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TMI Blog2021 (11) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... a P. Ltd. ("respondent No. 2"). It holds 3.48 per cent. of the issued and paid-up equity share capital. The applicant subscribed to the equity shares of respondent No. 2 between the year 2009 and 2010 after obtaining requisite approvals from the Foreign Investment Promotion Board. As such, in its capacity as a shareholder, the applicant has participated in the affairs and management of respondent No. 2 since 2009. Respondent No. 2 engaged, inter alia, in the business of delivering broadband wireless access and audio-visual services through an integrated hybrid satellite and terrestrial communication system. Respondent No. 2 entered into an agreement dated January 28, 2005 ("Devas Agreement") with respondent No. 1 herein/Antrix Corporation which is the marketing arm of the Government of India's Space Research Organization ("ISRO"), set up under DOS. (2) On February 25, 2011 respondent No. 1 herein purported to terminate the Devas Agreement and to thereby cause irreparable loss to respondent No. 2 leading to have no option but to invoke pre-arbitration hearing steps and then arbitration in accordance with the arbitration agreement contained in the Devas agreement. Since incepti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y any court of law, are mere conjectures based on which this hon'ble Tribunal cannot hold that there is any "fraud" in terms of section 271(c) of the Companies Act, 2013. In any event, respondent No. 1 is only relying on the charge-sheet and the criminal complaints which are pending adjudication and this hon'ble Tribunal cannot come to a finding of fraud when the issues are sub judice. (5) It is further stated that in case respondent No. 2 and/or its share holders and/or its officers succeed in the aforesaid criminal proceedings it will be a travesty of justice that respondent No. 2 is already wound up when the shareholders, officers and the company are acquitted of any criminal charge of "fraud", etc. Since no competent court of law has given a finding of "fraud" and/or cheating and/or bribery and/or corruption, etc. The present petition based on unproved allegations is not maintainable at this stage. (6) In fact, the applicant will demonstrate before this hon'ble Tribunal that the various criminal proceedings, the Registrar of Companies proceedings and the present winding up proceedings are a mere afterthought and an arm-twisting tactic. Since respondent No. 1 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the hon'ble National Company Law Appellate Tribunal the applicant filed present application to be impleaded as a necessary and proper party and be heard before any further hearing is undertaken in this hon'ble Tribunal in the winding up proceedings. The applicant has also relied on following judgments in support of this application : (a) Manoj Narula v. Union of India [2014] 9 SCC 1. (b) V. Ravi Kumar v. State [2019] 14 SCC 568. (c) M + R Logistics (India) P. Ltd. v. AGA Publications Ltd. (Company Appeal (AT) (Insolvency) No. 667 of 2020, dated February 1, 2021) [2021] 224 Comp Cas 666 (NCLAT). (d) National Textile Workers' Union v. P. R. Ramakrishnan [1983] 53 Comp Cas 184 (SC) ; [1983] 1 SCC 228. (e) The hon'ble High Court of Punjab and Haryana in Smt. Keerat Kaur v. Patiala Exhibition P. Ltd. [1991] 70 Comp Cas 728 (P&H). (f) The hon'ble High Court of Madhya Pradesh in Gwalior Sugar Co. Ltd. v. Shyam Saran Gupta and Co. [1969] 39 Comp Cas 657 (MP) ; AIR 1969 MP 74. 3. Respondent No. 1/Antrix has filed a reply dated April 30, 2021 to the application by, inter alia, stating as follows : (1) The hon'ble Tribunal vide its order passed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated by the petitioner, in paragraph 13(f) and paragraph 15 of the petition alleges that the shareholders of respondent No. 1-company were hand-in-glove with the officials of respondent No. 1- company to commit multiple violations of various laws, and fraudulent activities. At paragraph 31 of the written submissions filed by the petitioner on May 5, 2021 the petitioner reiterated its allegation that the shareholders colluded with its officials to perpetrate a fraud. It is well-established that if allegations are made against a person in a proceeding, that person either has to be made a party or given a chance to defend itself. (2) Every investment made by all of the investors was preceded by a meeting of the investors with the Government of India's officials, the investors satisfying themselves about the Devas Agreement, and the seriousness of the Antrix/Government to undertake its obligations under the Devas Agreement. This hon'ble Tribunal while looking at the investments asked how so much investment came when respondent No. 1-company had not even started business, and whether the premium on shares was on account of market sentiments. Respondent No. 1-company and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the petitioner is a private limited company owned by the Government of India. The Devas agreement was never implemented except that respondent No. 1-company paid two instalments of upfront capacity reservation fees. The petitioner never had any loss and/or parted with any property. Even the satellite which had been agreed to be launched was not done so till 2011, i. e., till termination of the Devas agreement. In these circumstances, there is no question of any fraud, and in any event the alleged fraud relates to the disputes between parties which is pending in various forums, like the hon'ble High Court of Delhi, CBI Court, PMLA Court, FEMA adjudication, etc. (6) The fraud contemplated within the meaning of section 271(c) of the Companies Act, 2013 is such fraudulent conduct which touches the public and must be continuous. A mere allegation of some alleged past illegal conduct which has ceased cannot be made a ground for winding up. Section 271(c) has been used for winding up where a company floats Ponzi schemes and dupes the general public, which is innocent of the illegal designs of the company. Even in the case of companies like Satyam and IL and FS, where huge fraud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up of a company. 7. As per law, all the affairs of a company will be conducted through elected board of directors nominated by its shareholders. All the decisions taken by board of directors are binding on its shareholders/stakeholders. However, if such board of directors are acting against the interest of company and its shareholders, shareholders by convening extraordinary general meeting, can remove such directors. In case, the interest of minority shareholders are being affected by the board of directors, such minority shareholders constituting not less than 10 per cent. of total shareholding, can also approach the Tribunal under section 241/242 of the Companies Act, 2013 by alleging acts of oppression and mismanagement on the part of board of directors and seek appropriate direction(s) from the Tribunal. In the instant case, the applicant-company by holding mere 3.48 per cent. shareholding of issued and paid-up equity share capital, has filed the instant application, that too defending the actions of Devas and going against Antrix. As long as the applicant has no grievance against the affairs of Devas and its directors, it has no locus standi to file any application to implea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, if so advised, can approach the liquidator placing its grievances. And there is no law that all shareholders of a company, which is facing winding up petition, filed under section 271/272 of the Companies Act, 2013, should be impleaded and prior notice to be given. There are cases where creditors can file petition seeking to wind up of a company on the ground that company is unable to pay its debts and if debt in question is paid, petition itself can be closed. But here in, the case is different that the incorporation itself and subsequent affairs are being run in fraudulent manner and unlawful object. The instant application is nothing but to delay proceedings and to support Devas in the main company petition and it is proxy war, as held by the hon'ble High Court in the writ petition filed by the applicant herein. Various contentions raised in the instant applications are baseless and untenable. 11. Since the Tribunal finds that Devas is a fit company to wind up by way of separate order dated May 25, 2021 the instant application is not maintainable and it is liable to be dismissed. When the applicant failed to make out even prima facie case to entertain the instant applic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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