aside or modification, of any agreement, howsoever arrived at,
between the company and the managing director, any other director or manager, upon such
terms and conditions as may, in the opinion of the Tribunal, be just and equitable in the
circumstances of the case;
(f) the termination, setting aside or modification of any agreement between the company and
any person other than those referred to in clause
(e): Provided that no such agreement shall be terminated, set aside or modified except after
due notice and after obtaining the consent of the party concerned;
(g) the setting aside of any transfer, delivery of goods, payment, execution or other act
relating to property made or done by or against the company within three months before the
date of the application under this section, which would, if made or done by or against an
individual, be deemed in his insolvency to be a fraudulent preference;
(h) removal of the managing director, manager or any of the directors of the company;
(i) recovery of undue gains made by any managing director, manager or director during the
period of his appointment as such and the manner of utilisation of the recovery including
transfer to Investor Education and Protection Fund or repayment to identifiable victims;
(j) the manner in which the managing director or manager of the company may be appointed
subsequent to an order removing the existing managing director or manager of the company
made under clause (h);
(k) appointment of such number of persons as directors, who may be required by the
Tribunal to report to the Tribunal on such matters as the Tribunal may direct;
(l) imposition of costs as may be deemed fit by the Tribunal;
(m) any other matter for which, in the opinion of the Tribunal, it is just and equitable that
provision should be made.
(3) A certified copy of the order of the Tribunal under sub-section
(1) shall be filed by the company with the Registrar within thirty days of the order of the
Tribunal.

(4) The Tribunal may, on the application of any party to the proceeding, make any interim
order which it thinks fit for regulating the conduct of the company‘s affairs upon such terms
and conditions as appear to it to be just and equitable.
(5) Where an order of the Tribunal under sub-section
(1) makes any alteration in the memorandum or articles of a company, then, notwithstanding
any other provision of this Act, the company shall not have power, except to the extent, if
any, permitted in the order, to make, without the leave of the Tribunal, any alteration
whatsoever which is inconsistent with the order, either in the memorandum or in the articles.
(6) Subject to the provisions of sub-section
(1), the alterations made by the order in the memorandum or articles of a company shall, in
all respects, have the same effect as if they had been duly made by the company in
accordance with the provisions of this Act and the said provisions shall apply accordingly to
the memorandum or articles so altered.
(7) A certified copy of every order altering, or giving leave to alter, a company‘s
memorandum or articles, shall within thirty days after the making thereof, be filed by the
company with the Registrar who shall register the same.
(8) If a company contravenes the provisions of sub-section (5), the company shall be
punishable with fine which shall not be less than one lakh rupees but which may extend to
twenty-five lakh rupees and every officer of the company who is in default shall be
punishable with imprisonment for a term which may extend to six months or with fine which
shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees,
or with both.
The above mentioned is the section 242 of The Companies Act 2013 wherein the act clearly
states the powers vested with the Tribunal with regards to different grounds of dispute which
comes under the ambit of the tribunal and owing to such ambit the tribunal can make
decisions on the issues as it may deem fit in the best interest of justice.
But this doesn’t seem to be the case here as per the council as well as the appellant as if the
entire section is looked at a glance it can be profoundly seen that the tribunal has the powers
to take the decisions keeping in mind the just and equitable clause which plays a very
important role as far as the decision making is concerned. The same has been highlighted by
the supreme court in the case of Tata Sons Ltd. Vs Cyrus Mistry 4 wherein the supreme
4
tata Sons Ltd. Vs Cyrus Investments Pvt. Ltd., (2021) 3 SCC 67.

