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2015 (9) TMI 190 - DELHI HIGH COURTDenial of security clearance - rejection of the application for pre-qualification for the e-auction of the first batch of private FM Radio Channels (Phase – III) - Lifting of corporate veil - Held that:- whether the security assessment in respect of Shri Dayanidhi Maran and Shri Kalanithi Maran is germane to the requirements of security clearance prescribed in clause 3.8 of the NIA. Clause 3.8 stipulates the requirement of a security clearance of the “company” as well as all its “Directors on the Board”. Now, on a plain reading, this would imply that the company which has applied must be security cleared. Not only the corporate entity, which is distinct and separate in law, but also its Directors as individuals, distinct from the corporate entity, have to be security cleared. At the same time, the clause does not, on a plain reading, extend to shareholders of the applicant company. - Wherever the respondent wanted to bring in a shareholder or refer to the concept of control over the company it has done so specifically as would be evident from clauses 3.2.1(b), 3.6 and 3.9 as pointed out earlier in this judgment. It therefore follows that there is no explicit reference to shareholders of the company in clause 3.8 of the NIA. But, this does not mean that the respondent is prevented from looking behind the corporate identity of the applicant company. There is no allegation that the petitioner companies were created as a camouflage to shield the persons exercising control over them from any liability. There is also no allegation that the petitioner companies themselves have indulged in any activities which could raise security concerns. In fact, both the petitioner companies have been operating their licenses under Phases I and II since 2002/2003. Even when the cases against the Marans were registered in 2011, the petitioner companies have continued to operate their respective radio channels without any objection concerning security issues. - petitioner companies themselves have not been alleged to be vehicles of any transgression of law. They have been functioning since 2002 / 2003 without there being any allegation regarding their functioning resulting in any security concerns. - we quash the impugned decision denying security clearance to the petitioner companies. The said petitioner companies shall be entitled to participate in the e-auction subject to other conditions being fulfilled. - Decided in favour of appellant.
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