court has also laid the conditions or the situations wherein the just and equitable clause can
be used.
In the case of Tata Sons Ltd Vs Cyrus Mistry a cognate situation had arose wherein the
NCLAT had overturned the ruling of the NCLT hereby directing the reinstatement of the
‘executive chairman’ of the Tata Sons i.e. in this case Cyrus Mistry. This was done by the
NCLAT on the basis of the Just and Equitable cause. The supreme court in this case gave the
principle and the definition of Just and Equitable Clause and struck down the order of the
NCLAT ultimately striking down the reinstatement of Cyrus Mistry which goes and states as
follows :
NCLAT failed to see that the “just and equitable clause” is triggered only in two situations
namely: (a) wherever there was a functional deadlock; and (b) wherever there was a
corporate quasi partnership in which there was a breakdown of trust and confidence. In
the case on hand there was no pre−existing partnership between Tata Group and the S.P.
Group. S.P. Group became shareholders only after 48 years of the incorporation of Tata
Sons and they did not even hold any directorial position until June−1980. Therefore S.P.
Group never had any right of management nor a right that could emanate from a
pre−existing relationship of trust and confidence, before the incorporation of the company;
The supreme Court here in this case laid down the principle in which just and equitable
clause can be used. According to the ruling of the supreme court as well as its principle the
Just and Equitable clause on which the decisions of the tribunal hold a significant grounds
can be triggered only in the two situations mentioned above.
The Council appearing on behalf of the appellant i.e. Kota Sons Ltd. Deems it appropriate
before this hon’ble court to humbly imply the above listed situations with regards to the
triggering of the Just and Equitable Clause in the current situation.
(a) wherever there was a functional deadlock:
The Council so as to advance the argument on the principles of the supreme court with
regards to the Just and Equitable Clause being used in the case where there has been a
functional deadlock would first like to present and state before this Hon’ble Court the
meaning of Deadlock as mentioned in the case of Brown Forman Mauritius Limited vs
Jagatjit Brown-Forman India Ltd.5 Wherein the Delhi High Court specifically stated and
5
Brown Forman Mauritius Limited vs Jagatjit Brown-Forman India Ltd.2005 126 CompCas 392 Delhisp

made clear the definition of Deadlock. Referring to the Black’s Law Dictionary the Delhi
High Court stated :
''when a control structure permits one or more faction s of shareholders to block corporate
action if they disagree with some aspect of corporate policy. A deadlock often arises with
respect to the election of directors e.g., by equal division of shares between two factions''.6
Taking into reference the definition by the Delhi High Court as well as the Situation in which
the Just and Equitable Clause is to be triggered it can be clearly and profoundly implied
without any doubt that there has been no such scenario of the Functional Deadlock in the
present case by referring its facts owing to which the first situation stands eliminated.
(b) wherever there was a corporate quasi partnership in which there was a breakdown
of trust and confidence.
The second situation wherein the Just and Equitable Clause can be triggered is when there is
or there has been or there has to be a corporate quasi partnership in which there is a
breakdown of trust and confidence.
The council so as to make the things crystal clear before this Hon’ble court would humbly
state before this hon’ble court the meaning of Corporate Quasi Partnership
The meaning of the Corporate Quasi Partnership goes as follows :
a public or municipal body or organization (as a county) not specifically incorporated or

vested with all the usual powers of a corporation but exercising certain corporate functions
and rights in connection with public duties
If the factsheet are looked at a glance and if the above situation as well as the definition of
Corporate Quasi Partnership is referred at it can be clearly observed that there is a complete
absence of a corporate quasi Partnership between the appellant i.e. Kota Sons Ltd. And The
Lalji-Premji Group (LPG) .
Moreover, adhering to the factsheet, it can be clearly inferred from paragraph 4 and 5
respectively that both the appellant i.e. Kota Sons Ltd. As well as the Lalji Premji Group
6
https://www.merriam-webster.com/dictionary/quasi%20corporation

(LPG) were in a joint venture from last 60 years and the joint venture continued on mutual
trust and confidence all over the years. Moreover, it is also pertinent to note that the joint
venture comprising of the appellant i.e. Kota Sons Ltd. And The Lalji Premji Group (LPG)
did not follow any legal obligations and were not bound by any formalities.
The Joint Venture between the appellant and the Lalji Premji Group existed from the past 60
years which here can be interpretated that there was no joint venture from the time of
incorporation of the company as well as there was no legal formalities between the two
groups which can be profoundly said as well as interpretated that Lalji-Premji Group never
had any right of management nor a right that could emanate from a pre−existing relationship
of trust and confidence, before the incorporation of the company
Thus, owing to such facts, figures and arguments presented by the council before this
hon’ble court humbly pleads to strike down the order of the NCLAT
 Arguments on Facts:
 The council would like to present certain arguments based on merits as mentioned in the
facts would like to present certain arguments before this hon’ble court which the council
feels and deems it appropriate to submit before this hon’ble court certain contentions, points
and arguments which the NCLAT failed to look into. The points to be raised are as follows:
 The appellant i.e. Kota sons Ltd. and the Lalji-Premji Group (LPG) had been in a joint
venture from the past 60 years which depicts a healthy atmosphere and clear
understanding between the two groups.
 The respondent despite of being a minority shareholder group member (LPG-Which holds
20% of the shares in the venture) was made the executive chairman of the venture on merits
as well as on the spirit of mutual trust and confidence which depicts the lack of oppression
and mismanagement as well as lack of biasness towards shareholders rights.
 The respondent on his part with regards to mismanagement alleged and contended that the
flagship projects of the appellant were occurring loss and so he wasn’t ready to work with
the appellant for the same reason. But the NCLAT failed to take note of the fact that mere
unwise or loss-making decisions cannot be construed as acts of mismanagement.

 As discussed above and submitted before the hon’ble court, the respondent contended that
certain flagship projects of the venture were occurring losses and that the respondent wasn’t
ready to work with the appellant on this ground. But the NCLAT failed to take note of the
fact that the respondent being the ‘Executive Chairman’ of the group had the complete power
to take decisions on the issues pertaining to the same but did not raise any issue till his
removal.
 The council in the conscience of justice finds it very ironical and pleads before this hon’ble
court to kindly take the fact into consideration that the very same person who represents
shareholders owing to just 20% of the total paid up capital and yet selected as the
‘Executive Chairman’ in the joint venture has chosen to accuse the very same board of the
fact mentioning allegations.
 Moreover, the NCLAT failed to take note of an ironical fact that on one hand before the
appointment of the respondent as the ‘Executive Chairman’ of the joint venture the
respondent showed great respect towards the management of the appellant group and
went up and down to protect their legacy and on the other hand after his removal he
accused the very same group of mismanagement and Oppression.
Thus, owing to such facts, figures and arguments presented by the council before this
hon’ble court humbly pleads to strike down the order of the NCLAT.

ISSUE 3:
Whether the acts of the respondent defame and tarnish the image of the appellant and
constitute defamation?
Yes, the acts of the respondent defame and tarnish the image of the petitioner and constitute
the same in the offence of defamation. The council appearing on behalf of the appellant
humbly states the same before this hon’ble court in the due course of justice considering it as
one of the profounds grounds to be taken into consideration and which according to the
council plays a very important role as far as facts, figures and merits are concerned.
The council is well aware of the fact that the above mentioned and submitted issue has not
been taken into consideration as well as hasn’t been dealt with before the hon’ble NCLT and
before the hon’ble NCLAT but the council humbly pleads before this hon’ble court to kindly
take into consideration the above submission as it is also a big bone of contention though not
taken into the matter in the proceedings of the case.
The council would humbly present before this hon’ble court the meaning types and essentials
of defamation and imply the same with the facts, figures and merits of the case.

The defamation are mainly of two types civil defamation and criminal defamation whose
respective meaning goes as follows:
Civil Defamation: Defined as "any intentional false statement either spoken or written, that
harms a person's reputation; decrease the respect, regard or confidence in which a person is
held; or induces disparaging, hostile, or disagreeable opinions or feelings against a person".7
Criminal Defamation is defined in IPC under section 499 and under section 500 whose
literal definition goes as follows
Definition of Criminal Defamation:
Section 499 of the IPC: "Whoever, by words either spoken or intended to be read, or by signs
or by visible representations, makes or publishes any imputation concerning any person
intending to harm, or knowing or having reason to believe that such imputation will harm,
the reputation of such person, is said, except in the cases hereinafter expected, to defame that
person".
Section 500 of the IPC : Lays forth the consequences for anyone who engages in defamatory
behaviour. "Punishment for defamation," it says. "Whoever defames another shall be
punished with simple imprisonment for a term which may extend to two years, or with fine,
or with both."
If the definitions of both the civil and criminal defamations are looked at it can be clearly
implied that the definition of the offence of defamation of under IPC as far as criminal law is
concerned it can be clearly interpretated that the meaning of defamation under criminal law
is and can certainly not be taken into consideration owing to the offence being criminal in
nature.
The council would humbly take into consideration before this hon’ble court the civil
defamation which has been described under the law of torts and whose definition as
mentioned above clearly states that for a defamation to be wrongful and civil in nature it has
to be an intentional statement either spoken or written with the aim to harm the reputation of
the person.
7
https://indiankanoon.org/search/?formInput=civil%20defamation+doctypes:judgments

If the same is implied in the current facts and figures by adhering to the merits of the case it
would be pertinent to note that the respondent had intentionally with the aim to harm the
reputation of the appellant escalated the dispute in the media, newspapers, T.V.s etc which
here can also be clearly considered as an deliberate attempt to harm the reputation of the
appellant.
 Essential Elements of Defamation
The council would like to further submit before this hon’ble court certain essentials which
help constitute defamation as a civil offence. The essential elements of defamation are as
follows:8
 A slanderous statement must exist

 The plaintiff must be identified as the subject of the defamatory remark in order for it
to be upheld
 There has to be publication of the same
 Proof of special damage
 Publication of a libelous remark is as vital necessary
The council so as to throw more light on the issue and make the issue more crystal clear
would deem it appropriate before this hon’ble court to explain all the issue in accordance and
in light with the situation of the facts of the present case.
 A slanderous statement must exist:

The accuser's writing must be malicious in nature in order for it to be admissible. This
basically implies that it must result in a worsening of the reputation of the subject of the
remark. The perception of a person by right-thinking members of society once they come
into touch with such defamatory material will determine whether or not a statement damages
their reputation.
The council so as to imply and interpret with the facts of the case as mentioned would
humbly state before this hon’ble court that the first essential of defamation which states that
a slanderous statement must exist is duly fulfilled and can also be clearly implied when the
facts of the case are looked at.
8
https://www.legalserviceindia.com/legal/article-2224-defamation-law-in-india.html#:~:text=The
%20Supreme%20Court%20has%20ruled,the%20right%20to%20free%20speech

The council so as to considerably prove the arguments made before this hon’ble court would
on profound grounds submit before this hon’ble court, the pertinence of the fact when
referred can be clearly implied as well as it is also mentioned in the factsheet in the context
that the respondent instead of addressing all the issues internally for the reasons best known
to the respondent escalated the entire issue by throwing the light on the issues through the
medium of newspapers, media, T.V.s etc even at the time when these were just mere
allegations yet to be proven which clearly depicts the motive of the respondent of an
deliberate attempt to harm the reputation of the appellant who has earned good reputation
over the years. It is on these grounds that the council on behalf of the respondent considers
this a profound ground for a slanderous statements to exist with regards to relentless
allegations being alleged from the respondent on the grounds of oppression and
mismanagement, abrupt removal of the respondent, corporate governance and shareholders
rights.
 The plaintiff must be identified as the subject of the defamatory remark in order for it to
be upheld
 A person is guilty of an offence if, after the statement has been published, it is reasonable
to assume that it is about the plaintiff. In the illustrious Jones v. Hulton case9, "where a
defamatory article was published about one Artemis Jones while describing a motor
festival. A barrister named Artemis Jones alleged that this was defamatory to him as
right-thinking individuals, as well as his friends, believed that the article referred to him
even though it was contended by the defendant that the same was an imaginary name
used for the purpose of this article. House of Lords upheld the decision that the same is
defamation, even if there was no knowledge or intention on the part of the accused"
humbly state before this hon’ble court that the second essential of defamation which states
that the plaintiff must be identified as a subject of the defamatory remark in order for it to be
upheld is duly fulfilled and can also be clearly implied when the facts of the case are looked
at.
9
Jones v. E. Hulton & Co., L. R. (1909), 2 K. B.444

over the years as well as seems to be an deliberate attempt by the respondent to specifically
make the appellant subject to defamatory remarks. It is on these grounds that the council on
behalf of the respondent considers this a profound ground for the plaintiff to be identified as
a subject of the defamatory remark in order for it to be upheld with regards to relentless
allegations being alleged from the respondent on the grounds of oppression and
mismanagement, abrupt removal of the respondent, corporate governance and shareholders
rights.
 There has to be publication of the same

 Publication of a libelous remark is as vital necessary
It is crucial that the remark that defames a person is published, meaning that it is known to a
third party who is not the target of the statement. It is necessary to show that the accused
intended for his or her comments to be published or heard or seen by someone other than the
person to whom they are directed in order to commit this offence.
If such evidence is lacking, the claimed individual would not be held accountable for the
defamatory statement's publishing. In the case of Mahendra Ram v. Harnandan Prasad10,
"the defendant was held liable for sending a defamatory letter to plaintiff written in Urdu
knowing that the plaintiff did not know Urdu and the letter will very likely be read over by
another person.
humbly state before this hon’ble court that the second and the fifth essential of defamation
which states that there has to be publication of the same is duly fulfilled and can also be
clearly implied when the facts of the case are looked at.
10
Mahendra Ram v. Harnandan Prasad AIR 1958 Pat 445

over the years. It is on these grounds that the council on behalf of the respondent considers
this a profound ground for the fact and essential that there has to be a publication for the
same with regards to relentless allegations being alleged from the respondent on the grounds
of oppression and mismanagement , abrupt removal of the respondent , corporate governance
and shareholders rights as well as they being published across all forms of media as well as
libelous remark with regards to the fake hegemony of the family dominance of the
appellant’s family having no profound grounds and ultimately ending up tarnishing the
image of the appellant.
 Proof of special damage
The remarks expressed must be untrue and false in actuality. A person cannot be considered
to have engaged in defamation by speaking the truth. Furthermore, because they are innately
subjective and cannot, therefore, be claimed to be defamatory, statements that represent a
person's opinion cannot be accurate or incorrect.
humbly state before this hon’ble court that the second essential of defamation which states
that there has to be publication of the same is duly fulfilled and can also be clearly implied
when the facts of the case are looked at.
over the years as well as considering the same as the proof of special damage. It is on these
grounds that the council on behalf of the respondent considers this a profound ground for the

proof of special damage with regards to relentless allegations being alleged from the
respondent on the grounds of oppression and mismanagement , abrupt removal of the
respondent , corporate governance and shareholders rights and tarnishing the image of the
appellant built over the years hereby considering it as a proof of special damage.
The council would humbly present before this hon’ble court the situations which may
constitute defamation. These situations are mentioned under section 499 of the IPC and are
applicable to both civil and criminal defamation.11
The situations which constitute to defamation are as follows:
 Defamation of the dead

 Defamation of a company or collection of persons
 Defamation by innuendo
Herein, if the above situations are referred the second situation clearly refers that there
should be a defamation of a company as a whole or some people being a group or part
of the company as well as an offence of defamation against any corporation could be made
out when the words accuse it of mismanagement or fraud in its dealings which clearly is the
case herein wherein the respondent has clearly defamed the company by not only the
accusations of mismanagement but also abruptly removal of the appellant, lack of proper
corporate governance and shareholders rights.
Moreover, it is very much ironical that the respondent was when employed went above and
beyond to protect the legacy of the appellant and actively participated in all the decisions
making of the company and after the removal of the respondent alleged the appellant with
the very same allegations failing to remember the fact that he himself was the part of the
same and he himself took decisions on the issues.
Thus, owing to all these grounds, facts, figures and merits the council pleads before this
hon’ble court to declare that the acts of the respondent tarnish the image of the appellant and
constitute defamation
11
https://www.scobserver.in/cases/subramanian-swamy-union-of-india-defamation-as-a-criminal-offence-
case-background/amp/


PRAYER
In light of the issues raised, arguments advanced and authorities cited, the counsel the
council for the appellant humbly pray before the Hon’ble court to adjudge and:
1. To Declare, that the acts of the appellant do not constitute lack of corporate governance,
oppression and mismanagement, violation of shareholder’s rights and abrupt removal of
respondent.
2. To Declare, that the order of NCLAT to be struck down.
3. To Declare, that the respondent is liable for defamation and grant relief.
AND PASS ANY OTHER ORDER, DIRECTION, OR RELIEF THAT THIS

HON’BLE COURT MAY DEEM FIT IN THE INTREST OF JUSTICE, EQUALITY
AND GOOD CONSCIENCE. AND FOR THIS ACT OF KINDNESS AND JUSTICE,
THE APPELLANT SHALL AS IN DUTY BOUND FOREVER PRAY.
PLACE: Supreme court of Indiva On the behalf of
Kota Sons Ltd.
(counsel on behalf of appellant)

(s/d)

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INTRA SEMESTER MOOT COURT COMPETITION, 2023

BEFORE THE HON’BLE SUPREME COURT OF INDICA

Kota Sons Ltd.

PETITION INVOKED UNDER SECTION 423 OF

COUNSEL APPEARING ON BEHALF OF THE APPELANT

SR.NO PARTICULARS Page.

GLS Law College Moot Court Activity Page |1

AIR All India Reporter

i.e. That is.

PUCL People’s union for civil Liberties

ILR Indian Law Reports

SCC Supreme Court Cases

UOI Union of India

GLS Law College Moot Court Activity Page |2

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INRODUCTION TO THE APPELLANT

INTRODUCTION TO THE RESPONDENT

UNJUSTIFIED REMOVAL OF THE RESPONDENT

THE CASE BEFORE NCLT

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THE APPEAL BEFORE NCLAT

APPEAL BEFORE SUPREME COURT

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1.1 Corporate Governance:

The definition of corporate governance goes as follows:

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 Section 135 - Corporate Social Responsibility.

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1.2 Oppression and Mismanagement and Shareholders rights:

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wherein supreme court held that:-

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1.3 Abrupt Removal of the Respondent i.e. Nikolas

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Section 241 of The Indian Companies Act, 2013 :

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Section 242 of the Indian Companies Act, 2013:

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(a) wherever there was a functional deadlock:

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The meaning of the Corporate Quasi Partnership goes as follows :

a public or municipal body or organization (as a county) not specifically incorporated or

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Definition of Criminal Defamation:

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 Essential Elements of Defamation

 A slanderous statement must exist

 A slanderous statement must exist:

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 There has to be publication of the same